ACC - Annual Report 2018 | FinancialReports.eu

Asia Cement Corporation

Financial Statements for the Years Ended December 31, 2018 and 2017 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Asia Cement Corporation

Opinion

We have audited the accompanying financial statements of Asia Cement Corporation (the “Corporation”), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Corporation’s financial statements for the year ended December 31, 2018 are stated as follows:

Estimated Impairment of Trade Receivables of Subsidiaries

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Corporation’s subsidiaries use judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on their historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash flows are less than expected, a material impairment loss may arise. Because the key assumptions and inputs used for measuring expected credit losses on trade receivables represent an area of significant judgement and uncertainty, we considered the estimated impairment of trade receivables as one of the key audit matters.

The corresponding audit procedures for estimated impairment of trade receivables of subsidiaries are as follows:

We obtained an understanding and performed tests on the management’s estimation of impairment of trade receivables and of the design and execution of relevant internal controls.
We evaluated the reasonableness of allowance for impairment loss by testing the aging of trade receivables and by quantifying the potential risk on overdue balances at the balance sheet date.
We tested the recoverability of receivables by vouching cash receipts after the balance sheet date.
For amounts that were past due and not yet recovered, we evaluated the adequacy of allowance for impairment loss by understanding the customers’ historical payment performance, any collateral pledged, and other abilities to repay the bills.

Fair Value Measurement of Investment Properties

The Corporation’s and its subsidiaries’ investment properties are subsequently measured using the fair value model and valued by an independent qualified professional appraiser, a member of the ROC certified real estate appraisers. Refer to Notes 5 and 17. Because the valuation of investment properties represents an area of significant judgement and uncertainty, we considered the fair value measurement of investment properties as one of the key audit matters.

The corresponding audit procedures for fair value measurement of investment properties are as follows:

We assessed the competencies and independence of the appraiser engaged by management and obtained an understanding of the scope of the work and the process of engagement acceptance to evaluate the risk of impairment of the appraiser’s independence and the limitation in the scope of the appraiser’s work.
We obtained an understanding of and assessed the reasonableness of management’s assumptions and methods used in valuation.
We tested samples of items from management’s supporting documents, including the reasonableness of effective gross income, expenses, and ownerships of land and buildings used in the valuation process and reperformed the calculation of the fair value of investment properties.

Emphasis of Matter

The Corporation’s and its subsidiaries’ investments in China Shanshui Cement Group Limited (CSCGL), which was previously recognized as financial assets at fair value through other comprehensive income, became qualified for the equity method of accounting and were therefore reclassified as investments accounted for using equity method in 2018. The Corporation and its subsidiaries reported a provisional amount of NT$2,789,230 thousand for the goodwill arising from the above transition during the measurement period as the goodwill was included in the carrying amounts of the Corporation’s and its subsidiaries’ investment in CSCGL. The Corporation will engage outside specialists to provide assistance in measuring the identifiable net assets of CSCGL and the measurement will be completed within one year from the transition date. The provisional amounts will be adjusted retrospectively during the subsequent measurement period to reflect new information obtained from facts and circumstances that existed as of the transition date that, if known, would have affected the amounts recognized as of that date. Refer to Notes 8 and 15. Our opinion is not qualified in respect of this matter.

Other Matter

The financial statements of CSCGL, an associate accounted for using equity method, were audited by other auditors. Our opinion, insofar as it relates to the amounts included in the accompanying financial statements for CSCGL, is based solely on the reports of other auditors. As of December 31, 2018, the aggregate carrying value of the equity-method investments in CSCGL was NT$10,215,045 thousand, representing 5% of the total assets. For the year ended December 31, 2018, the share of profit or loss of CSCGL was NT$376,472 thousand, representing 2% of the income before income tax.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the audit committee, are responsible for overseeing the Corporation’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
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conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Corporation to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the company audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Kuo, Li Wen and Fan, Yu Wei.

Deloitte & Touche Taipei, Taiwan Republic of China

March 21, 2019

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 32) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Notes 8 and 34) Available-for-sale financial assets - current (Notes 9 and 34) Financial assets at amortized cost - current (Notes 6, 11 and 32) Debt investments with no active market - current (Notes 6, 12 and 32) Notes receivable Third parties Trade receivables Third parties (Note 13) Related parties (Notes 13 and 32) Other receivables (Note 32) Current tax assets (Note 28) Inventories (Note 14) Prepayments (Note 19) Other current assets Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Notes 15 and 34) Financial assets at fair value through other comprehensive income - non-current (Note 8) Available-for-sale financial assets - non-current (Note 9) Financial assets measured at cost - non-current (Note 10) Property, plant and equipment (Notes 16 and 34) Investment properties (Notes 17, 32 and 34) Intangible assets (Note 18) Deferred tax assets (Note 28) Long-term prepayments for leases (Note 19) Other non-current assets (Notes 20, 24 and 32) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bills payable (Note 21) Financial liabilities at fair value through profit or loss - current (Note 7) Contract liabilities - current (Note 26) Accounts payable and accrued expenses Third parties Related parties (Note 32) Dividends and bonuses payable Current tax liabilities (Note 28) Customers' deposits and advances Deferred revenue - current (Note 23) Current portion of long-term liabilities (Note 22) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 22) Long-term borrowings (Note 22) Provisions - non-current (Note 23) Deferred tax liabilities (Note 28) Deferred revenue - non-current (Note 23) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 25 and 28) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2018 Amount % $ 3,165,795 2 1,172,826 1 2,371,026 1 - - 462,275 - - - 95,212 - 474,070 - 520,982 - 29,495 - 9,022 - 1,663,395 1 188,456 - 12,125 - 10,164,679 5 125,632,890 65 5,386,142 3 - - - - 4,374,050 2 41,689,694 22 8,344 - 12,603 - 369,801 - 5,192,895 3 182,666,419 95 $ 192,831,098 100 $ 11,437,104 6 268,218 - 40,661 - 1,415,215 1 188,104 - 214,593 - 8,477 - - - 75,912 - 4,000,000 2 17,648,284 9 12,192,567 6 15,025,011 8 98,000 - 9,020,630 5 923,805 - 30,575 - 37,290,588 19 54,938,872 28 33,614,472 17 1,362,554 1 15,615,380 8 63,945,145 33 20,358,461 11 99,918,986 52 2,996,214 2 137,892,226 72 $ 192,831,098 100		2017
				Amount % $ 815,926 1 171,500 - - - 3,063,312 2 - - 2,596,386 1 102,303 - 365,037 - 399,481 - 33,114 - 5,664 - 1,303,587 1 105,239 - 8,327 - 8,969,876 5 109,772,422 61 - - 9,044,215 5 128,793 - 4,665,393 3 42,019,637 23 8,948 - 168,986 - 259,142 - 4,808,286 3 170,875,822 95 $ 179,845,698 100 $ 9,128,405 5 - - - - 1,342,662 1 172,116 - 201,986 - - - 49,701 - 68,085 - 4,088,612 2 15,051,567 8 10,000,000 6 18,574,083 10 - - 7,894,060 4 858,838 1 31,585 - 37,358,566 21 52,410,133 29 33,614,472 19 1,168,692 1 15,068,480 8 63,001,957 35 16,125,837 9 94,196,274 52 (1,543,873) (1) 127,435,565 71 $ 179,845,698 100

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 26 and 32) OPERATING COSTS (Notes 14, 26, 27 and 32) GROSS PROFIT REALIZED GROSS PROFIT ON SALES TO SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Administrative expenses (Notes 27 and 32) Expected credit loss (Note 13) Total operating expenses OPERATING (LOSS) INCOME NON-OPERATING INCOME AND EXPENSES Other income (Note 27) Other gains and losses (Note 27) Finance costs (Note 27) Share of profit or loss of subsidiaries and associates Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) (Note 28) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE INCOME, NET Items that will not be reclassified subsequently to profit or loss: Unrealized loss on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans Share of other comprehensive income of subsidiaries and associates		2018 Amount % $ 8,732,236 100 8,479,146 97 253,090 3 3,444 - 256,534 3 649,813 8 694 - 650,507 8 (393,973) (5) 592,445 7 (641,800) (7) (331,984) (4) 12,970,044 148 12,588,705 144 12,194,732 139 1,077,638 12 11,117,094 127 (9) - 265,965 3 1,426,545 17 1,692,501 20		2017
				Amount % $ 8,186,867 100 7,525,121 92 661,746 8 9,181 - 670,927 8 522,645 6 - - 522,645 6 148,282 2 439,018 5 (85,962) (1) (331,552) (4) 5,231,593 64 5,253,097 64 5,401,379 66 (67,628) (1) 5,469,007 67 - - 148,032 2 103,891 1 251,923 3

(Continued)

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Unrealized gain on available-for-sale financial assets Share of other comprehensive income of subsidiaries and associates Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 29) Basic Diluted		2018 Amount % $ - - 1,758 - 1,758 - 1,694,259 20 $ 12,811,353 147 $ 3.54 $ 3.49		2017
				Amount % $ 1,745,213 21 429,603 5 2,174,816 26 2,426,739 29 $ 7,895,746 96 $ 1.74 $ 1.74

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

(Concluded)

ASIA CEMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CapitalStock Issued Shares Amount Capital Surplus 3,361,447 $ 33,614,472 $ 1,167,881 - - - - - - - - - - - 811 - - - - - - - - - 3,361,447 33,614,472 1,168,692 - - - 3,361,447 33,614,472 1,168,692 - - - - - - - - - - - 185,411 - - 8,451 - - - - - - - - - - - - 3,361,447 $ 33,614,472 $ 1,362,554	Other Equity	Other Equity
	Unrealized Gain (Loss) on Exchange Unrealized Gain Financial Assets Differences on (Loss) on at Fair Value Translating Available-for- Through Other Foreign sale Financial Comprehensive Operations Assets Income $ (44,313 ) $ (4,023,554 ) $ - - - - - - - - - - - - - - - - (2,593,840 ) 4,751,621 - - - - (2,638,153 ) 728,067 - - (728,067) 516,962 (2,638,153 ) - 516,962 - - - - - - - - - - - - - - - - - - (3,211 ) - 1,343,257 - - 3,408,697 - - - $ (2,641,364) $ - $ 5,268,916	Gains on Property Revaluation $ 307,728 - - - - - - - 307,728 - 307,728 - - - - - - - - - $ 307,728	Cash Flow Hedge $ 41,450 - - - - - 17,035 - 58,485 - 58,485 - - - - - - 2,449 - - $ 60,934

Shares 3,361,447 - - - - - - - 3,361,447 - 3,361,447 - - - - - - - - - 3,361,447

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Share of profit or loss of subsidiaries and associates Depreciation expenses Dividend income Finance costs Loss (gain) on changes in fair value of investment properties Net gain on fair value changes of financial assets and liabilities designated as at fair value through profit or loss Interest income Write-downs of inventories Unrealized loss on foreign exchange (Gain) loss on disposal of property, plant and equipment Realized gross profit on sales to subsidiaries and associates Amortization expenses Expected credit loss recognized on trade receivables Effect of changes in exchange rate of bonds payable Gain on disposal of available-for-sale financial assets Reversal of impairment loss on trade receivables Other items Changes in operating assets and liabilities: Notes receivable Trade receivables Other receivables Inventories Prepayments Other current assets Net defined benefit assets Contract liabilities Accounts payable and accrued expenses Provisions Customers' deposits and advances Deferred revenue Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at amortized cost Acquisition of property, plant and equipment	2018 $ 12,194,732 (12,970,044) 464,781 (405,773) 331,984 331,211 (171,737) (114,003) 52,791 44,425 (4,053) (3,444) 3,297 694 300 - - - 7,091 (238,962) 1,322 (396,116) (52,997) (3,798) (37,657) (9,040) 189,552 48,000 - (68,085) (805,529) 112,952 4,296,112 (336,387) (11,234) 3,255,914 2,096,122 (194,754)	2017 $ 5,401,379 (5,231,593) 641,963 (297,566) 331,552 (380,386) (10,900) (57,841) - 257,339 79 (9,181) 3,438 - (7,470) (34,961) (254) 4,409 32,810 (28,858) (12,540) (25,003) 52,336 (223) (20,774) - (53,426) - (12,146) (68,085) 474,098 57,546 3,105,652 (325,003) (2,267) 3,310,026 - (172,142) (Continued)

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Increase in refundable deposits Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment properties Increase in debt investments with no active market Increase in long-term prepayments for investment Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term borrowings Proceeds from long-term borrowings Proceeds from issuance of bonds Repayments of bonds Dividends paid Increase in short-term bills payable Decrease in guarantee deposits received Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2018 $ (33,377) 4,059 (2,693) (1,269) - - - - 1,868,088 (18,588,000) 15,033,000 6,574,843 (4,089,430) (4,033,715) 2,310,000 (1,010) (2,794,312) 20,179 2,349,869 815,926 $ 3,165,795	2017 $ (720,804) - (2,099) (48,967) (1,872,833) (1,911,179) (899,109) 286,209 (5,340,924) (17,700,000) 18,588,000 - - (3,025,272) 2,990,000 (400) 852,328 (124,655) (1,303,225) 2,119,151 $ 815,926

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

(Concluded)

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NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

ASIA CEMENT CORPORATION

1. ORGANIZATION AND OPERATIONS

Asia Cement Corporation (the “Corporation”) was incorporated in March 1957. It manufactures and sells cement, clinker, cement-related products and ready-mixed concrete, and engages in leasing activities. The Corporation is also required to undertake reforestation activities in designated areas. The Corporation’s shares have been listed on the Taiwan Stock Exchange since June 1962.

In June 1992 and September 1996, certain shares of the Corporation were sold by Far Eastern New Century Corporation (FENC) in the form of global depositary shares (GDSs). Such GDSs have been quoted through the SEAQ system of the London Stock Exchange and traded through the portal system of the National Association of Securities Dealers, Inc. As of December 31, 2018, the issued and outstanding GDSs aggregated 17,072 units, representing 170,717 shares of the Corporation.

The financial statements are presented in the Corporation’s functional currency, New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Corporation’s board of directors and authorized for issue on March 21, 2019.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Corporation’s accounting policies:

1) IFRS 9 “Financial Instruments” and related amendments

IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement”, with consequential amendments to IFRS 7 “Financial Instruments: Disclosures” and other standards. IFRS 9 sets out the requirements for classification, measurement and impairment of financial assets and hedge accounting. Refer to Note 4 for information relating to the relevant accounting policies.

Classification, measurement and impairment of financial assets

On the basis of the facts and circumstances that existed as of January 1, 2018, the Corporation has performed an assessment of the classification of recognized financial assets and has elected not to restate prior reporting periods.

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

Financial Assets Cash and cash equivalents Mutual funds Equity securities Time deposits with original maturities of more than 3 months Notes receivable, trade receivables and other receivables (including related parties)	MeasurementCategory IAS 39 IFRS 9 Loans and receivables Amortized cost Held‑for‑trading Mandatorily at FVTPL Available‑for‑sale Mandatorily at FVTPL Available‑for‑sale FVTOCI - equity instruments Loans and receivables Amortized cost Loans and receivables Amortized cost	Carrying Amount IAS 39 IFRS 9 Remark $ 815,926 $ 815,926 - 171,500 171,500 - 782,286 782,286 a) 11,454,034 11,873,357 a) 2,596,386 2,596,386 - 899,935 899,935 -

Financial Assets IAS 39 Carrying Amount as of January 1, 2018 R FVTPL $ 171,500 Add: Reclassification from available-for-sale (IAS 39) - required reclassification - 171,500 FVTOCI Equity instruments - Add: Reclassification from available-for-sale (IAS 39) - - $ 171,500	eclassifications R $ - 782,286 782,286 - 11,454,034 11,454,034 $ 12,236,320	emeasurements IFRS 9 Carrying Amount as of January 1, 2018 Retained Earnings Effect on January 1, 2018 Other Equity Effect on January 1, 2018 Remark $ - $ 171,500 $ - $ - - 782,286 183,322 (183,322 ) a) - 953,786 183,322 (183,322) - - - - 419,323 11,873,357 759,639 (340,316) a) 419,323 11,873,357 759,639 (340,316) $ 419,323 $ 12,827,143 $ 942,961 $ (523,638)

a) The Corporation elected to classify its investments in equity securities previously classified as available-for-sale under IAS 39 as partly at FVTPL and partly at FVTOCI under IFRS 9. As a result, the related other equity - unrealized gain (loss) on available-for-sale financial assets was reclassified to retained earnings in the amount of $183,322 thousand and to other equity - unrealized gain (loss) on financial assets at FVTOCI in the amount of $3,458,455 thousand.

Investments in unlisted shares previously measured at cost under IAS 39 have been designated as at FVTOCI under IFRS 9 and were remeasured at fair value. Consequently, an increase of $419,323 thousand was recognized in both financial assets at FVTOCI and other equity - unrealized gain (loss) on financial assets at FVTOCI on January 1, 2018.

The Corporation recognized impairment loss under IAS 39 on certain investments in equity securities measured at cost and the loss was accumulated in retained earnings. Since those investments were designated as at FVTOCI under IFRS 9 and no impairment assessment is required, an adjustment was made that resulted in a decrease of $759,639 thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI and an increase of $759,639 thousand in retained earnings on January 1, 2018.

		Adjustments	Adjustments			Retained
	IAS 39 Carrying	Arising from		IFRS 9 Carrying		Earnings	Other Equity
	Amount as of		Initial	Amount as of		Effect on		Effect on
	January 1, 2018		Application	January 1, 2018	January 1, 2018		January 1, 2018		Remark
Investments accounted for	$ 109,772,422	$	477,945	$ 110,250,367	$	165,412	$	312,533	b)
using equity method

b) As a result of the associates’ retrospective application of IFRS 9, there was an increase in investments accounted for using equity method of $477,945 thousand, an increase in other equity - unrealized gain (loss) on financial assets at FVTOCI of $312,533 thousand and an increase in retained earnings of $165,412 thousand on January 1, 2018
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2) IFRS 15 “Revenue from Contracts with Customers” and related amendments

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers and supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations. Refer to Note 4 for related accounting policies

The impact on assets, liabilities and equity of retrospective application of IFRS 15 on January 1, 2018 is detailed below:

Carrying Amount as of January 1, 2018 Impact on assets, liabilities and equity Investments accounted for using equity method $ 109,772,422 Unappropriated earnings $ 16,125,837	Adjustments Arising from Initial Application Adjusted Carrying Amount as of January 1, 2018 $ 605,086 $ 110,377,508 $ 605,086 $ 16,730,923

b. Amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed by the FSC for application starting from 2019

New IFRSs Annual Improvements to IFRSs 2015-2017 Cycle Amendments to IFRS 9 “Prepayment Features with Negative Compensation” IFRS 16 “Leases” Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures” IFRIC 23 “Uncertainty over Income Tax Treatments”	Effective Date Announced by IASB (Note 1)
	January 1, 2019 January 1, 2019 (Note 2) January 1, 2019 January 1, 2019 (Note 3) January 1, 2019 January 1, 2019

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

Note 2: The FSC permits the election for early adoption of the amendments starting from 2018.

Note 3: The Corporation shall apply these amendments to plan amendments, curtailments or settlements occurring on or after January 1, 2019.
1) IFRS 16 “Leases”

IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and a number of related interpretations.

Definition of a lease

Upon initial application of IFRS 16, the Corporation will elect to apply IFRS 16 only to contracts entered into or changed on or after January 1, 2019 and identified as lease contracts or contracts that contain a lease under IFRS 16. Contracts identified as containing a lease under IAS 17 and IFRIC 4 will not be reassessed and will be accounted for in accordance with the transitional provisions under IFRS 16.

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The Corporation as lessee

Upon initial application of IFRS 16, the Corporation will recognize right-of-use assets and lease liabilities for all leases on the balance sheets expect for those whose payments under low-value asset and short-term leases will be recognized as expenses on a straight-line basis. On the parent company only statements of comprehensive income, the Corporation will present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the parent company only statements of cash flows, cash payments for the principal portion of lease liabilities will be classified within financing activities; cash payments for the interest portion will be classified within operating activities. Cash flows for operating leases are classified within operating activities on the parent company only statements of cash flows.

The Corporation will apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized on January 1, 2019. Comparative information will not be restated.

Lease liabilities for leases currently classified as operating leases under IAS 17 will be recognized on January 1, 2019. Lease liabilities will be measured at the present value of the remaining lease payments, discounted at the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets will be measured at an amount equal to the lease liabilities. The Corporation will apply IAS 36 to all right-of-use assets assess impairment.

The Corporation expects to apply the following practical expedients:

a) The Corporation will apply a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
b) The Corporation will use hindsight, such as in determining lease terms, to measure lease liabilities.

The Corporation as lessor

The Corporation will not make any adjustments to leases in which it is the lessor and will account for those leases under IFRS 16 starting from January 1, 2019.

Anticipated impact on assets, liabilities and equity

	Carrying	Carrying	Adjustments	Adjustments	Adjusted	Adjusted
	Amount as of		Arising from		Carrying
	December 31,			Initial	Amount as of
		2018	Application		January 1, 2019
Right-of-use assets	$	-	$	553,768	$	553,768
Prepayments for leases - current		35,331		(25,879)		9,452
Prepayments for leases - non-current		369,801		(351,685)		18,116
Total effect on assets	$	405,132	$	176,204	$	581,336
Lease liabilities - current	$	-	$	81,737	$	81,737
Lease liabilities - non-current		-		94,467		94,467
Total effect on liabilities	$	-	$	176,204	$	176,204

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2) IFRIC 23 “Uncertainty over Income Tax Treatments”

IFRIC 23 clarifies that when there is uncertainty over income tax treatments, the Corporation should assume that the taxation authority will have full knowledge of all related information when making related examinations. If the Corporation concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the Corporation should determine the taxable profit, tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatments used or planned to be used in its income tax filings. If it is not probable that the taxation authority will accept an uncertain tax treatment, the Corporation should make estimates using either the most likely amount or the expected value of the tax treatment, depending on which method the entity expects to better predict the resolution of the uncertainty. The Corporation has to reassess its judgments and estimates if facts and circumstances change.

Except for the above impacts, as of the date the financial statements were authorized for issue, the Corporation assessed that the application of the aforementioned amendments would not have any material impact on the Corporation’s financial position and financial performance.

c. New amended and revised standards and interpretations in issue but not yet endorsed and issued into effect by the FSC (collectively, the “New IFRSs”)

New IFRSs Amendments to IFRS 3 “Definition of a Business” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IAS 1 and IAS 8 “Definition of Material”	Effective Date Announced by IASB (Note 1)
	January 1, 2020 (Note 2) To be determined by IASB January 1, 2021 January 1, 2020 (Note 3)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The Corporation shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.
Note 3: The Corporation shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

As of the date the financial statements were authorized for issue, the Corporation is continuously assessing the possible impact that the application of the above standards and interpretations will have on the Corporation’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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b. Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments and investment properties which are measured at fair value, investment properties, and net defined benefit assets which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing its parent company only financial statements, the Corporation used equity method to account for its investment in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owner of the Corporation in its consolidated financial statements, adjustments arising from the differences in accounting treatment between parent company only basis and consolidated basis were made to investments accounted for using equity method, share of profit or loss of subsidiaries and associates, share of other comprehensive income or loss of subsidiaries and associates and related equity items, as appropriate, in the parent company only financial statements.

The properties were leased out to subsidiaries for their operation, and are classified as property plant and equipment in consolidated financial statements. Under IFRSs, these properties are classified as investment properties in parent company only financial statements. In 2014, the subsequent measurement of investment properties were changed from cost less accumulated depreciation model to fair value model.

In order for the amounts of the net profit for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Corporation in its consolidated financial statements, the investment properties leased out to entities were measured at fair value model with the decrease in total equity and net profit for the year recorded in “investments accounted for using equity method” and “share of profit or loss of subsidiaries and associates”.

Classification of Current and Non-current Assets and Liabilities

Current assets include:

a. Assets held primarily for the purpose of trading;
b. Assets expected to be realized within twelve months after the reporting period; and
c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

a. Liabilities held primarily for the purpose of trading;
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b. Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the parent company only financial statements are authorized for issue; and
c. Liabilities for which the Corporation does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as non-current.

Foreign Currencies

In preparing the parent company only financial statements, transactions in currencies other than the Corporation’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting parent company only financial statements, the assets and liabilities of the Corporation’s foreign operations (including subsidiaries and associates in other countries that use currencies which are different from the currency of the Corporation) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

Inventories

Inventories consist of raw materials, supplies, finished goods and work-in-process and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

Investment in Subsidiaries

The Corporation uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Corporation.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of profit or loss and other comprehensive income (loss) of the subsidiary. The Corporation also recognizes the changes in the Corporation’s share of equity of subsidiaries.

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Changes in the Corporation’s ownership interest in a subsidiary that do not result in the Corporation losing control of the subsidiary are equity transactions. The Corporation recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

Any excess of the cost of acquisition over the Corporation’s share of net fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Corporation’s share of net fair value of the identifiable assets and liabilities over the cost of acquisition is recognized immediately in profit or loss.

The Corporation assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the entire financial statements of the invested company. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Corporation recognizes the reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Corporation loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Corporation accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Corporation had directly disposed of the related assets or liabilities.

Profits or losses resulting from downstream transactions are eliminated in full only in the parent company only financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized only in the parent company only financial statements only to the extent of interests in the subsidiaries that are not related to the Corporation.

Investment in Associates

An associate is an entity over which the Corporation has significant influence and which is neither a subsidiary nor an interest in a joint venture.

The Corporation uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of profit or loss and other comprehensive income of the associate. The Corporation also recognizes the changes in the Corporation’s share of equity of associates.

Any excess of the cost of acquisition over the Corporation’s share of net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Corporation’s share of net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

If the measurement of the fair values of the identifiable net assets and liabilities of an associate acquired in stage is incomplete by the end of the reporting period, the Corporation reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted retrospectively during the measurement period. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period about facts and circumstances that existed as of the acquisition date. The measurement period does not exceed 1 year from the acquisition date.

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When the Corporation subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Corporation’s proportionate interest in the associate. The Corporation records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates accounted for using equity method. If the Corporation’s ownership interest is reduced due to its additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using equity method is insufficient, the shortage is debited to retained earnings.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Corporation transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the parent company only financial statements only to the extent of unrelated parties’ interests in the associate.

The Corporation’s share of comprehensive income of associates is recognized using the treasury stock method if there are reciprocal holdings between investors and investees. The reciprocally held shares of the Corporation are treated as treasury stocks and are deducted from the outstanding shares in computing basic earnings per share.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss. Major renewals and betterments are capitalized, while maintenance and repairs are expensed currently.

Properties in the course of construction are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.

Depreciation is recognized using the fixed-percentage-on-declining-balance method or the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

Investment Properties

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are measured initially at cost, including transaction costs, and are subsequently measured using the fair value model. Changes in the fair value of investment properties are included in profit or loss for the period in which they arise.

For a transfer from property, plant and equipment to investment property at the end of owner-occupation, any difference between the fair value and the carrying amount of the property at the date of transfer is recognized in other comprehensive income.

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On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

Intangible Assets

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

Impairment of Tangible and Intangible Assets

At the end of each reporting period, the Corporation reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Corporation estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

Financial Instruments

Financial assets and financial liabilities are recognized when the Corporation becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

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

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a. Measurement category

2018

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

1) Financial assets at FVTPL

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 31.

2) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

a) The financial asset is held within a business model whose objective is to hold financial asset in order to collect contractual cash flows; and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables, other receivables and debt instruments at amortized cost, are measured at amortized cost, which is the gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial asset.

Cash equivalents include time deposits, bonds sold under repurchase agreements and commercial papers with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

3) Investments in equity instruments at FVTOCI

On initial recognition, the Corporation may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

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Dividends on these investments in equity instruments are recognized in profit or loss when the Corporation’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2017

Financial assets are classified into the following categories: Financial assets at fair value through profit or loss, available-for-sale financial assets, and loans and receivables.

1) Financial assets at fair value through profit or loss

Financial assets are classified as at fair value through profit or loss when such financial assets are held for trading.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on the financial asset. Fair value is determined in the manner described in Note 31.

2) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Fair value is determined in the manner described in Note 31.

Available-for-sale financial assets are measured at fair value. Changes in the carrying amounts of available-for-sale monetary financial assets (relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and dividends on available-for-sale equity investments) are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when such investments are disposed of or are determined to be impaired.

Dividends on available-for-sale equity instruments are recognized in profit or loss when the Corporation’s right to receive the dividends is established.

Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment loss at the end of each reporting period and are presented in a separate line item as financial assets measured at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are remeasured at fair value. The difference between carrying amount and fair value is recognized in other comprehensive income on financial assets. Any impairment losses are recognized in profit and loss.

3) Loans and receivables

Loans and receivables (including cash and cash equivalents, debt investments with no active market, trade receivables and other receivables) are measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables when the effect of discounting is immaterial.

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b. Impairment of financial assets

2018

The Corporation recognizes allowance for expected credit loss (ECL) on financial assets at amortized cost (including trade receivables) as well as lease receivables at the end of each reporting period.

The Corporation’s policy is to always recognize allowance for lifetime ECL on trade receivables. For all other financial instruments and lease receivables, the Corporation will recognize lifetime ECL when there is a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Corporation will measure the allowance for loss on that financial instrument at an amount equal to 12-month ECL.

ECL is the weighted average of credit losses estimated by using assigned levels of risks of defaults occurring as the weights. Lifetime ECL represents the expected credit loss that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible to occur within 12 months after the reporting date.

Impairment loss on all financial instruments is recognized with a corresponding adjustment to their carrying amount through a loss allowance account.

2017

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For financial assets measured at amortized cost, such as trade receivables, assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. The amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

For any available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss is not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment loss is subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

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For financial assets that are measured at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible trade receivables that are written off against the allowance account.

c. Derecognition of financial assets

The Corporation derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

Before 2018, on derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. Starting from 2018, on derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Financial liabilities

a. Subsequent measurement

Except the following situation, all financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities are held for trading and are stated at fair value, with any gain or loss arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any interest or dividends paid on the financial liability. Fair value is determined in the manner described in Note 31.

b. Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

Convertible bonds

The component parts of compound instruments (i.e. convertible bonds) issued by the Corporation are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or upon the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised; in which case, the balance recognized in equity will be transferred to capital surplus - share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the liability component are included in the carrying amount of the liability component. Transaction costs relating to the equity component are recognized directly in equity.

Derivative financial instruments

The Corporation enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including cross-currency swap contracts.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the mixed contracts are not measured at FVTPL.

Provisions

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows

Revenue Recognition

2018

The Corporation identifies the contract with the customers, identifies the performance obligations in the contract, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

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When another party is involved in providing goods or services to a customer, the Corporation is a principal if it controls the specified good or service before that good or service is transferred to a customer; otherwise, the Corporation is acting as an agent. The principal recognizes revenues and costs associated with providing the goods or services at the gross amount, while an agent recognizes revenue at the net amount. When a specified good or service is a distinct good or service, the Corporation determines whether it is a principal or an agent for each specified good or service.

The Corporation is a principal if it obtains control of any one of the following:

a. Before the good or another asset transfers to the customer, the Corporation acquire the good or the control of asset from another party.
b. The right to a service to be performed by another party which gives the Corporation the ability to direct that party to provide the service to the customer on its behalf.
c. A good or service from another party that it then combines with other goods or services in providing a specified good or service to the customer.

Indicators to support the Corporation’s assessment of whether it controls a specified good or service include, but are not limited to, the following:

a. The Corporation is primarily responsible for fulfilling the promise to provide the specified good or service.
b. The Corporation has inventory risk before or after the specified good or service is transferred to the customer.
c. The Corporation has discretion in establishing the price of the specified good or service.

2017

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Allowances for sales returns and liabilities for returns are recognized at the time of sale based on the seller’s reliable estimate of future returns and based on past experience and other relevant factors.

a. Sale of goods

Revenue from the sale of goods is recognized when all the following conditions are satisfied:

1) The Corporation has transferred to the buyer the significant risks and rewards of ownership of the goods;
2) The Corporation retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
3) The amount of revenue can be measured reliably;
4) It is probable that the economic benefits associated with the transaction will flow to the Corporation; and
5) The costs incurred or to be incurred in respect of the transaction can be measured reliably.
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b. Dividend and interest income

Dividend income from investments is recognized when the shareholder’s right to receive payment has been established provided that it is probable that the economic benefits will flow to the Corporation and the amount of income can be measured reliably.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Corporation and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and effective interest rate applicable.

Leasing

When the Corporation is lessor, rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. When the Corporation is lessee, operating lease payments are recognized as an expense on a straight-line basis over the lease term.

Employee Benefits

a. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

b. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost, past service cost, as well as gains and losses on settlements) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Corporation’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

c. Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Corporation can no longer withdraw the offer of the termination benefit and when the Corporation recognizes any related restructuring costs.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

a. Current tax

According to the Income Tax Law, an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

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Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the parent company only financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Corporation is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Corporation expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. If investment properties measured using the fair value model are non-depreciable assets, or are held under a business model whose objective is not to consume substantially all of the economic benefits embodied in the assets over time, the carrying amounts of such assets are presumed to be recovered entirely through sale.

c. Current tax and deferred tax for the year

Current tax and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current tax and deferred tax are also recognized in other comprehensive income, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Corporation’s accounting policies, management is required to make judgments, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

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Fair Value Measurements and Valuation Process

If some of the Corporation’s assets and liabilities measured at fair value have no quoted prices in active markets, the Corporation determines whether to engage third party qualified appraisers for the application of appropriate valuation techniques for fair value measurements in accordance with related regulations or professional standards.

Where Level 1 inputs are not available, the engaged appraisers would determine appropriate inputs by referring to the analyses of the financial position and the operating results of the investees and valuation multiples of entities that are comparable with the investees of the Corporation’s equity instruments not quoted in active markets or market prices or rates and specific features of the Corporation’s derivatives or the existing lease contracts and rentals of similar properties in the vicinity of the Corporation’s investment properties. If the actual changes of inputs in the future differ from expectation, fair value might vary accordingly.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities is disclosed in Notes 8, 9, 17 and 31.

6. CASH AND CASH EQUIVALENTS

Checking accounts and demand deposits Petty cash Cash on hand Cash equivalents (investments with original maturities of less than 3 months) Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2018 $ 848,592 915 355 2,162,608 153,325 $ 3,165,795	2017 $ 448,238 1,215 359 217,564 148,550 $ 815,926

The market rate intervals of time deposits and repurchase agreements collateralized by bonds at the end of the reporting period were as follows:

Time deposits Repurchase agreements collateralized by bonds	December 31
	2018 2017 2.80%-3.35% 1.80%-3.60% 2.52% 2.04%

In 2018

Time deposits with original maturities of more than 3 months in the amounts of $462,275 thousand as of December 31, 2018, are classified as financial assets at amortized cost in the balance sheets. Refer to Note 11.

In 2017

Time deposits with original maturities of more than 3 months in the amounts of $2,596,386 thousand as of December 31, 2017, were classified as debt investments with no active market in the balance sheets. Refer to Note 12.

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

Financial assets at FVTPL Financial assets held for trading Non-derivative financial assets Beneficiary certificates Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Beneficiary certificates Listed stocks Financial liabilities at FVTPL Derivative financial liabilities (not under hedge accounting) Bond options (Note 22) Cross-currency swap contracts		December 31	December 31
		2018 $ - 135,400 1,037,426 1,172,826 $ 1,172,826 $ 223,501 44,717 $ 268,218	2017 $ 171,500 - - - $ 171,500 $ - - $ -

The Corporation entered into cross-currency swap contracts to manage exposures to exchange rate fluctuations. The Corporation’s financial hedging strategy is to avoid most of the cash flow risk exposure. At the end of the reporting period, outstanding cross-currency swap contracts not under hedge accounting were as follows:

Notional Amounts			Range of Interest
(In Thousands)	Maturity Date	Range of Interest Rates Paid	Rates Received
US$215,000	2021.9.15	-	2.68%-2.80%

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

Domestic investments Listed stocks Unlisted stocks		December 31, 2018	December 31, 2018
		Current $ 2,371,026 - $ 2,371,026	Non-current $ 4,812,769 573,373 $ 5,386,142

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These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Corporation’s strategy of holding these investments for long-term purposes. These investments in equity instruments were classified as financial assets at fair value through profit or loss, available-for-sale financial assets and financial assets measured at cost under IAS 39. Refer to Notes 3, 7, 9 and 10 for information relating to their reclassification and comparative information for 2017.

The board of directors of China Shanshui Cement Group Limited (CSCGL) made an announcement on April 16, 2015 that the percentage of CSCGL’s securities held by the public has fallen below the prescribed minimum requirement of 25% according to the Main Board Listing Rules 8.08 of Hong Kong Exchanges and Clearing Limited (the “Exchange”). Therefore, the Exchange suspended the trading of CSCGL’s securities until the percentage of securities in public hands satisfies the minimum requirement.

On October 30, 2018, CSCGL’s shareholders resolved to restore the minimum public float requirement of 25% by issuing new shares of 974,825,988 at HK$4.2 per share. Then CSCGL resumed its trading on the Exchange effective on October 31, 2018.

The Corporation and its subsidiaries previously had a 22.50% equity interest in CSCGL, which has reduced to 17.46% after the subscription mentioned above. However, the Corporation’s chief financial officer, Mrs. Wu Ling-Ling, was elected to be the executive director of CSCGL since May 23, 2018. As CSCGL already addressed the audit issues raised by the Exchange and the confirmed the potential dilution of shareholding in the Corporation’s interests in CSCGL, the Corporation objectively demonstrated that it was able to exercise significant influence over CSCGL although the Corporation only holds less than 20% of the voting power. Accordingly, the Corporation’s investment in CSCGL was reclassified from financial assets at fair value through other comprehensive income to investments accounted for using equity method using the closing price on the Exchange on October 31, 2018. Refer to Note 15.

Refer to Note 34 for information relating to financial assets at fair value through other comprehensive income pledged as collaterals.

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

Domestic investments Listed stocks Foreign investments Listed stocks		December 31, 2017	December 31, 2017
		Current $ 2,281,026 782,286 $ 3,063,312	Non-current $ 5,155,710 3,888,505 $ 9,044,215

As of December 31, 2017, trading of CSCGL’s securities was still suspended and there was no quoted price in active markets. The Corporation engaged third party qualified appraisers for fair value measurement of CSCGL’s securities. According to the appraisal, the fair value per share was HK$2.82 as of December 31, 2017. For the year ended December 31, 2017, the net unrealized gain on CSCGL amounted to $2,898,200 thousand. As of December 31, 2017, the accumulated net unrealized loss on CSCGL amounted to $4,447,073 thousand. The Corporation considered that the decline in fair value is temporary and thus recognized the changes in fair value in other comprehensive income (loss) and other equity.

Refer to Note 34 for information relating to available-for-sale financial assets pledged as collaterals.

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10. FINANCIAL ASSETS MEASURED AT COST - NON-CURRENT - 2017

	December 31,	December 31,
		2017
Domestic unlisted stocks
Kaohsiung Rapid Transit Corp. (KRT)	$	87,448
Taiwan Stock Exchange Corp.		23,752
L’Hotel de Chine Group		11,441
Ding Ding Hotel Corp. (DDH)		-
Others		6,152
	$	128,793
Classified according to financial asset measurement categories
Available-for-sale financial assets	$	128,793

a. Management believed that the fair value of the above unlisted equity investments held by the Corporation cannot be reliably measured, because the range of reasonable fair value estimates was so significant. Therefore, they were measured at cost less impairment at the end of reporting period.
b. On June 30, 2013, the Corporation invested $107,290 thousand in KRT. The investment cost is amortized over the period of the chartered right to operate (to October 2037). As of December 31, 2017, the accumulated amortization amount is $19,842 thousand.
c. As of December 31, 2017, the Corporation recognized impairment loss on the full amount of its investment in DDH.

11. FINANCIAL ASSETS AT AMORTIZED COST - CURRENT - 2018

				December 31,
				2018
Time deposits	with original maturities of more than	3	months	$ 462,275

Based on the Corporation’s assessment, the credit risk of these financial assets is not expected to be high and has not increased since initial recognition.

These time deposits were classified as debt investments with no active market under IAS 39. Refer to Notes 3 and 12 for information relating to their reclassification and comparative information for 2017.

12. DEBT INVESTMENTS WITH NO ACTIVE MARKET - CURRENT - 2017

				December 31,
				2017
Time deposits	with original maturities of more than	3	months	$ 2,596,386

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13. TRADE RECEIVABLES

Trade receivables - sales Operating lease receivable Less: Allowance for impairment loss - sales		December 31	December 31
		2018 $ 983,780 17,778 (6,506) $ 995,052	2017 $ 752,930 17,400 (5,812) $ 764,518

Trade Receivables - Sales

In 2018

The average credit period of receivables from sales of goods was 30-150 days. The Corporation reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. The Corporation obtains sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Corporation applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date.

The Corporation writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Corporation continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

December 31, 2018

Gross carrying amount Loss: Allowance (lifetime ECL) Amortized cost	Less than 90 Days $ 960,363 - $ 960,363	91 to 180 Days $ 23,417 (6,506) $ 16,911	181 to 365 Days $ - - $ -	Over 366 Days $ - - $ -	Total $ 983,780 (6,506) $ 977,274

The above aging schedule was based on the invoice date.

The Corporation individually and collectively evaluated the reasonableness of allowance for impairment loss. The movements of the loss allowance of trade receivables were as follows:

	December 31,	December 31,
		2018
Balance at January 1, 2018	$	5,812
Add: Impairment losses recognized on receivables		694
Balance at December 31, 2018	$	6,506

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In 2017

The Corporation applied the same credit policy in 2018 and 2017. In determining the recoverability of trade receivables, the Corporation considered any changes in credit quality of the trade receivables since the day credit was initially granted to the end of the reporting period.

The Corporation transacted with vast variety of independent customers; thus, concentration of credit risk was limited.

Past due but not impaired trade receivables are trade receivables that are past due at the end of the reporting period but the Corporation does not recognize any allowance for impairment loss when there is no significant change in credit quality and the amounts are still considered recoverable. Furthermore, the Corporation requires collaterals or other credit enhancements to secure the receivables. The Corporation does not offset trade receivables from a counterparty against accounts payable to the same counterparty when the Corporation does not have the legal rights to offset.

The aging of trade receivables - sales (less allowance for impairment loss) was as follows:

	December 31,
	2017
Less than 90 days	$ 726,984
91-180 days	20,134
	$ 747,118

The aging of trade receivables - sales that were past due but not impaired was as follows:

		December 31,	December 31,
			2017
91-180	days	$	243

The above aging schedule was based on the invoice date.

Movement in the allowance for impairment loss recognized on trade receivables was as follows:

	Collectively
	Assessed for
	Impairment
Balance at January 1, 2017	$ 6,066
Less: Impairment losses reversed on receivables	(254)
Balance at December 31, 2017	$ 5,812

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14. INVENTORIES

Finished goods Work in progress Raw materials Supplies		December 31	December 31
		2018 $ 248,752 471,871 757,790 184,982 $ 1,663,395	2017 $ 174,920 511,955 367,256 249,456 $ 1,303,587

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2018 and 2017 were $8,309,912 thousand and $7,349,168 thousand, respectively. The cost of goods sold included inventory write-downs of $52,791 thousand in 2018.

15. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments in subsidiaries Investments in associates Less: Effect of investment properties at fair value method a. Investments in subsidiaries Listed stocks Asia Cement (China) Holdings Corp. (ACCHC) Unlisted stocks Der Ching Investment Corp. (DCI) Chiahui Power Corp. (CHP) Asia Cement (Singapore) Pte. Ltd. (ACSPL) Yuan Long Stainless Steel Corp. (YLSS) Asia Investment Corp. (AIC) Ya Tung Ready-Mixed Concrete Corp. (YTRMC) Fu Ming Transport Corp. (FMT) Yali Transport Corp. (YLT) Nan Hwa Cement Corp. (NHC) Asia Engineering Enterprise Corp. (AEE) Ya Li Precast and Prestressed Concrete Industries Corp. (YLPPC) Sunrise Industrial Holdings Ltd. (SIHL)		December 31	December 31
		2018 2017 $ 66,031,029 $ 58,478,233 62,396,158 54,503,916 128,427,187 112,982,149 2,794,297 3,209,727 $ 125,632,890 $ 109,772,422 December 31
		2018 $ 36,545,690 12,471,554 5,825,842 3,578,207 1,977,315 1,934,281 1,556,879 1,418,575 251,861 214,201 128,288 76,452 51,884 29,485,339 $ 66,031,029	2017 $ 30,476,645 11,972,491 5,727,396 3,179,210 1,860,353 1,460,530 1,601,300 1,421,690 233,927 356,280 104,373 35,595 48,443 28,001,588 $ 58,478,233

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At the end of the reporting period, the percentages of owners’ voting rights in subsidiaries held by the Corporation were as follows:

Name of Subsidiary ACCHC DCI CHP ACSPL YLSS YTRMC FMT AIC YLT NHC AEE YLPPC SIHL	December 31
	2018 2017 67.73% 67.73% 99.99% 99.99% 59.59% 59.59% 99.96% 99.96% 100.00% 100.00% 99.99% 99.99% 99.82% 99.82% 100.00% 100.00% 51.00% 51.00% 99.94% 99.94% 98.23% 98.23% 83.81% 83.81% 100.00% 100.00%

Fair values (Level 1) of investments in subsidiaries with available published price quotation are summarized as follows:

Name of Subsidiary ACCHC Investment in associates Material associates Listed stocks Far Eastern New Century Corporation (FENC) U-Ming Marine Transport Corp. (U-Ming) CSCGL Associates that are not individually material Unlisted stocks Yuan Ding Leasing Corp. (YDC) Yue Yuan Investment Corp. (YYI) Oriental Securities Corp. (OSC) FEDS Development Ltd. (FEDSDL) Yuan Ding Leasing Corp. (YDLC) Everstrong Iron & Steel Foundry Ltd. (EISF)		December 31	December 31
		2018 2017 $ 22,669,116 $ 10,982,433 December 31
		2018 $ 39,803,907 9,983,803 4,460,107 54,247,817 3,263,209 1,939,588 1,877,359 617,872 368,032 82,281 8,148,341 $ 62,396,158	2017 $ 38,167,156 8,498,063 - 46,665,219 3,235,051 1,656,355 1,866,239 633,447 368,059 79,546 7,838,697 $ 54,503,916

b. Investment in associates

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At the end of the reporting period, the percentages of owners’ voting rights in associates held by the Corporation were as follows:

Name of Associate FENC U-Ming CSCGL YDC YYI OSC FEDSDL YDLC EISF	December 31
	2018 2017 23.77% 23.77% 39.25% 39.25% 7.62% - 35.50% 35.50% 29.92% 29.92% 18.93% 18.93% 25.00% 25.00% 43.60% 43.60% 40.40% 40.40%

1) Fair values (Level 1) of investments in associates with available published price quotation are summarized as follows:

Name of Associate FENC U-Ming CSCGL		December 31	December 31
		2018 $ 35,496,531 $ 10,697,362 $ 2,724,722	2017 $ 34,097,026 $ 12,107,092 $ -

2) The summarized financial information in respect of the Corporation’s material associates is set out below:

FENC:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Corporation’s ownership Equity attributable to the Corporation Cross shareholdings Carrying amount Operating revenue Net profit for the year Other comprehensive income (loss) Total comprehensive income for the year Dividends received from FENC		December 31	December 31
	2018 2017 $ 31,423,092 $ 23,622,633 285,607,062 262,497,651 23,339,671 15,560,934 90,155,346 76,198,963 203,535,137 194,360,387 23.77% 23.77% 48,380,302 46,199,464 (8,576,395) (8,032,308) $ 39,803,907 $ 38,167,156 For the Year Ended December 31
		2018 $ 54,063,801 $ 12,028,294 855,093 $ 12,883,387 $ 1,526,733	2017 $ 45,216,423 $ 8,066,136 (257,424) $ 7,808,712 $ 1,017,822

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U-Ming:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Corporation’s ownership Equity attributable to the Corporation Unrealized gain or loss with associates Carrying amount Operating revenue Net profit for the year Other comprehensive income (loss) Total comprehensive income (loss) for the year Dividends received from U-Ming CSCGL: Current assets Non-current assets Current liabilities Non-current liabilities Non-controlling interests Equity attributable to CSCGL Proportion of the Corporation’s ownership Equity attributable to the Corporation Goodwill Carrying amount		December 31	December 31
	2018 2017 $ 1,985,037 $ 1,833,612 50,008,362 48,545,075 17,453,879 20,772,900 8,913,985 7,765,577 25,625,535 21,840,210 39.25% 39.25% 10,058,022 8,572,282 (74,219) (74,219) $ 9,983,803 $ 8,498,063 For the Year Ended December 31
		2018 $ 1,080,444 $ 1,668,840 2,007,257 $ 3,676,097 $ 398,041	2017 $ 878,369 $ 999,520 (3,085,478) $ (2,085,958) $ 248,776 December 31, 2018 $ 26,174,052 90,319,977 59,104,108 14,557,750 286,348 42,545,823 7.62% 3,241,551 1,218,556 $ 4,460,107

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Operating revenue Net profit for the year Other comprehensive loss Total comprehensive income for the year	For the Year Ended December 31, 2018 $ 80,162,793 $ 9,856,967 (1,082,166) $ 8,774,801

The Corporation and its subsidiaries’ investments in CSCGL, which previously being recognized as financial assets at fair value through other comprehensive income, became qualified for the equity method of accounting and were therefore reclassified as investments accounted for using equity method in 2018. The Corporation reported provisional amounts of $2,789,230 for the goodwill arising from the above transition during the measurement period as the goodwill was included in the carrying amounts of the Corporation’s investment in CSCGL. The Corporation will engage outside specialists to provide assistance in measuring the identifiable net assets of CSCGL and the measurement will be completed within one year from the transition date. The provisional amounts will be adjusted retrospectively during the subsequent measurement period to reflect new information obtained about facts and circumstances that existed as of the transition date that, if known, would have affected the amounts recognized as of that date.

3) Aggregate information of associates that are not individually material

The Corporation’s share of: Profit for the year Other comprehensive income Total comprehensive income for the year	For the Year Ended	For the Year Ended	December 31
		2018 $ 211,771 184,884 $ 396,655	2017 $ 104,857 511,063 $ 615,920

4) The amounts of investments in associates pledged as collateral for bank borrowings are disclosed in Note 34.

All the subsidiaries and associates are accounted for using equity method.

The investments accounted for using equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2018 and 2017 were based on the subsidiaries’ and associates’ financial statements which have been audited for the same years.

Refer to Table 7 “Information on Investees” and Table 8 “Information on Investments in Mainland China” for the nature of activities, principal place of business and country of incorporation of the subsidiaries and associates.

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16. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2017 Additions Disposals Transferred from completed construction Transferred to investment properties Balance at December 31, 2017 Accumulated depreciation and impairment Balance at January 1, 2017 Disposals Depreciation expense Balance at December 31, 2017 Carrying amounts at December 31, 2017 Cost Balance at January 1, 2018 Additions Disposals Transferred from completed construction Reclassified Transferred to other assets Balance at December 31, 2018 Accumulated depreciation and impairment Balance at January 1, 2018 Disposals Depreciation expense Transferred to other assets Balance at December 31, 2018 Carrying amounts at December 31, 2018	Land $ 2,779,025 - - - - 2,779,025 - - - - $ 2,779,025 $ 2,779,025 63 - - - - 2,779,088 - - - - - $ 2,779,088		Buildings $ 4,209,601 796 (8,228 ) 14,579 - 4,216,748 3,539,380 (8,188 ) 74,222 3,605,414 $ 611,334 $ 4,216,748 1,085 (418 ) - - - 4,217,415 3,605,414 (418 ) 57,696 - 3,662,692 $ 554,723	Equipment $ 16,884,954 77,883 (102,417 ) 103,374 - 16,963,794 16,375,441 (102,416 ) 210,931 16,483,956 $ 479,838 $ 16,963,794 12,439 (177,648 ) 3,049 (21,506 ) - 16,780,128 16,483,956 (177,648 ) 150,407 - 16,456,715 $ 323,413	Other Equipment $ 6,097,869 63,030 (2,354 ) 68,002 - 6,226,547 5,194,983 (2,316 ) 356,810 5,549,477 $ 677,070 $ 6,226,547 71,357 (618,597 ) 73,225 21,506 (15,622 ) 5,758,416 5,549,477 (618,592 ) 256,678 (15,622 ) 5,171,941 $ 586,475	Property Under Construction $ 280,454 56,289 - (185,955 ) (32,662) 118,126 - - - - $ 118,126 $ 118,126 88,499 - (76,274 ) - - 130,351 - - - - - $ 130,351	Total $ 30,251,903 197,998 (112,999 ) - (32,662) 30,304,240 25,109,804 (112,920 ) 641,963 25,638,847 $ 4,665,393 $ 30,304,240 173,443 (796,663 ) - - (15,622 ) 29,665,398 25,638,847 (796,658 ) 464,781 (15,622 ) 25,291,348 $ 4,374,050

No impairment assessment was performed for the years ended December 31, 2018 and 2017 as there was no indication of impairment.

The above items of property, plant and equipment are depreciated on a fixed-percentage-ondeclining-balance basis or on a straight-line basis over the estimated useful life of the asset taken apart into major component elements:

Building Main buildings 15-55 years Other facilities 3-15 years Equipment 2-20 years Other equipment 3-15 years

Refer to Note 34 for the carrying amount of property, plant and equipment pledged by the Corporation as collaterals for borrowings.

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17. INVESTMENT PROPERTIES

Leased investment properties Undeveloped investment properties		December 31	December 31
		2018 $ 35,525,301 6,164,393 $ 41,689,694	2017 $ 35,822,102 6,197,535 $ 42,019,637

The movements of investment property were as follows:

		Leased	Undeveloped	Undeveloped	Undeveloped
		Investment		Investment
		Property			Property	Total
Balance at January 1, 2017	$	36,131,162	$		5,426,460	$ 41,557,622
Changes in fair value of investment properties		(390,689)			771,075	380,386
Additions		48,967			-	48,967
Transferred from property, plant and equipment		32,662			-	32,662
Balance at December 31, 2017	$ 35,822,102		$		6,197,535	$ 42,019,637
Balance at January 1, 2018	$	35,822,102	$		6,197,535	$ 42,019,637
Changes in fair value of investment properties		(298,069)			(33,142)	(331,211)
Additions		1,269			-	1,269
Disposals		(1)			-	(1)
Balance at December 31, 2018	$ 35,525,301		$		6,164,393	$ 41,689,694

The investment properties for lease were as follows:

a. On January 1, 1998, the Corporation granted FEDSDL the right to construct a shopping center on a parcel of land it owned with an area of 6,976 square meters located in Lin-Ya, Kaohsiung. As consideration for the right to construct and the continued use of the land for fifty years, FEDSDL shall pay the following: (a) land use right in the amount of $1,073,000 thousand and (b) annual rental at 5% of the reference price of such land announced by the local government. The proceeds of the land use rights were recorded as long-term deferred revenue, and recognized as rental revenue on a periodic basis.
b. The Corporation and Far Eastern Resources Development Co. (FERD) equally owned a parcel of land located at Tun Hwa South Road, Taipei City. Under an agreement entered into with YDC, the Corporation and FERD had agreed on the following: (a) construction of a twin tower building (Taipei Metro) by YDC on the said land, (b) continued use of the land without additional compensation for 30 years starting from the date of the completion of the building, (c) transfer to each of the Corporation and FERD 12% of the usable area of the building, and (d) transfer to FERD and the Corporation the remaining usable area of the building after the end of 30 years in exchange for the carrying amount of the property. In view of the foregoing agreement, the Corporation recorded the 12% of the building construction cost or $1,402,753 thousand as building acquired and as long-term deferred revenue, and recognized as revenue on a periodic basis.
c. Others mainly included the following:
1) Land in Shu-Lin - leased to YLPPC;
2) Land in Taichung Quan-Lien Industrial Zone - leased to NHC;
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3) Land and buildings in Lin-Ko, Taichung and Hsi-Chih - leased to YTRMC;
4) Asia-Cement Building - leased to FEDS;
5) Pao-Ching Building - leased to Sofiva Genomics;
6) Land and building in Chayi City
7) Land and building in Hwalien - leased to YLT;

The lease terms of the above are 1-10 years and the rents are paid monthly.

The Corporation’s undeveloped investment properties included a parcel of land located in Lin-Ya, Kaohsiung.

The fair values of investment properties were valued by independent qualified professional appraisers. According to local requirements, entities are required to have independent appraisal for the investment properties with individual carrying amount of $300 million or higher. The fair values of investment properties as of December 31, 2018 and 2017 were determined by qualified professional appraisers, Mr. Tsai, real estate appraiser from DTZ real estate appraisers firm, and Mr. Chang, from Savills (Taiwan) Limited, on March 4, 2019 and February 21, 2018, respectively. The fair values of investment properties leased to subsidiary were determined by Mr. Huang, a qualified real estate professional appraiser from CCIS Real Estate Appraisers Firm.

The fair value of investment properties was estimated using unobservable inputs (Level 3). The movements in the fair value were as follows:

Balance at January 1, 2017 Recognized in profit or loss (gain or loss from changes in fair value of investment property) Purchases Transfers into Level 3 Balance at December 31, 2017 Balance at January 1, 2018 Recognized in profit or loss (gain or loss from changes in fair value of investment property) Purchases Disposals Balance at December 31, 2018	Leased Investment Property $ 36,131,162 (390,689) 48,967 32,662 $ 35,822,102 $ 35,822,102 (298,069) 1,269 (1) $ 35,525,301	Undeveloped Investment Property $ 5,426,460 771,075 - - $ 6,197,535 $ 6,197,535 (33,142) - - $ 6,164,393	Total $ 41,557,622 380,386 48,967 32,662 $ 42,019,637 $ 42,019,637 (331,211) 1,269 (1) $ 41,689,694

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The fair value measurement of undeveloped land located in Lin-Ya, Kaohsiung, was measured by land development analysis. The increase in estimated total selling price, the increase in rate of return, or the decrease in overall capital interest rate would result in an increase in the fair value. The significant assumptions used were as follows:

Estimated total selling price Rate of return Overall capital interest rate		December 31	December 31
		2018 $ 18,991,547 22% 6.08%	2017 $ 19,052,686 22% 6.81%

The total selling price is estimated on the basis of the most effective use of the land or property available for sale after development is completed, taking into account the related regulations, domestic macroeconomic prospects, local land use, and market rates.

The fair value of investment properties, except for undeveloped land, was measured using the income approach. The significant assumptions used were stated below. The increase in estimated future net cash inflows, or the decrease in discount rates would result in increase in the fair value.

Expected future cash inflows Expected future cash outflows Expected future cash inflows, net Discount rate		December 31	December 31
		2018 $ 44,926,855 1,986,947 $ 42,939,908 2.07%-4.50%	2017 $ 45,610,364 2,060,352 $ 43,550,012 2.09%-4.50%

The market rentals in the area where the investment property is located were between $1 thousand and $5 thousand per ping (i.e. per 3.3 square meters).

The rental income generated for the years ended December 31, 2018 and 2017 was $356,365 thousand and $355,460 thousand, respectively.

The expected future cash inflows to be generated by investment properties include rental income, interest income on rental deposits and disposal value. The rental income was extrapolated using the Corporation’s current rental contract, regional and market quotation, taking into account the annual rental growth rate; the income analysis covers a 10-year period, the interest income on rental deposits was extrapolated using the interest rate for one-year central bank-announced demand deposit interest rate; the disposal value was determined using the direct capitalization method under the income approach. The expected future cash outflows to be incurred by investment properties include expenditure such as land value taxes, house taxes, insurance premium, maintenance costs and others. This expenditure was extrapolated on the basis of the current level of expenditure, taking into account the future adjustment to the government-announced land value, and the tax rate promulgated under the House Tax Act.

The discount rate was determined by reference to the interest rate for two-year time deposits as posted by Chunghwa Post Co., Ltd., plus 0.75%, or estimated income capitalization rate, whichever is higher, as well as any asset-specific risk premiums. As of December 31, 2018 and 2017, the risk premiums were 0.23%-2.66% and 0.25%-2.66%, respectively.

Refer to Note 34 for the carrying amount of investment properties pledged by the Corporation as collaterals for borrowings.

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18. INTANGIBLE ASSETS

Cost

Balance at January 1, 2017

Additions

Balance at December 31, 2017

Accumulated amortization and impairment
Balance at January 1, 2017
Amortization expense

Balance at December 31, 2017

Carrying amounts at December 31, 2017

Cost

Balance at January 1, 2018

Additions

Balance at December 31, 2018

Accumulated amortization and impairment
Balance at January 1, 2018
Amortization expense

Balance at December 31, 2018

Carrying amounts at December 31, 2018

Computer
Software
$ 157,512

2,099

159,611
147,225

3,438

150,663
$ 8,948
$ 159,611

2,693

162,304
150,663

3,297

153,960
$ 8,344

The above items of intangible assets are amortized on a straight-line basis over the estimated useful life of the asset. The estimated useful life of computer software is from 2 to 5 years.

19. PREPAYMENTS FOR LEASES

Current asset (included in prepayments line item) Non-current asset		December 31	December 31
		2018 $ 35,331 369,801 $ 405,132	2017 $ 26,573 259,142 $ 285,715

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20. OTHER ASSETS-NON-CURRENT

Prepaid investments Net defined benefit assets (Note 24) Refundable deposits Others		December 31	December 31
		2018 $ 1,911,179 1,886,734 1,394,853 129 $ 5,192,895	2017 $ 1,911,179 1,516,621 1,380,357 129 $ 4,808,286

On March 23, 2017, the Corporation acquired 155 thousand issued shares of China Shanshui Investment Company Limited (CSI) in the amount of HK$577,662 thousand from six shareholders of CSI under a share purchase agreement. The Corporation has already obtained the physical share certificates of the acquired CSI shares. Pursuant to the Articles of Association of CSI, the share ownership can only be recorded on the register of shareholders if the board of directors of CSI approves the shares transfer. As of December 31, 2018, the Corporation submitted all necessary documents to CSI for registration of the shares transfer.

CSCGL and its subsidiaries obtained from the High Court of Hong Kong an injunction order by way of an ex-parte application on April 11, 2017. Pursuant to the injunction order, Mi Jingtian, Zhao Liping, Li Maohuan and Yu Yuchuan are prohibited from removing any of their assets in Hong Kong, each of their assets’ value is up to RMB142 million (or its Hong Kong dollar equivalent), in particular their shares in CSI and/or any proceeds from sales of any such CSI shares.

The Corporation is neither a plaintiff nor a defendant in the aforesaid proceedings. But, for the purpose of securing and exercising the rights and interests of the acquired shares of CSI, the Corporation provided a bank guarantee of RMB142 million to the High Court of Hong Kong according to the High Court’s ruling on April 21, 2017. On the same day, the High Court of Hong Kong lifted the injunction order on the shares of CSI acquired by the Corporation.

Chan Hongqing claimed that the CSI shares which the Corporation acquired from the abovementioned four persons were pledged as collaterals under an agreement signed on August 17, 2015 and thus applied for arbitration of China International Economic and Trade Arbitration Commission in Beijing.

21. SHORT-TERM BILLS PAYABLE

Commercial paper Less: Unamortized discounts on bills payable Interest rate (%)		December 31	December 31
		2018 $ 11,440,000 2,896 $ 11,437,104 0.36%-0.80%	2017 $ 9,130,000 1,595 $ 9,128,405 0.45%-0.54%

Short-term bills payable were issued under guarantee obtained from financial institutions.

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22. LONG-TERM LIABILITIES

Bank loans Long-term commercial paper Less: Unamortized discount Bonds Domestic bonds 1stunsecured bonds issued in 2014 1stunsecured bonds issued in 2016 Overseas bonds 2ndEuro convertible bonds issued in 2013 - US$220,000 thousand 3rdEuro convertible bonds issued in 2018 - US$215,000 thousand Less: Current portion		December 31	December 31
		2018 $ 10,033,000 5,000,000 7,989 15,025,011 4,000,000 6,000,000 10,000,000 - 6,192,567 31,217,578 4,000,000 $ 27,217,578	2017 $ 13,588,000 5,000,000 13,917 18,574,083 8,000,000 6,000,000 14,000,000 88,612 - 32,662,695 4,088,612 $ 28,574,083

a. Bank loans are repayable in installments at varying amounts or in one lump-sum payment prior to January 22, 2022. The Corporation has signed long-term revolving credit facilities with banks. As of December 31, 2018 and 2017, interest rates were 0.89% to 1.70% and 0.85% to 1.75%, respectively.
b. Long-term commercial paper was issued by contract. As of December 31, 2018 and 2017, interest rates were 0.83% to 0.84% and 0.83%, respectively. The maturity date of the contract is December 19, 2020.
c. Domestic bonds are repayable in installments at varying amounts or in one lump-sum on maturity prior to September 2021. As of December 31, 2018 and 2017, both interest rates were 0.80% to 1.36%.
d. In order to redeem bonds to save interest expenses, on May 13, 2013, the Corporation issued 2[nd] US$220,000 thousand (equivalent to NT$6,551,380 thousand) zero coupon Euro convertible bonds due 2018.

The terms of the zero coupon Euro convertible bonds included the following:

1) Final redemption

Unless previously redeemed, repurchased and cancelled, or converted, the bonds will be redeemed on the maturity date at a redemption price equal to 100% of the unpaid principal amount thereof.

2) The bonds are convertible into the Corporation’s ordinary shares (“Shares”) at any time on or after June 23, 2013 and prior to the close of business on April 13, 2018. The initial conversion price was NT$48 per Share, determined on the basis of a fixed exchange rate of NT$29.53=US$1.00.
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3) Redemption at the option of the Corporation

At any time on or after May 13, 2016, the Corporation may redeem the bonds in whole, or from time to time in part, at the early redemption amount, if the closing price of the Shares, translated into U.S. dollars at the prevailing rate, during a period of 30 consecutive trading days, is at least 130% of the quotient of the early redemption amount divided by the number of Shares to be issued upon conversion of US$200,000 principal amount of bonds on the applicable trading day based on the conversion price then in effect, translated into U.S. dollars at a fixed exchange rate of NT$29.53=US$1.00. Notwithstanding the foregoing, at any time, the Corporation may redeem the bonds in whole, but not in part, at the early redemption amount in U.S. dollars if at least 90% in principal amount of the bonds has already been redeemed, repurchased and cancelled, or converted.

4) Redemption at the option of the bondholders

Unless previously redeemed, repurchased and cancelled or converted, each holder will have the right to require the Corporation to redeem in whole or in part of the bonds held by such holder on May 13, 2016 at a redemption price equal to 100% of the principal amount thereof. (Refer to item 6 below for information on the redemption of bonds.)

5) The conversion price shall be subject to adjustment when there is occurrence of, including (but not limited to), the following:
a) Declaration of dividend in Shares or free distribution or bonus issue of Shares.
b) Subdivision, consolidation and reclassification of Shares.
c) Rights issues to shareholders.
d) Employee stock bonus.
e) Warrants issued to holders of Shares.
f) Issues of rights or warrants for equity-related securities to holders of Shares.
g) Capital distributions, other distributions to shareholders.
h) Issue of convertible or exchangeable securities other than to holders of Shares or on exercise of warrants.
i) Other issues of Shares.
j) Issue of equity related securities.
k) Capital reduction.
l) Tender or exchange offer.
m) Any other event or circumstance which would have an effect analogous to any of the events in a) to l) above.
6) As bondholders exercised the put option, the Corporation had redeemed the principal amount of US$217,000 thousand on May 11, 2016. After the redemption, the bonds outstanding in the amount of US$3,000 thousand had been paid on May 10, 2018.
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e. In order to repay debt, save interest expenses, and strengthen the Corporation’s financial structure, on September 21, 2018, the Corporation issued 3[rd] US$215,000 thousand (equivalent to NT$6,620,710 thousand) zero coupon Euro convertible bonds due 2023.

The terms of the zero coupon Euro convertible bonds included the following:

1) Final redemption

Unless previously redeemed, repurchased and canceled, or converted, the Bonds will be redeemed on the maturity date at the settlement equivalent of 103.04% of the unpaid principal amount thereof.

2) The bonds are convertible into the Corporation’s common shares (“Shares”) at any time on or after December 21, 2018 and prior to the close of business on August 22, 2023. The initial conversion price was NT$42.24 per Share, determined on the basis of a fixed exchange rate of NT$30.794=US$1.00.

3) Redemption at the option of the Corporation

At any time on or after September 21, 2021, the Corporation may redeem the bonds in whole, or from time to time in part, at the early redemption amount, if the closing price of the Shares, translated into U.S. dollars at the prevailing rate, during a period of 30 consecutive trading days, is at least 130% of the quotient of the early redemption amount divided by the number of Shares to be issued upon conversion of US$200,000 principal amount of the bonds on the applicable trading day based on the conversion price then in effect, translated into U.S. dollars at a fixed exchange rate of NT$30.794=US$1.00. Notwithstanding the foregoing, at any time, the Corporation may redeem the bonds in whole, but not in part, at the early redemption amount in U.S. dollars if at least 90% in principal amount of the bonds has already been redeemed, repurchased and cancelled, or converted.

4) Redemption at the option of the bondholders

Unless previously redeemed, repurchased and cancelled or converted, each holder will have the right to require the Corporation to redeem in whole or in part of the bonds held by such holder on September 21, 2021 at a redemption price equal to the settlement equivalent of 101.81% of the principal amount in U.S. dollars. Any U.S. dollar denominated amount payable in respect of the bonds will be converted into NT dollars using a fixed exchange rate and then converted back to a U.S. dollar amount using the applicable prevailing rate at the time of redemption.

5) The conversion price shall be subject to adjustment when there is occurrence of, including (but not limited to), the following:
a) Declaration of dividend in Shares or free distribution or bonus issue of Shares.
b) Subdivision, consolidation and reclassification of Shares.
c) Rights issues to shareholders.
d) Employee stock bonus.
e) Warrants issued to holders of Shares.
f) Issues of rights or warrants for equity-related securities to holders of Shares.
g) Capital distributions, other distributions to shareholders.
h) Issue of convertible or exchangeable securities other than to holders of Shares or on exercise of warrants.
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i) Other issues of Shares.
j) Issue of equity related securities.
k) Capital reduction.
l) Tender or exchange offer.
m) Any other event or circumstance which would have an effect analogous to any of the events in a) to l) above. The conversion price was NT$42.24 as of December 31, 2018.

23. DEFERRED REVENUE

Land use right Others Current Non-current		December 31	December 31
		2018 $ 858,838 140,879 $ 999,717 $ 75,912 $ 923,805	2017 $ 926,923 - $ 926,923 $ 68,085 $ 858,838

a. The deferred revenue on land use rights in Lin-Ya, Kaohsiung granted to FEDSDL (Note 17) is amortized to income over 50 years on a straight-line basis.
b. The deferred revenue on land use rights of Taipei Metro granted to YDC (Note 17) is amortized to income over 30 years on a straight-line basis.

24. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Corporation adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at specified percentage of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Corporation in accordance with the Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Corporation contributes amounts equal to 8% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Corporation assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Corporation is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Corporation has no right to influence the investment policy and strategy.

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The amounts included in the balance sheets in respect of the Corporation’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Surplus Net defined benefit asset		December 31	December 31
		2018 $ 804,119 (2,690,853) (1,886,734) $ (1,886,734)	2017 $ 1,006,401 (2,523,022) (1,516,621) $ (1,516,621)

Movements in net defined benefit assets were as follows:

	Present Value	Present Value
	of	the Defined		Net Defined
		Benefit	Fair Value of	Benefit
	Obligation		the Plan Assets	Liability (Asset)
Balance at January 1, 2017	$	1,066,363	$ (2,383,858)	$ (1,317,495)
Service cost
Current service cost		9,937	-	9,937
Net interest expense (income)		13,863	(30,990)	(17,127)
Recognized in profit or loss		23,800	(30,990)	(7,190)
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-	(196,585)	(196,585)
Actuarial loss - changes in financial
assumptions		8,968	-	8,968
Actuarial loss - experience adjustments		9,265	-	9,265
Recognized in other comprehensive income		18,233	(196,585)	(178,352)
Benefits paid		(101,995)	88,411	(13,584)
Balance at December 31, 2017	$	1,006,401	$ (2,523,022)	$ (1,516,621)
Balance at January 1, 2018	$	1,006,401	$ (2,523,022)	$ (1,516,621)
Service cost
Current service cost		9,207	-	9,207
Net interest expense (income)		12,077	(30,276)	(18,199)
Recognized in profit or loss		21,284	(30,276)	(8,992)
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-	(293,637)	(293,637)
Actuarial loss - changes in financial
assumptions		6,943	-	6,943
Actuarial loss - experience adjustments		(45,762)	-	(45,762)
Recognized in other comprehensive income		(38,819)	(293,637)	(332,456)
Benefits paid		(184,747)	156,082	(28,665)
Balance at December 31, 2018	$	804,119	$ (2,690,853)	$ (1,886,734)

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Through the defined benefit plans under the Labor Standards Law, the Corporation is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase	December 31
	2018 2017 1.10% 1.20% 2.00% 2.00%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 1% increase 1% decrease		December	31
		2018 $ (17,187) $ 17,768 $ 73,337 $ (65,545)	2017 $ (22,189) $ 22,972 $ 95,117 $ (84,537)

The major categories of plan assets at the end of the reporting period are disclosed based on the information announced by the Bureau:

Equity instruments Deposited in financial institutions Others		December 31	December 31
		2018 88.73 5.85 5.42 100.00	2017 86.05 6.82 7.13 100.00

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2018 $ - 10 years	2017 $ - 10 years

25. EQUITY

a. Share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2018 4,000,000 $ 40,000,000 3,361,447 $ 33,614,472	2017 4,000,000 $ 40,000,000 3,361,447 $ 33,614,472

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

The total of 350,000 thousand and 10,000 thousand shares of the Corporation’s authorized shares are reserved for the issuance of convertible bonds and employee share option, respectively.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Donation The difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition Change of capital surplus of subsidiaries and associates accounted for using equity method (2) May be used to offset a deficit only Change of capital surplus of subsidiaries and associates accounted for using equity method (3) May not be used for any purpose Share warrants Change of capital surplus of subsidiaries and associates accounted for using equity method		December 31	December 31
		2018 $ 41,790 54,907 992,530 1,089,227 38,085 185,411 49,831 235,242 $ 1,362,554	2017 $ 41,790 54,907 992,530 1,089,227 38,215 - 41,250 41,250 $ 1,168,692

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1) Such capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and to once a year).
2) Such capital surplus from the effect of changes in associate’s ownership interest in its subsidiary that resulted from actual acquisition and disposal of equity may be used to offset a deficit or distributed as cash dividends or share dividends under Article 241-1 of Company Act.
3) Such capital surplus from the effect of changes in associate’s ownership interest in its subsidiary that resulted from equity transactions other than actual acquisition and disposal may be used to offset a deficit under Article 239-1 of Company Act.
c. Retained earnings and dividends policy

Under the Corporation’s dividends policy, where the Corporation has a profit at the end of a fiscal year, the Corporation shall first pay business income taxes based on law and then offset losses of previous years, and if there is any remaining profit, 10% of the balance shall be appropriated as legal reserve. In addition, appropriation for special reserve shall be made based on provisions of law. Any remaining amount of profit together with the accumulated undistributed earnings of the previous year shall be allocated for distribution to shareholders. However, depending on the condition of the business, part of the profit may be retained. In case of an increase in the capital of the Corporation, the shareholders’ bonus for the new shares in the year of issue shall be decided in the shareholders’ meeting. For the policies on distribution of employees’ compensation and remuneration of directors and supervisors, refer to employees’ compensation and remuneration of directors and supervisors in Note 27(f).

The distribution of shareholders’ dividend shall take into consideration the changes in the outlook of the Corporation’s businesses, the lifespan of the various products or services that have an impact on future capital needs and taxation. Shareholders’ dividend shall be distributed with the aim of maintaining stable shareholders’ dividend distributions. Save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, when distributing shareholders’ dividend, the dividend payout ratio each fiscal year shall be no less than 50% of the final surplus which is the sum of after-tax profit of the fiscal year to withhold previous loss, if any, legal reserve and special reserve as required by law; the cash dividend shall not be less than 10% of the total shareholders’ dividend distributed in the same year.

These appropriations shall be resolved by the shareholders in the following year and given effect to in the financial statements of that year.

The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The Corporation is required to appropriate to or reverse from special reserve amounts that pertains to items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”.

Under the Integrated Income Tax System, ROC-resident shareholders are allowed tax credit for the income tax paid by the Corporation on earnings generated in 1998 onward. Tax credits allocated to shareholders are based on the balance of Imputation Credit Account (ICA) on the dividend distribution date. However, the income tax law was amended and the imputation tax system was abolished in 2018.

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The appropriation of earnings and dividends per share for 2017 and 2016 approved in the shareholders’ meetings on June 26, 2018 and June 27, 2017, respectively, were as follows:

Legal reserve Special reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2017 2016 $ 546,900 $ 394,577 943,188 881,019 4,033,736 3,025,302	Dividend Per Share (Dollars)
		For the Year Ended December 31
		2017 2016 $1.2 $0.9

The appropriation of earnings for 2017 had been proposed by the Corporation’s board of directors on March 21, 2018. The proposed appropriation of earnings and dividend per share were as follows:

		Dividend
	Appropriation	Per Share
	of Earnings	(Dollars)
Legal reserve	$ 1,111,709
Special reserve	518,281
Cash dividends	9,412,052	$ 2.8

Assuming that the shares reciprocally held by associates were not treated as treasury stock and not deducted from weighted average number of shares outstanding, the basic EPS would be NT$3.31 for the year ended December 31, 2018.

The appropriations of earnings for 2018 are subject to the resolution of the shareholders’ meeting to be held on June 24, 2019.

d. Special reserve recognized at the date of transition

In the first-time adoption of IFRSs, the amounts of adjusted unrealized revaluation increments, cumulative translation adjustments and unappropriated earnings recognized from the investment properties of associates which used fair value as deemed cost were $10,715,430 thousand, $3,163,258 thousand and $52,494 thousand, respectively; the Corporation appropriated the amounts to special reserve.

In addition, on the initial application of the fair value model to investment properties, the Corporation appropriated to special reserve the amount of the net increase in fair value of investment properties and transferred it to retained earnings. Additional special reserve should be appropriated for subsequent net increases in fair value. The amount appropriated may be reversed to the extent that the cumulative net increases in fair value decrease or on the disposal of investment properties.

The Corporation and its associates used and disposed of some of the related assets; accordingly, special reserve reversed to unappropriated earnings amounted to $548,152 thousand as of December 31, 2018.

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e. Other equity items

1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Share of exchange difference of subsidiaries and associates accounted for using equity method Balance at December 31 2) Unrealized gain (loss) on financial assets at FVTOCI	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (2,638,153) (3,211) $ (2,641,364)	2017 $ (44,313) (2,593,840) $ (2,638,153)

		For the Year	For the Year
			Ended
		December 31,
			2018
	Balance at January 1 per IAS 39	$	-
	Adjustment on initial application of IFRS 9		516,962
	Balance at January 1 per IFRS 9		516,962
	Unrealized gain of equity instruments		158,517
	Related income tax		(158,526)
	Share from subsidiaries and associates accounted for using equity method
	Equity instruments		1,340,746
	Debt instruments		2,520
	Cumulative unrealized loss of equity instruments transferred to retained earnings
	due to disposal		3,408,697
	Balance at December 31	$	5,268,916
3)	Unrealized gain (loss) on available-for-sale financial assets
		For the Year
			Ended
		December 31,
			2017
	Balance at January 1	$	(4,023,554)
	Unrealized gain arising on revaluation of available-for-sale financial assets		1,943,095
	Related income tax		(197,882)
	Share of unrealized gain on revaluation of available-for-sale financial assets of
	subsidiaries and associates accounted for using equity method		3,006,408
	Balance at December 31	$	728,067

55 -

4) Cash flow hedges

Balance at January 1 Share of cash flow hedging reserve of subsidiaries and associates accounted for using equity method Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 58,485 2,449 $ 60,934	2017 $ 41,450 17,035 $ 58,485

5) Gains on property revaluation: There has been no change to gains on property revaluation between the year of 2018 and 2017.

26. OPERATING REVENUE AND COSTS

Operating revenues Sales of goods Rental revenue Total operating revenue, net Operating costs Cost of goods sold Rental cost Total operating cost Gross profit	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 8,368,027 364,209 8,732,236 8,309,912 169,234 8,479,146 $ 253,090	2017 $ 7,827,368 359,499 8,186,867 7,349,168 175,953 7,525,121 $ 661,746

Contract balances: As of December 31, 2018, the Corporation’s contract liabilities in the amount of NT$40,661 thousand were customers’ deposits and advances.

27. NET PROFIT

Net profit was as follows:

a. Other income

Dividends Interest income Others	For the Year Ended	For the Year Ended	December 31
		2018 $ 405,773 114,003 72,669 $ 592,445	2017 $ 297,566 57,841 83,611 $ 439,018

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b. Other gains and losses

For the Year Ended	For the Year Ended	December 31
2018 $ (331,211) 171,737 (61,313) 36,987 4,053 - (462,053) $ (641,800) For the Year Ended		2017 $ 380,386 10,900 (53,550) (251,699) (79) 34,961 (206,881) $ (85,962) December 31
2018 $ 332,211 - (227) $ 331,984 For the Year Ended		2017 $ 331,914 - (362) $ 331,552 December 31
2018 2017 $ 227 $ 362 0.726%-1.139% 0.787%-1.080% For the Year Ended December 31
	2018 $ 462,524 1,783 474 $ 464,781 $ 3,297	2017 $ 638,815 2,057 1,091 $ 641,963 $ 3,438

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e. Employee benefits expense

Post-employment benefits (Note 24) Defined contribution plans Defined benefit plans Short-term benefits Salary Remuneration of directors Labor and health insurance Other employees-related expenses Total employee benefits expense		For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
		Operating Costs $ 10,268 (5,211) 479,469 - 31,453 28,649 $ 544,628	Operating Expenses Non-operating Expenses $ 4,450 $ 80 (3,781) - 136,318 3,200 225,074 - 11,001 153 10,907 70 $ 383,969 $ 3,503	Total $ 14,798 (8,992) 618,987 225,074 42,607 39,626 $ 932,100

Post-employment benefits (Note 24) Defined contribution plans Defined benefit plans Short-term benefits Salary Remuneration of directors Labor and health insurance Other employees-related expenses Total employee benefits expense		For the Year Ended December 31, 2017	For the Year Ended December 31, 2017
		Operating Costs $ 11,096 (4,732) 395,916 - 35,855 32,810 $ 470,945	Operating Expenses Non-operating Expenses $ 3,933 $ 94 (2,458) - 160,203 9,404 115,142 - 11,471 144 11,605 72 $ 299,896 $ 9,714	Total $ 15,123 (7,190) 565,523 115,142 47,470 44,487 $ 780,555

As of December 31, 2018 and 2017, the Corporation had 496 and 571 employees, respectively. There were 12 non-employee directors for both years.

f. Employees’ compensation and remuneration of directors and supervisors

The Corporation accrued employees’ compensation and remuneration of directors and supervisors at the rates between 2% and 3.5% and no higher than 2.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. The employees’ compensation and remuneration of directors and supervisors for the years ended December 31, 2018 and 2017 which have been approved by the Corporation’s board of directors on March 21, 2018 and March 23, 2017, respectively, were as follows:

Employees’ compensation Remuneration of directors and supervisors	For the Year Ended December 31	For the Year Ended December 31
	2018 Cash Share $ 253,436 $ - 223,658 -	2017
		Cash Share $ 147,850 $ - 130,120 -

If there is a change in the amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

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There is no difference between the actual amounts of employees’ compensation and remuneration of directors and supervisors paid and the amounts recognized in the financial statements for the years ended December 31, 2017 and 2016.

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Corporation’s board of directors in 2019 and 2018 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

28. INCOME TAXES RELATING TO CONTINUING OPERATIONS

a. Major components of tax (income) expense recognized in profit or loss

Current tax Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Adjustments to deferred tax attributable to changes in tax rates and laws Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 19,711 (9) 19,702 1,022,598 35,338 1,057,936 $ 1,077,638	2017 $ - (3,879) (3,879) (63,749) - (63,749) $ (67,628)

A reconciliation of accounting profit and income tax expenses is as follows:

Profit before tax from continuing operations Income tax expense calculated at the statutory rate (the tax rate of the year 2018 and 2017 are 20% and 17%, respectively) Nondeductible expenses in determining taxable income Tax-exempt income Unrecognized deductible temporary differences Tax on changes in fair value of investment properties Unrecognized loss carryforwards Income tax on unappropriated earnings Adjustments for prior years’ tax Income tax expense (income) recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 12,194,732 $ 2,438,946 44,394 (1,114,646) (301,182) (32,651) 23,075 19,711 (9) $ 1,077,638	2017 $ 5,401,379 $ 918,234 2,144 (692,418) 36,662 (418,733) 90,362 - (3,879) $ (67,628)

In 2017, the applicable corporate income tax rate used by the corporate in the ROC is 17%. However, the Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%, effective in 2018. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings will be reduced from 10% to 5%.

As the status of 2019 appropriation of earnings is uncertain, the potential income tax consequences of the 2018 unappropriated earnings are not reliably determinable.

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b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year: Fair value changes of financial assets at FVTOCI Fair value changes of available-for-sale financial assets Remeasurement on defined benefit plans Total income tax recognized in other comprehensive income	For the Year Ended	For the Year Ended	December 31
		2018 $ (158,526) - (66,491) $ (225,017)	2017 $ - (197,882) (30,320) $ (228,202)

c. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December	31
		2018 $ 9,022 $ 8,477	2017 $ 5,664 $ -

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2018

Deferred tax assets Temporary differences FVTOCI financial assets FVTPL financial assets and liabilities Property, plant and equipment Deferred tax liabilities Temporary differences Investment properties Land value increment tax Unappropriated earnings of subsidiaries Defined benefit obligation Property, plant and equipment Other financial assets and liabilities Allowance for impaired receivables Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 158,526 $ - $ (158,526) - 8,944 - 10,460 (6,801) - $ 168,986 $ 2,143 $ (158,526) $ 3,630,935 $ (32,651) $ - 3,427,438 - - 563,866 1,046,395 - 244,549 26,596 66,491 21,746 11,130 - 4,670 6,701 - 84 212 - 772 1,696 - $ 7,894,060 $ 1,060,079 $ 66,491	Closing Balance $ - 8,944 3,659
		$ 12,603
		$ 3,598,284 3,427,438 1,610,261 337,636 32,876 11,371 296 2,468
		$ 9,020,630

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For the year ended December 31, 2017

Deferred tax assets Temporary differences AFS financial assets Property, plant and equipment Others Deferred tax liabilities Temporary differences Investment properties Land value increment tax Unappropriated earnings of subsidiaries Defined benefit obligation Property, plant and equipment Other financial assets and liabilities Allowance for impaired receivables Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 356,408 $ - $ (197,882) 10,833 (373) - 923 (923) - $ 368,164 $ (1,296) $ (197,882) $ 4,049,668 $ (418,733) $ - 3,427,438 - - 198,244 365,622 - 210,698 3,531 30,320 17,370 4,376 - 17,328 (12,658) - - 84 - 8,039 (7,267) - $ 7,928,785 $ (65,045) $ 30,320	Closing Balance $ 158,526 10,460 -
		$ 168,986
		$ 3,630,935 3,427,438 563,866 244,549 21,746 4,670 84 772
		$ 7,894,060

e. The aggregate amount of temporary differences associated with investments for which deferred tax liabilities have not been recognized

As of December 31, 2018 and 2017, the taxable temporary differences associated with investments in subsidiaries for which no deferred tax liabilities have been recognized were $5,104,939 thousand and $4,477,570 thousand, respectively.

f. The tax returns through 2016, except 2013, have been assessed by the tax authorities. The Corporation disagreed with the tax authorities’ assessment of its 2013 tax return and applied for a re-examination.

29. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share	For	the Year Ended December 31	the Year Ended December 31
		2018 $ 3.54 $ 3.49	2017 $ 1.74 $ 1.74

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The earnings and weighted average number of ordinary shares outstanding used for the earnings per share computation were as follows:

Net Profit for the Year

Profit for the period attributable to owners of the Corporation Effect of potentially dilutive ordinary shares: Convertible bonds Earnings used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 11,117,094 26,638 $ 11,143,732	2017 $ 5,469,007 1,377 $ 5,470,384

Weighted average number of ordinary shares outstanding (in thousand shares):

Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employees’ compensation Convertible bonds Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2018 3,139,152 8,585 44,656 3,192,393	2017 3,139,297 5,937 2,420 3,147,654

The weighted average number of ordinary shares used in the computation of basic earnings per share is the weighted average outstanding shares after subtracting the shares of the Corporation held by the associates treated as treasury stock.

When an entity pays employee compensation that may be settled in shares or cash at the entity’s option, the entity shall presume that the employee compensation will be settled in shares, and the resulting potential shares shall be included in diluted earnings per share if the effect is dilutive. The number of shares is estimated by dividing the entire amount of the compensation by the closing price of the shares at the balance sheet date. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

30. CAPITAL MANAGEMENT

The Corporation manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Corporation consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Corporation (comprising issued capital, reserves, retained earnings, other equity).

The Corporation is not subject to any externally imposed capital requirements.

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Key management personnel of the Corporation review the capital structure on an annual basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Corporation may adjust the amount of dividends paid to shareholders and the amount of new debt issued or existing debt redeemed.

31. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

December 31, 2018

Carrying Fair Value Amount Level 1 Level 2 Level 3 Financial liabilities Financial liabilities measured at amortized cost Bonds payable (included current portion) $ 16,192,567 $ 16,719,158 $ - $ - December 31, 2017 Carrying Fair Value Amount Level 1 Level 2 Level 3 Financial liabilities Financial liabilities measured at amortized cost Bonds payable (included current portion) $ 14,088,612 $ 14,096,452 $ - $ - Fair values of financial instruments measured at fair value on a recurring basis 1) Fair value hierarchy December 31, 2018 Level 1 Level 2 Level 3 Financial assets at FVTPL Overseas listed stocks $ 1,037,426 $ - $ - Beneficiary certificates 135,400 - - $ 1,172,826 $ - $ - Financial assets at FVTOCI Investments in equity instruments at FVTOCI Domestic listed stocks $ 7,183,796 $ - $ - Domestic unlisted stocks - - 573,372 $ 7,183,796 $ - $ 573,372	Fair Value
	Level 1 Level 2 Level 3 $ 16,719,158 $ - $ - Fair Value	Total $ 16,719,158
		Total $ 14,096,452 Total $ 1,037,426 135,400 $ 1,172,826 $ 7,183,796 573,372 $ 7,757,168 (Continued)

b. Fair values of financial instruments measured at fair value on a recurring basis
63 -

Financial liabilities at FVTPL Cross-currency swap contracts Bond options December 31, 2017 Financial assets at FVTPL Beneficiary certificates Available-for-sale financial assets Domestic listed stocks Overseas listed stocks	Level 1 $ - - $ Level 1 $ 171,500 $ 7,436,736 782,286 $ 8,219,022	Level 2 $ - - $ - Level 2 $ - $ - - $ -	Level 3 $ 44,717 223,501 $ 268,218 Level 3 $ - $ - 3,888,505 $ 3,888,505	Total $ 44,717 223,501 $ 268,218 (Concluded) Total $ 171,500 $ 7,436,736 4,670,791 $ 12,107,527

There were no transfers between Levels 1 and 2 for the years ended December 31, 2018 and 2017.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2018

Balance at January 1 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1 per IFRS 9 Recognized in profit or loss Net gain (loss) on financial liabilities at FVTPL Recognized in other comprehensive income Unrealized gain (loss) on financial assets at FVTOCI Purchases Transfers out of Level 3 Balance at December 31, 2018		Financial Liabilities at FVTPL Derivatives $ - - - 47,303 - 220,915 - $ 268,218	Financial Assets at FVTOCI	Financial Assets at FVTOCI
				Equity Instruments $ 3,888,505 548,116 4,436,621 - 411,456 - (4,274,705) $ 573,372

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For the year ended December 31, 2017

	Available-
	for-sale Equity
	Instruments
Balance at January 1, 2017	$ 1,825,382
Recognized in other comprehensive income (loss)	1,164,014
Purchases	899,109
Balance at December 31, 2017	$ 3,888,505

3) Valuation techniques and inputs applied for Level 3 fair value measurement
a) The fair values of convertible bond options are determined using the information available from the counterparty for valuation based on the option pricing model. The option pricing model incorporates the present value techniques and reflects both the time value and the intrinsic value of options.
b) The fair value of cross currency swap contracts is determined using the information available from the counterparty for valuation. The counterparty measures the fair value of a cross currency swap contracts using the discounted cash flows model. Future cash flows are estimated based on observable forward exchange rates at balance sheet dates and contract forward rates and discounted at rates that reflect the credit risk of various counterparties.
c) The fair value of equity securities suspended for trading and therefore without quoted price was determined by using the weighted average of values calculated under market-based approach and market value approach. In market-based approach, the fair value of the investee is measured by weighted average multiple value of (i) EV/sales, (ii) EV/EBITDA, and (iii) P/B of other comparable listed companies. In market value approach, the fair value is estimated based on the average closing price before security suspension. Liquidity risk parameters need to be taken into account when using these approaches. Due to the long period of security trading suspension, the market value approach had become irrelevant. Therefore, the fair value was determined only by using the weighted average of values calculated under market-based approach as of December 31, 2017.
- i. EV/Sales: Enterprise value ÷ Sales.
- ii. EV/EBITDA: Enterprise value ÷ Earnings before interest, taxes, depreciation and amortization.

iii. P/B: Price ÷ Book value.

d) The fair values of unlisted stocks are determined by using the asset approach or the market approach. In the asset approach, the fair values are estimated by using the net asset value measured at fair value based on the unlisted investees’ latest financial statements, while taking into account the liquidity discount and non-controlling interest discount. In the market approach, the fair values are estimated based on the market transaction prices of comparable companies with similar industrial and business characteristics and liquidity discount are considered.
65 -
c. Categories of financial instruments

Financial assets Fair value through profit or loss (FVTPL) Loans and receivables (1) Available-for-sale financial assets (2) Financial assets at amortized cost (3) Financial assets at FVTOCI Financial liabilities Financial liabilities at FVTPL Financial liabilities at amortized cost (4)	December 31 2018 2017 $ 1,172,826 $ 171,500 - 4,312,247 - 12,236,320 4,747,829 - 7,757,168 - 268,218 - 44,258,001 43,305,878

1) The balances include loans and receivables measured at amortized cost, which comprise cash and cash equivalents, debt investments with no active market, and trade, notes and other receivables.
2) The balances include the carrying amount of available-for-sale financial assets measured at cost.
3) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable, trade receivables and other receivables.
4) The balances include financial liabilities at amortized cost, which comprise short-term bills payable, trade and other payables, bonds issued and long-term loans.
d. Financial risk management objectives and policies

The Corporation’s major financial instruments include equity and debt investments, trade receivables, trade payables, bonds payable and borrowings. The Corporation’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Corporation through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Corporation mitigates the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Corporation’s policies approved by the board of directors, which provides written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis.

1) Market risk

The Corporation’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Corporation enters into cross-currency swap contracts to mitigate its exposure to foreign currency risk and interest risk.

a) Foreign currency risk

The Corporation have foreign currency sales and purchases and foreign currency financing activities, which expose the Corporation to foreign currency risk.

66 -

The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities and derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 36.

Sensitivity analysis

The Corporation was mainly exposed to the RMB and USD.

The following table details the Corporation’s sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currencies. The sensitivity rate of 5% is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items less notional amounts of cross-currency swap. The analysis assumed a 5% change in foreign currency rates at the end of the reporting period. A positive number below indicates an increase in pre-tax profit assuming the New Taiwan dollars weakened by 5% against the relevant currency. For a 5% strengthening of New Taiwan dollars against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances shown below would be negative.

Increase (decrease) in pre-tax profit	RMB Impact For the Year Ended December 31 2018 2017 $ 42,224 $ 27,497	USD Impact
		For the Year Ended December 31
		2018 2017 $ 161,809 $ 169,681

b) Interest rate risk

The Corporation is exposed to interest rate risk because the Corporation borrows funds at both fixed and floating interest rates. The risk is managed by the Corporation by maintaining an appropriate mix of fixed and floating rate borrowings and using cross-currency swap contracts.

The carrying amounts of the Corporation’s financial assets and financial liabilities with exposure to changes in interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2018 2017 $ 2,793,778 $ 2,977,354 32,621,682 28,203,100 1,536,461 1,100,917 10,033,000 13,588,000

Sensitivity analysis

The sensitivity analysis below is based on the Corporation’s exposure to changes in interest rates of non-derivative instruments at the end of the reporting period.

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If interest rates had been 0.01% higher/lower and all other variables were held constant, the Corporation’s pre-tax profit for the years ended December 31, 2018 and 2017 would have decreased/increased by $1,049 thousand and $922 thousand, respectively, mainly due to the Corporation’s exposure to changes in interest rates of its variable-rate bank borrowings and bank deposits.

c) Other price risk

The Corporation is exposed to price risk through its investments in listed equity securities and beneficiary certificates of funds.

Sensitivity analysis

The sensitivity analysis below is based on the exposure to investment position price risks at the end of the reporting period.

If investment position prices had been 1% higher/lower, pre-tax profit for the year ended December 31, 2018 would have increased/decreased by $11,728 thousand as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the year ended December 31, 2018 would have increased/decreased by $71,838 thousand as a result of the changes in fair value of financial assets at FVTOCI.

If investment position prices had been 1% higher/lower, pre-tax profit for the year ended December 31, 2017 would have increased/decreased by $1,715 thousand as a result of the changes in fair value of held-for-trading investments, and the pre-tax other comprehensive income for the year ended December 31, 2017 would have increased/decreased by $82,190 thousand as a result of the changes in fair value of available-for-sale shares.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Corporation. As at the end of the reporting period, the Corporation’s maximum exposure to credit risk which would cause a financial loss to the Corporation due to the failure of counterparties to discharge an obligation and financial guarantees provided by the Corporation is equal to the carrying amount of the financial assets as stated in the balance sheets.

The Corporation adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Corporation only transacts with entities that are rated the equivalent of investment grade and above. The Corporation uses publicly available financial information and its own trading records to rate its major customers. The Corporation’s exposure and the credit ratings of its counterparties are continuously monitored.

The counterparties in trade receivables consist of a large number of clients in different industries and regions. The Corporation evaluates clients’ financial condition continuously.

Credit risk represents the potential negative impact on the financial assets of the Corporation if counterparties or third parties breach the contracts. The Corporation evaluates credit risk exposure on contracts with positive carrying value. The Corporation evaluated the credit risk exposure as immaterial because all counterparties are reputable financial institutions and companies with good credit ratings.

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3) Liquidity risk

The Corporation manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Corporation’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

a) Liquidity and interest rate tables for non-derivative financial liabilities

The following tables detail the Corporation’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Corporation can be required to pay. The tables included both interest and principal cash flows.

To the extent that interest rates are floating, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

December 31, 2018

Effective Interest Rates (%) Non-derivative financial liabilities Non-interest bearing - Variable interest rate liabilities 1.47 Fixed interest rate liabilities 0.70 Financial guarantee contracts - December 31, 2017 Effective Interest Rates (%) Non-derivative financial liabilities Non-interest bearing - Variable interest rate liabilities 1.36 Fixed interest rate liabilities 0.87 Financial guarantee contracts -	On Demand or Less than 1 Month $ 396,962 - 11,437,104 - $ 11,834,066 On Demand or Less than 1 Month $ 350,200 - 9,128,405 - $ 9,478,605	1-3 Months $ 568,442 - - - $ 568,442 1-3 Months $ 699,898 - - - $ 699,898	3 Months to 1 Year $ 585,020 - 4,000,000 23,249,487 $ 27,834,507 3 Months to 1 Year $ 350,934 - 4,088,612 22,632,412 $ 27,071,958	1-5 Years $ 52,895 10,033,000 17,184,578 - $ 27,270,473 1-5 Years $ 113,746 13,588,000 14,986,083 - $ 28,687,829	5+ Years $ - - - -
					$ -
					5+ Years $ - - - -
					$ -

The amounts above of variable interest rate non-derivative financial assets and liabilities are subject to change if actual variable interest rates differ from those estimates of interest rates at the end of the reporting period.

b) Liquidity and interest rate risk table for derivative financial liabilities

The following table details the Corporation’s liquidity analysis of its derivative financial instruments. The table is based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis. When the amount payable or receivable is not fixed, the amount disclosed is determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

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December 31, 2018

On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year Net settled Cross-currency swap contracts $ - $ (39,911) $ (139,437)	1-5 Years $ (322,827)	5+ Years $ -

e. Transfers of financial assets. None.
f. Offsetting financial assets and financial liabilities. None.
g. Reclassifications. None.

32. TRANSACTIONS WITH RELATED PARTIES

Details of transactions between the Corporation and other related parties are disclosed below.

Transactions with related parties are conducted under normal terms.

a. Related party name and category

Related Party Name FMT DCI YLPPC ACSPL NHC AEE AIC YTRMC ACCHC YLT Ya Sing Ready-Mixed Concrete Corp. Fu Shan Mineral Stone Co., Ltd. Fu Da Transportation Corp. Jiangxi Yadong Cement Co., Ltd. Kowloon Cement Corp. Ltd. Perez - AOG L.L.C. FENC U-Ming YDC OSC FEDSDL EISF Shih Hsin Storage & Transportation Co., Ltd. Pao-Good Industry Co., Ltd. Far EasTone Telecommunications Co., Ltd.	Related Party Category
	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Sub-subsidiaries Sub-subsidiaries Sub-subsidiaries Sub-subsidiaries Sub-subsidiaries Sub-subsidiaries Associates Associates Associates Associates Associates Associates Associates Associates Others (Continued)

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Related Party Name
Far Eastern Department Store Ltd.
Chu Feng Power Corporation, Preparatory Office
Oriental Union Chemical Corp.
Mr. Xu Yuanzhi Memorial Foundation
Yuan Ze University
New Century InfoComm Tech Co., Ltd.
CHC Resources Corporation
Far Eastern Resources Development Co.
Far Eastern General Construction Inc.
Far Eastern International Leasing Corporation
U-Ming Transport (Singapore) Private Limited
Ding & Ding Management Consultants Co., Ltd.
Far Eastern Memorial Hospital
Ya Tung Department Store Ltd.
YDT Technology International Corporation
Oriental Resources Development Co., Ltd.
Far Eastern Leasing Corporation
Ho Hwei Enterprise Corp. Ltd.
Far Eastern Apparel Co., Ltd.
NanKung Enterprise Ltd.
Far Eastern Fibertech Co., Ltd.
Far Eastern Technical Consultants Co., Ltd.
Far Eastern International Bank (FEIB)
Far Eastern New Century (China) Corporation

Related Party Category

Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
(Concluded)

Note: Other related party relationships mainly include associates’ subsidiaries, legal person in which the chairman is the same as the Corporation’s chairman and the director is also the Corporation’s chairman.

b. Operating transactions

Operating revenues Subsidiaries Associates Others Operating cost Subsidiaries Associates Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 2,582,709 253,840 139,159 $ 2,975,708 $ 726,082 601,069 370,105 $ 1,697,256	2017 $ 2,107,862 371,303 130,789 $ 2,609,954 $ 631,578 536,598 265,314 $ 1,433,490

71 -

Receivables from related parties (including notes receivable, trade receivables and other receivables):

Subsidiaries YTRMC Others Associates Others		December 31	December 31
		2018 $ 370,183 152,353 522,536 11,772 6,692 $ 541,000	2017 $ 297,210 96,302 393,512 11,901 15,555 $ 420,968

Accounts payable and accrued expenses to related parties:

Subsidiaries Associates Others		December 31	December 31
		2018 $ 84,014 97,764 6,326 $ 188,104	2017 $ 69,821 97,359 4,936 $ 172,116

The outstanding trade payables and receivables from related parties are unsecured. For the years ended December 31, 2018 and 2017, no allowance for impairment was recognized on trade receivables from related parties.

Prepayments:

Associates c. Transactions with FEIB Bank deposits (Note) Bank Loans		December 31	December 31
		2018 2017 $ 15,000 $ 15,000 December 31
		2018 $ 7,969,230 $ 400,000	2017 $ 1,078,121 $ 600,000

Note: The balances included amounts recognized as debt investments with no active market, financial assets measured at amortized cost, and other non-current assets (refundable deposits).

72 -

d. Compensation of key management personnel

The amounts of the compensation of directors and other key management personnel for the years ended December 31, 2018 and 2017 were as follows:

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 268,538 756 $ 269,294	2017 $ 173,469 756 $ 174,225

The remuneration of directors and key executives is determined by the remuneration committee based on the performance of individuals and market trends.

e. Other transactions with related parties
1) Operating expense - rental

Associates Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 44,912 6,084 $ 50,996	2017 $ 44,861 6,157 $ 51,018

2) Acquisitions of property, plant and equipment

Others 3) Acquisitions of investment properties Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2018 2017 $ 34 $ - For the Year Ended December 31
		2018 $ 337	2017 $ 1,186

33. OPERATING LEASE ARRANGEMENTS

a. The Corporation as lessee

Operating leases relate to leases of office. The refundable deposits paid under operating lease contracts as of December 31, 2018 and 2017 were both $10,811 thousand.

73 -

The future minimum lease payments for non-cancellable operating lease commitments are as follows:

Not later than 1 year Later than 1 year and not later than 5 years		December 31	December 31
		2018 $ 44,816 44,816 $ 89,632	2017 $ 44,761 89,522 $ 134,283

The rent expenses on the above operating lease contracts were $44,805 thousand and $44,754 thousand, respectively in 2018 and 2017 for the years ended December 31, 2018 and 2017, respectively.

b. The information of the Corporation as lessor refers to Note 17.

34. ASSETS PLEDGED AS COLLATERAL

The following assets are provided as collaterals for short-term and long-term bank borrowings:

Investment properties Investments accounted for using equity method Financial assets at fair value through other comprehensive income - current Property, plant and equipment, net Available-for-sale financial assets - current		December 31	December 31
		2018 $ 13,840,249 11,388,997 1,107,800 886,829 - $ 27,223,875	2017 $ 13,915,793 10,745,637 - 892,722 1,065,750 $ 26,619,902

35. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

As of December 31, 2018, the Corporation had the following significant commitments and contingencies:

a. Unused letters of credit of US$4,419 thousand and EUR131 thousand.
b. Guarantee notes issued for related parties:

The Corporation AIC DCI NHC YLPPC AEE YSRMC FSMS	$ 12,039,900 8,769,975 1,339,310 497,642 422,660 150,000 30,000 $ 23,249,487

74 -
c. On December 4, 2015 and December 17, 2015, CSCGL, China Shanshui Cement Group (Hong Kong) Company Limited and China Pioneer Cement (Hong Kong) Company Limited (collectively referred as “Shanshui Cement Group”) commenced legal proceedings against former directors of CSCGL in respect of alleged dishonest breaches of fiduciary duty or alleged conspiracy to injure CSCGL during their tenures. The proceedings arose from disputes between CSCGL’s present and former board of directors over the changes in management and the takeover of the headquarters of CSCGL. On April 7, 2016, the Corporation was added as the 10th defendant. The Corporation has engaged lawyers to take legal actions in connection with the unqualified claim to defend its reputation and interests. Up to the date of the auditors’ report, the proceedings are still ongoing and it is premature to make any assessment of the likely outcome of the action. Therefore, the Corporation did not recognize any contingent liabilities.
d. Tianrui Group Company Limited and Tianrui (International) Holding Company Limited (collectively referred as “Tianrui Group”), CSI and former and present directors of CSCGL, in breach of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Codes on Takeovers and Mergers and Share Buy-backs issued by the Hong Kong Securities and Futures Commission and the fiduciary duties, have engaged in unfair prejudicial conducts in favor of Tianrui directly and indirectly through CSCGL which are detrimental to the interests of shareholders including the Corporation. The Corporation has filed a writ of summons in the High Court of Hong Kong Special Administrative Region and the Grand Court of the Cayman Islands in June and August 2017, respectively. The Corporation is seeking legal advice in relation to the legal proceedings. Up to the date of the auditors’ report, the trial date has not been set. The Corporation’s appointed attorney has been actively following up on the legal proceedings.

36. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant financial assets and liabilities denominated in foreign currencies were as follows:

December 31, 2018

		Foreign		New Taiwan	New Taiwan
	Currencies		Exchange Rate		Dollars
Financial assets
Monetary items
RMB	$	189,004	4.46804	$	844,478
USD		105,534	30.665		3,236,187
Non-monetary items
HKD		266,622	3.891		1,037,426
Financial liabilities
Monetary items
USD		8,747	30.665		268,218

75 -

December 31, 2017

		Foreign		New Taiwan	New Taiwan
	Currencies		Exchange Rate		Dollars
Financial assets
Monetary items
RMB	$	120,949	4.5469	$	549,935
USD		117,225	29.71		3,482,756
Non-monetary items
HKD		1,026,926	3.777		3,878,700
Financial liabilities
Monetary items
USD		3,000	29.71		89,130

For the years ended December 31, 2018 and 2017, the total amounts of realized and unrealized net foreign exchange gains (losses) were $36,987 thousand and $251,699 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency because of the variety of the foreign currency transactions and functional currencies of the entities.

37. SEPARATELY DISCLOSED ITEMS

Following are the additional disclosures required by the Securities and Futures Bureau for the Corporation and investees:

a. Financing provided to others: Table 1 (attached).
b. Endorsement/guarantee provided: Table 2 (attached).
c. Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Table 3 (attached).
d. Marketable securities acquired and disposed of at costs or prices at least $300 million or 20% of the paid-in capital: Table 4 (attached).
e. Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: None.
f. Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None.
g. Total purchase from or sale to related parties amounting to at least $100 million or 20% of the paid-in capital: Table 5 (attached).
h. Receivables from related parties amounting to at least $100 million or 20% of the paid-in capital: Table 6 (attached).
i. Names, locations, and related information of investees on which the Corporation exercises significant influence (excluding investee companies in Mainland China): Table 7 (attached).
j. Derivative financial instrument transactions: Note 7.
76 -
k. Information on investments in Mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 8)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: Table 8.
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- c) The amount of property transactions and the amount of the resultant gains or losses.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.
77 -

TABLE 1

ASIA CEMENT CORPORATION

FINANCING PROVIDED TO OTHERS YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Interest Rate (Note 3)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)
													Item	Value
1	ACCHC	FENCC YDES	Other receivables Other receivables	Y Y	RMB651,000 thousand (equivalent to NT$2,908,697 thousand) RMB230,000 thousand (equivalent to NT$1,027,650 thousand)	RMB431,900 thousand (equivalent to NT$1,929,748 thousand) RMB230,000 thousand (equivalent to NT$1,027,650 thousand)	RMB431,900 thousand (equivalent to NT$1,929,748 thousand) RMB114,699 thousand (equivalent to NT$512,478 thousand)	- -	Necessary for short-term financing Necessary for short-term financing	$ - -	Operating capital Operating capital	$ - -	- -	$ - -	20% of net worth RMB2,417,582 thousand (equivalent to NT$10,801,863 thousand) Same as above	50% of net worth RMB6,043,955 thousand (equivalent to NT$27,004,657 thousand) Same as above
2	OHC	NYLC WYXC TZOCCL SHYLCP SYCPCL CYCPCL SLCL SLCCL SIYDCCL	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y Y Y Y	RMB5,000 thousand (equivalent to NT$22,340 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB25,000 thousand (equivalent to NT$111,701 thousand) RMB95,000 thousand (equivalent to NT$424,464 thousand) RMB15,000 thousand (equivalent to NT$67,021 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB240,000 thousand (equivalent to NT$1,072,331 thousand) RMB35,000 thousand (equivalent to NT$156,382 thousand) RMB160,000 thousand (equivalent to NT$714,887 thousand)	- - - - - - RMB240,000 thousand (equivalent to NT$1,072,331 thousand) - RMB160,000 thousand (equivalent to NT$714,887 thousand)	- - - - - - RMB193,000 thousand (equivalent to NT$862,332 thousand) - RMB140,000 thousand (equivalent to NT$625,526 thousand)	- - - - - - 4.57% - 4.57%	Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing	- - - - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	20% of net worth RMB399,973 thousand (equivalent to NT$1,787,097 thousand) Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above	50% of net worth RMB999,933 thousand (equivalent to NT$4,467,745 thousand) Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above

(Continued)

78 -

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Interest Rate (Note 3)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)
													Item	Value
3	JYDC	YYDCCL TZOCCL HGYDC NYLC SIYDCCL SLCL CYCPCL SLCCL SHYLCP	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y Y Y Y	RMB160,000 thousand (equivalent to NT$714,887 thousand) RMB145,000 thousand (equivalent to NT$647,866 thousand) RMB90,000 thousand (equivalent to NT$402,124 thousand) RMB5,000 thousand (equivalent to NT$22,340 thousand) RMB300,000 thousand (equivalent to NT$1,340,413 thousand) RMB500,000 thousand (equivalent to NT$2,234,022 thousand) RMB5,000 thousand (equivalent to NT$22,340 thousand) RMB35,000 thousand (equivalent to NT$156,382 thousand) RMB100,000 thousand (equivalent to NT$446,804 thousand)	RMB160,000 thousand (equivalent to NT$714,887 thousand) RMB145,000 thousand (equivalent to NT$647,866 thousand) - - RMB100,000 thousand (equivalent to NT$446,804 thousand) RMB400,000 thousand (equivalent to NT$1,787,218 thousand) - RMB35,000 thousand (equivalent to NT$156,382 thousand) RMB100,000 thousand (equivalent to NT$446,804 thousand)	RMB115,000 thousand (equivalent to NT$513,825 thousand) RMB95,000 thousand (equivalent to NT$424,464 thousand) - - - RMB132,000 thousand (equivalent to NT$589,782 thousand) - RMB34,000 thousand (equivalent to NT$151,913 thousand) RMB60,000 thousand (equivalent to NT$268,083 thousand)	4.57% 4.57% - - - 4.57% - 4.57% 4.57%	Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing	$ - - - - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	$ - - - - - - - - -	- - - - - - - - -	$ - - - - - - - - -	20% of net worth RMB1,116,765 thousand (equivalent to NT$4,989,755 thousand) Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above	50% of net worth RMB2,791,912 thousand (equivalent to NT$12,474,386 thousand) Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above
4	NYDC	SHYLCP NYLC SIYDCCL SLCL	Other receivables Other receivables Other receivables Other receivables	Y Y Y Y	RMB5,000 thousand (equivalent to NT$22,340 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB14,000 thousand (equivalent to NT$62,553 thousand) RMB14,000 thousand (equivalent to NT$62,553 thousand)	- - RMB14,000 thousand (equivalent to NT$62,553 thousand) RMB14,000 thousand (equivalent to NT$62,553 thousand)	- - RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand)	- - 4.57% 4.57%	Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing	- - - -	Operating capital Operating capital Operating capital Operating capital	- - - -	- - - -	- - - -	20% of net worth RMB34,781 thousand (equivalent to NT$155,403 thousand) Same as above Same as above Same as above	50% of net worth RMB86,953 thousand (equivalent to NT$388,510 thousand) Same as above Same as above Same as above
																(Continued)

79 -

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Interest Rate (Note 3)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)
													Item	Value
5	HYDCCL	WYXC HXMC WYCPCL SLCL SYCPCL SIYDCCL	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Y Y Y Y Y Y	RMB60,000 thousand (equivalent to NT$268,083 thousand) RMB115,000 thousand (equivalent to NT$513,825 thousand) RMB35,000 thousand (equivalent to NT$156,382 thousand) RMB170,000 thousand (equivalent to NT$759,567 thousand) RMB50,000 thousand (equivalent to NT$223,402 thousand) RMB130,000 thousand (equivalent to NT$580,846 thousand)	RMB60,000 thousand (equivalent to NT$268,083 thousand) RMB40,000 thousand (equivalent to NT$178,722 thousand) RMB35,000 thousand (equivalent to NT$156,382 thousand) RMB150,000 thousand (equivalent to NT$670,207 thousand) RMB50,000 thousand (equivalent to NT$223,402 thousand) RMB80,000 thousand (equivalent to NT$357,444 thousand)	RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB24,500 thousand (equivalent to NT$109,467 thousand) - RMB105,000 thousand (equivalent to NT$469,145 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand) -	4.57% 4.68% - 4.57% 4.57% -	Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing	$ - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	$ - - - - - -	- - - - - -	$ - - - - - -	20% of net worth RMB483,712 thousand (equivalent to NT$2,161,246 thousand) Same as above Same as above Same as above Same as above Same as above	50% of net worth RMB1,209,279 thousand (equivalent to NT$5,403,112 thousand) Same as above Same as above Same as above Same as above Same as above
6	WYDC	WYXC WYCPCL SYCPCL SLCL	Other receivables Other receivables Other receivables Other receivables	Y Y Y Y	RMB60,000 thousand (equivalent to NT$268,083 thousand) RMB50,000 thousand (equivalent to NT$223,402 thousand) RMB30,000 thousand (equivalent to NT$134,041 thousand) RMB90,000 thousand (equivalent to NT$402,124 thousand)	RMB60,000 thousand (equivalent to NT$268,083 thousand) RMB35,000 thousand (equivalent to NT$156,382 thousand) RMB30,000 thousand (equivalent to NT$134,041 thousand) RMB90,000 thousand (equivalent to NT$402,124 thousand)	RMB60,000 thousand (equivalent to NT$268,083 thousand) RMB25,000 thousand (equivalent to NT$111,701 thousand) RMB30,000 thousand (equivalent to NT$134,041 thousand) RMB90,000 thousand (equivalent to NT$402,124 thousand)	4.57% 4.57% 4.57% 4.57%	Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing Necessary for short-term financing	- - - -	Operating capital Operating capital Operating capital Operating capital	- - - -	- - - -	- - - -	20% of net worth RMB116,013 thousand (equivalent to NT$518,351 thousand) Same as above Same as above Same as above	50% of net worth RMB290,031 thousand (equivalent to NT$1,295,871 thousand) Same as above Same as above Same as above
7	CYCPCL	SIYDCCL SLCL	Other receivables Other receivables	Y Y	RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand)	RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand)	RMB10,000 thousand (equivalent to NT$44,680 thousand) RMB10,000 thousand (equivalent to NT$44,680 thousand)	4.57% 4.57%	Necessary for short-term financing Necessary for short-term financing	- -	Operating capital Operating capital	- -	- -	- -	20% of net worth RMB13,628 thousand (equivalent to NT$60,891 thousand) Same as above	50% of net worth RMB34,070 thousand (equivalent to NT$152,226 thousand) Same as above
8	HGYDC	SIYDCCL SLCL	Other receivables Other receivables	Y Y	RMB50,000 thousand (equivalent to NT$223,402 thousand) RMB50,000 thousand (equivalent to NT$223,402 thousand)	RMB50,000 thousand (equivalent to NT$223,402 thousand) RMB50,000 thousand (equivalent to NT$223,402 thousand)	RMB20,000 thousand (equivalent to NT$89,361 thousand) RMB50,000 thousand (equivalent to NT$223,402 thousand)	4.57% 4.57%	Necessary for short-term financing Necessary for short-term financing	- -	Operating capital Operating capital	- -	- -	- -	20% of net worth RMB236,851 thousand (equivalent to NT$1,058,261 thousand) Same as above	50% of net worth RMB592,128 thousand (equivalent to NT$2,645,654 thousand) Same as above

(Continued)

80 -

(Concluded)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Interest Rate (Note 3)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)
													Item	Value
9	NYLC	SIYDCCL SLCL	Other receivables Other receivables	Y Y	RMB16,000 thousand (equivalent to NT$71,489 thousand) RMB16,000 thousand (equivalent to NT$71,489 thousand)	RMB16,000 thousand (equivalent to NT$71,489 thousand) RMB16,000 thousand (equivalent to NT$71,489 thousand)	$ - -	- -	Necessary for short-term financing Necessary for short-term financing	$ - -	Operating capital Operating capital	$ - -	- -	$ - -	20% of net worth RMB36,830 thousand (equivalent to NT$164,558 thousand) Same as above	50% of net worth RMB92,074 thousand (equivalent to NT$411,391 thousand) Same as above

Note 1: The net value was calculated based on audited financial statements as of December 31, 2018.

Note 2: The ending balance is the financing credit lines to the respective borrowers approved by the board of directors of lenders.

Note 3: The interest rate was for the year ended December 31, 2018.

Note 4: The foreign currency amounts are expressed in New Taiwan dollars at exchange rate as of December 31, 2018.

81 -

TABLE 2

ASIA CEMENT CORPORATION

ENDORSEMENTS/GUARANTEES PROVIDED YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/ Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Each Endorsement/ Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 1)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship (Note 3)
0	The Corporation	AIC DCI FSMS NHC AEE YLPPC YSRMC	b b b b b b b	50% of net worth ($68,946,113) Same as above Same as above Same as above Same as above Same as above Same as above	$ 12,054,300 8,773,575 30,000 1,340,920 423,620 497,642 150,000	$ 12,039,900 8,769,975 30,000 1,339,310 422,660 497,642 150,000	$ 8,130,000 4,800,000 30,000 445,000 160,000 177,975 55,000	None None None None None None None	8.73 6.36 0.02 0.97 0.31 0.36 0.11	100% of net worth ($137,892,226) Same as above Same as above Same as above Same as above Same as above Same as above	Y Y Y Y Y Y Y	- - - - - - -	- - - - - - -
1	DCI	FSMS ACM IV	b b	50% of net worth ($6,236,401) Same as above	50,000 216,335	50,000 214,655	- -	None $214,655	0.40 1.72	100% of net worth ($12,472,801) Same as above	Y Y	- -	- -
2	Asia Oriental (Guam) L.L.C.	PEREZ - AOG, L.L.C.	b	50% of net worth (US$851 thousand) (equivalent to NT$26,085 thousand)	15,333	-	-	None	-	100% of net worth (US$1,701 thousand) (equivalent to NT$52,169 thousand)	Y	-	-
3	ACCHC	PIHPL	b	50% of net worth (RMB6,043,955 thousand) (equivalent to NT$27,004,655 thousand)	919,950	-	-	None	-	100% of net worth (RMB12,087,909 thousand) (equivalent to NT$54,009,309 thousand)	Y	-	-

Note 1: The net value was calculated based on audited financial statements as of December 31, 2018.

Note 2: The foreign currency amounts are expressed in New Taiwan dollars at exchange rate as of December 31, 2018.

Note 3: The relationship between guarantor and guarantee are as follows:

a. Firms that do business with the Corporation.
b. Firms of which the Corporation holds, directly or indirectly, over 50% of the voting shares.
82 -

TABLE 3

ASIA CEMENT CORPORATION

(EXCLUDING SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES)

MARKETABLE SECURITIES HELD DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2018	December 31, 2018		Note
				Shares or Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
The Corporation DCI	Beneficiary certificates Deutsche Far Eastern DWS Taiwan Flagship Security Investment Trust Fund Common stocks China Conch Venture Holding Far EasTone Far Eastern Department Stores Ltd. Oriental Union Chemical Corp. CHC Resources Corporation Far Eastern International Bank KRT Taiwan Stock Exchange Corp. DDH L’ Hotel de Chine Hotel China Trade & Development Corp. Pan Asia Engineers & Constructors Corp. Linkou Recreation Corporation Beneficiary certificates Polaris Taiwan Top 50 Tracker Fund Mega Target Return Strategy Fund of ETF Funds ChinaAMC CSI 300 Index ETF Opas Fund Segregated Portfolio Tranche A Opas Fund Segregated Portfolio Tranche C Opas Fund Segregated Portfolio Tranche D Opas Fund Segregated Portfolio Tranche E Common stocks Industrial and Commercial Bank of China, A share China Mobile Communications Corporation Haitong Securities Co., Ltd. Taiwan Cement Co., Ltd. Hsing Ta Cement Co., Ltd. Chunghwa Picture Tubes, Ltd. Innolux Corporation Pegatron Corporation Delta Electronics Inc. Tong Yang Industry Co., Ltd First Financial Holding Co., Ltd. Taiwan Semiconductor Manufacturing Co., Ltd E Ink Holdings corporation Casetek Holdings Limited	- - The same chairman The same chairman The same chairman The Corporation is its director The chairman of the Corporation is its vice-chairman - - Related party in substance - - The Corporation is its director - - - - Related party in substance Related party in substance Related party in substance Related party in substance - - - - - - - - - - - - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - noncurrent Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through profit or loss - current Same as above Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through profit or loss - current Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through other comprehensive income - current	10,000,000 11,443,000 31,034,372 80,052,950 63,766,522 22,801,185 76,842,263 15,873,243 8,028,922 555,625 598,121 250,003 1,551,395 5 400,000 1,000,811 540,000 8,000 1,352 56,000 4,070 2,000,000 210,000 1,800,000 7,501,400 12,247,854 275,223 9,200,000 1,242,000 1,080,000 1,632,000 2,950,210 450,000 1,130,000 1,050,000	$ 135,400 1,037,426 2,371,026 1,256,831 1,645,176 1,142,339 768,423 83,040 439,664 - 24,427 3,902 22,340 - 30,200 9,608 74,065 259,519 51,698 1,716,669 151,615 47,272 61,569 52,528 267,050 169,020 171 89,424 63,839 139,860 60,139 59,004 101,475 34,070 41,317	- 0.63 0.95 5.65 7.20 9.17 2.35 5.70 1.16 0.53 0.31 0.38 1.36 0.5 - - 0.20 - - - - - - 0.05 0.14 3.58 - 0.09 0.05 0.04 0.28 0.02 0.00 0.10 0.25	$ 135,400 1,037,426 2,371,026 1,256,831 1,645,176 1,142,339 768,423 83,040 439,664 - 24,427 3,902 22,340 - 30,200 9,608 74,065 259,519 51,698 1,716,669 151,615 47,272 61,569 52,528 267,050 169,020 171 89,424 63,839 139,860 60,139 59,004 101,475 34,070 41,317	Note 4

(Continued)

83 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2018	December 31, 2018		Note
				Shares or Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
NHC YTRMC FMT FDT AEE YLPPC AIC	China Life Insurance Company Limited, H share Far Eastern International Bank Oriental Union Chemical Corp. Far EasTone Mega Financial Holding Co., Ltd. Far Eastern International Bank Far Eastern Department Stores Ltd. Oriental Union Chemical Corp. CHC Resources Corporation Picvue Electronics Co., Ltd. DDH Far Eastern International Leasing Corporation Common stocks Far EasTone Common stocks Far EasTone Common stocks Everest Textile Co., Ltd. Oriental Union Chemical Corp. Far Eastern Department Store Ltd. Yi Tong Fiber Co., Ltd. Common stocks Far Eastern International Bank Far Eastern Department Store Ltd. Oriental Union Chemical Corp. Ding & Ding Management Consultants Co., Ltd. Common stocks Far EasTone Ding & Ding Management Consultants Co., Ltd. Common stocks Far EasTone Yamay International Development Corp. Beneficiary certificates Opas Fund Segregated Portfolio Tranche C Opas Fund Segregated Portfolio Tranche D Opas Fund Segregated Portfolio Tranche E ChinaAMC CSI 300 Index ETF	- The chairman of the Corporation’s major stockholder is its vice-chairman Same chairman with the major stockholder Same chairman with the major stockholder - The chairman of the Corporation’s major stockholder is its vice-chairman The same chairman The same chairman The Corporation is its director - Same chairman with the major stockholder The Corporation is its director Same chairman with the major stockholder Same chairman with the major stockholder The chairman of the Corporation is its chairman The chairman of the Corporation is its director Same chairman with the major stockholder - The chairman of the Corporation is its vice-chairman by the ultimate parent company The chairman of the Corporation is its vice-chairman Same chairman with the ultimate parent company - Same chairman with the major stockholder - The director of the Corporation is its chairman - Related party in substance Related party in substance Related party in substance -	Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through other comprehensive income - noncurrent Same as above Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - noncurrent Same as above Same as above Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - noncurrent Same as above Same as above Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through profit or loss - current Same as above Same as above Same as above	607,000 36,720,075 41,246 215,000 9,958,000 94,924,216 13,630,966 10,506,792 4,812,514 161,700 213,428 45,258,938 50,000 230,000 13,018,843 2,256,782 1,185,713 5,256,454 288,376 935,029 3,254,125 685,704 120,000 216,000 105,000 15 4,016 58,000 3,973 1,000,000	$ 39,301 367,201 1,064 16,426 258,410 949,242 214,006 271,075 241,107 - - 602,813 3,820 17,572 151,019 58,225 18,616 41,691 2,884 14,680 83,956 8,376 9,168 900 8,022 - 153,597 1,777,978 147,992 137,158	0.01 1.12 - 0.01 0.07 2.90 0.96 1.19 1.94 0.06 0.21 10.14 - 0.01 2.60 0.25 0.08 5.94 0.01 0.07 0.37 16.00 - 5.04 - - - - - 0.37	$ 39,301 367,201 1,064 16,426 258,410 949,242 214,006 271,075 241,107 - - 602,813 3,820 17,572 151,019 58,225 18,616 41,691 2,884 14,680 83,956 8,376 9,168 900 8,022 - 153,597 1,777,978 147,992 137,158	Note 5

(Continued)

84 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2018	December 31, 2018		Note
				Shares or Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
Asia Cement Pioneer Investment Ltd. FSMS YLT YLSS KCC KCCL	Common stocks Hsing Ta Cement Co., Ltd First Financial Holding Co., Ltd. Foxconn Technology Co., Ltd Taiwan Cement Co., Ltd. Quanta Computer Inc. Pegatron Corporation Taiwan Semiconductor Manufacturing Co., Ltd Hon Hai Precision Industry Co., Ltd. Mega Financial Holding Co., Ltd. China Construction Bank Corporation, A share China Life Insurance Company Limited, H share China Mobile Communications Corporation Far EasTone Casetek Holdings Limited Nan Ya Plastics Corporation Inventec Corporation China Life Insurance Company Limited, A share China Life Insurance Company Limited, H share Far Eastern International Bank Oriental Union Chemical Corp. Far Eastern Department Store Ltd. Ding Shen Investment Co., Ltd. Common stocks Cementon Micronesia L.L.C. Common stocks Stone Industry Resource System Corp Beneficiary certificates Polaris Taiwan Top 50 Tracker Fund Common stocks Far Eastern International Bank Far EasTone Common stocks Far EasTone Beneficiary certificates iShare FTSF A50 China Index ETF CSOP FTSE China A50 ETF Beneficiary certificates Allianz US High Yield Fund Opas Fund Segregated Portfolio Tranche C	- - - - - - - - - - - - Same chairman with the major stockholder - - - - - The chairman of the Corporation’s major stockholder is its vice-chairman Same chairman with the major stockholder Same chairman with the major stockholder The Corporation is its director - - - The chairman of the Corporation’s major stockholder is its vice-chairman Same chairman with the major stockholder Same chairman with the major stockholder - - - Related party in substance	Financial assets at fair value through profit or loss - current Same as above Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through profit or loss - current Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Same as above Financial assets at fair value through other comprehensive income - noncurrent Same as above Same as above Same as above Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - noncurrent Same as above Financial assets at fair value through other comprehensive income - current Financial assets at fair value through profit or loss - current Same as above Financial assets at fair value through profit or loss - current Same as above	16,515,650 3,869,310 2,043,000 364,000 1,805,000 825,000 400,000 1,720,000 7,926,000 2,500,000 1,350,000 448,000 1,426,303 1,000,000 2,541,000 2,882,000 540,000 986,000 131,660,130 1,552,156 4,473,972 39,600,000 (Note 1) 10,000 350,000 2,942,886 71,099 130,000 1,123,600 300,000 97,741 1,606	$ 227,916 77,386 123,602 12,958 95,124 42,405 90,200 121,776 205,680 71,154 87,407 131,348 108,970 39,350 191,845 63,548 49,196 63,840 1,316,601 40,047 70,241 310,068 121,914 70 26,425 29,429 5,432 9,932 HK$ 12,809 thousand HK$ 3,438 thousand HK$ 5,231 thousand HK$ 16,931 thousand	4.83 0.03 0.14 0.01 0.05 0.03 - 0.01 0.06 - - - 0.04 0.24 0.03 0.08 - - 4.03 0.18 0.32 18.00 10.00 0.15 - 0.09 - - - - - -	$ 227,916 77,386 123,602 12,958 95,124 42,405 90,200 121,776 205,680 71,154 87,407 131,348 108,970 39,350 191,845 63,548 49,196 63,840 1,316,601 40,047 70,241 310,068 121,914 70 26,425 29,429 5,432 9,932 HK$ 12,809 thousand HK$ 3,438 thousand HK$ 5,231 thousand HK$ 16,931 thousand	Note 6

(Continued)

85 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2018	December 31, 2018		Note
				Shares or Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
ACSPL OCPL	Beneficiary certificates United Emerging Markets Bond Funds United Growth Fund Opas Fund Segregated Portfolio Tranche D Common stocks DBS Group Guocoland Ltd. Hong Leong Asia INTRACO Engro Corp Ltd. Holcim Singapore Ltd. Common stocks Hiap Hoe Ltd.	- - Related party in substance - - - - - - -	Financial assets at fair value through profit or loss - current Same as above Same as above Financial assets at fair value through profit or loss - current Same as above Same as above Same as above Same as above Financial assets at fair value through other comprehensive income - noncurrent Financial assets at fair value through profit or loss - current	3,232,758 745,068 19,000 33,436 26,666 20,000 46,875 2,000 2,000 44,260	SGD 3,889 thousand SGD 2,454 thousand SGD 25,913 thousand SGD 792 Thousand SGD 48 Thousand SGD 10 Thousand SGD 12 thousand SGD 2 thousand SGD 5 thousand SGD 39 thousand	- - - - - - - - - -	SGD 3,889 thousand SGD 2,454 thousand SGD 25,913 thousand SGD 792 Thousand SGD 48 Thousand SGD 10 Thousand SGD 12 thousand SGD 2 thousand SGD 5 thousand SGD 39 thousand

Note 1: This is not a company limited by shares.

Note 2: Marketable securities in this table are stocks, bonds, beneficiary certificates and securities derived from these items under IFRS 9 “Financial Instruments: Recognition and Measurement”.

Note 3: The carrying amounts of financial instruments measured at fair values are adjusted for fair value less accumulated impairment loss; the carrying amounts of financial instruments not measured at fair values are the original cost or amortized cost less accumulated impairment loss.

Note 4: 14,500 thousand shares ($1,107,800 thousand) of the securities are pledged as collaterals for bank loans of the Corporation.

Note 5: 5,000 thousand shares ($78,500 thousand) of the securities are pledged as collaterals for bank loans of DCI.

Note 6: 3,500 thousand shares ($54,950 thousand) of the securities are pledged as collaterals for bank loans of AIC.

(Concluded)

86 -

TABLE 4

ASIA CEMENT CORPORATION

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities (Note 1)	Financial Statement Account	Counterparty (Note 2)	Relationship (Note 2)	Beginning Balance	Beginning Balance	Acquisition (Note 3)	Acquisition (Note 3)		Disposal (Note 3)	Disposal (Note 3)		Ending	Balance
					Shares/Units	Amount	Shares/Units	Amount	Shares/Units	Amount	Carrying Value	Gain (Loss) on Disposal	Shares/Units	Amount
ACSPL DCI AIC	Beneficiary certificates Opas Fund Segregated Portfolio Tranche D Beneficiary certificates Opas Fund Segregated Portfolio Tranche D Beneficiary certificates Opas Fund Segregated Portfolio Tranche D	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	- - -	- - -	- - -	$ - - -	19,000 56,000 58,000	SGD 25,785 thousand 1,713,600 1,774,800	- - -	$ - - -	$ - - -	$ - - -	19,000 56,000 58,000	SGD 25,913 thousand 1,716,669 1,777,978

Note 1: Marketable securities in this table are stocks, bonds, beneficiary certificates and securities derived from these items.

Note 2: Marketable securities accounted for using equity method should fill these two columns.

Note 3: Marketable securities acquired or disposed of should be calculated separately based on market price to determine whether they are of at least NT$300 million or 20% of the paid-in capital.

Note 4: Paid-in capital is the parent company’s paid-in capital. In the case of shares issued with no par value or a par value other than NT$10 per share, the 20% paid-in capital ruling refers to 10% of equity attributable to owners of the parent company as stated in the balance sheet.

87 -

TABLE 5

ASIA CEMENT CORPORATION

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Purchasing or (Selling) Company Name	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts (Payable) or Receivable	Notes/Accounts (Payable) or Receivable	Note
			Purchase (Sale)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Corporation ACSPL YTRMC FMT FDT YSRMC YLPPC NHC YLT YTV JYDC	YTRMC ACSPL YSRMC YDC U-Ming U-Ming Singapore YLT JYDC NHC Alliance Concrete Singapore Pte. Ltd. The Corporation Far Eastern General Construction Inc. The Corporation CHC Resources Corporation Air Liquide Far Eastern Co. FENC OUCC FENC Oriental Petrochemical (Taiwan) Co., Ltd. The Corporation Far Eastern General Construction Inc. The Corporation The Corporation Far Eastern Polytex Vietnam Ltd. The Corporation TZOCCL WYDC YYDCCL NYDC	A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation Related party in substance An investee accounted for by equity method A subsidiary of an investee accounted for by equity method A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation An investee accounted for by equity method Parent company Related party in substance Parent company Related party in substance Related party in substance An investee accounted for by equity method Related party in substance An investee accounted for by equity method Related party in substance Parent company Related party in substance Parent company Parent company A subsidiary of an investee accounted for by equity method Parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company A subsidiary of the Corporation	Sales Sales Sales Sales Sales freight expense Sales freight expense Sales freight expense Purchase Purchase Sales Purchase Sales Purchase Purchase Sales Sales Sales Sales Sales Purchase Sales Sales Sales Sales Sales Sales Sales Sales Sales	$ (1,769,285) (596,047) (154,194) (197,307) 543,364 262,477 157,617 246,326 149,387 SGD (21,804) thousand SGD 26,666 thousand (439,894) 1,769,285 399,570 (173,027) (205,148) (129,164) (118,377) (196,519) 154,194 (155,661) (149,387) (157,617) VND (91,621,457) thousand RMB (54,200) thousand RMB (171,146) thousand RMB (265,028) thousand RMB (523,623) thousand RMB (86,312) thousand	(20) (7) (2) (2) 6 3 2 3 2 (63) 80 (5) 22 5 (16) (19) (12) (13) (22) 24 (55) (36) (96) (75) (1) (4) (5) (11) (2)	Purchase 45 days after monthly closing Average 30 days Purchase 45 days after monthly closing Average 60 days Average 10 days Average 30 days Within 7 days Purchase 45 days after monthly closing Average 60 days Average 30 days Average 90 days Purchase 45 days after monthly closing Purchase 45 days after monthly closing Purchase 120 days after monthly closing Purchase 60 days after monthly closing Purchase 75 days after monthly closing Purchase 60 days after monthly closing 110 days Purchase 45 days after monthly closing Average 30 days Purchase 45 days after monthly closing 30 days Within 45 days Within 7 days Within 90 days Average 30 days Within 90 days Average 30 days	$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - -	$ 370,183 90,525 32,382 11,771 (76,223) - (41,808) - (15,847) SGD 7,024 thousand SGD (4,043) thousand 277,818 (370,183) (53,522) 80,563 23,472 25,272 24,810 62,014 (32,382) 28,646 15,847 41,808 VND 22,446,794 thousand - RMB 34,652 thousand RMB 25,398 thousand RMB 35,116 thousand RMB 9,785 thousand	34 8 3 1 (5) - (3) - (1) 64 (100) 9 (30) (4) 40 12 13 15 38 (31) 28 30 98 82 - 4 3 4 1

(Continued)

88 -

Purchasing or (Selling) Company Name	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts (Payable) or Receivable	Notes/Accounts (Payable) or Receivable	Note
			Purchase (Sale)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
NYDC NYLC TZOCCL WYDC YYDCCL HYDCCL WYCPCL SIYDCCL	NYLC HYDCCL JYLTC WAMTC NYDC NYLC HGYDC JYDC JYDC JYDC JYDC JYDC JYDC HYDCCL JYDC JYDC WYDC WYCPCL WAMTC HGYDC HYDCCL SLCL SYTCL	The same ultimate parent company The same ultimate parent company A subsidiary of the Corporation An investee accounted for by equity method A subsidiary of the Corporation A subsidiary of the Corporation The same ultimate parent company Parent company Parent company Parent company Parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company An investee accounted for by equity method The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sales Sales Sales freight expense Sales freight expense Purchase Purchase Purchase Sales Purchase Sales Purchase Purchase Purchase Purchase Purchase Purchase Sales Sales Sales freight expense Purchase Purchase Sales Sales freight expense	RMB (37,478) thousand RMB (42,629) thousand RMB 44,496 thousand RMB 68,375 thousand RMB 280,286 thousand RMB 26,610 thousand RMB 45,360 thousand RMB (280,286) thousand RMB 86,312 thousand RMB (26,610) thousand RMB 37,478 thousand RMB 171,146 thousand RMB 265,028 thousand RMB 125,198 thousand RMB 523,623 thousand RMB 42,629 thousand RMB (125,198) thousand RMB (48,031) thousand RMB 38,464 thousand RMB 88,932 thousand RMB 48,031 thousand RMB (81,162) thousand RMB 24,948 thousand	(1) 1 2 2 10 1 2 (100) 36 (14) 24 99 51 24 71 4 (8) (3) 4 9 31 (4) 2	Average 30 days Within 90 days Within 90 days Within 90 days Average 30 days Average 30 days Average 30 days Average 30 days Average 30 days Average 30 days Average 30 days Within 90 days Average 30 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days	$ - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - -	RMB 2,331 thousand RMB 45,597 thousand RMB (12,988) thousand RMB (12,127) thousand RMB (41,298) thousand RMB (2,336) thousand RMB (11,784) thousand RMB 41,298 thousand RMB (9,785) thousand RMB 2,336 thousand RMB (2,331) thousand RMB (34,652) thousand RMB (25,398) thousand RMB (33) thousand RMB (35,116) thousand RMB (45,597) thousand RMB 33 thousand RMB 18,228 thousand RMB (9,064) thousand RMB (19,799) thousand RMB (18,228) thousand RMB 6,010 thousand RMB (4,761) thousand	1 (5) (8) (7) (24) (1) (7) 100 (64) 2 (11) (95) (47) - (78) (33) - 3 (7) (15) (47) 1 (11)

(Continued)

89 -

Purchasing or (Selling) Company Name	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts (Payable) or Receivable	Notes/Accounts (Payable) or Receivable	Note
			Purchase (Sale)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
HGYDC SLCL JYLTC SYTCL	HYDCCL JYDC SYTCL SIYDCCL JYDC SLCL SIYDCCL	The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company Parent company The same ultimate parent company The same ultimate parent company	Sales Sales Sales freight expense Purchase Sales Sales Sales	RMB (88,932) thousand RMB (45,360) thousand RMB 46,223 thousand RMB 81,162 thousand RMB (44,496) thousand RMB (46,223) thousand RMB (24,948) thousand	(11) (6) 6 10 (64) (55) (30)	Within 90 days Average 30 days Within 90 days Within 90 days Within 90 days Within 90 days Within 90 days	$ - - - - - - -	- - - - - - -	RMB 19,799 thousand RMB 11,784 thousand RMB (5,093) thousand RMB (6,010) thousand RMB 12,988 thousand RMB 5,093 thousand RMB 4,761 thousand	38 23 (8) (9) 80 16 50

(Concluded)

90 -

TABLE 6

ASIA CEMENT CORPORATION

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
The Corporation ACSPL YTRMC JYDC NYDC ACCHC OHC	YTRMC Alliance Concrete Singapore Pte. Ltd. Far Eastern General Construction Inc. YYDCCL WYDC TZOCCL HYDCCL JYDC FENC (China) Yuan Ding (Shanghai) SIYDCCL SLCL	A subsidiary of the Corporation An investee accounted for by equity method Related party in substance The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company Parent company Related party in substance Related party in substance The same ultimate parent company The same ultimate parent company	$ 370,183 SGD 7,024 thousand 277,818 RMB 35,116 thousand RMB 25,398 thousand RMB 34,652 thousand RMB 45,597 thousand RMB 41,298 thousand RMB 431,900 thousand RMB 114,699 thousand RMB 140,000 thousand RMB 193,000 thousand	5.3 times 5.59 times 2.17 times 10.23 times 7.37 times 7.20 times 1.53 times 5.82 times Note 1 Note 1 Note 1 Note 1	$ - - - - - - - - - - - -	- - - - - - - - - - - -	$ 370,003 SGD 5,843 thousand 155,071 RMB 35,116 thousand RMB 25,398 thousand RMB 34,652 thousand RMB 45,597 thousand RMB 41,298 thousand - - RMB 20,000 thousand -	$ - - - - - - - - - - - -
								(Continued)

91 -

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
JYDC HYDCCL HGYDC WYDC	YYDCCL TZOCCL SLCL SLCCL SHYLCP SLCL HXMC SLCL SYCPCL SLCL WYCPCL WYXC	The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company An investee accounted for by equity method The same ultimate parent company The same ultimate parent company The same ultimate parent company A subsidiary of the Corporation The same ultimate parent company	RMB 115,000 thousand RMB 95,000 thousand RMB 132,000 thousand RMB 34,000 thousand RMB 60,000 thousand RMB 105,000 thousand RMB 24,500 thousand RMB 50,000 thousand RMB 30,000 thousand RMB 90,000 thousand RMB 25,000 thousand RMB 60,000 thousand	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	$ - - - - - - - - - - - -	- - - - - - - - - - - -	RMB 35,000 thousand - RMB 20,000 thousand RMB 1,000 thousand - RMB 20,000 thousand - - - - RMB 10,000 thousand -	$ - - - - - - - - - - - -

Note 1: The accounts receivable from financing.

(Concluded)

92 -

TABLE 7

ASIA CEMENT CORPORATION

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES ON WHICH THE CORPORATION EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA) YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2018	as of December 31, 2018	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2018	December 31, 2017	Shares	Percentage of Ownership	Carrying Value
The Corporation DCI	ACCHC FENC U-Ming DCI CHP YDC YYI ACSPL OSC AIC YTRMC YLSS FMT FEDSDL NHC YDLC YLT AEE EISF YLPPC SIHL CSCGL YDC FEC FENC KCC SHSTC FSMS U-Ming AC Mega Investment Ltd. AC Leap Investment Ltd. AC Mega II Investment Ltd.	Cayman Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Chiayi, Taiwan Taipei, Taiwan Taipei, Taiwan Singapore Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Kaohsiung, Taiwan Taipei, Taiwan Taipei, Taiwan Taichung, Taiwan Taipei, Taiwan Hwalien, Taiwan Hwalien, Taiwan Kaohsiung, Taiwan Taipei, Taiwan B.V.I. Cayman Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Hong Kong Kaohsiung, Taiwan Hwalien, Taiwan Taipei, Taiwan B.V.I. B.V.I. B.V.I.	Investment Textile Marine transportation Investment Power plant Investment Investment Cement Broker Investment Ready-mixed concrete, cement - related products Stainless steel Transportation Retails Cement, granulated blast-furnace slag Leasing Transportation Engineering Iron and steel Cement - related products Investment Investment Investment Construction Textile Cement Storage and transportation Mining excavation, mineral processing and sales Marine transportation Investment Investment Investment	$ 13,660,636 3,459,787 510,236 2,555,255 3,119,492 2,232,220 911,058 186,958 154,207 1,212,679 1,042,252 2,661,240 68,416 500,000 410,994 309,049 22,110 5,136 31,463 144,961 2,898 4,821,008 289,982 140,138 1,263,385 36,024 143,516 112,096 27,619 579,926 579,439 289,050	$ 13,660,636 3,459,787 510,236 2,555,255 3,119,492 2,232,220 911,058 186,958 154,207 1,212,679 1,042,252 2,661,240 68,416 500,000 410,994 309,049 22,110 5,136 31,463 144,961 2,898 - 289,982 140,138 1,263,385 36,024 231,322 112,096 27,619 579,926 579,439 289,050	1,061,209,202 1,272,277,085 331,701,152 595,576,603 280,093,521 178,707,648 155,000,803 10,495,495 135,092,154 222,039,596 159,067,779 200,000,000 29,517,188 53,250,000 26,128,171 34,640,189 5,100,000 7,970,703 3,199,823 16,241,083 90,000 331,878,315 72,989,090 103,080,349 82,812,887 1,127,000 13,345,949 1,294,270 468,486 19,600,000 19,600,000 10,000,000	67.73 23.77 39.25 99.99 59.59 35.50 29.92 99.96 18.93 100.00 99.99 100.00 99.82 25.00 99.94 43.60 51.00 98.23 40.40 83.81 100.00 7.62 14.50 33.76 1.55 49.00 14.30 99.56 0.06 100.00 100.00 100.00	$ 36,545,690 39,803,907 9,983,803 12,471,554 5,845,842 3,263,209 1,939,588 3,570,587 1,877,359 1,946,618 1,557,263 1,977,315 1,418,575 617,872 214,201 368,032 251,861 128,288 82,281 76,492 51,884 4,460,107 1,338,858 4,204,157 2,557,351 434,807 35,088 140,641 30,236 455,842 507,038 243,207	$ 11,000,630 12,028,294 1,668,840 452,716 871,315 148,412 435,943 420,624 46,790 81,038 (43,827) 124,872 197,110 71,477 (109,869) 8,181 13,760 41,576 21,265 37,302 3,442 2,156,683 148,412 833,615 12,028,294 HK$ (10,465) thousand (88,106) 442 1,668,840 15,498 19,267 9,642	$ 7,452,890 2,342,563 655,035 452,684 519,247 42,315 130,433 421,166 8,995 81,038 (43,827) 116,586 208,364 17,869 (109,804) 3,567 7,018 40,840 8,591 31,262 3,442 164,339 Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation

(Continued)

93 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2018	as of December 31, 2018	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2018	December 31, 2017	Shares	Percentage of Ownership	Carrying Value
DCI NHC YTRMC FMT FDT AEE YLPPC AIC	AC Mega III Investment Ltd. AC Mega IV Investment Ltd. Catalyst Tranche One CSCGL SHSTC PGIC FENC U-Ming CSCGL YSRMC YTV PYCI AOG FDT FENC YDEC U-Ming FENC ACCHC U-Ming CSCGL YDEC YLPCIP AOG PYCI FENC U-Ming CHP Asia Cement Pioneer Investment Ltd. Asia Cement Pioneer II Investment Ltd. Asia Cement Pioneer III Investment Ltd. Asia Cement Pioneer IV Investment Ltd. Asia Cement Explorer Investment Ltd. DCI	B.V.I. B.V.I. B.V.I. Cayman Kaohsiung, Taiwan Kaohsiung, Taiwan Taipei, Taiwan Taipei, Taiwan Cayman Hsinchu, Taiwan Hà Tĩnh, Vietnam Indonesia Guam Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Cayman Taipei, Taiwan Cayman Taipei, Taiwan India Guam Indonesia Taipei, Taiwan Taipei, Taiwan Chiayi, Taiwan B.V.I. B.V.I. B.V.I. B.V.I. B.V.I. Taipei, Taiwan	Investment Investment Investment Investment Storage and transportation Granulated blast-furnace slag Textile Marine transportation Investment Ready-mixed concrete Ready-mixed concrete Ready-mixed concrete Investment Transportation Textile Retail Marine transportation Textile Investment Marine transportation Investment Retail Tunnel lining segments Investment Ready-mixed concrete Textile Marine transportation Power plant Investment Investment Investment Investment Investment Investment	$ 289,050 575,055 123,120 872,619 333,309 36,771 15,240 1,027 282,957 69,930 201,823 61,439 175,230 30,373 40,263 160,424 1,891 31,322 50,541 38,931 266,942 20,776 8,338 66,816 621 405,473 77,446 376 2,039,879 544,135 289,050 286,263 334,065 76	$ 289,050 575,055 - - 333,309 36,771 15,240 1,027 - 69,930 201,823 - 175,230 30,373 33,759 160,424 1,891 31,322 50,541 38,931 - 20,776 8,338 66,816 - 405,473 77,446 376 2,039,879 544,135 289,050 286,263 334,065 76	10,000,000 19,400,000 4,000 56,297,000 13,634,527 3,287,550 1,739,978 64,143 9,250,000 6,993,000 (Note 1) (Note 1) (Note 1) 27,892,834 4,415,299 28,914,405 50,000 1,020,000 3,161,500 3,485,997 8,368,000 4,174,292 (Note 1) (Note 1) (Note 1) 15,430,293 7,796,914 37,574 66,550,000 18,500,000 10,000,000 9,510,000 11,415,000 5,401	100.00 100.00 25.00 1.29 14.61 31.00 0.03 0.01 0.21 69.93 100.00 99.00 77.69 99.87 0.08 26.95 0.01 0.02 0.20 0.41 0.19 3.89 99.99 22.31 1.00 0.29 0.92 0.01 100.00 100.00 100.00 100.00 100.00 -	$ 276,156 596,541 122,662 756,511 35,849 60,232 41,281 819 124,253 68,254 208,429 48,464 40,530 740,087 112,003 566,922 1,683 31,705 69,877 30,457 112,405 81,752 2,226 11,639 490 658,429 61,241 850 1,758,890 521,076 224,136 261,126 142,357 76	$ 8,336 13,399 8 2,156,683 (88,106) 22,435 12,028,294 1,668,840 2,156,683 9,460 VND 14,660,774 thousand IDR (2,530,312) thousand US$ (1,200) thousand 104,118 12,028,294 69,107 1,668,840 12,028,294 11,000,630 1,668,840 2,156,683 69,107 US$ (1,901) thousand US$ (1,892) thousand IDR (2,530,312) thousand 12,028,294 1,668,840 871,315 61,107 19,715 8,708 9,877 3,350 452,716	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation

(Continued)

94 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2018	as of December 31, 2018	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2018	December 31, 2017	Shares	Percentage of Ownership	Carrying Value
AIC YLT ACE ACP ACP II ACP III ACP IV Leap Mega Mega II Mega III Mega IV KCC JFTL AOG	FMT NHC AEE FSMS FDT YSRMC EISF YTRMC CSCGL U-Ming Opas Fund Segregated Portfolio Company Catalyst_207 SPC CSCGL CSCGL CSCGL CSCGL CSCGL CSCGL CSCGL CSCGL CSCGL CSCGL KCCL Join Fortune Trading Ltd. Empire Success Corp Ltd. Profit Enterprises Int'l Ltd. Perez-AOG, L.L.C. Perez-Mtec-ACC, L.L.C.	Taipei, Taiwan Taichung, Taiwan Hwalien, Taiwan Hwalien, Taiwan Taipei, Taiwan Hsinchu, Taiwan Kaohsiung, Taiwan Taipei, Taiwan Cayman Taipei, Taiwan Cayman Cayman Cayman Cayman Cayman Cayman Cayman Cayman Cayman Cayman Cayman Cayman Hong Kong B.V.I. Hong Kong Hong Kong Guam Guam	Transportation Cement, granulated blast-furnace slag Engineering Mining excavation, mineral processing and sales Transportation Ready-mixed concrete Iron and steel Ready-mixed concrete, cement - related products Investment Marine transportation Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Ready-mixed concrete Investment Storage and transportation Barge transportation Mining excavation and sales Ready-mixed concrete	$ 176 78 116 119 110 37 15,649 53 556,895 58,840 1,531 494 266,882 1,959,250 544,689 290,967 292,032 567,556 554,533 293,393 292,743 504,078 HK$ 10 thousand HK$ 23,140 thousand HK$ 17,040 thousand HK$ 6,100 thousand US$ 5,950 thousand US$ 300 thousand	$ 176 78 116 119 110 37 15,649 53 - 58,840 1,610 494 - - - - - - - - - - HK$ 10 thousand HK$ 23,140 thousand HK$ 17,040 thousand HK$ 6,100 thousand US$ 5,950 thousand US$ 300 thousand	5,000 5,000 6,000 5,000 7,145 5,000 660,000 5,782 31,528,000 6,348,103 33 33 7,480,000 107,536,000 36,865,000 14,790,000 18,514,000 35,569,000 30,251,000 16,058,000 18,477,000 37,410,000 10,000 2,979,721 17,040,000 6,100,000 (Note 1) (Note 1)	0.02 0.02 0.07 0.38 0.03 0.05 8.33 - 0.72 0.75 33.00 33.00 0.17 2.47 0.85 0.34 0.43 0.82 0.70 0.37 0.42 0.86 100.00 100.00 50.00 50.00 64.50 33.33	$ 272 80 120 125 199 44 17,191 53 423,610 299,617 1,610 493 100,481 1,445,197 495,515 198,773 248,929 478,092 406,675 215,835 248,209 502,778 HK$ 32,944 thousand HK$ 4,816 thousand HK$ 4,464 thousand HK$ 543 thousand US$ 155 thousand US$ 1 thousand	$ 197,110 (109,869) 41,576 442 104,118 9,460 21,265 (43,827) 2,156,683 1,668,840 76 11 2,156,683 2,156,683 2,156,683 2,156,683 2,156,683 2,156,683 2,156,683 2,156,683 2,156,683 2,156,683 HK$ (769) thousand HK$ (3,096) thousand HK$ (2,293) thousand HK$ (778) thousand US$ (1,892) thousand -	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation

(Continued)

95 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2018	as of December 31, 2018	Net Income (Loss) of the Investee	Share of Profits (Loss)	Note
				December 31, 2018	December 31, 2017	Shares	Percentage of Ownership	Carrying Value
ACSPL ACCHC	OCPL ACCHC Alliance Concrete Singapore Pte. Ltd. PIHPL	Singapore Cayman Singapore B.V.I.	Ready-mixed concrete, leasing Investment Ready-mixed concrete Investment	SGD 17,000 thousand US$ 20,000 thousand SGD 7,000 thousand US$ 880,613 thousand	SGD 17,000 thousand US$ 20,000 thousand SGD 7,000 thousand US$ 880,613 thousand	17,000,000 63,790,798 6,000,000 9,379,303	100.00 4.07 50.00 100.00	SGD 11,578 thousand SGD 98,077 thousand SGD 4,817 thousand US$ 2,165,969 thousand	SGD 203 thousand 11,000,630 SGD (1,386) thousand US$ 398,784 thousand	Not applicable Not applicable Not applicable Not applicable	A subsidiary of the Corporation A subsidiary of the Corporation A subsidiary of the Corporation

Note 1: This is not a company limited by shares.

(Concluded)

96 -

TABLE 8

ASIA CEMENT CORPORATION

INVESTMENT IN MAINLAND CHINA YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 2)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2018	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Income as of December 31, 2018
					Outward	Inward
SHYLCP JYDC WYDC SHYFCP OHC NYLC NYDC SIYDCCL CYCPCL JYLTC	It manufactures and sells ready-mixed concrete and cement - related products It manufactures and sells cement, clinker and ready-mixed concrete (including cement - related products). It manufactures and sells cement, slag powder and slag cement. It manufactures and sells ready-mixed concrete and cement - related products Investment It manufactures and sells ready-mixed concrete and cement - related products It manufactures and sells cement, slag powder and slag cement. Cement, clinker, slag powder and ready-mixed concrete (including cement - related products) It manufactures and sells ready-mixed concrete and cement - related products Transportation	US$15,000 (equivalent to NT$459,975 thousand) US$356,104 (equivalent to NT$10,919,929 thousand) US$36,140 (equivalent to NT$1,108,233 thousand) US$2,540 (equivalent to NT$77,889 thousand) US$130,407 (equivalent to NT$3,998,931 thousand) RMB60,000 (equivalent to NT$268,083 thousand) RMB90,000 (equivalent to NT$402,124 thousand) US$368,340 (equivalent to NT$11,295,146 thousand) US$4,100 (equivalent to NT$125,727 thousand) RMB12,500 (equivalent to NT$55,851 thousand)	(2) (2) (2) (2) (2) (2) (2) (2) (2) (2)	US$11,200 (equivalent to NT$343,448 thousand) US$93,035 (equivalent to NT$2,852,918 thousand) RMB(21,013) (equivalent to NT$(93,887) thousand) US$22,081 (equivalent to NT$677,114 thousand) RMB(1,378) (equivalent to NT$(6,157) thousand) US$1,270 (equivalent to NT$38,945 thousand) US$54,191 (equivalent to NT$1,661,767 thousand) - - US$67,585 (equivalent to NT$2,072,494 thousand) US$2,023 (equivalent to NT$62,035 thousand) -	$ - - - - - - - - - -	$ - RMB(105,745) (equivalent to NT$(472,473) thousand) RMB(2,155) (equivalent to NT($9,629) thousand) - - - - RMB(4,091) (equivalent to NT$(18,279) thousand) - -	US$11,200 (equivalent to NT$343,448 thousand) US$93,035 (equivalent to NT$2,852,918 thousand) RMB(126,758) (equivalent to NT$(566,360) thousand) US$22,081 (equivalent to NT$677,114 thousand) RMB(3,533) (equivalent to NT$(15,786) thousand) US$1,270 (equivalent to NT$38,945 thousand) US$54,191 (equivalent to NT$1,661,767 thousand) - - US$67,585 (equivalent to NT$2,072,494 thousand) RMB(4,091) (equivalent to NT$(18,279) thousand) US$2,023 (equivalent to NT$62,035 thousand) -	RMB(30,833) (equivalent to NT$(140,128) thousand) RMB1,370,378 (equivalent to NT$6,228,087 thousand) RMB24,907 (equivalent to NT$113,198 thousand) RMB170 (equivalent to NT$775 thousand) RMB295,191 (equivalent to NT$1,341,584 thousand) RMB17,082 (equivalent to NT$77,635 thousand) RMB25,320 (equivalent to NT$115,076 thousand) RMB780,904 (equivalent to NT$3,549,051 thousand) RMB11,103 (equivalent to NT$50,460 thousand) RMB5,167 (equivalent to NT$23,481 thousand)	72.00 68.40 72.00 0.00 72.00 68.40 52.20 72.00 72.00 70.12	RMB(22,199) (equivalent to NT$(100,892) thousand) RMB937,338 (equivalent to NT$4,260,012 thousand) RMB17,933 (equivalent to NT$81,503 thousand) RMB(14,544) (equivalent to NT$(66,098) thousand) RMB212,538 (equivalent to NT$965,940 thousand) RMB11,684 (equivalent to NT$53,102 thousand) RMB13,217 (equivalent to NT$60,070 thousand) RMB562,010 (equivalent to NT$2,554,221 thousand) RMB7,994 (equivalent to NT$36,331 thousand) RMB3,623 (equivalent to NT$16,465 thousand)	RMB130 (equivalent to NT$582 thousand) RMB3,819,336 (equivalent to NT$17,064,962 thousand) RMB417,645 (equivalent to NT$1,866,056 thousand) - RMB1,439,903 (equivalent to NT$6,433,551 thousand) RMB126,651 (equivalent to NT$565,883 thousand) RMB90,779 (equivalent to NT$405,603 thousand) RMB3,121,272 (equivalent to NT$13,945,981 thousand) RMB49,060 (equivalent to NT$219,203 thousand) RMB24,154 (equivalent to NT$107,919 thousand)	US$800 (equivalent to NT$24,532 thousand) US$50,781 (equivalent to NT$1,557,199 thousand) RMB126,758 (equivalent to NT$566,360 thousand) US$4,469 (equivalent to NT$137,042 thousand) RMB3,533 (equivalent to NT$15,786 thousand) - US$809 (equivalent to NT$24,808 thousand) - - US$27,009 (equivalent to NT$828,231 thousand) RMB4,091 (equivalent to NT$18,279 thousand) US$77 (equivalent to NT$2,361 thousand) -

(Continued)

97 -

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 2)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2018	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Income as of December 31, 2018
					Outward	Inward
HYDCCL CYSPC SYCPCL SYTCL YYDCCL HGYDC HYTCL WYCPCL WYXC HZYCCL HXMC WAMTC TZOCCL	Cement, clinker, slag powder and ready-mixed concrete (including cement - related products) Slag powder It manufactures and sells ready-mixed concrete and cement - related products Transportation Cement, clinker, slag powder and ready-mixed concrete (including cement - related products) Cement, slag powder and ready-mixed concrete (including cement - related products) Transportation It manufactures and sells ready-mixed concrete and cement - related products Cement, clinker, slag powder and ready-mixed concrete (including cement - related products) It manufactures and sells ready-mixed concrete and cement - related products Production and sales of limestone Marine transportation Cement - related products	US$154,800 (equivalent to NT$4,746,942 thousand) - US$3,300 (equivalent to NT$101,195 thousand) US$3,500 (equivalent to NT$107,328 thousand) US$35,530 (equivalent to NT$1,089,527 thousand) US$86,170 (equivalent to NT$2,642,403 thousand) RMB13,000 (equivalent to NT$58,085 thousand) RMB60,000 (equivalent to NT$268,083 thousand) RMB90,000 (equivalent to NT$402,124 thousand) RMB30,000 (equivalent to NT$134,041 thousand) RMB10,000 (equivalent to NT$44,680 thousand) RMB35,500 (equivalent to NT$158,616 thousand) US$16,000 (equivalent to NT$490,640 thousand)	(2) - (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2)	US$44,610 (equivalent to NT$1,367,966 thousand) RMB(5,356) (equivalent to NT$(23,931) thousand) US$980 (equivalent to NT$30,052 thousand) US$2,970 (equivalent to NT$91,075 thousand) US$2,158 (equivalent to NT$66,175 thousand) US$14,833 (equivalent to NT$454,854 thousand) US$13,513 (equivalent to NT$414,376 thousand) RMB(4,090) (equivalent to NT$(18,274) thousand) - - - - - - -	$ - - - - - - - - - - - - -	RMB(30,799) (equivalent to NT$(137,611) thousand) - - - - RMB(19,988) (equivalent to NT$(89,307) thousand) - - - - - - -	US$44,610 (equivalent to NT$1,367,966 thousand) RMB(36,155) (equivalent to NT$(161,542) thousand) US$980 (equivalent to NT$30,052 thousand) US$2,970 (equivalent to NT$91,075 thousand) US$2,158 (equivalent to NT$66,175 thousand) US$14,833 (equivalent to NT$454,854 thousand) US$13,513 (equivalent to NT$414,376 thousand) RMB(24,078) (equivalent to NT$(107,582) thousand) - - - - - - -	RMB292,002 (equivalent to NT$1,327,089 thousand) - RMB15,096 (equivalent to NT$68,608 thousand) RMB1,606 (equivalent to NT$7,299 thousand) RMB32,957 (equivalent to NT$149,784 thousand) RMB227,687 (equivalent to NT$1,034,790 thousand) RMB(445) (equivalent to NT$(2,025) thousand) RMB15,265 (equivalent to NT$69,378 thousand) RMB51,917 (equivalent to NT$235,950 thousand) RMB2,733 (equivalent to NT$12,421 thousand) RMB4,562 (equivalent to NT$20,733 thousand) RMB10,208 (equivalent to NT$46,392 thousand) RMB(1,178) (equivalent to NT$(5,352) thousand)	72.00 - 72.00 72.00 72.00 72.00 72.00 72.00 64.79 28.80 28.80 34.20 72.00	RMB210,241 (equivalent to NT$955,504 thousand) - RMB10,869 (equivalent to NT$49,398 thousand) RMB1,156 (equivalent to NT$5,255 thousand) RMB23,729 (equivalent to NT$107,844 thousand) RMB163,935 (equivalent to NT$745,049 thousand) RMB(321) (equivalent to NT$(1,458) thousand) RMB10,991(equivalent to NT$49,952) thousand) RMB(66,722) (equivalent to NT$(303,240) thousand) RMB787 (equivalent to NT$3,577 thousand) RMB1,235 (equivalent to NT$5,614 thousand) RMB3,475 (equivalent to NT$15,795 thousand) RMB(806) (equivalent to NT$(3,661) thousand)	RMB1,741,362 (equivalent to NT$7,780,483 thousand) - RMB25,863 (equivalent to NT$115,558 thousand) RMB28,313 (equivalent to NT$126,503 thousand) RMB264,000 (equivalent to NT$1,179,563 thousand) RMB852,665 (equivalent to NT$3,809,744 thousand) RMB13,236 (equivalent to NT$59,137 thousand) RMB48,386 (equivalent to NT$216,190 thousand) RMB227,414 (equivalent to NT$1,016,094 thousand) RMB11,927 (equivalent to NT$53,289 thousand) RMB3,871 (equivalent to NT$17,295 thousand) RMB29,870 (equivalent to NT$133,459 thousand) RMB51,968 (equivalent to NT$232,194 thousand)	US$12,990 (equivalent to NT$398,338 thousand) RMB36,155 (equivalent to NT$161,542 thousand) - - US$992 (equivalent to NT$30,420 thousand) US$1,016 (equivalent to NT$31,156 thousand) US$1,837 (equivalent to NT$56,332 thousand) RMB24,078 (equivalent to NT$107,582 thousand) - - - - - - -
												(Continued)

98 -

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 2)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2018	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Income as of December 31, 2018
							Outward	Inward
SLCL SLCCL	Cement, slag powder and ready-mixed concrete (including cement - related products) Cement - related products		RMB600,000 (equivalent to NT$2,680,826 thousand) RMB20,000 (equivalent to NT$89,361 thousand)	(2) (2)	$	- -	$ - -	$ - -	$ - -	RMB323,124 (equivalent to NT$1,468,531 thousand) RMB969 (equivalent to NT$4,403 thousand)	72.00 72.00	RMB230,469 (equivalent to NT$1,047,433 thousand) RMB698 (equivalent to NT$3,170 thousand)	RMB1,105,426 (equivalent to NT$4,939,090 thousand) RMB(14,652) (equivalent to NT$(65,465) thousand)	$ - -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2018		Investment Amounts Authorized by Investment Commission, MOEA				Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
US$481,069 (Note 3) (equivalent to NT$14,751,981 thousand) RMB(194,615) (equivalent to NT$(869,548) thousand)		US$2,261,757 (equivalent to NT$69,356,778 thousand)				(Note 4)

Note 1: The accrual is based on the financial statements audited by independent auditors.

Note 2: The investor companies were incorporated in Mainland China by a company (2) (ACCHC) which was incorporated in the area other than Taiwan and Mainland China in order to invest in Mainland China.

Note 3: As of December 31, 2018 accumulated investment in China Shanshui Cement Group Ltd which listed at HKEx for managing finance purpose was US$150,620 thousand included in Accumulated Outward Remittance for Investment in Mainland China.

Note 4: The Corporation obtained certificate No. 10620435220 from Industrial Development Bureau, Ministry of Economic Affairs, according to the “Regulations Governing the Approval of Investment or Technical Cooperation in Mainland China”, the accumulation of fund is not limited.

Note 5: The foreign currency amounts of original investment amount and carrying value are expressed in New Taiwan dollars at exchange rate as of December 31, 2018 the foreign currency amount of net income is expressed in New Taiwan dollars at average exchange rate for the year ended December 31, 2018

(Concluded)

99 -

Others 3) Acquisitions of investment properties Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2018 2017 $ 34 $ - For the Year Ended December 31
		2018 $ 337	2017 $ 1,186

AI assistant

ACC — Annual Report 2018

51736_rns_2018-11-14_065dcda6-b376-4f21-a059-31cde3b0ec98.pdf

Asia Cement Corporation

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Estimated Impairment of Trade Receivables of Subsidiaries

Fair Value Measurement of Investment Properties

Emphasis of Matter

Other Matter

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

ASIA CEMENT CORPORATION

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION

1. ORGANIZATION AND OPERATIONS

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

1) IFRS 9 “Financial Instruments” and related amendments

Classification, measurement and impairment of financial assets

The Corporation as lessee

The Corporation as lessor

Anticipated impact on assets, liabilities and equity

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Classification of Current and Non-current Assets and Liabilities

Foreign Currencies

Inventories

Investment in Subsidiaries

Investment in Associates

Property, Plant and Equipment

Investment Properties

Intangible Assets

Impairment of Tangible and Intangible Assets

Financial Instruments

Financial assets

2018

2017

2018

2017

Financial liabilities

Convertible bonds

Derivative financial instruments

Provisions

Revenue Recognition

2018

2017

Leasing

Employee Benefits

Taxation

b. Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Fair Value Measurements and Valuation Process

6. CASH AND CASH EQUIVALENTS

In 2018

In 2017

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

10. FINANCIAL ASSETS MEASURED AT COST - NON-CURRENT - 2017

11. FINANCIAL ASSETS AT AMORTIZED COST - CURRENT - 2018

12. DEBT INVESTMENTS WITH NO ACTIVE MARKET - CURRENT - 2017

13. TRADE RECEIVABLES

Trade Receivables - Sales

In 2018

December 31, 2018

14. INVENTORIES

15. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

U-Ming:

ACC Annual Report 2018