ACC - Audit Report / Information 2018

Asia Cement Corporation and Subsidiaries

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

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2018 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

ASIA CEMENT CORPORATION

DOUGLAS TONG HSU Chairman

March 21, 2019

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Asia Cement Corporation

Opinion

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

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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 Consolidated Financial Statements section of our report. We are independent of the Group 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 consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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

Estimated Impairment of Trade Receivables

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s 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. Refer to Notes 5 and 13. 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 are as follows:

We obtained an understanding and performed tests on 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 Group’s 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 20. 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 Group’s 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 Group reported a provisional amount of NT$2,789,881 thousand for the goodwill arising from the above transition during the measurement period as the goodwill was included in the carrying amounts of the Group’s investment in CSCGL. The Group 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 18. 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$10,217,370 thousand, representing 4% of the consolidated total assets. For the year ended December 31, 2018, the share of profit or loss of CSCGL was NT$376,557 thousand, representing 2% of the consolidated income before income tax.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 consolidated 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 consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements 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 consolidated financial statements are intended only to present the consolidated 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 consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated 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 consolidated financial statements shall prevail.

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 38) 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 40) Available-for-sale financial assets - current (Notes 9 and 40) Financial assets at amortized cost - current (Notes 6, 11, 38 and 40) Contract assets - current (Note 33) Debt investments with no active market - current (Notes 6, 12, 38 and 40) Notes receivable Third parties Trade receivables Third parties (Notes 13 and 14) Related parties (Notes 13 and 38) Other receivables (Notes 15 and 38) Current tax assets (Note 33) Inventories (Note 16) Prepayments (Note 23) Other current assets (Note 24) Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Notes 18 and 40) Financial assets at fair value through other comprehensive income - non-current (Notes 8 and 40) Available-for-sale financial assets - non-current (Notes 9 and 40) Financial assets at amortized cost - non-current (Notes 6, 11, 38 and 40) Financial assets measured at cost - non-current (Note 10) Debt investments with no active market - non-current (Notes 6, 12, 38 and 40) Property, plant and equipment (Notes 19 and 40) Investment properties (Notes 20 and 40) Intangible assets (Notes 21 and 22) Deferred tax assets (Note 33) Finance lease receivables - non-current (Note 14) Long-term prepayments for leases (Note 23) Other non-current assets (Notes 24 and 38) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 25 and 38) Short-term bills payable (Note 26) Financial liabilities at fair value through profit or loss - current (Note 7) Contract liabilities - current (Note 33) Accounts payable and accrued expenses Third parties Related parties (Note 38) Dividends and bonuses payable Other payable - other (Note 27) Current tax liabilities (Note 33) Provisions - current (Note 30) Customers' deposits and advances (Note 28) Deferred revenue - current (Note 29) Current portion of long-term liabilities (Notes 28 and 38) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 28) Long-term borrowings (Notes 28 and 38) Provisions - non-current (Notes 24, 30 and 41) Deferred tax liabilities (Note 33) Net defined benefit liabilities - non-current Deferred revenue - non-current (Note 29) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 32) Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Note 32) Total equity TOTAL		2018 Amount % $ 14,929,411 5 9,046,583 3 3,800,923 1 - - 14,322,874 5 147,528 - - - 12,928,203 5 9,251,854 3 976,266 1 2,964,751 1 15,901 - 9,804,276 4 1,684,612 1 485,324 - 80,358,506 29 78,846,276 28 9,784,743 4 - - 14,642 - - - - - 52,549,341 19 35,965,203 13 3,694,783 1 436,238 - 8,894,355 3 3,779,353 1 4,864,558 2 198,829,492 71 $ 279,187,998 100 $ 24,805,239 9 18,564,469 7 268,218 - 731,015 - 8,028,077 3 250,857 - 231,722 - 334,305 - 2,181,268 1 48,200 - - - 75,912 - 7,285,012 2 62,804,294 22 12,192,567 5 33,593,896 12 679,377 - 9,365,429 4 185,107 - 923,805 - 395,177 - 57,335,358 21 120,139,652 43 33,614,472 12 1,362,554 - 15,615,380 6 63,945,145 23 20,358,461 7 99,918,986 36 2,996,214 1 137,892,226 49 21,156,120 8 159,048,346 57 $ 279,187,998 100		2017
				Amount % $ 7,739,492 3 322,080 - - - 7,805,406 3 - - - - 4,380,928 2 8,328,652 3 9,348,386 4 589,265 - 3,042,831 1 23,145 - 6,572,982 3 1,675,449 1 434,086 - 50,262,702 20 64,859,378 26 - - 18,072,678 7 - - 1,300,668 1 150,549 - 53,738,838 22 35,745,411 14 4,552,561 2 564,185 - 9,566,585 4 3,814,315 2 4,436,478 2 196,801,646 80 $ 247,064,348 100 $ 18,410,863 7 16,124,918 7 - - - - 7,386,877 3 272,360 - 205,046 - 330,729 - 1,155,972 1 47,646 - 748,214 - 68,085 - 9,197,457 4 53,948,167 22 10,000,000 4 27,277,821 11 451,056 - 8,100,162 3 193,291 - 858,838 1 438,649 - 47,319,817 19 101,267,984 41 33,614,472 14 1,168,692 1 15,068,480 6 63,001,957 25 16,125,837 7 94,196,274 38 (1,543,873) (1) 127,435,565 52 18,360,799 7 145,796,364 59 $ 247,064,348 100

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

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 33 and 38) OPERATING COSTS (Notes 16, 33, 34 and 38) GROSS PROFIT UNREALIZED GROSS PROFIT ON SALES TO ASSOCIATES REALIZED GROSS PROFIT ON SALES TO ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Administrative expenses (Notes 34 and 38) Expected credit loss (Note 13) Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Other income (Note 34) Other gains and losses (Note 34) Finance costs (Note 34) Share of profit or loss of associates and joint ventures Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Note 35) NET INCOME FOR THE YEAR		2018 Amount % $ 82,741,004 100 61,584,690 74 21,156,314 26 - 15,147 - 21,171,461 26 2,875,798 4 142,553 - 3,018,351 4 18,153,110 22 1,479,803 2 (1,733,766) (2) (1,673,185) (2) 4,144,156 5 2,217,008 3 20,370,118 25 5,480,921 7 14,889,197 18		2017
				Amount % $ 64,899,248 100 54,728,230 85 10,171,018 15 (540) - - - 10,170,478 15 2,733,762 4 - - 2,733,762 4 7,436,716 11 1,040,658 2 (728,230) (1) (1,772,075) (3) 2,522,090 4 1,062,443 2 8,499,159 13 1,833,618 2 6,665,541 11 (Continued)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

OTHER COMPREHENSIVE INCOME, NET Items that will not be reclassified subsequently to profit or loss: Unrealized gain on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans Share of other comprehensive income of associates and joint ventures Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Unrealized gain on available-for-sale financial assets Cash flow hedges Share of other comprehensive income (loss) of associates and joint ventures Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 36) Basic Diluted		2018 Amount % $ 707,605 1 265,511 - 723,519 1 1,696,635 2 (894,761) (1) - - (2,434) - 636,733 1 (260,462) - 1,436,173 2 $ 16,325,370 20 $ 11,117,094 13 3,772,103 5 $ 14,889,197 18 $ 12,811,353 16 3,514,017 4 $ 16,325,370 20 $3.54 $3.49		2017
				Amount % $ - - 127,020 - 124,241 - 251,261 - (1,017,135) (1) 4,092,288 6 - - (1,206,875) (2) 1,868,278 3 2,119,539 3 $ 8,785,080 14 $ 5,469,007 8 1,196,534 2 $ 6,665,541 10 $ 7,895,746 12 889,334 2 $ 8,785,080 14 $1.74 $1.74

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

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

(Concluded)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

		Equity Attribu	ble to Owners of the Corporation	ble to Owners of the Corporation	ble to Owners of the Corporation
Capital Stock	Issued Amount Capital Surplus $ 33,614,472 $ 1,167,881 - - - - - - - 811 - - - - - - - - 33,614,472 1,168,692 - - 33,614,472 1,168,692 - - - - - - - 185,411 - 8,451 - - - - - - - - - - $ 33,614,472 $ 1,362,554	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 14,673,903 $ 62,119,922 $ 14,805,588 394,577 - (394,577 ) - 881,019 (881,019 ) - - (3,025,302 ) - - - - - 5,469,007 - - 251,923 - - - - 1,016 (99,783) 15,068,480 63,001,957 16,125,837 - - 1,713,459 15,068,480 63,001,957 17,839,296 546,900 - (546,900 ) - 943,188 (943,188 ) - - (4,033,736 ) - - - - - - - - 11,117,094 - - 351,764 - - - - - (3,408,697 ) - - (17,172) $ 15,615,380 $ 63,945,145 $ 20,358,461		Other Equity			Total Other Equity $ (3,718,689 ) - - - - - 2,174,816 - - (1,543,873 ) (211,105) (1,754,978 ) - - - - - - 1,342,495 - 3,408,697 - $ 2,996,214
			Exchange Differences on Translating Foreign A Operations $ (44,313 ) - - - - - (2,593,840 ) - - (2,638,153 ) - (2,638,153 ) - - - - - - (3,211 ) - - - $ (2,641,364)	Unrealized Gain (Loss) on Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other vailable-for-sale Comprehensive Financial Assets Income $ (4,023,554 ) $ - - - - - - - - - - - 4,751,621 - - - - - 728,067 - (728,067) 516,962 - 516,962 - - - - - - - - - - - - - 1,343,257 - - - 3,408,697 - - $ - $ 5,268,916	Gains on Property Revaluation $ 307,728 - - - - - - - - 307,728 - 307,728 - - - - - - - - - - $ 307,728	Cash Flow Hedges $ 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 consolidated financial statements.

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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: Depreciation expenses Share of loss of associates and joint ventures Finance costs Dividend income Impairment loss recognized on goodwill Interest income Reversal of impairment loss on (write-downs of) inventories Amortization expenses Net loss (gain) on fair value changes of financial assets and liabilities designated as at fair value through profit or loss Gain on disposal of financial assets Impairment loss recognized on associates and joint ventures Expected credit loss recognized on trade receivables Gain on changes in fair value of investment properties Impairment loss on property, plant and equipment Gain on disposal of subsidiaries Loss on disposal of property, plant and equipment Unrealized (gain) loss on foreign exchange Effect of changes in exchange rate of bonds payable Impairment loss recognized on trade receivables Loss on disposal of intangible assets Gain on disposal of associates Other items Changes in operating assets and liabilities Financial assets held for trading Financial assets mandatorily classified as at fair value through profit or loss Contract assets Notes receivable Trade receivables Other receivables Inventories Prepayments Other current assets Contract liabilities Accounts payable and accrued expenses Provisions Customers' deposits and advances Net defined benefit liabilities Deferred revenue Cash generated from operations Interests received Dividends received	2018 $ 20,370,118 4,649,561 (4,144,156) 1,673,185 (770,314) 630,631 (370,571) 315,353 269,631 256,294 (251,859) 200,245 142,553 (98,015) 51,888 (40,440) 33,455 (15,575) 300 - - - (755) - (3,051,110) (44,533) (4,805,502) 525,258 (487,332) (3,566,055) (31,307) (74,718) (20,934) (640,964) 176,021 - (12,254) (68,085) 10,800,014 254,393 3,172,662	2017 $ 8,499,159 4,839,940 (2,522,090) 1,772,075 (616,680) - (179,840) (4,401) 337,651 (31,422) (393,588) 122,619 - (216,580) - - 103,818 419,217 (7,470) 159,402 1,030 (76) 4,949 37,397 - - (4,188,102) 596,114 (365,498) 278,234 (810,951) 12,784 - 496,543 153,618 41,831 (1,661) (68,085) 8,469,937 191,079 2,298,195 (Continued)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

Interests paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Acquisition of property, plant and equipment Acquisition of financial assets at fair value through other comprehensive income Acquisition of associates Proceeds from disposal of property, plant and equipment Increase in long-term prepayments for investment Proceeds from disposal of subsidiaries Acquisition of intangible assets Increase in refundable deposits Decrease in other non-current assets Acquisition of investment properties Acquisition of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Increase in debt investments with no active market Proceeds from capital reduction of investments accounted for using equity method Increase in prepayments for leases Proceeds from capital reduction of available-for-sale financial assets Proceeds from capital reduction of financial assets at cost Net cash inflow on disposal of associates Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from issuance of bonds Increase (decrease) in short-term borrowings Repayments of bonds Dividends paid Increase in short-term bills payable Change of non-controlling interests Decrease in other non-current liabilities Increase in guarantee deposits received Net cash generated from (used in) financing activities	2018 $ (1,658,691) (3,304,318) 9,264,060 (9,537,968) (4,274,600) (556,016) (123,120) 90,395 (83,721) 48,391 (13,037) (9,678) 1,559 (1,269) - - - - - - - - (14,459,064) 34,819,996 (30,396,615) 6,574,843 6,445,333 (4,089,430) (4,033,715) 2,439,125 723,504 (59,096) 14,691 12,438,636	2017 $ (1,731,570) (1,088,593) 8,139,048 - (1,157,324) - (16,024) 150,935 (1,954,754) - (13,608) (711,225) 2,950 (48,967) (6,799,317) 5,689,530 (2,037,434) 115,631 (27,997) 16,880 5,841 86 (6,784,797) 33,917,158 (34,878,734) - (300,971) - (3,025,272) 4,094,700 (528,712) (63,285) 5,561 (779,555) (Continued)

13 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

2018
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN
CURRENCIES
$ (53,713)

NET INCREASE IN CASH AND CASH EQUIVALENTS
7,189,919
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR

7,739,492

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$ 14,929,411

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated March 21, 2019)

2017
$ (285,210)

289,486

7,450,006
$ 7,739,492
(Concluded)

14 -

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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 stock 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.

As of December 31, 2018 and 2017, the Corporation and its subsidiaries (collectively, the “Group”) had 5,878 and 6,004 employees, respectively.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated 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 Group’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.

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Classification, measurement and impairment of financial assets

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

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 Group’s financial assets and financial liabilities as of January 1, 2018.

Financial Assets Cash and cash equivalents Equity securities Mutual funds Debt 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 fair value through profit or loss (FVTPL) Held‑for‑trading Fair value through other comprehensive income (FVTOCI) - equity instruments Available‑for‑sale Mandatorily at FVTPL Available‑for‑sale FVTOCI - equity instruments Held‑for‑trading Mandatorily at FVTPL Available‑for‑sale Mandatorily at FVTPL Available‑for‑sale Mandatorily at FVTPL Loans and receivables Amortized cost Loans and receivables Amortized cost	Carrying Amount IAS 39 IFRS 9 Remark $ 7,739,492 $ 7,739,492 - 69,039 69,039 - 9,555 9,555 a) 4,055,199 4,055,199 b) 21,546,015 21,884,158 b) 243,486 243,486 - 1,205,078 1,205,078 c) 372,460 372,460 d) 4,531,477 4,531,477 - 21,309,134 21,309,134 -

Financial Assets FVTPL Add: Reclassification from available-for-sale (IAS 39) - required reclassification Less: Reclassification to FVTOCI - equity instruments (IFRS 9) FVTOCI Equity instruments Add: Reclassification from FVTPL (IAS 39) Add: Reclassification from available-for-sale (IAS 39)	IAS 39 Carrying Amount as of January 1, 2018 $ 322,080 - - 322,080 - - - - $ 322,080	Reclassifi- cations $ - 5,632,737 (9,555) 5,623,182 - 9,555 21,546,015 21,555,570 $ 27,178,752	Remeasure- ments $ - - - - - - 338,143 338,143 $ 338,143	IFRS 9 Carrying Amount as of January 1, 2018 $ 322,080 5,632,737 (9,555) 5,945,262 - 9,555 21,884,158 21,893,713 $ 27,838,975	Retained Earnings Effect on January 1, 2018 $ - 59,525 - 59,525 - (4,708 ) 860,641 855,933 $ 915,458	Other Equity Effect on January 1, 2018 Remark $ - (59,525 ) b), c) and d) - a) (59,525) - 4,708 a) (522,498 ) b) (517,790) $ (577,315)

a) The Group elected to designate some of its investments in equity securities previously classified as FVTPL under IAS 39 as at FVTOCI under IFRS 9, because these investments are not held for trading. The retrospective adjustment resulted in an increase of NT$4,708 thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI and a decrease of NT$4,708 thousand in retained earnings on January 1, 2018.

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b) The Group 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 NT$90,263 thousand and to other equity - unrealized gain (loss) on financial assets at FVTOCI in the amount of NT$1,704,035 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 NT$338,143 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 Group 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 NT$860,641 thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI and an increase of NT$860,641 thousand in retained earnings on January 1, 2018.

c) Mutual funds previously classified as available-for-sale under IAS 39 were classified mandatorily as at FVTPL under IFRS 9, because the contractual cash flows were not solely payments of principal and interest on the principal outstanding and they were not equity instruments. The retrospective adjustment resulted in a decrease of NT$51,696 thousand in other equity - unrealized gain (loss) on available-for-sale financial assets and an increase of NT$51,696 thousand in retained earnings on January 1, 2018.
d) Debt investments previously classified as available‑for‑sale financial assets under IAS 39 were classified as at FVTPL under IFRS 9, because on January 1, 2018, the contractual cash flows were not solely payments of principal and interest on the principal outstanding. As a result of retrospective application, the related adjustments comprised an increase in other equity - unrealized gain (loss) on available‑for‑sale financial assets of NT$82,434 thousand and a decrease in retained earnings of NT$82,434 thousand on January 1, 2018.

	IAS 39		IFRS 9		Retained
	Carrying	Adjustments	Carrying		Earnings	Other Equity
	Amount as of	Arising from	Amount as of		Effect on		Effect on
	January 1,	Initial	January 1,	January 1,		January 1,
	2018	Application	2018		2018		2018	Remark
Investments accounted for
using equity method	$ 64,859,378	$ 563,935	$ 65,423,313	$	192,915	$	366,210	e)

e) As a result of the associates’ retrospective application of IFRS 9, there was an increase in investments accounted for using equity method of NT$563,935 thousand, an increase in other equity - unrealized gain (loss) on financial assets at FVTOCI of NT$366,210 thousand and an increase in retained earnings of NT$192,915 thousand on January 1, 2018.
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.

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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 $ 64,859,378 Unappropriated earnings $ 16,125,837	Adjustments Arising from Initial Application Adjusted Carrying Amount as of January 1, 2018 $ 605,086 $ 65,464,464 $ 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 Group 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, IFRIC 4 and a number of related interpretations.

Definition of a lease

Upon initial application of IFRS 16, the Group 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 Group as lessee

Upon initial application of IFRS 16, the Group will recognize on the consolidated balance sheets right-of-use assets and lease liabilities for all leases except low-value and short-term leases whose payments will be recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group 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 consolidated 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. Prepaid lease payments for land use rights of land located in mainland China, Hong Kong, Singapore and Vietnam are recognized as prepayments for leases. Cash flows for operating leases are classified within operating activities on the consolidated statements of cash flows.

The Group 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 Group will apply IAS 36 to all right-of-use assets.

The Group expects to apply the following practical expedients:

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

The Group as lessor

The Group 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	Adjustments	Adjustments		Adjusted
	Amount as of		Arising from			Carrying
	December 31,			Initial	Amount as of
		2018	Application		January 1, 2019
Right-of-use assets	$	-	$	1,156,091	$	1,156,091
Prepayments for leases - current		142,246		(29,087)		113,159
Prepayments for leases - non-current		3,779,353		(351,685)		3,427,668
Total effect on assets	$	3,921,599	$	775,319	$	4,696,918
Lease liabilities - current	$	-	$	168,998	$	168,998
Lease liabilities - non-current		-		606,321		606,321
Total effect on liabilities	$	-	$	775,319	$	775,319

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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 Group should assume that the taxation authority will have full knowledge of all related information when making related examinations. If the Group concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the Group 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 Group should make estimates using either the most likely amount or the expected value of the tax treatment, depending on which method the Group expects to better predict the resolution of the uncertainty. The Group has to reassess its judgments and estimates if facts and circumstances change.

Except for the above impacts, as of the date the consolidated financial statements were authorized for issue, the Group assessed that the application of the aforementioned amendments would not have any material impact on the Group’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 Group 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 Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of the above standards and interpretations will have on the Group’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 consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

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b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments, investment properties which are measured at fair value, and net defined benefit assets (liabilities) 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.

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 12 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 12 months after the reporting period.

Current liabilities include:

a. Liabilities held primarily for the purpose of trading;
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 consolidated financial statements are authorized for issue; and
c. Liabilities for which the Group 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.

Ya Li Precast and Prestressed Concrete Industries Corp., Asia Engineering Enterprise Corp. and Ya Li Precast Concrete India Pvt. Ltd. engage in construction related businesses, which have operating cycles of over one year. The assets and liabilities of the aforementioned companies related to the construction contracts are classified as current or non-current according to the length of their operating cycles.

Basis of Consolidation

Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Corporation and the entities controlled by the Corporation (i.e. its subsidiaries).

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Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Corporation.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

Total comprehensive income of subsidiaries is attributed to the owners of the Corporation and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Corporation.

Refer to Note 17, Tables 7 and 8 for detailed information on subsidiaries (including percentages of ownership and main businesses).

Foreign Currencies

In preparing the financial statements of each individual entity, transactions in currencies other than the entity’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 consolidated financial statements, the functional currencies of the Group (including subsidiaries, associates, joint ventures and branches 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 (attributed to the owners of the Corporation and non-controlling interests as appropriate).

On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.

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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 the weighted-average cost on the balance sheet date.

Investments in Associates and Joint Ventures

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Group uses the equity method to account for its investments in associates and joint ventures.

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

Any excess of the cost of acquisition over the Group’s share of net fair value of the identifiable assets and liabilities of an associate or a joint venture 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 Group’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 Group 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.

When the Group subscribes for additional new shares of an associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group 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 and joint ventures accounted for using equity method. If the Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture 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.

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The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.

When the Group transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Group’s consolidated financial statements only to the extent of unrelated parties’ interests in the associate and joint venture.

The Group’s share of comprehensive income of associates or joint ventures is recognized using the treasury stock method if there are reciprocal holdings between investors and investees. The reciprocally held shares of the Group 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 initially measured 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.

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.

Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

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For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit is tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods.

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.

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

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 Other than Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, 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 Group 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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

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 for 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 Group becomes a party to the contractual provisions of the instruments.

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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 FVTPL) 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 FVTPL 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.

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 37.

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.

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3) Investments in equity instruments at FVTOCI

On initial recognition, the Group 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.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’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 37.

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 37.

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 Group’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.

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3) Loans and receivables

Loans and receivables (including cash and cash equivalents, trade receivables, other receivables and debt investments with no active market) 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.

b. Impairment of financial assets

2018

The Group 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 Group’s policy is to always recognize allowance for lifetime ECL on trade receivables. For all other financial instruments and lease receivables, the Group 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 Group 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.

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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.

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 Group 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 37.

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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 Group 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.

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 Group 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 on which 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.

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Revenue Recognition

2018

The Group 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.

When another party is involved in providing goods or services to a customer, the Group is a principal if it controls the specified good or service before that good or service is transferred to a customer; otherwise, the Group is acting as an agent. The principal recognizes revenue 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 Group determines whether it is a principal or an agent for each specified good or service.

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

a. The Group is primarily responsible for fulfilling the promise to provide the specified good or service.
b. The Group has inventory risk before or after the specified good or service is transferred to the customer.
c. The Group 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 Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
2) The Group 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 Group; 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 Group 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 Group 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.

c. Construction contracts

Revenue and costs are recognized by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred to date relative to the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

a. The Group as lessor

Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

b. The Group as lessee

Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

Government Grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

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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 Group’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 Group can no longer withdraw the offer of the termination benefit and when the Group 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.

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 consolidated 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 and unused loss carry forward 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, and interests in joint ventures, except where the Group 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

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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 Group 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. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’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.

Estimated Impairment of Trade Receivables

In 2018

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In 2017

When there is objective evidence of impairment loss, the Group takes into consideration the estimation of future cash flows. The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

Fair Value Measurements and Valuation Process

If some of the Group's assets and liabilities measured at fair value have no quoted prices in active markets, the Group 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 Group’s equity instruments not quoted in active markets or market prices or rates and specific features of the Group’s derivatives or the existing lease contracts and rentals of similar properties in the vicinity of the Group’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, 20 and 37.

6. CASH AND CASH EQUIVALENTS

Checking accounts and demand deposits Cash on hand Petty cash Cash equivalents (investments with original maturities of less than 3 months) Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2018 $ 6,003,398 3,843 3,706 8,745,170 173,294 $ 14,929,411	2017 $ 4,452,440 4,739 4,100 3,129,663 148,550 $ 7,739,492

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

Time deposits Repurchase agreements collateralized by bonds	December 31
	2018 2017 1.00%-4.80% 0.85%-6.00% 0.52%-2.52% 2.04%

In 2018

As of December 31, 2018, the Group’s bank deposits in the amounts of $169,139 thousand, which were restricted as collaterals for bank loans are classified as financial assets at amortized cost in the balance sheets. Time deposits with original maturities of more than 3 months in the amounts of $14,168,377 thousand as of December 31, 2018, are also classified as financial assets at amortized cost in the balance sheets. Refer to Note 11.

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In 2017

As of December 31, 2017, the Group’s bank deposits in the amounts of $228,560 thousand, which were restricted as collaterals for bank loans were classified as debt investments with no active market in the balance sheets. Time deposits with original maturities of more than 3 months in the amounts of $4,302,917 thousand as of December 31, 2017, were also classified as debt investments with no active market in the balance sheets. Refer to Note 12.

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 Listed stocks Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Beneficiary certificates Listed stocks Financial liabilities at FVTPL Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Bond options (Note 28) Cross-currency swap contracts		December 31	December 31
		2018 $ - - - 5,543,595 3,502,988 9,046,583 $ 9,046,583 $ 223,501 44,717 $ 268,218	2017 $ 243,486 78,594 322,080 - - - $ 322,080 $ - - $ -

The Group entered into cross-currency swap contracts to manage exposures to exchange rate fluctuations. The Group’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 Amount		Range of Interest	Range of Interest
(In Thousands)	Maturity Date	Rates Paid	Rates Received
US$215,000	2021.09.15	-	2.68%-2.80%

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

2018

Domestic investments Listed stocks Unlisted stocks Foreign investments Listed stocks Unlisted stocks		December 31, 2018	December 31, 2018
		Current $ 3,648,586 - 3,648,586 152,337 - 152,337 $ 3,800,923	Non-current $ 8,125,426 1,537,291 9,662,717 - 122,026 122,026 $ 9,784,743

a. 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 Group’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.
b. 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 Group previously had a 22.50%-equity interest in CSCGL, which was 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 confirmed the potential dilution of shareholding in the Group’s interests in CSCGL, the Group objectively demonstrated that it was able to exercise significant influence over CSCGL although the Group only holds less than 20% of the voting power. Accordingly, the Group’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 18.

c. Asia Cement Pioneer Investment Ltd. (ACP) acquired the stocks of Cementon Micronesia L.L.C. for US$3,900 thousand in September 2010. As of December 31, 2018, 50% of the investment consideration was not paid and accounted for as accounts payable and accrued expenses - third parties. The consideration will be paid once the counterparty asks for payment.
d. Refer to Note 40 for information relating to financial assets at fair value through other comprehensive income pledged as collaterals.
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9. AVAILABLE-FOR-SALE FINANCIAL ASSETS-2017

Domestic investments Listed stocks Foreign investments Listed stocks Mutual funds Listed corporate bonds		December 31, 2017	December 31, 2017
		Current $ 5,612,002 1,835,201 358,203 - 2,193,404 $ 7,805,406	Non-current $ 8,401,959 8,451,384 846,875 372,460 9,670,719 $ 18,072,678

As of December 31, 2017, trading of CSCGL’s securities was still suspended and there was no quoted price in active markets. The Group engaged third party qualified appraisers for fair value measurement of CSCGL’s securities as of December 31, 2017. 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 Group 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 40 for information relating to available-for-sale financial assets pledged as collaterals.

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

	December 31,	December 31,
		2017
Domestic unlisted stocks
Far Eastern International Leasing Corp.	$	602,814
Ding Shen Investment Co., Ltd.		396,000
Kaohsiung Rapid Transit Corp. (KRT)		87,448
Yi Tong Fiber Co., Ltd.		41,691
Ding Ding Hotel Corp. (DDH)		-
Others		50,690
Overseas unlisted stocks
Cementon Micronesia L.L.C.		121,914
Others		111
	$	1,300,668
Classified according to financial asset measurement categories
Available-for-sale financial assets	$	1,300,668

a. Management believed that the fair value of the above unlisted equity investments held by the Group 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.
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c. As of December 31, 2017, the Group recognized impairment loss on the full amount of its investment in DDH.

11. FINANCIAL ASSETS AT AMORTIZED COST - 2018

Time deposits with original maturities of more than 3 months Restricted assets Current Non-current	December 31, 2018 $ 14,168,377 169,139 $ 14,337,516 $ 14,322,874 $ 14,642

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

These debt investments 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.

Refer to Note 40 for information relating to financial assets at amortized cost pledged as collaterals.

12. DEBT INVESTMENTS WITH NO ACTIVE MARKET - 2017

	December 31,
	2017
Time deposits with original maturities of more than 3 months	$ 4,302,917
Restricted assets	228,560
	$ 4,531,477
Current	$ 4,380,928
Non-current	150,549
	$ 4,531,477

Refer to Note 40 for information relating to debt investments with no active market pledged as collaterals.

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13. TRADE RECEIVABLES

Trade receivables Trade receivables - sales Finance lease receivable - current (Note 14) Construction receivable Operating lease receivable Less: Allowance for impairment loss - sales Less: Allowance for impairment loss - construction		December 31	December 31
		2018 $ 10,322,875 672,230 105,262 12,438 (884,685) - $ 10,228,120	2017 $ 9,802,045 624,604 259,572 12,544 (760,036) (1,078) $ 9,937,651

Trade Receivables - Sales

In 2018

The average credit period of receivables from sales of goods was 30-90 days. Specific customers with good credit records were given longer credit period occasionally. The average credit period for customers of concrete products was 180-365 days after construction of building was finished.

The Group 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 Group has obtained sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Group 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 Group 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 Group 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 91 to 180 Days $ 6,595,347 $ 1,864,201 (109,335) (73,046) $ 6,486,012 $ 1,791,155	181 to 365 Days Over 366 Days $ 553,258 $ 1,310,069 (119,917) (582,387) $ 433,341 $ 727,682	Total $ 10,322,875 (884,685) $ 9,438,190

The above aging schedule was based on the invoice date.

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The Group 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,
	2018
Balance at January 1, 2018	$ 761,114
Add: Impairment losses recognized on receivables	142,553
Add: Amounts recovered from the prior year write-offs	2,318
Less: Amounts written off	(6,845)
Foreign exchange gains and losses	(14,455)
Balance at December 31, 2018	$ 884,685

In 2017

The Group applied the same credit policy in 2018 and 2017. In determining the recoverability of trade receivables, the Group 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 Group 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 Group 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 Group requires collaterals or other credit enhancements to secure the receivables. The Group does not offset trade receivables from a counterparty against accounts payable to the same counterparty when the Group 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	$ 6,229,737
91-180 days	1,275,171
181-365 days	665,408
More than 365 days	871,693
	$ 9,042,009

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

	December 31,
	2017
Less than 90 days	25,751
91-180 days	155,070
181-365 days	870,693
More than 365 days
	$ 1,082,803

The above aging schedule was based on the invoice date.

41 -

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

Individually
Assessed for
Impairment
Collectively
Assessed for
Impairment
Balance at January 1, 2017
$ 594,104
$ 26,618

Add: Impairment losses recognized (reversed) on
receivables
162,117
(2,715)
Less: Amounts written off as uncollectible
(7,142)
(681)
Effect of exchange rate changes

(10,972)

(215)

Balance at December 31, 2017
$ 738,107
$ 23,007

14. FINANCE LEASE RECEIVABLES

Total
$ 620,722
159,402
(7,823)
(11,187)
$ 761,114

Minimum lease payments Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years Less: Unearned finance income Present value of minimum lease payments Present value of minimum lease payments Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years Present value of minimum lease payments Current Non-current		December 31	December 31
		2018 $ 1,401,682 5,606,728 7,008,410 14,016,820 4,450,235 $ 9,566,585 $ 672,230 3,242,092 5,652,263 $ 9,566,585 $ 672,230 8,894,355 $ 9,566,585	2017 $ 1,401,682 5,606,728 8,410,092 15,418,502 5,227,313 $ 10,191,189 $ 624,604 3,012,397 6,554,188 $ 10,191,189 $ 624,604 9,566,585 $ 10,191,189

Chiahui Power Corp. (CHP) entered into a 25-year purchase and sale agreement with Taiwan Power Company (TPC). According to the agreement, all electricity generated by CHP is sold to TPC. CHP started its operation on December 15, 2003. The requirements of IFRIC 4 are applicable to the agreement after the transition date to IFRSs. Because the nature of the agreement is considered as conveyance of rights to use asset, the agreement is regarded as finance lease.

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

42 -

15. OTHER RECEIVABLES

Asia Cement (China) Holdings Corp. (ACCHC), Far Eastern Polytex (Holding) Limited (FEPHL) and FEDS Development (BVI) Ltd. (FEDSBVI) intend to invest in Yuan Ding Enterprise (Shanghai) Limited (YDES) and acquire 40%, 40% and 20% equity, respectively. Through the investment, ACCHC can join projects on land development and commercial building construction in the World Exposition district in Shanghai.

YDES was initially established with registered capital of RMB500,000 thousand by Far Eastern New Century (China) Corporation (FENCC), a wholly owned subsidiary of FEPHL. When the completion of the construction process of the commercial building reaches 25%, ACCHC will subscribe to new shares issued by YDES and ACCHC’s ultimate ownership is expected to be 40%. ACCHC has signed related investment contract with FEPHL and FEDSBVI.

As of December 31, 2018, ACCHC agreed to grant one-year interest-free credit line loan to FENCC (a subsidiary of FENC) and YDES in the amount of RMB431,900 thousand and RMB230,000 thousand, respectively. The borrower can use the loan during the loan period. As of December 31, 2018, the loan amounts drawn by FENCC and YDES were RMB431,900 thousand and RMB114,699 thousand, respectively. The aforementioned amounts were accounted for as other receivables.

The Group believes that potential benefit from the investment will exceed potential interest income if interest is charged on the loan. The Group did not consider the loan an independent transaction but took it as part of a more beneficial investment strategy. Accordingly, the borrowers were not required to pay any interest unless the development project failed to be implemented. In addition, FENC is FENCC and YDES’s ultimate parent company, so the Group believes that the borrowers have sufficient financial resources to repay the loan and thus did not take any collateral.

On February 18, 2019, YDES’s board of directors resolved to issue new shares, which increased its registered capital to RMB1,250,000 thousand. ACCHC invested RMB500,000 thousand in YDES through its subsidiary Oriental Holdings Co., Ltd. with ultimate ownership of 40%.

16. INVENTORIES

Finished goods Work in progress Raw materials Supplies		December 31	December 31
		2018 $ 3,095,204 1,176,038 3,519,927 2,013,107 $ 9,804,276	2017 $ 1,065,637 1,084,346 2,369,761 2,053,238 $ 6,572,982

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2018 and 2017 was $54,480,379 thousand and $47,838,702 thousand, respectively. The cost of goods sold included inventory write-downs of $315,353 thousand and reversals of inventory write-downs of $4,401 thousand. Previous write-downs were reversed as a result of increased selling prices in specific markets.

43 -

17. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements

Investor
Subsidiary
The Corporation
Der Ching Investment Corp. (DCI)
Ya Tung Ready-Mixed Concrete Corp. (YTRMC)
Nan Hwa Cement Corp. (NHC)
Chiahui Power Corp. (CHP)
Asia Cement (Singapore) Pte. Ltd. (ACSPL)
Asia Cement (China) Holdings Corp. (ACCHC)
Ya Li Precast and Prestressed Concrete Industries Corp.
(YLPPC)
Asia Investment Corp. (AIC)
Fu Ming Transport Corp. (FMT)
Asia Engineering Enterprise Corp. (AEE)
Sunrise Industrial Holdings Ltd. (SIHL)
Yuan Long Stainless Steel Corp. (YLSS)
Yali Transportation Corp. (YLT)
DCI
Kowloon Cement Corp. Ltd. (KCC)
Fu Shan Mineral Stone Co., Ltd. (FSMS)
AC Mega Investment Ltd. (ACM)
AC Mega II Investment Ltd. (ACM II)
AC Mega III Investment Ltd. (ACM III)
AC Mega IV Investment Ltd. (ACM IV)
AC Leap Investment Ltd. (ACL)
YTRMC
Ya Sing Ready-Mixed Concrete Corp. (YSRMC)
Ya Tung Vietnam Co., Ltd. (YTV)
PT Yatung Concrete International (PYCI)
Asia Oriental (Guam) L.L.C. (AOG)
AOG
Perez - AOG L.L.C. (PEREZ)
FMT
Fu Da Transportation Corp. (FDT)
AEE
ACCHC
AIC
CHP
DCI
NHC
FMT
FSMS
FDT
YSRMC
AEE
YTRMC
Asia Cement Explorer Investment Ltd. (ACE)
Asia Cement Pioneer Investment Ltd. (ACP)
Asia Cement Pioneer II Investment Ltd. (ACP II)
Asia Cement Pioneer III Investment Ltd. (ACP III)
Asia Cement Pioneer IV Investment Ltd. (ACP IV)
YLPPC
PYCI
Ya Li Precast Concrete India Pvt. Ltd. (YLPCIP)
AOG
ACSPL
Oriental Concrete Pte. Ltd. (OCPL)
ACCHC
ACCHC
Perfect Industrial Holdings Pte. Ltd. (PIHPL)
PIHPL
Asia Continent Investment Holdings Pte. Ltd. (ACIHPL)
Oriental Industrial Holdings Pte. Ltd. (OIHPL)
ACIHPL
Jiangxi Yadong Cement Co., Ltd. (JYDC)

Proportion of Ownership
and Voting Rights
December 31
2018
2017
Remark
99.99
99.99
99.99
99.99
99.94
99.94
59.59
59.59
c
99.96
99.96
67.73
67.73
c
83.81
83.81
100.00
100.00
99.82
99.82
98.23
98.23
100.00
100.00
100.00
100.00
51.00
51.00
49.00
49.00
99.56
99.56
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
69.93
69.93
100.00
100.00
99.00
-
Note 1
77.69
77.69
64.50
64.50
99.87
99.87
0.20
0.20
0.01
0.01
-
-
0.02
0.02
0.02
0.02
0.39
0.39
0.03
0.03
0.05
0.05
0.07
0.07
-
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
1.00
-
Note 1
99.99
99.99
22.31
22.31
100.00
100.00
4.07
4.07
100.00
100.00
100.00
100.00
99.99
99.99
85.00
85.00
(Continued)

44 -

Investor
Subsidiary
OIHPL
Wuhan Yadong Cement Co., Ltd. (WYDC)
Oriental Holdings Co., Ltd. (OHC)
Shanghai Yafu Cement Products Co., Ltd. (SHYFCP)
Shanghai Yali Cement Products Co., Ltd. (SHYLCP)
Hubei Yadong Cement Co., Ltd. (HYDCCL)
Sichuan Yali Concrete Produce Co., Ltd. (SYCPCL)
Sichuan Yali Transport Co., Ltd. (SYTCL)
Yangzhou Yadong Cement Co., Ltd. (YYDCCL)
Sichuan Yadong Cement Co., Ltd. (SIYDCCL)
Chengdu Yali Cement Products Co., Ltd. (CYCPCL)
Huanggang Yadong Cement Co., Ltd. (HGYDC)
JYDC
Jiangxi Yali Transport Co., Ltd. (JYLTC)
Nanchang Yadong Cement Co., Ltd. (NYDC)
Nanchang Yali Concrete Produce Ltd. (NYLC)
OHC
JYDC
WYDC
SHYFCP
NYDC
JYLTC
SHYLCP
SYTCL
SIYDCCL
HGYDC
YYDCCL
CYCPCL
HYDCCL
SYCPCL
Tai Zhou Oriental Construction Co., Ltd. (TZOCCL)
WYDC
Wuhan Yali Cement Products Co., Ltd. (WYCPCL)
SIYDCCL
Sichuan Lanfeng Cement Co., Ltd. (SLCL)
SLCL
Sichuan Lanfeng Construction Co., Ltd. (SLCCL)
HYDCCL
Hubei Yali Transport Co., Ltd. (HYTCL)
Wuhan Yaxin Cement Co., Ltd. (WYXC)
KCC
Kowloon Concrete Corporation Limited (KCCL)
Join Fortune Trading Ltd. (JFTL)
SHYLCP
SHYFCP

Proportion of Ownership
and Voting Rights
December 31
2018
2017
Remark
90.00
90.00
100.00
100.00
-
50.00
Note 2
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
51.22
51.22
90.00
90.00
51.99
51.99
50.00
50.00
100.00
100.00
10.00
10.00
10.00
10.00
-
15.00
Note 2
25.00
25.00
48.00
48.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
48.78
48.78
10.00
10.00
10.00
10.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
90.00
100.00
100.00
100.00
100.00
-
35.00
Note 2

(Concluded)

Remarks:

Note 1: On October 30, 2018, YTRMC and YLPPC entered into an agreement to jointly establish PT Yatung Concrete International (PYCI) and held 99% and 1% interests in PYCI, respectively. As of December 31, 2018, total investments accumulated amounted to US$2,000 thousand. PYCI manufactures and sells ready-mixed concrete.
Note 2: On July 26, 2018, the Group entered into a sale agreement to dispose of SHYFCP. The proceeds from disposal and net gain on disposal of subsidiary amounted to RMB29,421 thousand and RMB9,051 thousand, respectively.
b. Subsidiaries excluded from the consolidated financial statements: None.
45 -
c. Details of subsidiaries that have material non-controlling interests

Principal Place of Business Refer to Table 7 Refer to Tables 7 and 8 Profit (Loss) Allocated to Non-controlling Interests For the Year Ended December 31 2018 2017 $ 3,443,947 $ 912,428 352,011 316,163 (23,855) (32,057) $ 3,772,103 $ 1,196,534	Proportion of Ownership and Voting Rights Held by Non-controlling Interests	Proportion of Ownership and Voting Rights Held by Non-controlling Interests
	December 31
	2018 2017 40.40% 40.40% 28.00% 28.00% Accumulated Non-controlling Interests

	December 31
2018 $ 3,443,947 352,011 (23,855) $ 3,772,103	2018 $ 16,698,351 3,728,503 729,266 $ 21,156,120	2017 $ 13,971,545 3,661,759 727,495 $ 18,360,799

Summarized financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests is set out below. The summarized financial information below represents amounts before intragroup eliminations.

CHP:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to: Owners of the Corporation Non-controlling interests of CHP		December 31	December 31
		2018 $ 1,981,089 11,948,216 3,843,336 857,002 $ 9,228,967 $ 5,500,464 3,728,503 $ 9,228,967	2017 $ 1,798,849 9,567,649 1,434,251 868,486 $ 9,063,761 $ 5,402,002 3,661,759 $ 9,063,761

46 -

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2018 2017 $ 6,682,384 $ 6,114,715 $ 871,315 $ 782,583 (1,109) (1,272) $ 870,206 $ 781,311 $ 519,304 $ 466,420 352,011 316,163 $ 871,315 $ 782,583 $ 518,643 $ 465,661 351,563 315,650 $ 870,206 $ 781,311 $ 284,860 $ 398,748 December 31
2018 2017 $ 46,700,020 $ 23,914,694 45,832,407 50,649,919 18,119,166 19,256,818 18,865,216 8,938,222 $ 55,548,045 $ 46,369,573 $ 38,849,694 $ 32,398,028 15,108,214 12,599,233 1,590,137 1,372,312 $ 55,548,045 $ 46,369,573 For the Year Ended December 31
	2018 $ 51,612,506 $ 11,364,401 (898,139) $ 10,466,262	2017 $ 35,446,672 $ 2,865,022 (874,271) $ 1,990,751 (Continued)

47 -

Profit attributable to: Owners of the Corporation Non-controlling interests of ACCHC Non-controlling interests of ACCHC’s subsidiaries Total comprehensive income attributable to: Owners of the Corporation Non-controlling interests of ACCHC Non-controlling interests of ACCHC’s subsidiaries Dividends paid to non-controlling interest ACCHC ACCHC’s subsidiaries	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 7,920,453 3,080,177 363,771 $ 11,364,401 $ 7,273,794 2,828,698 363,770 $ 10,466,262 $ 319,715 $ 116,017	2017 $ 1,952,594 759,342 153,086 $ 2,865,022 $ 1,348,748 514,547 127,456 $ 1,990,751 $ 57,800 $ 63,476 (Concluded)

18. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments in associates Investments in joint ventures a. Investments in associates Material associates Listed stocks FENC U-Ming Marine Transport Corp. (U-Ming) CSCGL Associates that are not individually material Unlisted stocks Yuan Ding Co., Ltd. (YDC) Far Eastern Construction Co., Ltd. (FEC) Yue Yuan Investment Corp. (YYI) Oriental Securities Corp. (OSC) Yue Ding Enterprise Corp. (YDEC) FEDS Development Ltd. (FEDSDL) Yuan Ding Leasing Corp. (YDLC) Catalyst_207 SPC-Tranche One (Catalyst Tranche One)		December 31	December 31
		2018 2017 $ 78,499,814 $ 64,507,691 346,462 351,687 $ 78,846,276 $ 64,859,378 December 31
		2018 $ 43,204,676 10,394,553 10,217,370 63,816,599 4,602,067 4,200,160 1,939,588 1,877,359 648,674 617,872 368,032 122,662	2017 $ 41,432,386 8,826,968 - 50,259,354 4,556,408 4,066,901 1,656,355 1,866,239 581,271 633,447 368,059 - (Continued)

48 -

Everstrong Iron & Steel Foundry Ltd. (EISF) Hubei Zhongjian Yadong Concrete Co., Ltd. (HZYCCL) Shih Hsin Storage & Transportation Co., Ltd. (SHSTC) Pao-Good Industry Co., Ltd. (PGIC) Opas Fund Segregated Portfolio Company (OFSPC) Catalyst_207 SPC (Catalyst) Perez-Mtec-ACC, L.L.C. (PMA)		December 31	December 31
		2018 $ 99,473 74,013 70,937 60,232 1,610 493 43 14,683,215 $ 78,499,814	2017 $ 95,947 73,999 280,430 67,215 1,535 490 41 14,248,337 $ 64,507,691 (Concluded)

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

Name of Associate FENC U-Ming CSCGL YDC FEC YYI OSC YDEC FEDSDL YDLC Catalyst Tranche One EISF HZYCCL SHSTC PGIC OFSPC Catalyst PMA	December 31
	2018 2017 25.74% 25.74% 41.41% 41.41% 17.46% - 49.99% 49.99% 33.76% 33.76% 29.92% 29.92% 18.93% 18.93% 30.84% 30.84% 25.00% 25.00% 43.60% 43.60% 25.00% - 48.73% 48.73% 40.00% 40.00% 28.91% 28.91% 31.00% 31.00% 33.00% 33.00% 33.00% 33.00% 33.33% 33.33%

AIC, the Corporation’s subsidiary, acquired 655 thousand shares of EISF for $15,530 thousand in March 2017. After the transaction, the Group’s percentage of ownership in EISF increased from 40.46% to 48.73%.

ACE, the Corporation’s subsidiary, subscribed for 33 shares of Catalyst and paid US$17 thousand in December 2017. After the subscription, ACE owned 33% of the shares of Catalyst.

DCI, the Corporation’s subsidiary, subscribed for 4,000 shares of Catalyst Tranche One and paid US$4,000 thousand in December 2018. After the subscription, DCI owned 25% of the shares of Catalyst Tranche One.

As of December 31, 2018 and 2017, the information of associates was as follows:

1) Fair values (Level 1) of investments in associates with available published price quotation are summarized as follows:
49 -

Name of Associate FENC U-Ming CSCGL		December 31	December 31
		2018 $ 38,437,706 $ 11,284,752 $ 6,241,835	2017 $ 36,922,241 $ 12,771,890 $ -

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

FENC:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Group’s ownership Equity attributable to the Group 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 U-Ming:		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 25.74% 25.74% 52,389,944 50,028,364 (9,185,268) (8,595,978) $ 43,204,676 $ 41,432,386 For the Year Ended December 31
		2018 $ 54,063,801 $ 12,028,294 855,093 $ 12,883,387 $ 1,653,235	2017 $ 45,216,423 $ 8,066,136 (257,424) $ 7,808,712 $ 1,102,167

Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Group’s ownership Equity attributable to the Group Unrealized gain or loss with associates Other adjustments Carrying amount		December 31	December 31
		2018 $ 1,985,037 50,008,362 17,453,879 8,913,985 25,625,535 41.41% 10,611,534 (87,523) (129,458) $ 10,394,553	2017 $ 1,833,612 48,545,075 20,772,900 7,765,577 21,840,210 41.41% 9,044,031 (87,523) (129,540) $ 8,826,968

50 -

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 Group’s ownership Equity attributable to the Group Goodwill Carrying amount Operating revenue Net profit for the year Other comprehensive loss Total comprehensive income for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 1,080,444 $ 1,668,840 2,007,257 $ 3,676,097 $ 419,898	2017 $ 878,369 $ 999,520 (3,085,478) $ (2,085,958) $ 262,399 December 31, 2018 $ 26,174,052 90,319,977 59,104,108 14,557,750 286,348 42,545,823 17.46% 7,427,489 2,789,881 $ 10,217,370 For the Year Ended December 31, 2018 $ 80,162,793 $ 9,856,967 (1,082,166) $ 8,774,801

The Group’s 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 Group reported provisional amounts of NT$2,789,881 for the goodwill arising from the above transition during the measurement period as the goodwill was included in the carrying amounts of the Group’s investment in CSCGL. The Group 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.

51 -
3) Aggregate information of associates that are not individually material

The Group’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 $ 520,731 220,999 $ 741,730	2017 $ 313,494 575,431 $ 888,925

4) The amounts of investments in associates pledged as collateral for bank borrowings are disclosed in Note 40.

b. Investments in joint ventures that are not individually material

Unlisted companies Wuhan Asia Marine Transport Co., Ltd. (WAMTC) Alliance Concrete Singapore Pte. Ltd. (Alliance) Hubei Xinlongyuan Mining Co., Ltd. (HXMC) Empire Success Corp. Ltd. (ESC) Profit Enterprises Int'l Ltd. (PEI)		December 31	December 31
		2018 $ 195,115 107,842 24,020 17,371 2,114 $ 346,462	2017 $ 182,397 122,146 16,628 25,524 4,992 $ 351,687

At the end of the reporting period, the percentages of owners’ voting rights in joint ventures held by the Group were as follows:

Name of Joint Ventures WAMTC Alliance HXMC ESC PEI	December 31
	2018 2017 50.00% 50.00% 50.00% 50.00% 40.00% 40.00% 50.00% 50.00% 50.00% 50.00%

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Income (loss) for the year Other comprehensive income Total comprehensive income (loss) for the year		December	31
		2018 $ 19,089 - $ 19,089	2017 $ (40,174) - $ (40,174)

All the associates and joint ventures are accounted for using equity method.

For the years ended December 31, 2018 and 2017, impairment loss on individually not material joint ventures amounted to $200,245 thousand and $122,619 thousand, respectively, recognized in profit or loss.

52 -

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 associates and joint ventures.

19. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2017 Additions Disposals Transferred to supplies Transferred from completed construction Transferred to intangible assets Transferred to investment properties Effect of foreign currency exchange differences Balance at December 31, 2017 Accumulated depreciation and impairment Balance at January 1, 2017 Depreciation expense Disposals Effect of foreign currency exchange differences Balance at December 31, 2017 Carrying amounts at December 31, 2017 Cost Balance at January 1, 2018 Additions Disposals Disposal of subsidiary Transferred to supplies Transferred to intangible assets Transferred to other assets Transferred from investment properties to PPE Transferred from completed construction Reclassifications Others Effect of foreign currency exchange differences Balance at December 31, 2018 Accumulated depreciation and impairment Balance at January 1, 2018 Depreciation expense Disposals Disposal of subsidiary Impairment loss recognized Transferred to intangible assets Transferred to other assets Reclassifications Effect of foreign currency exchange differences Balance at December 31, 2018 Carrying amounts at December 31, 2018	Land $ 6,591,954 - - - - - - - 6,591,954 12,595 - - - 12,595 $ 6,579,359 $ 6,591,954 63 - - - - - - - - - - 6,592,017 12,595 - - - - - - - - 12,595 $ 6,579,422	Buildings $ 25,324,730 6,994 (152,295 ) - 175,008 - - (414,140) 24,940,297 8,705,281 658,925 (28,810 ) (88,020) 9,247,376 $ 15,692,921 $ 24,940,297 11,061 (137,449 ) (17,215 ) - - - 22,270 153,845 - - (325,581) 24,647,228 9,247,376 640,439 (97,604 ) (14,074 ) 18,365 - - - (84,260) 9,710,242 $ 14,936,986	Equipment O $ 77,112,502 161,795 (248,767 ) - 219,431 - - (1,170,634) 76,074,327 44,576,754 3,348,961 (179,356 ) (522,618) 47,223,741 $ 28,850,586 $ 76,074,327 324,480 (360,313 ) (45,449 ) - - - - 131,726 57,159 - (929,674) 75,252,256 47,223,741 3,308,785 (317,576 ) (40,833 ) 32,341 - - (15,680 ) (520,409) 49,670,369 $ 25,581,887	ther Equipment Property Under Construction $ 12,756,441 $ 334,362 507,102 364,855 (532,275 ) - (460 ) - 79,061 (473,500 ) - (555 ) - (32,662 ) (93,115) (1,060) 12,716,754 191,440 9,992,873 - 832,054 - (470,418 ) - (62,287) - 10,292,222 - $ 2,424,532 $ 191,440 $ 12,716,754 $ 191,440 493,934 3,499,440 (956,539 ) - (617 ) - (37,670 ) - (577 ) (1,333 ) (15,622 ) - - - 138,943 (424,514 ) (57,159 ) - - (156 ) (47,871) (4,086) 12,233,576 3,260,791 10,292,222 - 700,337 - (915,271 ) - (555 ) - 1,182 - (577 ) - (15,622 ) - 15,680 - (34,075) - 10,043,321 - $ 2,190,255 $ 3,260,791	Total $ 122,119,989 1,040,746 (933,337 ) (460 ) - (555 ) (32,662 ) (1,678,949) 120,514,772 63,287,503 4,839,940 (678,584 ) (672,925) 66,775,934 $ 53,738,838 $ 120,514,772 4,328,978 (1,454,301 ) (63,281 ) (37,670 ) (1,910 ) (15,622 ) 22,270 - - (156 ) (1,307,212) 121,985,868 66,775,934 4,649,561 (1,330,451 ) (55,462 ) 51,888 (577 ) (15,622 ) - (638,744) 69,436,527 $ 52,549,341

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

Building Main buildings 15-60 years Other facilities 2-15 years Equipment 2-20 years Other equipment 2-20 years

As of December 31, 2018 and 2017, the titles of land with carrying value of $88,655 thousand were temporarily registered in the name of trustees who had either signed an agreement or had pledged the land to the Corporation or to the subsidiaries.

Refer to Note 40 for the carrying amount of property, plant and equipment pledged by the Group as collaterals for borrowings.

20. INVESTMENT PROPERTIES

Leased investment property Undeveloped investment property Balance at January 1, 2017 Additions Transferred from property, plant and equipment Accounts receivable write-offs Changes in fair value of investment properties Effect of foreign currency exchange difference Balance at December 31, 2017 Balance at January 1, 2018 Additions Accounts receivable write-offs Transferred to property, plant and equipment Changes in fair value of investment properties Effect of foreign currency exchange difference Balance at December 31, 2018	Leased Investment Property $ 29,855,285 48,967 32,662 - (582,930) (1,581) $ 29,352,403 $ 29,352,403 1,269 - - 128,575 (1,171) $ 29,481,076		December 31	December 31
			2018 $ 29,481,076 6,484,127 $ 35,965,203 Undeveloped Investment Property $ 5,426,460 - - 165,605 799,510 1,433 $ 6,393,008 $ 6,393,008 - 149,528 (22,270) (30,560) (5,579) $ 6,484,127	2017 $ 29,352,403 6,393,008 $ 35,745,411 Total $ 35,281,745 48,967 32,662 165,605 216,580 (148) $ 35,745,411 $ 35,745,411 1,269 149,528 (22,270) 98,015 (6,750) $ 35,965,203

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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 rights 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. SYDCCL signed a contract with Mie Business Services Co., Ltd. (Mie Business). The contract fully authorized Mie Business to manage and operate SYDCCL’s store located in area A of Guosetianxiang Second-Stage in Wenjiang District of Chengdu City, with an area of 932.49 square meters. The contract started from May 1, 2017 and will end on March 31, 2022.
d. The Corporation also has lease contract for Asia-Cement Building and Pao-Ching Building, as well as land and building located in Chiayi City and Wuhan. These investment properties are leased out for 1 to 10 years with monthly lease payments.

The Group’s undeveloped investment properties included a parcel of land located in Lin-Ya, Kaohsiung, as well as stores, apartments, and office buildings acquired by SIYDCCL as collaterals for overdue balances from customers.

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.

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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) Recognized in other comprehensive income Exchange differences on translating foreign operations 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) Recognized in other comprehensive income Exchange differences on translating foreign operations Purchases Transfers into Level 3 Transfers out of Level 3 Balance at December 31, 2018	Completed Investment Property Investment Property under Construction $ 29,855,285 $ 5,426,460 (582,930) 799,510 (1,581) 1,433 48,967 - 32,662 165,605 $ 29,352,403 $ 6,393,008 $ 29,352,403 $ 6,393,008 128,575 (30,560) (1,171) (5,579) 1,269 - - 149,528 - (22,270) $ 29,481,076 $ 6,484,127	Total $ 35,281,745 216,580 (148) 48,967 198,267 $ 35,745,411 $ 35,745,411 98,015 (6,750) 1,269 149,528 (22,270) $ 35,965,203

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 2018 2017 $ 18,991,547 $ 19,052,686 22% 22% 6.08% 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.

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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 $ 35,860,267 1,499,390 $ 34,360,877 2.07%-6.25%	2017 $ 35,595,066 1,517,009 $ 34,078,057 2.09%-5.25%

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 $342,591 thousand and $341,890 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 Group’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 0.225%-4.50% and 0.25%-3.00%, respectively.

Refer to Note 40 for the carrying amount of investment properties pledged by the Group as collaterals for borrowings.

21. INTANGIBLE ASSETS - GOODWILL

Cost Balance at January 1 Impairment losses recognized Effect of foreign currency exchange differences Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 3,171,735 (630,631) (43,956) $ 2,497,148	2017 $ 3,237,530 - (65,795) $ 3,171,735

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The goodwill comprised of the following:

a. In July 2010, HYDCCL acquired 70% ownership of WYXC. The investment cost in excess of the fair value of net identifiable assets of the investee was the amount of goodwill, which was RMB138,759 thousand. The recoverable amount of the cash generating unit were lower than the related carrying amount, and impairment loss of RMB138,759 thousand were recognized for the year ended December 31, 2018.
b. In April 2014, SYDCCL acquired 100% ownership of SLCL. The investment cost in excess of the fair value of net identifiable assets of the investee was the amount of goodwill, which was RMB554,241 thousand.
c. On December 31, 2014, the Corporation acquired control power over YLT. The investment cost in excess of the fair value of net identifiable assets of the investee was the amount of goodwill, which was $20,780 thousand.

As of December 31, 2018, the Group assessed that there was no indication of impairment on the cash-generating units including the goodwill listed above.

22. INTANGIBLE ASSETS - OTHERS

Quarry Right Cost Balance at January 1, 2017 $ 1,898,093 Additions 3,787 Disposals - Transferred from completed construction - Effect of foreign currency exchange differences (166,984) Balance at December 31, 2017 1,734,896 Accumulated amortization and impairment Balance at January 1, 2017 $ 630,156 Amortization expense 223,080 Disposals - Effect of foreign currency exchange differences (141,599) Balance at December 31, 2017 711,637 Carrying amounts at December 31, 2017 $ 1,023,259	Computer Software $ 240,282 9,821 (2,575) 555 (1,380) 246,703 $ 208,591 11,208 (1,545) (1,035) 217,219 $ 29,484	Others $ 421,727 - - - (1,951) 419,776 $ 92,243 1,327 - (1,877) 91,693 $ 328,083	Total $ 2,560,102 13,608 (2,575) 555 (170,315) 2,401,375 $ 930,990 235,615 (1,545) (144,511) 1,020,549 $ 1,380,826 (Continued)

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Quarry Right Cost Balance at January 1, 2018 $ 1,734,896 Additions - Disposals - Transferred from completed construction - Effect of foreign currency exchange differences (28,227) Balance at December 31, 2018 1,706,669 Accumulated amortization and impairment Balance at January 1, 2018 711,637 Amortization expense 171,621 Disposals - Effect of foreign currency exchange differences (15,232) Balance at December 31, 2018 868,026 Carrying amounts at December 31, 2018 $ 838,643	Computer Software $ 246,703 13,037 (379) 1,333 (1,346) 259,348 217,219 11,292 (379) (1,036) 227,096 $ 32,252	Others $ 419,776 - - - (1,619) 418,157 91,693 1,336 - (1,612) 91,417 $ 326,740	Total $ 2,401,375 13,037 (379) 1,333 (31,192) 2,384,174 1,020,549 184,249 (379) (17,880) 1,186,539 $ 1,197,635

The above items of other intangible assets with finite useful lives are amortized on a straight-line basis. Quarry rights are amortized over 40 to 47 years and the computer software and others are amortized over 2 to 6 years. The other items with indefinite useful lives will not be amortized until their useful lives are determined to be finite. Instead, they will be tested for impairment annually and whenever there is an indication that they may be impaired.

23. PREPAYMENTS FOR LEASE OBLIGATIONS

Current assets (included in prepayments line item) Non-current assets		December 31	December 31
		2018 $ 142,246 3,779,353 $ 3,921,599	2017 $ 135,289 3,814,315 $ 3,949,604

The above prepayments for lease obligations include land use rights in mainland China, Hong Kong, Singapore and Vietnam. The amortization expenses are $85,382 thousand and $102,036 thousand for the years ended December 31, 2018 and 2017, respectively.

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24. OTHER NON-CURRENT ASSETS

Prepaid investments Net defined benefit assets Refundable deposits Others Refundable deposits Current (accounted for as other current assets) Non-current		December 31	December 31
		2018 $ 2,042,722 1,898,029 914,114 9,693 $ 4,864,558 $ 82,493 $ 914,114	2017 $ 1,959,002 1,525,609 891,114 60,753 $ 4,436,478 $ 95,815 $ 891,114

The prepaid investments comprised of the following:

a. 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 with China International Economic and Trade Arbitration Commission in Beijing.

b. Chu Feng Power Corporation, Preparatory Office (Chu Feng), founded in October 2016, was created by DCI, the Corporation’s subsidiary, for the development of offshore wind power in Taiwan. As of December 31, 2018 and 2017, the accumulated prepaid investments were $131,544 thousand and $47,823 thousand, respectively. In March 2018, Chu Feng submitted an application to the Bureau of Energy, Ministry of Economic Affairs, ROC, for the offshore wind power project’s selection. However, Chu Feng did not pass the selection according to the announcement on April 30, 2018. In June 2018, Chu Feng joined the second stage auction and its bid failed again. As of the balance sheet date, the Group recognized the amounts paid within the preparatory period as other receivables or prepaid investments. The Group also recognized full amounts of provisions based on the preparatory loss of Chu Feng. Refer to Note 30.
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25. SHORT-TERM BORROWINGS

Unsecured Secured Interest rate (%) Final repayment date: Unsecured Secured		December 31	December 31
		2018 $ 23,099,239 1,706,000 $ 24,805,239 1.04-5.30 2019.10.31 2019.3.26	2017 $ 16,820,863 1,590,000 $ 18,410,863 1.03-5.55 2018.12.24 2018.2.22

26. SHORT-TERM BILLS PAYABLE

Commercial paper Less: Unamortized discount on bills payable Interest rate (%)		December 31	December 31
		2018 $ 18,569,425 4,956 $ 18,564,469 0.36%-1.26%	2017 $ 16,130,300 5,382 $ 16,124,918 0.45%-1.09%

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

27. OTHER PAYABLE

Payable on investment		December 31	December 31
		2018 $ 334,305	2017 $ 330,729

Payable on investment is the unpaid consideration for SIYDCCL’s acquisition of SLCL, which amounted to RMB72,738 thousand.

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28. 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 $ 31,886,897 5,000,000 7,989 36,878,908 4,000,000 6,000,000 10,000,000 - 6,192,567 6,192,567 53,071,475 7,285,012 $ 45,786,463	2017 $ 27,400,583 5,000,000 13,917 32,386,666 8,000,000 6,000,000 14,000,000 88,612 - 88,612 46,475,278 9,197,457 $ 37,277,821

a. Bank loans are repayable in installments at varying amounts or in one lump-sum payment prior to January 22, 2022. The Group has signed long-term revolving credit facilities with banks. As of December 31, 2018 and 2017, interest rates were 0.89% to 5.58% and 0.85% to 5.75%, respectively.
b. Long-term commercial paper was issued by contract. As of December 31, 2018 and 2017, interest rates were 0.83%-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 and pay 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 the debt, save interest expenses, and strengthen the Corporation’s financial structure, on September 21, 2018, the Corporation issued US$215,000 thousand (equivalent to NT$6,620,710 thousand), which is the third zero coupon Euro convertible bond due on 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 ordinary 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.
f. As of December 31, 2018, CHP had used its credit lines as follows:

	Amount	Interest Rate/
Bank	(In Thousands)	Guarantee Fee Rate (%)	Contract Period
Mizuho	NT$ 184,252	0.45	2018.10.16-2019.10.16
Mizuho	NT$ 275,000	0.45	2018.09.18-2019.09.18
Mizuho	US$ 4,470	0.45	2018.10.16-2019.10.16

29. DEFERRED REVENUE

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

a. The deferred revenue on land use rights in Lin-Ya, Kaohsiung granted to FEDSDL (Note 20) 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 20) is amortized to income over 30 years on a straight-line basis.
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30. OTHER LIABILITIES

Preparatory costs provisions (Note 24) Decommissioning of electric factory provisions Accrued reward provisions Compensation of traffic accident provisions Other provisions (Note 41) Current Non-current		December 31	December 31
		2018 $ 222,729 217,942 140,572 127,894 18,440 $ 727,577 $ 48,200 679,377 $ 727,577	2017 $ 57,963 119,942 150,718 121,939 48,140 $ 498,702 $ 47,646 451,056 $ 498,702

31. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Corporation and the subsidiaries in the ROC 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 specific rate of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Corporation and domestic subsidiaries in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months or last month before retirement. The Corporation and domestic subsidiaries contribute amounts equal to 2% to 15% 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 Group 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 Group 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 Group has no right to influence the investment policy and strategy.

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

Present value of defined benefit obligation Fair value of plan assets Deficit (surplus) Net defined benefit liabilities (asset)		December 31	December 31
		2018 $ 1,322,473 (3,035,395) (1,712,922) $ (1,712,922)	2017 $ 1,527,968 (2,860,286) (1,332,318) $ (1,332,318)

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Movements in net defined benefit liabilities (assets) were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liability (Asset)
Balance at January 1, 2017	$ 1,569,276	$ (2,724,868)	$ (1,155,592)
Service cost
Current service cost	20,448	-	20,448
Past service cost and gain on settlements	(2,130)	-	(2,130)
Net interest expense (income)	20,239	(35,416)	(15,177)
Recognized in profit or loss	38,557	(35,416)	3,141
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(195,470)	(195,470)
Actuarial loss - changes in demographic
assumptions	697	-	697
Actuarial loss - changes in financial
assumptions	21,434	-	21,434
Actuarial loss - experience adjustments	19,897	-	19,897
Recognized in other comprehensive income	42,028	(195,470)	(153,442)
Contributions from the employer	-	(12,628)	(12,628)
Benefits paid	(121,679)	108,096	(13,583)
Liabilities extinguished on settlement	(214)	-	(214)
Balance at December 31, 2017	$ 1,527,968	$ (2,860,286)	$ (1,332,318)
Balance at January 1, 2018	$ 1,527,968	$ (2,860,286)	$ (1,332,318)
Service cost
Current service cost	19,607	-	19,607
Past service cost and gain on settlements	-	-	-
Net interest expense (income)	17,492	(33,798)	(16,306)
Recognized in profit or loss	37,099	(33,798)	3,301
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(303,940)	(303,940)
Actuarial loss - changes in demographic
assumptions	259	-	259
Actuarial loss - changes in financial
assumptions	20,848	-	20,848
Actuarial loss - experience adjustments	(46,872)	-	(46,872)
Recognized in other comprehensive income	(25,765)	(303,940)	(329,705)
Contributions from the employer	-	(25,085)	(25,085)
Benefits paid	(216,873)	183,077	(33,796)
Liabilities extinguished on settlement	-	-	-
Others	44	4,637	4,681
Balance at December 31, 2018	$ 1,322,473	$ (3,035,395)	$ (1,712,922)

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Through the defined benefit plans under the Labor Standards Law, the Group 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 0.75%-1.40% 1.00%-1.50% 2.00%-2.50% 1.00%-2.50%

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	December 31
		2018 $ (30,402) $ 31,476 $ 139,268 $ (128,585)	2017 $ (35,772) $ 37,081 $ 163,168 $ (149,460)

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 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 The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December 31	December 31
		2018 84.40 6.75 8.85 100.00 December	2017 81.00 8.39 10.61 100.00 31
	2018 $ 14,925 7-12.5 years		2017 $ 13,952 8-15 years

32. 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 associates and joint ventures accounted for using equity method (2)		December 31	December 31
		2018 $ 41,790 54,907 992,530 1,089,227	2017 $ 41,790 54,907 992,530 1,089,227 (Continued)

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May be used to offset a deficit only Change of capital surplus of associates and joint ventures accounted for using equity method (3) May not be used for any purpose Share warrants Change of capital surplus of associates and joint ventures accounted for using equity method		December 31	December 31
		2018 $ 38,085 185,411 49,831 235,242 $ 1,362,554	2017 $ 38,215 - 41,250 41,250 $ 1,168,692 (Concluded)

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 dividend 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 34 (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.

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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.

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 2018 had been proposed by the Corporation’s board of directors on March 21, 2019. The proposed appropriation of earnings and dividend per share were as follows:

		Dividend	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.

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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 Group 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.

e. Other equity items

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

		For	the Year Ended December 31	the Year Ended December 31	the Year Ended December 31
			2018		2017
	Balance at January 1	$ (2,638,153)		$	(44,313)
	Exchange differences on translating the financial statements
	of foreign operations		(627,348)		(701,380)
	Share of exchange difference of associates and joint ventures
	accounted for using equity method		624,137		(1,892,460)
	Balance at December 31	$ (2,641,364)		$	(2,638,153)
2)	Unrealized gain (loss) on available-for-sale financial assets
	Balance at January 1, 2017			$	(4,023,554)
	Unrealized gain arising on revaluation of available-for-sale financial		assets		4,281,676
	Related income tax				(210,141)
	Share of unrealized gain on revaluation of available-for-sale financial assets of
	associates and joint ventures accounted for using equity method				680,086
	Balance at December 31, 2017			$	728,067
	Balance at January 1, 2018 per IAS 39			$	782,067
	Adjustment on initial application of IFRS 9				(728,067)
	Balance at January 1, 2018 per IFRS 9			$	-
3)	Unrealized gain (loss) on financial assets at FVTOCI
				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 - equity instruments				926,188
	Related income tax				(219,554)
					(Continued)

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	For the Year	For the Year
		Ended
	December 31,
		2018
Share from associates and joint ventures accounted for using equity method
Equity instruments	$	634,103
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
		(Concluded)

4) Cash flow hedges

Balance at January 1 Cash flow hedges Share from associates and joint ventures 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 (2,434) 4,883 $ 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.
f. Non-controlling interests

Balance at January 1 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1 per IFRS 9 Attributable to non-controlling interests: Share of profit for the year Other comprehensive income (loss) during the year Exchange difference on translating the financial statements of foreign operations Unrealized gain on financial assets at FVTOCI Related income tax Unrealized gain on available-for-sale financial assets Related income tax Remeasurement on defined benefit plans Related income tax Share of other comprehensive income (loss) of associates and joint ventures accounted for using equity method Share of other changes in equity of associates and joint ventures accounted for using equity method Cash dividends from subsidiaries Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 18,360,799 4,810 18,365,609 3,772,103 (267,413) 1,497 (526) - - (309) 3 8,662 (2) (723,504) $ 21,156,120	2017 $ 18,000,144 - 18,000,144 1,196,534 (315,755) - - 20,855 (102) (576) (9) (11,613) 33 (528,712) $ 18,360,799

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33. OPERATING REVENUE AND COSTS

Operating revenue Sales of goods Electric power revenue Transportation revenue Rental revenue Engineering revenue Income from investments Sale of investments Cost of investments sold Gain on sale of investments, net Dividends Total income from investments Less: Sales returns and discounts Total operating revenue, net Operating costs Cost of goods sold Electric power cost Transportation cost Rental cost Engineering cost Total operating costs Gross profit	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 73,071,313 5,905,306 1,803,059 1,142,218 286,691 3,135,587 2,883,728 251,859 335,416 587,275 54,858 82,741,004 54,480,379 5,399,450 1,322,486 179,693 202,682 61,584,690 $ 21,156,314	2017 $ 55,749,429 5,293,385 1,700,096 1,180,448 416,920 5,131,408 4,800,786 330,622 290,584 621,206 62,236 64,899,248 47,838,702 4,967,340 1,291,269 187,058 443,861 54,728,230 $ 10,171,018

Contract balances: As of December 31, 2018, the Group’s contract assets and contract liabilities of NT$147,528 thousand and NT$731,015 thousand were accounts receivable and customers’ deposits and advances, respectively.

34. NET PROFIT

Net profit was as follows:

a. Other income

Dividends Government grants Interest income Rental income Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 434,898 430,015 370,571 51,105 193,214 $ 1,479,803	2017 $ 326,096 324,283 179,840 49,578 160,861 $ 1,040,658

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b. Other gains and losses

Impairment losses of goodwill Net gain (loss) gain on financial assets and liabilities designated as at FVTPL Impairment losses recognized on investments accounted for using equity method Preparatory costs (Note 24) Bank charges Gain on changes in fair value of investment properties (Note 20) Net foreign exchange gains (losses) Gain on disposal of subsidiaries Loss on disposal of property, plant and equipment Gain on disposal of investments Loss on disposal of intangible assets Miscellaneous expenses Finance costs Interest on bank loans Amortization of discount on bonds payable Other interest expense Less: Amounts included in the cost of qualifying assets (capitalized interest) Information about capitalized interest was as follows: Capitalized interest Capitalization rate	For the Year Ended December 31
	2018 2017 $ (630,631) $ - (256,294) 31,422 (200,245) (122,619) (159,275) - (142,401) (128,306) 98,015 216,580 90,672 (454,600) 40,440 - (33,455) (103,818) - 63,042 - (1,030) (540,592) (228,901) $ (1,733,766) $ (728,230) For the Year Ended December 31
	2018 2017 $ 1,645,742 $ 1,763,418 24,567 1,401 3,103 7,618 (227) (362) $ 1,673,185 $ 1,772,075 For the Year Ended December 31
	2018 2017 $ 227 $ 362 0.726%-1.139% 0.787%-1.080%

c. Finance costs

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d. Depreciation and amortization

An analysis of depreciation by function Operating costs Operating expenses Non-operating expenses An analysis of amortization by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 4,524,970 115,507 9,084 $ 4,649,561 $ 172,655 11,594 $ 184,249	2017 $ 4,709,312 118,221 12,407 $ 4,839,940 $ 222,918 12,697 $ 235,615

e. Employee benefits expense

Post-employment benefits (Note 31) Defined contribution plans Defined benefit plans Short-term benefits Salary Remuneration of directors Labor and health insurance Other employees-related expenses Termination benefits Other employee benefits Total employee benefits expense Post-employment benefits (Note 31) Defined contribution plans Defined benefit plans Short-term benefits Salary Remuneration of directors Labor and health insurance Other employees-related expenses Termination benefits Other employee benefits Total employee benefits expense	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
	Operating Costs Operating Expenses Non-operating Expenses $ 160,404 $ 41,020 $ 80 3,743 (442) - 2,782,957 839,523 3,200 - 250,692 - 176,539 50,966 153 173,420 105,487 70 - - 3,270 - 71,340 432 $ 3,297,063 $ 1,358,586 $ 7,205 For the Year Ended December 31, 2017		Total $ 201,504 3,301 3,625,680 250,692 227,658 278,977 3,270 71,772 $ 4,662,854
	Operating Costs $ 152,148 2,631 2,448,379 - 170,496 172,628 53 - $ 2,946,335	Operating Expenses Non-operating Expenses $ 46,952 $ 95 510 - 814,511 9,404 135,346 - 45,602 145 100,708 71 - 2,194 42,720 536 $ 1,186,349 $ 12,445	Total $ 199,195 3,141 3,272,294 135,346 216,243 273,407 2,247 43,256 $ 4,145,129

As of December 31, 2018 and 2017, the Corporation had 5,878 and 6,004 employees, respectively. There were 19 non-employee directors for both years.

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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, 2019 and March 23, 2018, 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 Shares $ 253,436 $ - 223,658 -	2017
		Cash Shares $ 147,850 $ - 130,120 -

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

There is no difference between the actual amounts of employees’ compensation and remuneration of directors and supervisors paid and the amounts recognized in the consolidated 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.

35. INCOME TAXES RELATING TO CONTINUING OPERATIONS

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

Current tax In respect of the current year Income tax on unappropriated earnings Withholding tax on dividend 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 $ 4,205,378 22,260 143,261 3,608 4,374,507 974,372 132,042 1,106,414 $ 5,480,921	2017 $ 1,745,115 12,887 68,808 (10,858) 1,815,952 17,666 - 17,666 $ 1,833,618

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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 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 Investment credits Effect of tax rate changes Effect of different tax rate of the Group operating in other jurisdictions Income tax on unappropriated earnings Additional income tax under the Alternative Minimum Tax Act Withholding tax on dividend Adjustments for prior years’ tax 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 $ 20,370,118 $ 4,074,024 646,250 (1,047,109) 2,022,562 (19,411) (82,852) (441,247) 132,042 14,167 22,260 13,366 143,261 3,608 $ 5,480,921	2017 $ 8,499,159 $ 1,444,857 378,545 (603,950) 592,702 (404,492) (10,221) (21,523) - 372,876 12,887 13,987 68,808 (10,858) $ 1,833,618

In 2017, the applicable corporate income tax rate used by the Group 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%. The applicable tax rate used by subsidiaries in China is 25%. Tax rates used by other entities in the Group operating in other jurisdictions are based on the tax laws in those jurisdictions.

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

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Fair value changes of financial assets at FVTOCI Remeasurement on defined benefit plans Fair value changes of available-for-sale financial assets Total income tax recognized in other comprehensive income	For the Year Ended	For the Year Ended	December 31
		2018 $ (220,107) (64,194) - $ (284,301)	2017 $ - (26,422) (210,243) $ (236,665)

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c. Current tax assets and liabilities

Current tax assets Tax refund receivable Current tax liabilities Income tax payable		December 31	December 31
		2018 $ 15,901 $ 2,181,268	2017 $ 23,145 $ 1,155,972

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 Allowance for impaired receivables Defined benefit obligation Other financial liabilities Investment properties Property, plant and equipment FVTOCI financial assets Others Tax losses Deferred tax liabilities Temporary differences Land value increment tax Investment properties Unappropriated earnings of subsidiaries Finance leases Defined benefit obligation Associates Property, plant and equipment Unrealized foreign exchange gain Allowance for impaired receivables Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 167,788 $ 39,199 $ - 23,027 - 2,314 - 8,943 - 4,124 112 - 21,526 (17,647) - 220,113 - (220,113) 75,217 53,746 - 511,795 84,353 (217,799) 52,390 10,839 - $ 564,185 $ 95,192 $ (217,799) $ 3,449,871 $ - $ - 3,109,538 (19,915) - 654,553 1,110,236 - 547,736 68,627 - 245,265 26,596 66,502 65,639 (3,390) - 22,033 10,844 - 4,671 6,701 - 84 212 - 772 1,695 - $ 8,100,162 $ 1,201,606 $ 66,502	Exchange Differences Closing Balance $ (3,570) $ 203,417 - 25,341 - 8,943 (63) 4,173 61 3,940 - - (1,599) 127,364 (5,171) 373,178 (169) 63,060 $ (5,340) $ 436,238 $ - $ 3,449,871 - 3,089,623 (1,760) 1,763,029 - 616,363 - 338,363 (1,081 ) 61,168 - 32,877 - 11,372 - 296 - 2,467 $ (2,841) $ 9,365,429

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For the year ended December 31, 2017

Deferred tax assets Temporary differences AFS financial assets Allowance for impaired receivables Defined benefit obligation Property, plant and equipment Investment properties Others Tax losses Deferred tax liabilities Temporary differences Investment properties Land value increment tax Unappropriated earnings of subsidiaries Finance leases Defined benefit obligation Associates Property, plant and equipment Unrealized foreign exchange gain Allowance for impaired receivables Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income $ 430,356 $ - $ (210,243) 125,008 45,004 - 21,421 (2,331) 3,937 15,052 6,439 - 7,269 (2,974) - 97,433 (21,106) - 696,539 25,032 (206,306) 164,867 (108,960) - $ 861,406 $ (83,928) $ (206,306) $ 3,517,004 $ (407,466) $ - 3,449,871 - - 270,789 384,060 - 575,567 (27,831) - 211,375 3,531 30,359 59,574 7,222 - 28,269 (5,937) - 17,329 (12,658) - - 84 - 8,039 (7,267) - $ 8,137,817 $ (66,262) $ 30,359	Exchange Differences Closing Balance $ - $ 220,113 (2,224) 167,788 - 23,027 35 21,526 (171) 4,124 (1,110) 75,217 (3,470) 511,795 (3,517) 52,390 $ (6,987) $ 564,185 $ - $ 3,109,538 - 3,449,871 (296) 654,553 - 547,736 - 245,265 (1,157) 65,639 (299) 22,033 - 4,671 - 84 - 772 $ (1,752) $ 8,100,162

e. Unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Expire in 2018 Expire in 2019 Expire in 2021 Expire in 2022 Expire in 2023 Expire in 2024 Expire in 2025 Expire in 2026 Expire in 2027		December 31	December 31
		2018 $ 1,635 561,999 222,721 247,162 27,752 58,219 299,401 156,574 23,022 $ 1,598,485	2017 $ 195,232 588,358 222,721 263,267 27,752 60,080 302,557 9,042 69,659 $ 1,738,668

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f. Information about unused loss carryforwards

Loss carryforwards as of December 31, 2018 comprised the following:

Unused Amount	Unused Amount	Expiry Year
$	1,635	2018
	561,999	2019
	222,721	2021
	247,162	2022
	27,752	2023
	58,219	2024
	299,401	2025
	156,574	2026
	23,022	2027
	197,002	No expiration
$	1,795,487

g. 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.

h. The latest years of income tax returns which had been examined and cleared by the tax authorities were as follows:

Company The Corporation DCI YTRMC YSRMC FMT AEE AIC FDT YLPPC FSMS NHC CHP YLSS YLT	Year 2016 Note 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016

Note: 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.

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36. EARNINGS PER SHARE

Unit: NT$ Per Share

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

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.

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37. FINANCIAL INSTRUMENTS

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

b.	December 31, 2018 Carrying FairValue Amount Level 1 Level 2 Level 3 Financial liabilities Financial liabilities measured at amortized cost Bonds payable (include 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 (include 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 Listed stocks $ 3,502,988 $ - $ - Beneficiary certificates 1,390,765 4,152,830 - Overseas bonds - - - $ 4,893,753 $ 4,152,830 $ - Financial assets at FVTOCI Domestic listed stocks $ 11,774,012 $ - $ - Domestic unlisted shares - - 1,537,291 Overseas listed stocks 152,337 - - Overseas unlisted shares - - 122,026 $ 11,926,349 $ - $ 1,659,317 Financial liabilities at FVTPL Convertible options $ - $ - $ 223,501 Cross-currency swap contracts - - 44,717 $ - $ - $ 268,218	FairValue
		Level 1 Level 2 Level 3 $ 16,719,158 $ - $ - Fair Value	Total $ 16,719,158
			Total $ 14,096,452 Total $ 3,502,988 5,543,595 - $ 9,046,583 $ 11,774,012 1,537,291 152,337 122,026 $ 13,585,666 $ 223,501 44,717 $ 268,218

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December 31, 2017

Financial assets at FVTPL Beneficiary certificates Listed stocks Available-for-sale financial assets Domestic listed stocks Overseas listed stocks Beneficiary certificates Overseas bonds	Level 1 $ 243,486 78,594 $ 322,080 $ 14,013,961 1,835,201 358,203 372,460 $ 16,579,825	Level 2 $ - - $ - $ - - 846,875 - $ 846,875	Level 3 $ - - $ - $ - 8,451,384 - - $ 8,451,384	Total $ 243,486 78,594 $ 322,080 $ 14,013,961 10,286,585 1,205,078 372,460 $ 25,878,084

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 For the year ended December 31, 2017 Balance at January 1, 2017 Recognized in other comprehensive income (loss) Purchases Balance at December 31, 2017		Financial Liabilities at FVTPL Derivatives $ - - - 47,303 - 220,915 - $ 268,218	Financial Assets at FVTOCI	Financial Assets at FVTOCI
				Equity Instruments $ 8,451,384 1,638,811 10,090,195 - 1,361,674 - (9,792,552) $ 1,659,317 Available-for- sale Equity Instruments $ 4,619,464 2,932,811 899,109 $ 8,451,384

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3) Valuation techniques and inputs applied for Level 2 fair value measurement

Financial Instruments Valuation Techniques and Inputs Mutual funds The Group uses net asset value as the basis to determine the fair value as the Group has determined that the net asset value of the mutual fund represents fair value at the end of the reporting period.

4) 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.
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c. Categories of financial instruments

Financial assets Financial assets at FVTPL Available-for-sale financial assets (2) Financial assets at amortized cost (3) Loans and receivables (1) Financial assets at FVTOCI Financial liabilities Financial liabilities at FVTPL Financial liabilities at amortized cost (4)	December 31
	2018 2017 $ 9,046,583 $ 322,080 - 27,178,752 55,388,001 - - 33,580,103 13,585,666 - 268,218 - 105,054,422 89,001,025

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 measured at amortized cost, which comprise short-term and long-term loans, short-term and long-term bills payable, trade and other payable, and bonds issued.
d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt investments, trade receivables, trade payables, bonds payable, and borrowings. The Group’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 Group 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 Group mitigates the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the Corporation’s 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 Group’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).

a) Foreign currency risk

Several subsidiaries of the Corporation have foreign currency sales and purchases and foreign currency financing activities, which expose the Group to foreign currency risk.

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The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and derivatives exposed to foreign currency risk at the end of the reporting period are set out in Note 42.

Sensitivity analysis

The Group was mainly exposed to the RMB and USD.

The following table details the Group’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.

be negative.
Increase (decrease) in pre-tax profit	RMB Impact For the Year Ended December 31 2018 2017 $ 69,060 $ 44,109	USD Impact
		For the Year Ended December 31
		2018 2017 $ 145,181 $ 310,190

b) Interest rate risk

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

The carrying amounts of the Group’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 Sensitivity analysis	December 31
	2018 2017 $ 17,727,715 $ 5,148,393 45,872,001 37,994,264 12,084,642 7,541,702 50,569,182 43,016,795

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

If interest rates had been 0.01% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2018 and 2017 would have decreased/increased by $3,698 thousand and $3,264 thousand, respectively, mainly due to the Group’s exposure to changes in interest rates of its variable-rate bank borrowings and bank deposits.

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c) Other price risk

The Group is exposed to price risk through its investments in listed equity securities, corporate bonds 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 $90,466 thousand as a result of the changes in fair value of financial assets at fair value through profit or loss, and the pre-tax other comprehensive income for the year ended December 31, 2018 would have increased/decreased by $119,263 thousand as a result of the changes in fair value of financial assets at fair value through other comprehensive income.

If investment position prices had been 1% higher/lower, pre-tax profit for the year ended December 31, 2017 would have increased/decreased by $3,221 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 $174,267 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 Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which would cause a financial loss to the Group due to the failure of counterparties to discharge an obligation and financial guarantees provided by the Group is equal to the carrying amount of the financial assets as stated in the balance sheets.

The Group 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 Group only transacts with entities that are rated the equivalent of investment grade and above. The Group uses publicly available financial information and its own trading records to rate its major customers. The Group’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 Group evaluates clients’ financial condition continuously.

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

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’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.

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

The following tables detail the Group’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 Group 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 Rate (%) Non-derivative financial liabilities Non-interest bearing Variable interest rate liabilities 3.02 Fixed interest rate liabilities 0.87 December 31, 2017	On Demand or Less than 1 Month $ 4,323,700 6,735,000 17,746,801 $ 28,805,501	1-3 Months $ 2,662,290 6,725,614 6,213,450 $ 15,601,354	3 Months to 1 Year $ 866,745 8,508,552 4,725,303 $ 14,100,600	1-5 Years $ 690,195 28,600,016 17,186,447 $ 46,476,658	5+ Years $ 70,309 - -
					$ 70,309

Effective Interest Rate (%) Non-derivative financial liabilities Non-interest bearing Variable interest rate liabilities 2.91 Fixed interest rate liabilities 0.90	On Demand or Less than 1 Month $ 3,498,318 6,473,000 14,558,597 $ 24,529,915	1-3 Months $ 2,755,509 553,142 4,254,072 $ 7,562,723	3 Months to 1 Year $ 937,458 13,703,024 4,191,403 $ 18,831,885	1-5 Years $ 807,978 22,287,629 14,990,192 $ 38,085,799	5+ Years $ 60,789 - -
					$ 60,789

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 tables for derivative financial liabilities

The following table details the Group’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.

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 $ -

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

38. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

Transactions with related parties are conducted under normal terms.

Balances and transactions between the Group and single related party are disclosed separately except when the amount is less than 10% of the total balances or transactions; otherwise, the amounts are lumped together as others.

a. Related party name and category

Related Party Name
FENC
U-Ming
SHSTC
EISF
PGIC
YDC
OSC
HZYCCL
FEDSDL
YDLC
FEC
YYI
YDEC
Alliance
PEI
HXMC
WAMTC
Malaysia Garment Manufacturers Private Limited
U-Ming Transport (Singapore) Private Limited
CHC Resources Corporation
Far Eastern Department Store Ltd.
Chu Chiang Enterprise Corp. Ltd.
Chu Feng
Air Liquide Far Eastern Co.
Oriental Petrochemical (Taiwan) Corporation
Far Eastern Memorial Hospital
Ya Tung Department Store Ltd.
Yuan Ze University
Oriental Resources Development Co., Ltd.

Related Party Category

Associates
Associates
Associates
Associates
Associates
Associates
Associates
Associates
Associates
Associates
Associates
Associates
Associates
Joint ventures
Joint ventures
Joint ventures
Joint ventures
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
Others
(Continued)

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Related Party Name
Far Eastern Leasing Corporation
Ho Hwei Enterprise Corp. Ltd.
Far Eastern Apparel Co., Ltd.
Oriental Union Chemical Corp.
NanKung Enterprise Ltd.
New Century InfoComm Tech Co., Ltd.
Ding & Ding Management Consultants Co., Ltd.
Far Eastern Fibertech Co., Ltd.
Far Eastern Technical Consultants Co., Ltd.
Far Eastern International Bank (FEIB)
FENCC
Far Eastern New Apparel (Vietnam) Ltd.
Far Eastern Polytex (Vietnam) Ltd.
FERD
Far Eastern General Construction Inc.
Far EasTone Telecommunications Co., Ltd.
YDES
Far Eastern Property Insurance Agency Co., Ltd.
Far Eastern International Leasing Corporation
Lien Fang Enterprise Corp. Ltd.
Chubei New Century Shopping Mall Co., Ltd.
Far Eastern Electronic Toll Collection Co., Ltd.
Mr. Xu Yuanzhi Memorial Foundation
YDT Technology International Corporation
J-Power Investment Netherlands
Pan Asia Engineers & Constructors Corp.

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
Others
Others

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 revenue Associates Others Joint ventures Operating cost Associates Others Joint ventures	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 694,540 1,766,679 497,486 $ 2,958,705 $ 601,236 907,989 653,781 $ 2,163,006	2017 $ 827,705 1,292,096 572,602 $ 2,692,403 $ 536,858 705,900 477,500 $ 1,720,258

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

Associates Others FENCC Others Joint ventures		December 31	December 31
		2018 $ 120,926 1,929,748 1,243,535 3,173,283 268,741 $ 3,562,950	2017 $ 96,716 1,963,784 932,451 2,896,235 267,762 $ 3,260,713

Accounts payable and accrued expenses to related parties:

Associates Others Joint ventures		December 31	December 31
		2018 $ 98,574 83,694 68,588 $ 250,856	2017 $ 98,160 64,090 110,110 $ 272,360

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 Others Joint ventures		December 31	December 31
		2018 $ 15,000 77 - $ 15,077	2017 $ 15,000 94 48,610 $ 63,704

c. Transactions with FEIB

Bank deposits (Note) Bank loans		December 31	December 31
		2018 $ 3,361,915 $ 2,106,000	2017 $ 5,977,545 $ 2,120,000

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).

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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 $ 282,998 756 $ 283,754	2017 $ 187,440 756 $ 188,196

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 $ 50,433 19,073 $ 69,506	2017 $ 51,603 13,840 $ 65,443

2) Acquisitions of property, plant and equipment

Others 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

3) Acquisitions of investment properties
4) The nature of the Group’s transaction with OFSPC is acquisition or disposal of OPAS Fund Segregated Portfolio’s overseas fund through OFSPC’s platform. The portfolio’s decision is made and managed by the investment committee which is composed of the Corporation and other investors. The Group’s investment activities through OFSPC’s platform for the years ended December 31, 2018 and 2017 included acquisition of $4,065,473 thousand and $151,050 thousand and disposal of $0 thousand and $640,424 thousand as well as gain on disposal of $0 thousand and $55,741 thousand, respectively.
5) The Corporation’s subsidiary, DCI, subscribed for shares of Catalyst Tranche One and paid $123,120 thousand in 2018.
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39. OPERATING LEASE ARRANGEMENTS

a. The Group as lessee

Operating leases relate to leases of land with lease terms between 5 and 10 years. All operating lease contracts over 5 years contain clauses for 5-year market rental reviews. The Group does not have a bargain purchase option to acquire the leased land at the expiration of the lease periods.

The refundable deposits paid under operating lease contracts as of December 31, 2018 and 2017, were $34,145 thousand and $15,798 thousand, respectively.

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 Later than 5 years		December 31	December 31
		2018 $ 302,209 941,408 2,940,674 $ 4,184,291	2017 $ 321,955 953,410 3,231,833 $ 4,507,198

The Group’s rent expenses on the above operating lease contracts were $320,313 thousand and $254,632 thousand for the years ended December 31, 2018 and 2017, respectively.

Refer to Note 23 for the information on land use rights of the Group on leases located in mainland China, Hong Kong, Singapore and Vietnam.

b. Refer to Notes 14 and 20 for the information of the Group as lessor.

40. ASSETS PLEDGED AS COLLATERAL

The following assets are provided as collaterals for short-term and long-term bank borrowings or for purchases from suppliers.

Investment properties Investments accounted for using equity method Property, plant and equipment Financial assets at fair value through other comprehensive income Financial assets at amortized cost Available-for-sale financial assets Debt investment with no active market		December 31	December 31
		2018 $ 13,840,249 13,374,748 2,830,624 1,241,250 169,139 - - $ 31,456,010	2017 $ 13,915,794 12,710,318 3,076,926 - - 1,193,250 228,560 $ 31,124,848

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41. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. Unused letters of credit of JPY31,120 thousand, US$17,474 thousand and EUR131 thousand.
b. Guarantee notes issued for related parties:

The Corporation

AIC DCI NHC YLPPC AEE YSRMC FSMS DCI AC Mega IV Investment Ltd. FSMS	December 31, 2018 $ 12,039,900 8,769,975 1,339,310 497,642 422,660 150,000 30,000 $ 23,249,487 $ 214,655 50,000 $ 264,655

c. CHP entered into agreements on the following transactions:
1) Purchase of natural gas from Chinese Petroleum Corporation.
2) Electricity purchase from and sale to Taiwan Power Company.
3) Contractual Service Agreement with General Electric International, Inc.
d. The estimated payments for construction of plants and acquisition of land use rights and equipment of JYDC, SIYDCCL, HGYDC and SLCL in the future amount to RMB517,566 thousand.
e. YSRMC supplied ready-mixed concrete to Da Cin Construction Co., Ltd. (“Da Cin”) during 2003. The owner of the project under construction demanded Da Cin to take responsibility to repair the construction flaws. Da Cin requested YSRMC to compensate the loss and damage on the construction. However, they did not reach an agreement from year 2006 to 2009. Da Cin filed an appeal and requested YSRMC to indemnify $22,881 thousand in April 2010. In July 2014, the local court concluded that YSRMC has to pay indemnity in the amount of $17,642 thousand. In years 2010 and 2014, YSRMC had estimated related compensation loss, accounted for as provisions, of $13,800 thousand and $3,840 thousand, respectively. YSRMC had also filed an appeal against the court’s decision in October 2014. Later, Da Cin requested additional compensation of $137,544 thousand in the second instance and the total damage compensation claimed was $160,425 thousand together with the amount in the first instance. As of the date the financial statements were authorized for issue, the case is in the process of examination by the Supreme Court so YSRMC cannot make reasonable estimate about the judgment. YSRMC did not recognize additional compensation loss up to the auditors’ report date.
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f. On March 13, 2013, the No. 1114 Commissioners’ Meeting of Fair Trade Commission resolved that independent power producers violated Article 14, Paragraph 1 of Fair Trade Act due to the rejection of power purchase rate adjustment with TPC and fined CHP $400,000 thousand. Accordingly, CHP recognized penalty expenses, which is included in other losses in the consolidated financial statements for the year ended December 31, 2013. The penalty is payable in 60 monthly installments and covered by a long-term note payable. CHP had filed an appeal on April 17, 2013.

On September 12, 2013, the Petitions and Appeals Committee of the Executive Yuan rescinded the imposition of penalty (the “Penalty Disposition”) and advised the Fair Trade Commission to impose more appropriate disposition with refund of penalty paid by CHP. However, CHP’s appeal against the imposition of illegal concerted action among independent power producers (the “Act Disposition”) was dismissed.

Regarding the Penalty Disposition, the Fair Trade Commission resolved a penalty of $370,000 thousand on November 13, 2013. CHP thus adjusted the penalty expenses in other gains and losses for the year ended December 31, 2013. The disposition was revoked again by the Petitions and Appeals Committee on May 9, 2014. Then the Fair Trade Commission imposed a penalty of $364,000 thousand on July 9, 2014. CHP recognized a reversal gain of $6,000 thousand in other income for the year ended December 31, 2014 and issued a long-term note payable in 60 installments for the penalty in accordance with the disposition. In addition, CHP also filed an appeal to defend its interest on August 11, 2014.

On December 11, 2014, Letter from the Petitions and Appeals Committee indicates that the filing of appeal against the Penalty Disposition is suspended until the administrative court makes the final judgment on the Act Disposition.

Regarding the Act Disposition, on November 7, 2013, CHP filed an administrative litigation at the Taipei High Administrative Court against the dispositions of the Fair Trade Commission. The Taipei High Administrative Court entered a final judgment in favor of CHP on October 29, 2014. Nevertheless, the Fair Trade Commission filed an appeal with the Supreme Administrative Court. The Supreme Administrative Court dismissed the judgment made by the Taipei High Administrative Court on July 2, 2015. The Taipei High Administrative Court remanded the judgement on May 25, 2017 and still revoked the administrative disciplinary action and the judgement of the appeal. The Fair Trade Commission filed an appeal with the Supreme Administrative Court and the Taipei High Administrative Court filed an appeal to the Supreme Administrative Court on September 27, 2018. This case is currently heard by the Taipei High Administrative Court.

g. On March 15, 2013, Letter No. 102035 from the Fair Trade Commission indicated concerted action among CHP and other independent power producers due to the rejection of power purchase rate adjustment with TPC. Accordingly, in August 2015, TPC filed at the Taipei District Court a civil mediation which requests CHP to compensate $2.35 billion plus interest from November 1, 2007 to the settlement date for the damage caused. Later, in September 2015, TPC filed at the Taipei District Court a civil litigation appeal which requests CHP to compensate $2.349 billion plus interest from November 1, 2007 to the settlement date as well as an apology published in major newspapers. TPC also filed at the Taipei High Administrative Court an administrative litigation which requests CHP to compensate the damage caused which amounted to $1.4 billion plus interest from November 1, 2007 to the settlement date with a 5% annual interest rate.

CHP and TPC did not reach an agreement in the civil mediation council meeting held on October 7, 2015. Later, TPC included the damage compensation claimed in the civil mediation in the administrative litigation appeal and the total compensation claimed in the statement of the administrative litigation amounted to $3.75 billion plus interest from November 1, 2007 to the settlement date with a 5% annual interest rate. On November 27, 2015, the administrative court ruled that the litigation proceedings are suspended until the administrative court makes the final judgment on the Act Disposition. However, on July 12, 2016, Taipei High Administrative Court notified that the power purchase and sales contracts between independent power producers and TPC are subject to the performance of obligation under the Civil Code. Therefore, the abovementioned ruling for suspension

96 -

was revoked and the administrative litigation for compensation would be transferred to the Taipei District Court. TPC filed counter appeal against the ruling; however, the appeal was dismissed by the Supreme Administrative Court on December 30, 2016. This case has been transferred to the Taipei District Court on January 25, 2017.

In light of the civil proceedings, on March 1, 2016, TPC added posterior statement which requests the capital expenditure it paid to CHP from October 9, 2007 to November 30, 2012 according to the power purchase and sales contracts to be recalculated relying on CHP’s capital ratio. Accordingly, CHP would compensate at least $2.349 billion to TPC. The Taipei District Court dismissed the appeal on November 1, 2018, and CHP filed an appeal subsequently. This case is currently heard by the Taiwan High Court.

The Corporation considered the payment of the indemnity is not possible unless TPC can provide proof that the damage was caused by the Corporation and their appeal is filed within the statute of limitation. As of the date the financial statements were authorized for issue, the amount of the compensation cannot be reasonably estimated. Therefore, the Corporation could not assess the possible impact on its financial position and did not recognize any contingent liabilities.

h. 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.
i. 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.
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42. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s 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	$	309,127	4.468	$	1,381,194
USD		591,160	30.665		18,127,926
EUR		10,002	35		350,055
AUD		2,873	21.55		61,912
HKD		2,015	3.891		7,839
Non-monetary item
RMB		37,516	4.468		167,621
USD		804,287	30.665		24,663,454
HKD		618,269	3.891		2,405,686
Financial liabilities
Monetary items
USD		496,687	30.665		15,230,907
Non-monetary item
USD		8,747	30.665		268,218
December 31, 2017
		Foreign		New Taiwan
	Currencies		Exchange Rate		Dollars
Financial assets
Monetary items
RMB	$	194,020	4.5468	$	882,181
USD		244,746	29.71		7,271,405
JPY		862,447	0.2622		226,134
AUD		2,817	23.07		64,988
Non-monetary item
RMB		121,305	4.5468		551,557
USD		33,191	29.71		986,094
HKD		2,605,975	3.777		9,842,767
Financial liabilities
Monetary items
USD		35,934	29.71		1,067,596

For the years ended December 31, 2018 and 2017, the total amounts of realized and unrealized net foreign exchange losses were $90,672 thousand and $(454,600) thousand, respectively. It is impractical to disclose net foreign exchange losses by each significant foreign currency because of the variety of the foreign currency transactions and functional currencies of the Group.

98 -

43. 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.
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.
99 -
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.
l. Business relationships and significant intercompany transactions: Table 9 (attached).

44. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group’s reportable segments were as follows: Cement, electric power, investment, engineering, transportation, stainless steel and leasing.

a. Segment revenue and results

Reportable operating segments’ revenue and profits are as follows:

Cement Electric power Investment Engineering Transportation Stainless steel Leasing Non-operating income and expenses Income before income tax		Segment Revenue For the Year Ended December 31 2018 2017 $ 67,339,927 $ 49,651,029 6,682,384 6,114,715 587,275 621,206 286,691 416,920 1,802,744 1,699,538 5,676,843 6,036,722 365,140 359,118 $ 82,741,004 $ 64,899,248		Segment Profit	Segment Profit
				For the Year Ended December 31
		2018 $ 67,339,927 6,682,384 587,275 286,691 1,802,744 5,676,843 365,140 $ 82,741,004		2018 $ 15,951,898 1,205,596 253,553 55,836 381,152 119,963 185,112 18,153,110 2,217,008 $ 20,370,118	2017 $ 5,554,248 1,038,985 358,616 (54,112) 202,375 164,860 171,744 7,436,716 1,062,443 $ 8,499,159

Segment revenue reported above represents revenue generated from external customers.

b. Segment assets and liabilities, and other segment information

The Group does not report segment assets and liabilities or other segment information to the chief operating decision maker. Therefore, no information is disclosed here.

100 -

c. Geographical information

The Group operates principally in Taiwan and China. The Group and its subsidiaries’ revenue from external customers and information about its non-current assets by geographical location are detailed below.

Revenue from External

	Revenue from External	Revenue from External
China Taiwan Others	Customers For the Year Ended December 31 2018 2017 $ 51,366,180 $ 35,284,969 27,647,571 25,860,444 3,727,253 3,753,835		Non-current Assets
			For the Year Ended December 31
		2018 $ 51,366,180 27,647,571 3,727,253		2018 $ 45,206,253 50,299,590 623,944	2017 $ 49,973,176 47,329,406 656,989

$ 82,741,004 $ 64,899,248 $ 96,129,787 $ 97,959,571

Revenue is categorized according to customers’ location. Non-current assets exclude those classified as held for sale, financial instruments, deferred tax assets, post-employment benefit assets, and assets arising from insurance contracts.

d. Information of major customers

Taiwan Power Company		Revenue	Revenue	Revenue
		For the Year Ended December 31
		2018 Amount % $ 6,682,384 8		2017
				Amount % $ 6,114,715 9

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TABLE 1

ASIA CEMENT CORPORATION AND INVESTEES

FINANCING PROVIDED TO OTHERS FOR THE 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)

102 -

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)

103 -

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)

104 -

(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.

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TABLE 2

ASIA CEMENT CORPORATION AND INVESTEES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE 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.
106 -

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)

107 -

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)

108 -

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)

109 -

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)

110 -

TABLE 4

ASIA CEMENT CORPORATION AND INVESTEES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE 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.

111 -

TABLE 5

ASIA CEMENT CORPORATION AND INVESTEES

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE 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)

112 -

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)

113 -

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)

114 -

TABLE 6

ASIA CEMENT CORPORATION AND INVESTEES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE 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)

115 -

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)

116 -

TABLE 7

ASIA CEMENT CORPORATION AND INVESTEES

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES ON WHICH THE CORPORATION EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA) FOR THE 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)

117 -

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)

118 -

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)

119 -

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)

120 -

TABLE 8

ASIA CEMENT CORPORATION AND INVESTEES

INVESTMENT IN MAINLAND CHINA FOR THE 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)

121 -

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)

122 -

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)

123 -

TABLE 9

ASIA CEMENT CORPORATION AND INVESTEES

BUSINESS RELATIONSHIP AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars)

Number	Company Name	Counterparty	Relationship (Note)	Transaction Details	Transaction Details		% to Total Revenue or Assets
				Financial Statement Account	Amount	Transaction Terms
0	The Corporation	PEREZ-AOG, L.L.C. KCC YTRMC ACSPL AIC YSRMC DCI	1 1 1 1 1 1 1 1 1 1 1	Sales Sales Accounts receivable Sales Guarantee deposits Accounts receivable Sales Other revenue Accounts receivable Sales Other revenue	$ 19,327 24,496 370,183 1,769,285 590,803 90,525 596,047 29,507 32,382 154,194 16,806	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - 2 - - 1 - - - -
1	YTRMC	YTV	1	Other receivables	35,778	Based on regular terms	-
2	AEE	YLT	3	Sales	32,297	Based on regular terms	-
3	NHC	The Corporation	2 2	Accounts receivable Sales	15,847 149,387	Based on regular terms Based on regular terms	- -
4	YLT	The Corporation	2 2	Accounts receivable Sales	41,808 157,617	Based on regular terms Based on regular terms	- -
5	FSMS	The Corporation	2	Sales	30,985	Based on regular terms	-
6	FMT	The Corporation YTRMC NHC FDT	2 2 3 3 1 1	Accounts receivable Sales Sales Sales Other revenue Sales	18,306 83,325 41,518 14,691 22,081 60,897	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - -
7	FDT	The Corporation FMT YLSS	2 2 2 3	Sales Accounts receivable Sales Sales	12,286 22,804 79,727 24,657	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -
8	SHYLCP	JYDC	3	Sales	28,039	Based on regular terms	-

(Continued)

124 -

Number	Company Name	Counterparty	Relationship (Note)	Transaction Details	Transaction Details		% to Total Revenue or Assets
				Financial Statement Account	Amount	Transaction Terms
9	OHC	SIYDCCL SLCL	3 3 3 3	Interest revenue Other receivables Interest revenue Other receivables	$ 21,451 626,399 32,458 863,535	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -
10	SYTCL	SIYDCCL SLCL	3 3 3 3	Accounts receivable Sales Accounts receivable Sales	21,271 113,382 22,757 210,076	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -
11	SIYDCCL	SLCL CYCPCL	1 1 3 3	Accounts receivable Sales Accounts receivable Sales	26,853 368,864 18,884 55,380	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -
12	CYCPCL	SYCPCL SIYDCCL SLCL	3 3 3 3 3	Accounts receivable Sales Other receivables Other receivables Sales	16,287 16,084 44,742 44,742 11,048	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - -
13	JYLTC	JYDC NYDC HGYDC	2 2 3 3	Accounts receivable Sales Sales Sales	58,029 202,225 59,006 34,447	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -
14	JYDC	The Corporation SHYLCP SIYDCCL SLCL SLCCL WYDC NYLC NYDC TZOCCL YYDCCL HYDCCL	2 3 3 3 3 3 3 3 3 1 1 1 1 3 3 3 3 3 3 3 3 3 3	Sales Interest revenue Other receivables Other revenue Interest revenue Other receivables Other receivables Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Interest revenue Other receivables Accounts receivable Sales Interest revenue Other receivables Accounts receivable Sales Accounts receivable Sales	246,326 11,873 268,687 15,340 53,833 595,470 152,125 113,480 1,204,498 10,416 170,332 43,719 392,270 19,267 425,548 154,826 777,824 26,624 516,259 156,900 2,379,761 203,729 193,738	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - - - - 1 - - - - - - - 1 - - - 3 - -
							(Continued)

125 -

Number	Company Name	Counterparty	Relationship (Note)	Transaction Details	Transaction Details		% to Total Revenue or Assets
				Financial Statement Account	Amount	Transaction Terms
15	WYDC	SYCPCL SLCL JYDC WYCPCL WYXC HYDCCL	3 3 3 3 3 1 1 3 3 3	Other receivables Interest revenue Other receivables Other revenue Other receivables Other receivables Sales Interest revenue Other receivables Prepayment for purchases	$ 134,228 18,972 402,685 11,161 11,686 111,857 11,726 12,648 268,457 118,448	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - - - - - -
16	WYXC	WYDC	3	Sales	13,494	Based on regular terms	-
17	NYLC	JYDC	2 2	Accounts receivable Sales	10,436 120,938	Based on regular terms Based on regular terms	- -
18	NYDC	SIYDCCL SLCL JYDC	3 3 2 2	Other receivables Other receivables Accounts receivable Sales	44,742 44,742 184,523 1,273,843	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - 2
19	HYTCL	WYDC HYDCCL	3 2	Sales Sales	12,966 52,054	Based on regular terms Based on regular terms	- -
20	HYDCCL	SYCPCL SIYDCCL SLCL JYDC WYCPCL WYDC WYXC	3 3 3 3 3 3 3 3 3 1 1	Other receivables Sales Interest revenue Other receivables Sales Accounts receivable Sales Other revenue Sales Other receivables Sales	44,742 28,334 25,662 469,800 92,146 81,445 218,292 25,793 569,001 45,130 31,460	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - - - - 1 - -
21	HGYDC	SIYDCCL SLCL JYDC HYDCCL	3 3 3 3 3 3	Other receivables Other receivables Accounts receivable Sales Accounts receivable Sales	89,486 223,714 52,652 206,153 88,464 404,177	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - -
22	TZOCCL	JYDC	3	Sales	28,241	Based on regular terms	-
23	SLCL	SYCPCL	3 3	Accounts receivable Sales	62,990 80,710	Based on regular terms Based on regular terms	- -
							(Continued)

126 -

Number	Company Name	Counterparty	Relationship (Note)	Transaction Details	Transaction Details		% to Total Revenue or Assets
				Financial Statement Account	Amount	Transaction Terms
24	SLCCL	SLCL	2	Other revenue	$ 13,865	Based on regular terms	-
25	AOG	PEREZ-AOG, L.L.C.	1 1	Long-term lease receivable Accounts receivable	17,104 13,232	Based on regular terms Based on regular terms	- -

Note: 1. Parent to subsidiary.
Subsidiary to parent.
Between subsidiaries.

(Concluded)

127 -

Others 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 — Audit Report / Information 2018

51736_rns_2018-11-14_463b38ab-0add-4863-81cd-077220996535.pdf

Asia Cement Corporation and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Estimated Impairment of Trade Receivables

Fair Value Measurement of Investment Properties

Emphasis of Matter

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED 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 AND SUBSIDIARIES

CONSOLIDATED 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 AND SUBSIDIARIES

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

1. ORGANIZATION AND OPERATIONS

2. APPROVAL OF FINANCIAL STATEMENTS

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

Classification, measurement and impairment of financial assets

Definition of a lease

The Group as lessee

The Group as lessor

Anticipated impact on assets, liabilities and equity

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b. Basis of preparation

Classification of Current and Non-current Assets and Liabilities

Basis of Consolidation

Principles for preparing consolidated financial statements

Foreign Currencies

Inventories

Investments in Associates and Joint Ventures

Property, Plant and Equipment

Investment Properties

Goodwill

Intangible Assets

Impairment of Tangible and Intangible Assets Other than Goodwill

Financial Instruments

Financial assets

2017

2018

2017

c. Derecognition of financial assets

Financial liabilities

Convertible bonds

Derivative financial instruments

Provisions

Revenue Recognition

2018

2017

Leasing

Government Grants

Employee Benefits

a. Short-term employee benefits

b. Retirement benefits

Taxation

a. Current tax

b. Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Estimated Impairment of Trade Receivables

In 2018

Fair Value Measurements and Valuation Process

6. CASH AND CASH EQUIVALENTS

In 2018

In 2017

ACC Audit Report / Information 2018