CSCC — Interim / Quarterly Report 2015

Dec 24, 2015

Stock Code: 1723

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Financial Statements and Independent Auditor’s Report Q1 of 2015 and 2014

Address : 25F, No. 88, Chengong 2nd Road, Qianzhen District, Kaohsiung City Tel. : (07)338–3515

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§Table of Contents§

Item I. Cover page II Table of contents III. Independent Auditor’s Report IV. Consolidated Balance Sheet V. Consolidated Income Statement VI. Consolidated Statement of Retained Earnings VII. Consolidated Statement of Cash Flow VIII. Notes to consolidated financial statements (I) Company background (II) Financial statements approval date and procedures (III) The application of newly published and revised standards and interpretations (IV) Material accounting polices summary (V) Primary source of uncertainty in material accounting judgment, estimate, and assumption (VI) Main accounting titles description (VII) Related party transactions (VIII) Pledged assets (IX) Material contingent liability and unrecognized contractual commitments (X) Material disaster damage and loss (XI) Material post events (XII) Information on financial assets and liabilities in foreign currencies with significant influence (XIII) Supplementary disclosures 1. Significant transactions information 2. Transfer investment business information 3. Investment in Mainland China (XIV) Department Information	Page	Note to financial statements
	1 2 3~4 5 6~7 8 9~11 12 12 12~20 21~22 22 22~46 47~50 – 51 – – 51~52 52~53 52~53 53 54~55	– – – – – – – I II III IV V VI~XXVIII XXIX – XXX – – XXXII XXXII XXXII XXXIII

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China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Balance Sheet

March 31 2015 and December 31 and March 31, 2014.

Unit: NT$ Thousands

Code	Assets	December 31, 2015 (Audited)	December 31, 2015 (Audited)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation) Amount % $ 455,212 5 2,203,831 25 160,025 2 12,478 – 748,211 8 158,660 2 343,347 4 79 – 379,534 4 – – 389,600 4 72,905 1 4,923,882 55 368,915 4 104,802 1 144,777 2 1,317,394 15 1,459,788 16 541,020 6 43,277 1 8,932 – 1,527 – 33,981 – – – 4,024,413 45 $8,948,295 100	Code	Liabilities and Shareholders’ equity		December 31, 2015 (Audited)	December 31, 2015 (Audited)		December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)
		Amount	%	Amount	%	Amount				Amount	%		Amount	%		Amount		%
1100 1110 1125 1150 1170 1180 1200 1220 130X 1460 1476 1479 11XX 1523 1527 1546 1550 1600 1760 1840 1915 1920 1985 1990 15XX 1XXX	Current assets Cash and cash equivalent (Note VI) Financial assets measured at fair value through profit and loss - current (Note VII) Available-for-sale financial assets – current (Note VIII) Notes payable (Note XI) Accounts receivable – net (Note XI) Accounts receivable – related party (Note IXI, & XXIX) Other receivables (Note XXIX) Current income tax assets Inventories (Note XII) Available-for-sale noncurrent assets (Note XIII) Other financial assets – current (Note XIV) Other current assets Total current assets Noncurrent assets Available-for-sale financial assets – noncurrent (Note VIII) Held-to-maturity financial assets - noncurrent (Note IX) Investment in debt instrument with no active market – non-current (Note X) Investment under the equity method (Note III & XVI) Property, plant, and equipment (Note XVII, & XXX) Investment property (Note XVIII) Deferred income tax assets (Note III) Prepaid equipment Refundable deposit Long-term prepaid rent (Note XXIX) Other noncurrent assets (Note XXIX) Total noncurrent assets Total assets	$ 1,320,420 1,829,798 196,802 12,169 469,146 127,802 176,583 – 423,495 – 183,300 65,617	15 20 2 – 5 1 2 – 5 – 2 1	$ 1,097,928 1,346,604 220,684 7,054 409,411 137,006 386,196 – 446,627 32,058 233,300 69,362	13 15 2 – 5 2 4 – 5 – 3 1	$ 455,212 2,203,831 160,025 12,478 748,211 158,660 343,347 79 379,534 – 389,600 72,905	2100 2110 2170 2180 2200 2230 2300 21XX 2570 2640 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX 3X2X		$			$			$	$ 69,201 – 29,463 317,296 315,107 328,645 34,880 1,094,592 854 127,083 127,937 1,222,529 2,369,044 433,261 1,727,592 242,136 2,855,418 4,825,146 105,118 (167,082 ) 7,565,487 160,279 7,725,766 8,948,295	1 – – 4 3 4 – 12 – 2 2 14 26 5 19 3 32 54 1 ( 2 ) 84 2 86 100
												$
		4,805,132	53	–	50	4,923,882
		505,038 107,656 205,644 1,378,400 1,408,006 552,988 40,315 24,688 1,587 32,679 37,179	6 1 2 15 16 6 1 – – – –	525,241 108,860 160,597 1,380,338 1,431,399 552,988 42,644 24,409 2,467 33,454 36,776	6 1 2 16 17 6 1 – – – 1	368,915 104,802 144,777 1,317,394 1,459,788 541,020 43,277 8,932 1,527 33,981 –
															$
		4,294,180	47	4,299,173	50	4,024,413
		$9,099,312	100	$8,685,403	100	$8,948,295

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on May 7 2015)

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China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Income Statement

January 1 to March 31, 2015 and 2014

(Review only, no audit has been conducted in accordance with GAAP)

January1 ~ March 31, Code Amount Operating income (Note XXIII & XXIX) 4100 Sales income $1,558,162 4800 Other operating income 28,544 4000 Total operating income 1,586,706 5000 Operating cost (Note XII, XXI, XXIV & XXIX) 1,154,570 5900 Gross profit 432,136 Operating expense (Note III, XXI, XXIV & XXIX) 6100 Marketing expense 30,339 6200 Management expense 10,466 6300 R&D expense 35,771 6000 Total operating expense 76,576 6900 Net operating income 355,560 Non-operating income and expense 7190 Other incomes (Note II & XXIX) 9,037 7020 Other profit and loss (Note XXIV & XXIX) 67,793 7060 The Portion of incomes from associates recognized under the equity method (Note 3) 17,589 7510 Interest expense ( 781 ) 7000 Non-operating income and expense Total 93,638	January1 ~ March 31,	Unit: NT$ Thousands Except for earnings per share in NTD 2015 January 1 ~ March 31, 2014 (Recompiled) % Amount % 98 $2,339,307 98 2 51,489 2 100 2,390,796 100 73 1,579,538 66 27 811,258 34 2 39,801 2 1 31,173 1 2 37,494 2 5 108,468 5 22 702,790 29 1 10,973 1 4 10,862 – 1 17,777 1 – ( 488 ) – 6 39,124 2	Unit: NT$ Thousands Except for earnings per share in NTD 2015 January 1 ~ March 31, 2014 (Recompiled) % Amount % 98 $2,339,307 98 2 51,489 2 100 2,390,796 100 73 1,579,538 66 27 811,258 34 2 39,801 2 1 31,173 1 2 37,494 2 5 108,468 5 22 702,790 29 1 10,973 1 4 10,862 – 1 17,777 1 – ( 488 ) – 6 39,124 2
			%
			98 2
			100 66
			34
			2 1 2
			5
			29
			1 – 1 –
			2

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Code 7900 Net income before tax 7950 Income tax expenses (Note III, IV & XXV) 8200 Net income Other comprehensive income (Note XXII) 8360 Items probable of subsequent reclassification under the tile of incomes 8361 Exchange difference from financial statement conversion of foreign operation 8362 Unrealized loss of financial assets available for sale under evaluation. 8370 The portion of other comprehensive incomes of associates recognized under the equity method. 8300 Current other comprehensive income (loss) (net amount after taxation) 8500 Total comprehensive income 8600 Net income classification: 8610 Shareholders’ equity 8620 Non-controlling interests 8700 Total comprehensive income classification: 8710 Shareholders’ equity 8720 Non-controlling interests Earnings per share (Note XXVI) 9710 Basic 9810 Diluted	January1 ~ March 31, 2015 Amount % $ 449,198 28 ( 56,849 ) ( 3 ) 392,349 25 ( 4,368 ) ( 1 ) ( 29,660 ) ( 2 ) ( 19,150 ) ( 1 ) ( 53,178 ) ( 4 ) $ 339,171 21 $ 392,414 ( 65 ) $ 392,349 $ 338,905 266 $ 339,171 $ 1.70 $ 1.70	January 1 ~ March 31, 2014 (Recompiled)	January 1 ~ March 31, 2014 (Recompiled)
	Amount $ 449,198 ( 56,849 ) 392,349 ( 4,368 ) ( 29,660 ) ( 19,150 ) ( 53,178 ) $ 339,171 $ 392,414 ( 65 ) $ 392,349 $ 338,905 266 $ 339,171 $ 1.70 $ 1.70	Amount	%
		$ 741,914 ( 111,025 ) 630,889 8,483 ( 16,936 ) ( 45,583 ) ( 54,036 ) $ 576,853 $ 631,530 ( 641 ) $ 630,889 $ 577,833 ( 980 ) $ 576,853 $ 2.74 $ 2.73	31 ( 5 ) 26 1 ( 1 ) ( 2 ) ( 2 ) 24

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on May 7 2015)

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China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Statement of Retained Earnings

January 1 to March 31, 2015 and 2014

(Review only, no audit has been conducted in accordance with GAAP)

Unit: NT$ Thousands

Capital sto Code Shares (1,000 shares) C A1 Balance- January 1 2015 236,904 A3 The influence of recompilation under the use of new standards (Note 3) – A5 Balance as of January 1 2015 after recompilation 236,904 D1 Net gains (loss) from January 1 to March 31 2015 – D3 Other comprehensive earnings after taxation from January 1 to March 31 2015 – D5 Total comprehensive incomes from January 1 to March 31 2015. – L7 Subsidiary’s disposing parent company’s stock deemed as treasury stock transaction – Z1 Balance as of March 31 2015 236,904 A1 Balance – 1/1/2014 236,904 C7 Changes of associates recognized under the equity method – D1 Net gains (loss) from January 1 to March 31 2014 – D3 Other comprehensive earnings after taxation from January 1 to March 31 2014 – D5 Total comprehensive incomes from January 1 to March 31 2014. – Z1 Balance as of March 31 2014 236,904							Sharehol	de	rs’ Equity											Total	Non-controlling interests	Total equity
	Capital sto		ck ommon stock capital $ 52,369,044 – 2,369,044 – – – – 12,369,044 $ 2,369,044 – – – – $ 2,369,044	Additional paid-in capital		Retained	earnings					Oth	e	r equity items				Treasury stock
											Exchange difference from financial statement conversion of foreign operation	U a av f	nr n a in	ealized profit d loss of the ilable-for-sale ancial assets			Total
	Shares (1,000 shares)	C			Legal reserve	Special reserve	Unappropriated earnings		Total
				$ 515,023 – 515,023 – – – 19,214 $ 534,237 $ 431,711 1,550 – – – $ 433,261	$ 1,948,583 –				$ 4,406,214 ( 296 ) 4,405,912 392,414 – 392,414 – $ 4,798,332 $ 4,193,616 – 631,530 – 631,530 $ 4,825,146	$ 27,989 – 27,989 – ( 6,173 ) ( 6,173 ) – $ 21,816 ( $ 2,154 ) – – 7,929 7,929 $ 5,775				$ 289,056 – 289,056 – 47,336 ) 47,336 ) – $ 241,720 $ 160,969 ) – – 61,626 ) 61,626 ) $ 99,343	$ ( ( $ $ ( (	$	317,045 317,045 – 53,509 ) 53,509 ) – 263,536 158,815 – – 53,697 ) 53,697 ) $ 105,118	( $ ( ( $ ( $ (	162,034 ) – 162,034 ) – – – 3,712 158,322 ) 167,082 ) – – – – $ 167,082 )	$ 7,445,292 ( 296 ) 7,444,996 392,414 ( 53,509 ) 338,905 22,926 $ 7,806,827 $ 6,986,104 – 631,530 ( 53,697 ) 577,833 $ 7,565,487	$ 150,840 – 150,840 ( 65 ) 331 266 – $ 151,106 $ 161,259 – ( 641 ) ( 339 ) ( 980 ) $ 160,279	$ 7,596,132 ( 296 ) 7,695,836 392,349 ( 53,178 ) 339,171 22,926 $ 7,957,933 $ 7,147,363 1,550 630,889 ( 54,226 ) 576,853 $ 7,725,766
	236,904				1,948,583	242,136
	– h –				– –	– –							(
	–				–	–							(
	–				–	–
	236,904				$ 1,948,583	$ 242,136
	236,904				$ 1,727,592	$ 242,136							(
	–				–	–
	– h –				– –	– –							(
	–				–	–							(
	236,904				$ 1,727,592	$ 242,136

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on May 7 2015)

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China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Statement of Cash Flow

January 1 to March 31, 2015 and 2014

(Review only, no audit has been conducted in accordance with GAAP)

Unit: NT$ Thousands

				Unit: NT$ Thousands	Unit: NT$ Thousands
				January 1 ~ March 31,
		January	1 ~ March 31,		2014
Code			2015		(Recompiled)
	Cash flow from operating activities
A10000	Earnings before taxation in current period	$	449,198	$	741,914
A20010	Profits and losses not affecting cash flow
A20100	Depreciation		71,246		67,437
A20200	Amortization		632		–
A20400	Net profit of financial assets measured at fair
	value through profit and loss	(	4,767 )	(	4,252 )
A20400	Held-for-trading financial instruments net loss
	(profit)	(	7,649 )		206
A20900	Interest expense		781		488
A21200	Interest income	(	2,306 )	(	4,837 )
A22300	Portion of earnings from associates recognized
	under the equity method	(	16,559 )	(	19,403 )
A22500	Profit from the disposal of property, plant, and
	equipment	(	158 )	(	67 )
A23000	Capital gains from disposition of non-current
	assets for disposal	(	66,609 )		–
A23100	Loss (profit) from the disposal of investment		1,100	(	34,110 )
A23700	Inventory loss in valuation and obsolescence		2,787		8,826
A30000	Change in operating assets and liabilities - net
A31110	Held-for-trading financial assets		225,317		31,068
A31130	Note receivable	(	5,115 )		6,347
A31150	Accounts receivable	(	60,297 )	(	215,873 )
A31160	Accounts receivable – related party		9,204		19,035
A31180	Other receivables	(	94,011 )	(	31,844 )
A31200	Inventories		20,158	(	12,742 )
A31240	Other current assets		3,783	(	27,878 )
A32150	Accounts payable		32,430		4,164
A32160	Accounts payable – related party	(	49,938 )	(	9,985 )
A32180	Other payables	(	42,191 )	(	8,250 )
A32230	Other current liabilities		7,993		5,187
A32240	Net determined benefit liabilities	(	1,295 )	(	1,102 )
(Continuing)

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(Continued)

(Continued)
Code A33000 Cash inflow from operating activities A33500 Income tax paid AAAA Net cash inflow from operating activities Cash flow from investing activities B00100 Acquisition of financial assets measured at fair value through profit and loss designated at initial recognition B00200 Proceeds from disposal of financial assets measured at fair value through profit and loss designated at initial recognition B00300 Acquisition of available-for-sale financial assets B00400 Proceeds from the disposal of available-for-sale financial assets B00600 Investment in debt instruments with no active market B00700 Proceeds for investment in debt instruments with no active market B02600 Proceeds from disposition of non-current assets for disposal B02700 Acquisition of property, plant, and equipment B02800 Disposal of the property, plant, and equipment B03700 Decrease (increase) of refundable deposit B04100 Decrease of other receivables B06600 Decrease of other financial assets B06700 Increase of other noncurrent assets B07300 Increase of long-term prepaid rent B07300 Decrease of other current assets B07500 Interest received BBBB Net cash outflow from investing activities Cash flow from financing activities C00100 Increase of short-term loans C00200 Decrease of short-term loans C00500 Increase of short-term bills payable C00600 Decrease of short-term bills payable C04500 Distribution of cash dividend C05000 Disposal of Treasury stock C05600 Interest paid CCCC Net cash inflow (outflow) from financing DDDD Exchange rate effect on cash and cash equivalent (Continuing)	January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 (Recompiled)
	$ 473,734 $ 514,329 ( 459 ) ( 309 ) 473,275 514,020 ( 1,042,177) ( 770,117 ) 345,040 280,510 – ( 57,600 ) 13,325 33,754 ( 45,441 ) ( 9,690 ) 9,824 98,667 – ( 50,031 ) ( 56,905 ) 647 196 880 ( 246 ) 303,265 – 50,000 29,464 ( 724 ) – – ( 33,981 ) – 3,000 2,665 4,179 ( 323,884 ) ( 567,612 ) 996,376 1,284,141 ( 979,558 ) ( 1,287,097 ) 85,000 – ( 50,000 ) – – ( 7 ) 22,926 – ( 702 ) ( 496 ) 74,042 ( 3,459 ) ( 941 ) 2,827

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(Continued)

(Continued)
Code EEEE Change in cash and cash equivalents in current period E00100 Cash and cash equivalent balance - beginning E00200 Cash and cash equivalent balance - yearend	January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 (Recompiled)
		$ 222,492 ( $ 54,224 ) 1,097,928 509,436 $ 1,320,420 $ 455,212

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on May 7 2015)

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China Steel Chemical Corporation (CSCC) and Subsidiaries Notes to Consolidated Financial Statements

January 1 to March 31, 2015 and 2014

(Review only, no audit has been conducted in accordance with GAAP)

(Unit in NT$ Thousands, unless otherwise stated)

I. Company background

China Steel Chemical Corporation (hereinafter referred to as “CSCC”) was established in February 1989 by China Steel Corporation (CSC, the parent of the Company that has dominant control, and held 29% of the stake as of March 31 2015 and March 31 2014) and other institutional shareholders with operation kicked off since May 1993. The principal business is the production, processing, and sale of distilled products of coal tar, light oil series and coke series, and also the trading of products from upper and lower streams.

The Company has been authorized to have stock shares traded publicly on Taiwan Stock Exchange since November 1998.

The consolidated financial statements are prepared in New Taiwan Dollar, the functional currency of the Company.

II. Financial statements approval date and procedures

This consolidated financial statement was announced after reporting to the Board on May 5 2015

III. The application of newly published and revised standards and interpretations

• (I) First-use of the amended Criteria for the Compilation of Financial Statements by Securities Issuers and the 2013 edition of IFRS, IAS, IFRIC, and SIC as recognized by FSC.

According to Letter Chin-Kuan-Cheng-Shen-Zi No. 1030029342 and Letter Chin-Kuan-Cheng-Shen-Zi No. 1030010325 of Financial Supervisory Commission (hereinafter referred to as “FSC”), the Company and its subsidiaries started to use the2013 edition of IFRS, IAS, IFRIC, and SIC announced by IASB and recognized by FSC and the amended Criteria for the Compilation of Financial Statements by Securities Issuers from 2015 onward.

Significant change in the accounting policies of the Company and its subsidiaries under the use of the amended Criteria for the Compilation of Financial Statements by Securities Issuers and the 2013 edition of IFRSs further to the explanation given below:

1. IFRS 10 “Consolidated Financial Statements”

This standard replaced IAS 27 “Consolidated and Separate Financial Statements” and also SIC 12 “Consolidation: Special Purpose Entities” The Company and its subsidiaries consider the control over other entities to determine whether to have them included in the consolidated financial statements. If the Company is (1) under the power of the investors, (2) has changes in the risk exposure of return or power due to the participation of the investors, and (3) to influence the capacity of the amount of return with the use of the power of the investors on the investees, then the Company and its subsidiaries are under the control of the investors. In addition, whether investor has control over the investee under a relatively complicated situation, new standards provide more guidance.

1. IFRS 12 “Disclosure of Interests in other Entities”

The new standard requires for the disclosure of the content of subsidiaries, joint arrangements, associates, and the equity of structural entities not included in the consolidated financial statements. In the first-use of IFRS 12, the consolidated financial statement of the Company and subsidiaries is under extensive disclosure.

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3. IFRS 13 “Fair value measurement”

IFRS 13 provides a guideline on the measurement of fair value. The definition of fair value, establishment of a fair value measurement structure, and the disclosure of fair value measurement are stated in IFRS 13. In addition, the scope of disclosure under the new standard is broader. For example, before the application of IFRS 13, the standard only required the disclosure of financial instruments at fair value at 3 tiers of fair value. Under IFRS 13, all assets and liabilities are subject to disclosure.

IFRS 13 measurement requirement has been applied by deferral since 2015. For related disclosure, refer to Note 28.

4. IAS 1 Amendment “Presentation of other comprehensive income items”

According to IAS 1 Amendment, other comprehensive income items shall be classified by nature and grouped as (1) items not being reclassified to profit and loss and (2) items may be subsequently reclassified to profit and loss. The related income tax should be also grouped on the same basis. The aforementioned mandatory grouping requirement is not in effect before implementing the amendment referred to above.

In 2015, the Company applied the aforementioned requirement in retrospect. The items not being reclassified as incomes included determined benefit plant reassessment value and the portion of determined benefit plans under reassessment for associates recognized under the equity method. Items that may be reclassified as incomes in the future may include the exchange difference for the conversion of financial statements of foreign entities in operation, unrealized gain (loss) of financial assets available for sale, and the portion of other comprehensive income of associates recognized under the equity method (except the reassessment value of determined benefit plan). However, the aforementioned amendment does not affect the net profits, corporate earnings, other comprehensive incomes, and the total earnings of the current period.

5. IAS 19 Amendment “Employee Benefits”

“Net interest” replaced the cost of interest and the expected return of planned assets of the standard before amendment with net interest determined by determined benefit liabilities (assets) multiplied by discount rate. The amended IAS 19 in addition to changing the expression of defined benefit cost requires a wider range of presentation.

In addition, the definition of short-term employee benefits is revised in this amendment. The definition of short-term employee benefits is modified as “the entire employees benefits (except for the benefit of the resigned employees) will be paid to employees in full within 12 months at the end of the service reporting period.” However, this revision does not affect the expression of vacation payable as current liabilities in the consolidated balance sheet.

In addition, the definition of short-term employee benefits is revised in this amendment. The definition of short-term employee benefits is modified as “the entire employees benefits (except for the benefit of the resigned employees) will be paid to employees in full within 12 months at the end of the service reporting period.” However, this revision does not affect the expression of vacation payable as current liabilities in the consolidated balance sheet.	In addition, the definition of short-term employee benefits is revised in this amendment. The definition of short-term employee benefits is modified as “the entire employees benefits (except for the benefit of the resigned employees) will be paid to employees in full within 12 months at the end of the service reporting period.” However, this revision does not affect the expression of vacation payable as current liabilities in the consolidated balance sheet.	In addition, the definition of short-term employee benefits is revised in this amendment. The definition of short-term employee benefits is modified as “the entire employees benefits (except for the benefit of the resigned employees) will be paid to employees in full within 12 months at the end of the service reporting period.” However, this revision does not affect the expression of vacation payable as current liabilities in the consolidated balance sheet.
In the first-use of IAS 19, the Company and its subsidiaries elected no disclosure of the annual consolidated financial statements for comparing the determined benefit obligation sensitivity analysis in the period. influence of previous period is shown below: Amount before recompilation Applicable in first-use Amount after recompilation Assets, Liabilities, and Shareholders’ Equity effect January 1, 2014 Investment under the equity method $ 1,341,972 $ – $ 1,341,972 Deferred income tax assets $ 42,629 $ – $ 42,629 Net determined benefit liabilities $ 129,229 $ – $ 129,229 Retained earnings $ 4,193,616 $ – $ 4,193,616
	$ 1,341,972	$ 1,341,972
January 1, 2014 Investment under the equity method Deferred income tax assets Net determined benefit liabilities Retained earnings
	$ 42,629	$ 42,629
	$ 129,229	$ 129,229
	$ 4,193,616	$ 4,193,616

(Continuing)

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(Continued)

d)
March 31, 2014 Investment under the equity method Deferred income tax assets Net determined benefit liabilities Retained earnings December 31, 2014 Investment under the equity method Deferred income tax assets Net determined benefit liabilities Retained earnings The influence on comprehensive income	Amount before recompilation $ 1,317,400 $ 43,271 $ 128,104 $ 4,825,183 $ 1,380,634 $ 42,644 $ 134,172 $ 4,406,214 $ 108,431 $ 17,783 $ 111,031 $ 630,926	Applicable in first-use ( $ 6 ) $ 6 $ 37 ( $ 37) ( $ 296 ) $ – $ – ( $ 296 ) $ 37 ( $ 6 ) ( $ 6 ) ( $ 37 )	Amount after recompilation
			$ 1,317,394
			$ 43,277
			$ 128,141
			$ 4,825,146
			$ 1,380,338
			$ 42,644
			$ 134,172
			$ 4,405,918
			$ 108,468
January 1~March 31, 2014 Operating expense Portion of earnings from associates recognized under the equity method Income tax expense Net income
			$ 17,777
			$ 111,025
			$ 630,889

6. ”2009~2011 Annual improvements”

In the period of 2009~2011, the amendment with improvement of IAS 16 “Property, Plant and Equipment”, IAS 32 “Financial Instruments: Presentation”, and IAS 34 “Interim Financial Reporting”.

IAS 16 Amendment states that the spare parts, spare equipment, and maintenance equipment in conformity with the property, plant and equipment definition should be recognized in accordance with IAS 16. In addition, the remaining items that do not meet the property, plant, and equipment definition are recognized as inventories.

IAS 32 Amendment states that the income tax of the transaction costs allocated to the shareholders and equity transaction is to be processed in accordance with IAS 12 “Income Tax.”

IAS 34 Amendment states that if the total liability measurement amount of the department is regularly provided to the decision-maker of the Company and its subsidiaries and if there is material difference between the prior period financial statements and the measurement amount disclosed by the reporting department, the measurement amount should be disclosed in the interim financial statements.

1. The recognition and measurement of the financial liability designated to be measured at fair value through profit and loss

According to the amended Regulations Governing the Preparation of Financial Reports by Securities Firms, for the financial liability designated to be measured at fair value through profit and loss, the change in fair value arising from the change in credit risk is recognized in other comprehensive income and it will not be reclassified subsequently to profit and loss; also, the remaining amount of the change in the fair value of liabilities is reported in profit and loss. However, if the aforementioned accounting treatment causes or worsens improper

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accounting ratio, the profit and loss of the liabilities will be reported in profit and loss entirely.

In sum, the use of the amended Criteria for the Compilation of Financial Statements by Securities Issuers and the 2013 edition of IFRSs do not significantly affect the Company and its subsidiaries.

(II) IFRSs published by IASB but not yet approved by the FSC

The Company and its subsidiaries are not subject to the following IFRSs that are published by IASB but not yet approved by the FSC. FSC still did not announce the effective date as of the day this consolidated financial statement was presented to the Board.

Newly published / amended / revised standards and interpretations

IASB effective date(Note 1)

”2010~2012 Annual improvements” ”2011~2013 Annual improvements” ”2012~2014 Annual improvements” IFRS 9 “Financial Instruments” IFRS 9 and IFRS 7 Amendment “Mandatory effective date and transitional disclosure” IFRS 10 and IAS 28 Amendment “Assets sales or input between investors and their associates or joint venture” IFRS 10, IFRS 12, and IFRS 28 Amendment “Investment entity: Application of the exceptions in the consolidated financial statements” IFRS 11 Amendment “Acquisitions of Interests in Joint Operations” IFRS 14 “Regulatory deferral account” IFRS 15 “Revenue from contracts with customers” IAS 1 Amendment “Disclosure plan” IAS 16 and IAS 38 Amendment “Clarification of acceptable methods of depreciation and amortization” IAS 16 and IAS 41 Amendment “Agriculture: Plantation” IAS 19 Amendment “Defined benefit plans: Employee appropriation” IAS 36 Amendment “Non-financial assets recoverable amount disclosure” IAS 39 Amendment “Derivatives contract replacement and hedge accounting continuity” IFRIC 21 “Taxation”

July 1, 2014 (Note 2) July 1, 2014 January 1, 2016 (Note 4) January 1, 2018 January 1, 2018 January 1, 2016 (Note 3) January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2017 January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2014 January 1, 2014 January 1, 2014

• Note 1: Unless otherwise noted, the newly published / amended / revised standards and interpretations referred to above are valid starting from the period after the respective date.

• Note 2: The share-based payment transaction with a grant date after July 1, 2014 is subject to IFRS 2 Amendment. The corporate merger with a merger date after July 1, 2014 is subject to IFRS 3 Amendment. IFRS 13 Amendment is effective immediately. The remaining amendments are valid starting from the period after July 1, 2014.

• Note 3: It is applicable by deferral to all transactions starting from the period after January 1, 2016.

• Note 4: All other amendment shall be effective as of January 1 2016 and beyond except the official launch of IFRS 5, which will be effective in the fiscal period thereafter.

Except for the following instructions, the application of the aforementioned newly published / amended / revised standards and interpretations will not cause significant changes to the accounting policies of the Company and its subsidiaries:

• 13 -

• IFRS 9 “Financial Instruments”

The recognition and measurement of financial assets

In terms of financial assets, the subsequent measurement of all financial assets within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” is measured at the amortized cost or fair value. The classification of financial assets according to IFRS 9 is as follows:

For the debt instrument invested by the Company and its subsidiaries, if its contractual cash flow is exclusive for the payment of principal and interest on the outstanding principal amount, the classification and measurement is as follows:

• (1) The financial assets that are held for the purpose of collecting contractual cash flows are measured at the amortized cost. The interest income of such financial assets is subsequently recognized in profit and loss in accordance with the effective interest rate and is with impairment assessed continuously and recognized in profit and loss.

• (2) The financial assets that are held for the purpose of collecting contractual cash flows and selling financial assets are measured at fair value through other comprehensive income. The interest income of such financial assets is subsequently recognized in profit and loss in accordance with the effective interest rate and is with impairment assessed continuously and recognized in profit and loss along with exchange profit and loss. The changes in other fair values are recognized in other comprehensive income. When such financial assets are de-recognized or reclassified, the changes in fair value accumulated in other comprehensive income should be reclassified to profit and loss.

The financial assets not subject to the conditions referred to above invested by the Company and its subsidiaries are measured at fair value; also, changes in fair value are recognized in profit and loss. However, the Company and its subsidiaries may choose to have the not-held-for-trading equity investments designated at the original recognition to be measured at fair value through other comprehensive income. The dividend income of such financial assets is recognized in profit and loss; also, other related profits and losses are recognized in other comprehensive income without the need of subsequently assessing impairments; moreover, the changes in the fair value accumulated in other comprehensive income will not be reclassified to profit and loss.

Impairments of financial assets

According to IFRS 9, adopts “expected credit loss model” to recognize the impairments of financial assets. The financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income mandatorily, rent receivables, and the contractual assets or loan commitment and financial guarantee contracts arising from IFRS 15 “Revenue from contracts with customers” are with allowance for credit losses recognized. If the credit risk of the aforementioned financial assets has not significantly increased since the original recognition, its allowance for credit losses is measured in accordance with the expected credit loss within 12 months. If the credit risk of the aforementioned financial assets has significantly increased since the original recognition with high risk, its allowance for credit losses is measured in accordance with the expected credit losses within the remaining duration. However, the allowance for credit losses of the accounts receivable excluding significant financial composition should be measured in accordance with the expected credit loss of the duration.

In addition, for the financial assets with credit impairment at the time of recognition, the Company and its subsidiaries have the effective interest rate after credit adjustment calculated with the expected credit loss at the time of original recognition considered. The subsequent allowance for credit losses is measured in accordance with the cumulative changes in the subsequent expected credit losses.

• 14 -

• IAS 36 Amendment “Non-financial assets recoverable amount disclosure”

IASB has amended the disclosure requirement of IAS 36 “Impairment of Assets” at the time of publishing IFRS 13 “Fair Value Measurement,” requiring the Company and its subsidiaries to additionally disclose the recoverable amount of each asset or cash-generating unit in each reporting period. IAS 36 Amendment is to clarify that the Company and its subsidiaries need to disclose such recoverable amount only when recognizing or reversing impairment loss. IAS 36 Amendment is to clarify that the Company and its subsidiaries need to disclose such recoverable amount only when recognizing or reversing impairment loss. In addition, if the recoverable amount is measured at the fair value derived from the present value method net of the cost of disposal, the Company and its subsidiaries need to disclose the discount rate adopted.

3. 2010~2012 Annual improvements

IFRS 8 Amendment is to clarify that if the Company and its subsidiaries have the operating divisions with similar economic characteristics disclosed comprehensively, the judgments made by the management in accordance with the summarized standards should be disclosed in the consolidated financial statements. In addition, IFRS 8 Amendment is to clarify that the adjustment information regarding the total assets of the reporting department consolidated to the total corporate assets should be disclosed only when the Company and its subsidiaries have department assets information provided to the major decision-maker periodically.

IFRS 13 Amendment is to clarify that after the application of IFRS 13, if the short-term accounts receivable and payable without interest rates defined are not significantly affected by the discount, they can still be measured in accordance with the original invoice amount.

IAS 24 Amendment “Disclosure of Related Party” is to clarify that the management entity providing services to the management of the Company and its subsidiaries is a related party of the Company and its subsidiaries. The paid and payable amount of the reporting entity arising from the services provided by the management entity to the senior management should be disclosed, but do not have to disclose the composition of the remuneration.

4. 2011~2013 Annual improvements

IFRS 13 Amendment is to adjust the exception (that is the “combination exception”) of the financial assets and financial liabilities measured at fair value on a net amount basis in order to clarify the scope of the exception including all contracts subject to the requirements of IAS 39 or IFRS 9, even if the contract does not comply with the definition of financial assets or financial liabilities in IAS 32 “Financial Instruments: Presentation.”

1. IAS 16 Amendment “Clarification of acceptable methods of depreciation and amortization”

Enterprises should adopt appropriate depreciation method to reflect the expected consumption of future economic benefits of the property, plant, and equipment.

IAS 16 Amendment “Property, Plant, and Equipment” is to clarify that income is not an appropriate basis for measuring the depreciation expense of property, plant, and equipment; also, the Amendment does not provide a justification for the exception of basing depreciation expense appropriation on income.

The aforementioned amendments can be applied by deferral starting from the period after the effective date and can be applied ahead of the schedule.

1. IFRS 15 “Revenue from contracts with customers”

IFRS 15 is to stipulate the principle of recognition for the revenue generated from the contracts signed with customers; also, IFRS 15 will replace IAS 18 “Revenue,” IAS 11 “Construction Contracts,” and related interpretations.

• 15 -

The Company and its subsidiaries have revenue recognized in accordance with the following steps when subject to IFRS 15:

• (1) Identifying contracts with customers;

• (2) Identifying the performance obligations in the contract;

• (3) Determining transaction price;

• (4) Amortizing transaction price to each performance obligation in the contract; and

• (5) Recognizing revenue upon fulfilling performance obligations;

When IFRS 15 is valid, the Company and its subsidiaries may choose to have it applied retroactively to the comparing period or to have the first-time adoption cumulative effect recognized in the first-time application date.

1. 2012~2014 Annual improvements

IFRS 7 Amendment provides additional guidance to clarify whether the service contracts are continuously applicable to the transferred financial assets

8. IAS 1 Amendment “Disclosure Plan”

IAS 1 Amendment states that the consolidated financial report is to disclose material information; also, material information different in nature or function should be disclosed separately and may not be disclosed comprehensively with non-material information in order to enhance the understandability of the consolidated financial statements.

In addition, IAS 1 Amendment clarifies that the Company and its subsidiaries should consider the understandability and comparability of the consolidated financial statements in order to have notes prepared systematically.

Further to the aforementioned influence, the Company and its subsidiaries continued to assess the influence of other IFRS, IAS, IFRIC and SIC on the financial position and performance to the date this consolidated financial statement was presented to the Board. Related influence will be disclosed after the completion of the assessment.

IV. Material accounting polices summary

(I) Statement of compliance

This consolidated financial statement was compiled in compliance with the amended Criteria for the Compilation of Financial Statements and IAS 34 “Interim Financial Reporting” approved by FSC, but does not cover all IFRSs disclosure as required for the report covering the whole fiscal period.

• (II) Preparation basis

Further to the financial instrument at fair value, this consolidated financial statement was compiled based on historical cost.

The assessment of fair value could be classified from Class 1 to Class 3 by observable degree and importance:

1. Class 1 input value: the quotes (before adjustment) from active market of the same assets or liabilities available on the assessment day.

2. Class 2 input value: direct (price) or indirect (inferable from price) observable input value of assets or liabilities further to the quotes in Class 1.

3. Class 3 input value: unobservable input value of assets or liabilities.

(III) Consolidation basis

Details, proportion of shareholding, and business items of subsidiaries. Refer to Note 15 and Table 6.

• (IV) Note to other major accounting policy

• 16 -

Further to the note specified below, the accounting policy applied to this consolidated financial statements is identical with the policy used in FY2014.

1. Benefit after discharge in determined benefits

The determined benefit cost of determined benefit retirement plan (including service cost, net interest, and reassessment value) is based on the actuarial unit benefit method in calculation. Service cost and net benefit liabilities (assets) net interest shall be recognized as employee benefit expenses at the time of recognition. Reassessment value (including profit/loss under actuarial calculation, the change in the effect of upper limit of assets, and the return on assets of plan net of interest) shall be recognized as other comprehensive income and entered as retained earnings at the time of recognition, and will not be reclassified as income in subsequent periods.

Net determined benefit liabilities (assets) shall be the amount short (surplus) of appropriation of funds to determined benefit retirement plan. Net determined benefit assets shall not exceed the present value of the refund from the plan or the reduction of fund for appropriation in the future.

The pension cost in the period is based on the pension cost rate determined under actuarial calculation on the ending day of the previous fiscal period, and on the basis from the beginning to the ending of the period with adjustment in line with significant market fluctuation, major reduction, settlement or other major one-time events.

2. Income tax

Income tax expense equals to the sum of the current income tax and deferred income tax. The income tax in the period is based on assessment of the fiscal period with anticipation of the applicable tax rate on the total earnings of the period with calculation of earnings before taxation in the interim period.

V. Primary source of uncertainty in material accounting judgment, estimate, and assumption

The primary source of uncertainty of significant accounting judgment, estimate, and assumption adopted by this consolidated financial statements is identical with the source for the consolidated financial statement in FY2014.

VI. Cash and cash equivalent

inancial statement in FY2014. Cash and cash equivalent
			December 31,
	March 31, 2015		2014	March	31, 2014
Cash on hand and revolving fund	$	330 $	331	$	330
Bank checks and demand deposits		923,162	439,912		325,319
Cash equivalent
Bank time deposits with the original maturity
date due in three months or less		–	158,250		79,900
Commercial paper		396,928	499,435		49,663
	$	1,320,420 $	1,097,928	$	455,212

• 17 -

VII. Financial instruments measured at fair value through profit and loss - Current

VIII. IX.	Financial assets at fair value through profits and loss are not derivative assets			March 31, 2015 1,482,153 41,502 33,056 1,556,711 126,009 147,078 273,087 1,829,798 March 31, 2015
			$
	Fund beneficiary certificate Credit linked note Domestic listed stock Held-for-tradingfinancial assets
			$
	Non-derivative financial assets Fund beneficiary certificate Domestic listed stock Available-for-sale financial assets Current
			$
	Domestic investment Listed stock Noncurrent
	Domestic investment Emerging stock Unlisted (Non-OTC) stock Held-to-maturity financial assets Noncurrent
	Foreign investment Structured bonds

The investment in foreign structured bond by the Company and its subsidiaries at the balance sheet date is as follows:

sheet date is as follows:
Investment face amount (US$ Thousands) Coupon rate (%) Average maturity date	March 31, 2015 $ 3,440 7~9 10~13 years	December 31, 2014 $ 3,440 7~9 11~14 years	March 31, 2014
			$ 3,440
			7~9 11~14 years

• 18 -

From 2012 onwards, the issuers have retired the investment of structured note before maturity. The amount of disposal is not significant but fell beyond the control of the Company and its subsidiaries. This change did not affect the continued classification of these assets as financial assets held to maturity. As of March 31 2015 and March 31 2014, the Company and its subsidiaries had accumulated amount of disposition in the previous 3 fiscal years amounting to NT$86,701 thousand (USD 2,770 thousand)and NT$102,684 thousand (USD 3,370 thousand), respectively, which accounted for 28% and 32% of the investment of financial assets held to maturity, respectively.

X. Investment in debt instrument with no active market – non-current

		March 31,	December 31,	December 31,		March 31,
		2015		2014		2014
Subordinated bonds - Taiwan Business Bank	$	100,000	$	100,000	$	100,000
Subordinated bonds - Sunny Bank		20,000		20,000		20,000
Subordinated bonds - AN Z Bank		4,223		4,270		–
Corporate Bond -Cayman Ton Yi Industrial
Holdings Limited		45,441		–		–
Corporate bond – Road King Infrastructure Limited		10,089		10,183		–
Corporate bond – Vneshtorgbank		9,990		10,083		9,799
Corporate bond - Russian Agricultural Bank		9,516		9,604		–
Corporate bond - GAZPROM BANK		6,385		6,457		–
Corporate Bond – Shimao Property Holdings Ltd.		–		–		14,978
	$	205,644	$	160,597	$	144,777

The subsidiary purchased the bond issued by Cayman Ton Yi Industrial Holdings Limited amounted to CNY9,000 thousand in February 2015 with maturity in February 2018 at interest rate of 4.2% per annum.

XI. Notes receivable and accounts receivables – net (including the related party)

Note receivable arising from business operation Accounts receivable	March 31, 2015 $ 12,169 $ 596,948	December 31, 2014 $ 7,054 $ 546,417	March 31, 2014
			$ 12,478 $ 906,871

The Company and its subsidiaries have granted an average period of 30 days ~ 90 days for credit sales of goods. The Company and its subsidiaries have allowance for bad debt assessed by referring to the doubtful account aging analysis, historical experience, and the current financial situation of the client and any change in the client’s credit quality in order to estimate the non-performing loan amount.

The balance of delinquent account receivables without being recognized for provision for bad debts as of the balance sheet date is shown below. In consideration of no significant change in asset quality and no worry in recovery, the Company and subsidiaries did not hold any collaterals or other credit reinforcement for protection.

• 19 -

No impairment in the account receivables for the Company and its subsidiaries and the analysis of the aging account is shown below:

he aging account is shown below:
Not overdue Under 30 days 31 days ~ 60 days 61 days ~ 90 days	March 31, 2015 $ 591,059 5,249 640 – $ 596,948	December 31, 2014 $ 528,148 11,995 6,274 – $ 546,417	March 31, 2014
			$ 902,122 4,256 – –
			$ 906,871

The aforementioned account aging analysis is based on the number of days overdue.

XII. Inventories

Inventories
Finished goods Work-in-process goods Raw material Substances Instruments		March 31, 2015 $ 221,270 142,954 21,672 35,807 1,792 $ 423,495	December 31, 2014 $ 290,589 93,460 15,781 41,075 5,722 $ 446,627	March 31, 2014
				$ 283,899 56,164 5,497 33,974 –
				$ 379,534

As of March 31 2015, December 31 2014 and March 31 2014, provisions for devaluation of inventory and provisions for bad debts were recognized at NT$60,397 thousand, NT$70,579 thousand, and NT$75,579 thousand, respectively.

Cost of sales related to inventory in the period of January 1 to March 31, 2014 and 2015, amounted to NT$1,139,916 thousand and NT$1,567,065 thousand, respectively. The said amount included provision for devaluation of inventory and idle inventory amounting to NT$2,787 thousand and NT$8,826 thousand, respectively.

XIII. Available-for-sale noncurrent assets – 12/31/2014

Available-for-sale noncurrent assets–12/31/2014
Available-for-sale property, plant, and equipment Accumulated depreciation Available-for-sale land	Amount
	$ 13,719 ( 13,719 ) – 32,058 $ 32,058

The Company sold investment property to affiliates in February 2015. The said property (land) was previously procured for commercial leasing purpose. On December 31 2014, this investment property was classified as non-current assets held for disposal without recognition for impairment loss. The proceeds for disposition and impairment were specified in Note 29.

• 20 -

XIV. Other financial assets - current

Other financial assets-current
Time deposits with the original maturity date exceeding three months Annual interest rate (%)	March 31, 2015	December 31, 2014	March 31, 2014
	$ 183,300	$ 233,300	$ 389,600
	1.13~1.36	1.13~1.36	0.88~1.36

XV. Subsidiary

The main business entities of the consolidated financial statements:

InvestingCompany	Subsidiaries	Nature of business	Shareholding ratio March 31, 2015 December 31, 2014 March 31, 2014 100 100 100 100 100 100 51 51 51 100 100 100 100 100 100	Shareholding ratio March 31, 2015 December 31, 2014 March 31, 2014 100 100 100 100 100 100 51 51 51 100 100 100 100 100 100	Shareholding ratio March 31, 2015 December 31, 2014 March 31, 2014 100 100 100 100 100 100 51 51 51 100 100 100 100 100 100
The Company Ever Wealthy China Steel Chemical Material Technology Company (CSCMTC)	Ever Wealthy (Jing Yu) Ever Glory International Co., Ltd. (EGI) Ever Glory (Jing Ying) China Steel Chemical Material Technology Company (CSCMTC) Changzhou China Steel Chemical Material Technology Company (Changzhou CCSCMTC)	General investment business International trade General investment business General investment business The processing and sale of MCMB products	100 100 51 100 100	100 100 51 100 100	100 100 51 100 100

The aforementioned subsidiary is not an essential subsidiary and its financial statements were unaudited. The total assets as of March 31 2015 and March 31 2014 amounted to NT$2,128,660 thousand and NT$1,696,428 thousand, respectively. The total liabilities as of March 31 2015 and March 31 2014 amounted to NT$64,338 thousand and NT$23,101 thousand, respectively. The comprehensive incomes in the period of January 1 to March 31, 2015 and 2014, amounted to NT$18,573 thousand and NT$20,145 thousand, respectively.

VXI. Investment under the equity method

The Company and its subsidiaries have had investments in the associated companies under the equity method as follows:

equity method as follows:
Associates of significant influence CHC Resources Corporation (CHC) Yun Hung Investment Company Separate associates of insignificant influence	March 31, 2015 $ 288,878 524,851 813,729 564,671 $ 1,378,400	December 31, 2014 $ 275,203 532,774 807,977 572,361 $ 1,380,338	March 31, 2014
			$ 269,059 490,273
			759,332 558,062
			$ 1,317,394

• 21 -

(I) Associates of significant influence

Associates of significant influence
Company CHC Resources Yun Hung	Proportion of shareholding and voting rights (%) March 31, 2015 December 31, 2014 March 31, 2014 6 6 6 9 9 9
		6 9

Refer to the table attached to Note 6, “Information on Investees” for information on the nature of business, principal place of business and country of incorporation of the aforementioned associates.

Information on Class 1 fair value of quote from open market of the associates is shown below:

below:
CHC Resources TTMC China Steel Structure Co., Ltd.	March 31, 2015 $ 1,069,104 134,634 69,966	December 31, 2014 $ 962,603 146,874 71,787	March 31, 2014
			$ 941,122 173,495 88,303

The Company and its associates adopted the equity method for the measurement of the aforementioned associates. The following financial information was compiled based on the consolidated financial information of all associates in accordance with IFRSs and has reflected the adjustment under the equity method.

CHC Resources

CHC Resources
Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity Non-controlling interests The proportion of shareholding by the Company and its subsidiaries (%) Equity entitled to the Company and its subsidiaries Book amount Operating income (Continuing)	March 31, 2015 December 31, 2014 March 31, 2014 $ 2,171,300 $ 1,928,291 $ 1,864,360 4,560,895 4,505,402 4,235,711 ( 1,361,483 ) ( 1,291,894 ) ( 1,369,800 ) ( 457,981 ) ( 458,109 ) ( 158,606 ) 4,912,731 4,683,690 4,571,665 ( 129,991 ) ( 127,356 ) ( 117,048 ) $ 4,782,740 $ 4,556,334 $ 4,454,617 6 6 6 $ 288,878 $ 275,203 $ 269,059 $ 288,878 $ 275,203 $ 269,059 January1 ~ March 31, 2015 January1 ~ March 31, 2014 $1,927,827 $1,665,692		March 31, 2014
		$1,665,692

• 22 -

(Continued)

d)
Net income Other comprehensive income (loss) Total comprehensive income Yun Hung Current assets Noncurrent assets Current liabilities Equity The proportion of shareholding by the Company and its subsidiaries (%) Equity entitled to the Company and its subsidiaries Book amount Operating income Net income Other comprehensive income (loss) Total comprehensive income	January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 $ 244,626 $ 217,311 ( 15,585 ) ( 19,291 ) $ 229,041 $ 198,020 March 31, 2015 December 31, 2014 March 31, 2014 $ 437 $ 575 $ 386 6,752,291 6,832,189 6,470,291 ( 1,047,825 ) ( 1,041,742 ) ( 1,141,618 ) $ 5,704,903 $ 5,791,022 $ 5,329,059 9 9 9 $ 524,851 $ 532,774 $ 490,273 $ 524,851 $ 532,774 $ 490,273 January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 $ – $ 209 ( $ 6,842 ) ( $ 6,252 ) ( 79,277 ) ( 346,931 ) ( $ 86,119 ) ( $ 353,183 )
		$ 209 ( $ 6,252 ) ( 346,931 ) ( $ 353,183 )

• (II) Information on separate associates of insignificant influence

The proportion entitled to the Company and subsidiaries Net income Other comprehensive income (loss) Total comprehensive income	January 1 ~ March 31, 2015 $ 2,573 ( 10,262 ) ( $ 7,689 )	January 1 ~ March 31, 2014
		$ 7,060 ( 12,450 ) ( $ 5,390 )

With the exception of CHC Resources, Thintech Materials Technology (TTMC), China Steel Structure (CSSC) and United Steel International Development Co, Ltd., which financial statements were audited, the investment of the Company and its subsidiaries accounted for under the equity method as of March 31 2015 and March 31 2014, and the profits and loss and proportion of comprehensive incomes in the periods of January 1 to March 31, 2015 and 2014, were calculated on the basis of the unaudited financial statements of the investees, and amounted to NT$860,931 thousand and NT$824,026 thousand, respectively.

The proportion of return on investment of the associates accounted for under the equity method in the periods of January 1 to March 31, 2015 and 2014, amounted to NT$4,497 thousand and NT$6,125 thousand, respectively. The portion of other comprehensive incomes recognized under the equity method in the same period mounted to (NT$16,751 thousand) and

• 23 -

(NT$45,084 thousand), respectively.

The shares of the invested companies referred to above held by the Company and its subsidiaries plus the shareholdings of the parent company, China Steel Corporation, and the sister companies exceeds 20%; therefore, it is evaluated in accordance with the equity method.

XVII. Property, plant, and equipment

~ January 1 March 31, 2015

Cost		Land	House and building $ 399,522 – – – $ 399,522 $ 190,554 5,198 – – $ 195,752 $ 208,968 $ 203,770	Machinery equipment	Transportation equipment	Miscellaneous equipment		Construction inprogress	Total
		$ 60,698 – – – $ 60,698 $ – – – – $ – $ 60,698 $ 60,698		$ 3,338,563 11,482 ( 2,680 ) ( 233 ) $ 3,347,132 $ 2,408,172 60,930 ( 2,403 ) – $ 2,466,699 $ 930,391 $ 880,433	$ 91,638 5,661 ( 2,381 ) ( 13 ) $ 94,905 $ 55,953 3,191 ( 2,169 ) ( 2 ) $ 56,973 $ 35,685 $ 37,932	$ 80,614 258 – ( 22 ) $ 80,850 $ 55,681 1,927 – ( 1 ) $ 57,607 $ 24,933 $ 23,243		$ 170,724 31,206 – – $ 201,930 $ – – – – $ – $ 170,724 $ 201,930	$ 4,141,759 48,607 ( 5,061 ) ( 268 ) $ 4,185,037 $ 2,710,360 71,246 ( 4,572 ) ( 3 ) $ 2,777,031 $ 1,431,399 $ 1,408,006
Balance- January 1 2015 Addition Disposal Exchange difference - net Balance as of March 31 2015 Accumulated depreciation
Balance- January 1 2015 Depreciation Disposal Exchange difference - net Balance as of March 31 2015 Net amount – 12/31/2014 Net amount – March 31 2015

~ January 1 March 31, 2014

Cost	Land $ 104,724 – – $ 104,724 $ – – – $ – $ 104,724	House and building $ 428,720 – – $ 428,720 $ 198,756 5,351 – $ 204,107 $ 224,613	Machinery equipment $ 3,155,639 74,953 ( 3,518 ) $ 3,227,074 $ 2,181,573 57,652 ( 3,475 ) $ 2,235,750 $ 991,324	Transportatio n equipment	Miscellaneous equipment	Construction inprogress	Total
				$ 82,364 3,467 ( 621 ) $ 85,210 $ 45,471 2,868 ( 578 ) $ 47,761 $ 37,449	$ 73,861 237 ( 587 ) $ 73,511 $ 50,068 1,566 ( 544 ) $ 51,090 $ 22,421	$ 99,762 ( 20,505 ) – $ 79,257 $ – – – $ – $ 79,257	$ 3,945,070 58,152 ( 4,726 ) $ 3,998,496 $ 2,475,868 67,437 ( 4,597 ) $ 2,538,708 $ 1,459,788
Balance – 1/1/2014 Addition4 Disposal Balance as of March 31 2014 Accumulated depreciation
Balance – 1/1/2014 Depreciation Disposal Balance as of March 31 2014 Net amount – March 31 2014

The Company and its subsidiaries have the depreciation of the property, plant, and equipment appropriated in accordance with the straight-line method and the respective years of useful life as follows:

• 24 -

House and building
Main structure of the house	10~50 years
Ancillary equipment of the house	5~25 years
Machinery equipment
Power machinery equipment	3~15 years
Test and examination equipment	3~5 years
Computer equipment	3~10 years
Transportation equipment
Transportation equipment	3~5 years
Telecommunication equipment	3~10 years
Miscellaneous equipment
Firefighting equipment	5~8 years
Air-conditioning and water and electricity facilities	3~10 years
Monitoring, operating, and other equipment	3~10 years

XVIII. Investment property

~ January 1 March 31, 2015

January 1~March 31, 2015
Cost		Land	House and building $ 47,665 $ 47,665 $ – House and building		Total
		$ 561,813			$ 609,478 $ 56,490 $ 552,988 Total
Balance- March 31 2014 and December 31 2014 Accumulated depreciation and depletion
		$ 8,825
Balance- March 31 2014 and December 31 2014 Net amount – March 31 2014 and December 31 2014 January 1~March 31, 2014 Cost
		$ 552,988
		Land $ 549,845 $ 8,825 $ 541,020
			$ 32,186 $ 32,186 $ –	$ 582,031 $ 41,011 $ 541,020
Balance- January 1 and June 30, 2014 Accumulated depreciation and depletion
Balance- January 1 and June 30, 2014 Net amount – March 31 2014

• 25 -

The Company has the depreciation of the invested property of house and building appropriated in accordance with the straight line method and the useful life of 20~50 years.

The fair value as of March 31 2015, December 31 2014, and March 31 2014, amounted to NT$796,377 thousand, NT$796,377 thousand, and NT$832,981 thousand, respectively. The fair value of investment in real property was assessed based on the appraisal value as of December 2013 and March presented by real property appraiser under Class 3 input value and with reference to comparison of the transaction price in the real estate market and the income method. The significant and observable input value being adopted included the rate of capitalization of return and the rate of related expenses.

The investment property is proprietary interest of the Company.

Please refer to Note XXIX for the lease transactions conducted with the related party.

XIX. Loan

• (I) Short-term loans

an Short-term loans
Unsecured loans Letter of credit loans	March 31, 2015 $ 117,259	December 31, 2014 $ 100,441	March 31, 2014
			$ 69,201

The interest rate for financing of L/C as of March 31 2015, December 31 2014 and March 31 2014, were 1.17%~1.56%, 1.33%~1.56%, and 1.3%~1.345% , respectively.

• (II) Short-term bills payable

The payable commercial papers before maturity are:

March 31, 2015

March 31, 2015	March 31, 2015
Guarantor/underwriter Face amount Discount amount Book amount Interest rate interval (%) Collateral Mega Bills Finance Corporation $ 35,000 $ – $ 35,000 1.18 None XX. Other payables March 31, 2015 December 31, 2014 Employee bonus and directors and supervisors remuneration payable $ 147,612 $ 125,509 Salaries and incentives payable 74,679 113,232 Repair materials fee payable 31,161 44,700 Equipment payable 6,755 7,900 Dividend payable 4,336 4,336 Others (mainly freight, commission, and insurance expense) 48,236 60,359 $ 312,779 $ 356,036	Guarantor/underwriter	Face amount	Discount amount	Book amount		Interest rate interval (%)	Collateral	Book value of the collaterals $ – March 31, 2014
		$ 35,000	$ –	$ 35,000
								$ 159,204 79,110 21,938 6,792 4,424 43,639
								$ 315,107

• 26 -

XXI. Post-employment benefit plan

The determined benefit plan related pension expenses recognized in the periods of January 1 to March 31, 2015 and 2014, were based on the rate of pension cost under actuarial calculation as of December 31 2014 and December 31 2013, and amounted to NT$2,102 thousand and NT$2,103 thousand, respectively.

XXII. Equity

• (I) Common stock capital

uity Common stock capital
Rated number of shares (thousand shares) Rated capital stock Number of shares issued and proceeds collected (Thousand shares) Capital stock issued	March 31, 2015	December 31, 2014 300,000 $ 3,000,000 236,904 $ 2,369,044	March 31, 2014
	300,000		300,000
	$ 3,000,000		$ 3,000,000
	236,904		236,904
	$ 2,369,044		$ 2,369,044

The face value of outstanding common stock is NT$10/share and the holder of each share is entitled to one voting rights and entitlement to dividend.

• (II) Additional paid-in capital

Additional paid-in capital
				December	31,
	March	31, 2015		2014		March	31, 2014
Applied to make up loss, distribute cash, or
replenish capital stock (Note)
Stock issued with premium	$	218	$		218	$	218
Treasury stock trading		529,210		509,996			427,450
Inapplicable for any purpose
Changes in net equity of associated
company under the equity method		4,809			4,809		5,593
	$	534,237	$	515,023		$	433,261

• Note: Such additional paid-in capital can be applied to make up losses; also, when the Company has no loss, it can be applied to distribute cash or replenish capital stock; however, the replenishment amount of capital stock is limited to certain percentage of the paid-in capital.

The issuance of stock at premium was the assignment of treasury shares by parent company in 2009, China Steel Corporation, to the employees of the subsidiaries whereby the Company recognized for service cost and capital surplus amounting to NT$161 thousand. In July 2011, parent company China Steel Corporation raised capital by issuing new shares and had reserved 10% for the subscription of employees (including the employees of subsidiaries) as required by the Company Act. The Company recognized service cost and capital surplus amounting to NT$ 57 thousand.

• 27 -

(III) Retained earnings and dividend policy

Annual earnings (if any loss, it refers to the balance after making up all losses) are distributed in accordance with the Articles of Association as follows:

1. Appropriate 10% of the earnings as legal reserve.

2. Special reserve is appropriated in accordance with the operating needs, laws, and regulations of the year.

3. The balance will be distributed pending on the resolution of the General Meeting of shareholders with 1% for remuneration to directors and supervisors and 5% as employee bonus.

The Company is currently in a growing industry environment and the Company intends to take advantage of the economic environment to seek for a sustainable operation. The dividend policy of the Company will be made with reference to the state of operation and the stability and growth of dividend. If there are distributable earnings, the amount for distribution shall not fall below 50% of the total and cash dividend shall not fall below 50% of the distributable earnings.

The aforementioned distributions should be admitted in the shareholders’ meeting of the following year and presented in the current financial statements.

The estimated employee bonus for the periods of January 1 to March 31, 2015 and 2014, amounted to NT$18,398 thousand and NT$28,079 thousand, respectively. The estimates for remuneration to directors and supervisors amounted to NT$3,705 thousand and NT$5,616 thousand, respectively. The aforementioned employee bonus and remuneration to directors and supervisors was based on 5% and 1% of the possible amount for release as was in the past. In case of significant change in the amount for distribution as resolved by the Board at the end of the fiscal year and before the day the financial statements were approved for announcement, such change will be adjusted as the expense for the year of recognition. If there is still a significant change in the amount after the financial statements of the year were approved and announced, proceeding to accounting estimate for change and booked for adjustment in the year of decision by the General Meeting of shareholders. If the General Meeting of shareholders resolved to release employee bonus, the value of stock dividend shall be determined based on the amount resolved for distribution divided by the fair value of the stock. Fair value of stock refers to the closing price on the day before the resolution of the General Meeting of shareholders in consideration of ex-right and ex-dividend effect.

The Company has special reserve appropriated and reversed in accordance with FSC Certificate Far.Tzi No. 1010012865 Letter, FSC Certificate Far.Tzi No. 1010047490 Letter, and the “Special Reserves Q&A after Adopting IFRSs.” The subsequently reversed amount of the debit balance of other shareholders’ equity can be distributed accordingly.

The Company may have legal reserve appropriated until it is equivalent to the amount of paid-in capital. Legal reserve can be used to make up losses. If the Company has no loss, the portion of the legal reserve exceeding 25% of the total paid-in capital can be applied to replenish capital stock and distribute cash.

For the distribution of unappropriated earnings, except for the shareholders who are not a resident of the ROC, all shareholders are entitled to the shareholder tax credit that is calculated in accordance with the tax credit rate on the dividend distribution date.

• 28 -

The Board proposed in a session of March 2015 and the regular session of the General Meeting of shareholders resolved in June 2014 on the distribution of earnings, employee bonus, remuneration to directors and supervisors, and earnings per share for FY2014 and FY2013 specified as follows:

FY2013 specified as follows:	follows:	follows:	follows:
Earnings distribution 2014 2013 Legal reserve $ 218,719 $ 220,991 Cash dividend 1,966,307 1,966,307 $ 2,185,026 $ 2,187,298 2014 Employee bonus $104,591 Remuneration to directors and supervisors 20,918	Earnings distribution			Dividendper share(NT$)
			2013	2014 $ 8.3 Cash dividend		2013
			$ 220,991 1,966,307			$ 8.3
			$ 2,187,298
			2014			2013
			$104,591 20,918			$104,591 20,918

The aforementioned amount of employee bonus and remuneration to directors and supervisors proposed by the Board and resolved by the regular session of the General Meeting of shareholders was identical with the amount of employee bonus and remuneration to directors and shareholders recognized in the consolidated financial statements of FY2014 and FY2013.

The aforementioned distribution of earnings, employee bonus and remuneration to directors and supervisors for FY2014 shall be subject to the resolution of the General Meeting of shareholders held in June 2015. For information on the proposal of the Board and the resolution of the General Meeting of shareholders on employee bonus and remuneration to directors and shareholders, please visit the “MOPS” website of TWSE.

(IV) Other equity items

1. Exchange difference from financial statement conversion of foreign operation

Balance at beginning of period Exchange difference arising from the conversion of the net assets of foreign operating Exchange difference share of the associated company under the equity method Balance at ending of period	January1 ~ March 31, 2015 $ 27,989 ( $ 4,368 ) ( 1,805 ) $ 21,816	January1 ~ March 31, 2014
		($ 2,154)
		$ 8,483 ( 554 ) $ 5,775

• 29 -

2. Unrealized profit and loss of the available-for-sale financial assets

January1 ~ March 31, 2015 Balance at beginning of period $ 289,056 Unrealized profit and loss of the available-for-sale financial assets ( 30,335 ) The disposition of financial assets available for sale Reclassification as profit or loss 344 Unrealized profit and loss share of the available-for-sale financial assets of the associated company under the equity method ( 17,345 ) Balance at ending of period $ 241,720 Non-controlling interests January1 ~ March 31, 2015 Balance at beginning of period $ 150,840 Attributable to non-controlling interests share Net income ( 65 ) Unrealized profit and loss of the available-for-sale financial assets – The disposition of financial assets available for sale was reclassified as profit or loss 331 Balance at ending of period $ 151,106	January1 ~ March 31, 2015	January1 ~ March 31, 2014	January1 ~ March 31, 2014
			$ 160,969 ( 16,597 ) – ( 45,029 ) $ 99,343 January 1 ~ March 31, 2014
			$ 161,259 ( 641 ) ( 339 ) – $ 160,279

(V) Non-controlling interests

(VI) Treasury stock

Ever Wealthy, the subsidiary, held the Company’s stock shares for investing and financial purpose; therefore, it was process in accordance with the accounting for Treasury stock. The Company’s stock shares held by Ever Wealthy is disclosed as follows (Unit: Thousand shares).

~ January 1 March 31, 2015

At beginningofperiod	At beginningofperiod	Sold in currentperiod	Sold in currentperiod	Sold in currentperiod	Sold in currentperiod		Endingofperiod	Endingofperiod	Endingofperiod	Endingofperiod
Shares	Book value	Shares	Book value	Selling price		Shares		Book value		Marketprice
6,548 January 1~						6,398				$ 950,034
At beginningofperiod
Shares	Book value	Shares	Book value	Selling price		Shares	Book value			Marketprice
6,752	$ 167,082	–	$ –	$ –		6,752	$ 167,082		$ 1,174,767

Subsidiary Ever Wealthy sold the shares of the Company under its holding in January 2015, the proceeds for the transaction amounted to NT$22,926 thousand.

The Company’s stock shares held by the subsidiary is deemed as treasury stock for process, which is entitled to the rights same as shareholders except for not eligible to participate in the cash capitalization of the Company and voting.

• 30 -

XXIII. Revenue

.Revenue
Operating income Profit from financial assets sold Labor service income Net income from held-for-trading financial assets Portion of earnings from associates recognized under the equity method	January 1 ~ March 31, 2015 $ 1,558,162 – 20,895 7,649 – $ 1,586,706	January 1 ~ March 31, 2014
			$2,339,307 33,754 16,109 – 1,626 $2,390,796

XXIV. Net income before tax

Net income before tax includes the following items:

• (I) Other income

(I) Other income
Rent income Interest income Others (II) Other profit and loss	January 1 ~ March 31, 2015 $ 3,850 2,306 2,881 $ 9,037	January1 ~ March 31, 2014
			$ 3,772 4,837 2,364 $ 10,973

Other profit and loss
Profit from the disposal of property, plant, and equipment Capital gains from disposition of non-current assets for disposal Foreign exchange profit (loss) - net Profit from the disposal of investment Net profit of specific financial assets at fair value through profit and loss Profit from the valuation of the held-for-trading financial liabilities Other losses	January 1 ~ March 31, 2015 $ 158 66,609 ( 3,414 ) – 4,767 ( 327 ) $ 67,793	January 1 ~ March 31, 2014
			$ 67 6,026 356 4,322 91 – $ 10,862

The net foreign exchange profit (loss) referred to above includes:

Total foreign exchange profit Total foreign exchange loss Net exchange profit (loss)	January 1 ~ March 31, 2015 $ 64 ( 3,478 ) ( $ 3,414 )	January 1 ~ March 31, 2014
		$ 6,616 ( 590 ) $ 6,026

• 31 -

(III) Depreciation and amortization

Depreciation and amortization
			January	1 ~ March 31,
	January1 ~ March 31, 2015			2014
Property, plant, and equipment	$	71,246	$	67,437
Long-term prepaid rent		632		–
	$	71,878	$	67,437
Depreciation summarized by function
Operating cost	$	66,534	$	63,618
Operating expense		4,712		3,819
	$	71,246	$	67,437
Amortization summarized by function
Operating cost	$	632	$	–
Employee benefit expense
	January 1 ~ March 31,
		2015	January1 ~	March 31, 2014
Short-term employee benefits
Salary	$	106,199	$	110,931
Labor and health insurance		3,532		3,399
Others		2,353		4,107
		112,084		118,437
Post-employment benefits
Defined contribution plan		930		786
Defined benefit plan (Note XXI)		2,102		2,103
		3,032		2,889
	$	115,116	$	121,326
Summarized by function
Operating cost	$	84,099	$	76,298
Operating expense		31,017		45,028
	$	115,116	$	121,326

(IV) Employee benefit expense

XXV. Income tax

(I) Income tax recognized in profit and loss

Current income tax Generated in current period Deferred income tax Generated in current period	January1 ~ March 31, 2015 $ 55,802 1,047 $ 56,849	January 1 ~ March 31, 2014 $ 111,499 ( 474 ) $ 111,025

• 32 -

(II) Income Tax Integration

Unappropriated earnings Unappropriated earnings after 1998 Shareholder tax credit account balance Tax credit ratio of earnings distribution (%)	2015 2014 2014 March 31 December 31 March 31 $ 2,607,613 $ 2,215,199 $ 2,855,418 $ 204,245 $ 204,245 $ 191,222 2014(estimated) 2013(actual) 17.73 18.63

According to the Income Tax Act, shareholders who are nationals of the ROC are entitled to deductible amount of taxation for shareholders based on the tax deduction rate as of the dividend day at the time the Company distributes earnings for FY1998 and beyond. The exact deductible amount allocated to shareholders shall be based on the balance of the deduction account of shareholders as of the dividend day. Therefore, the Company will anticipate a variation between the ratio of deductible amount allocated to shareholders and the ratio of deductible amount applied at the time of actual distribution of earnings for FY2014.

(III) Tax audit

Until FY2010, the income tax declaration of subsidiaries Ever Wealthy and Ever Glory to FY2014 have been approved by the taxation authorities.

XXVI. Earnings per share

The earnings and weighted average common stock shares for the calculation of earnings per share are as follows:

are as follows:
Net income Net income attributable to the Company’s shareholders Shares The weighted average common stock shares issued Less: The Company’s stock shares held by subsidiaries transferred to Treasury stock The weighted average common stock shares for the calculation of basic earnings per share Add: Potential common stock shares with dilution effect – employee bonus The weighted average quantity of shares for calculating the dilution of earnings per share.	January 1 ~ March 31, 2015 $392,414 January 1 ~ March 31, 2015 236,904 6,408 230,496 887 231,383				January 1 ~ March 31, 2014 $631,530 Unit: In Thousands shares January 1 ~ March 31, 2014 236,904 6,752 230,152 813 230,965

• 33 -

The Company may have employee bonus distributed in the form of stock dividend or cash dividend. While calculating diluted earnings per share, assume that stock dividend is distributed as employee bonus and such potential common shares with dilution effect should be included in the weighted average shares in circulation in order to calculate the diluted earnings per share. The dilution effect of such potential common stock shares should be considered continuously when calculating diluted earnings per share before the stock dividend to employees resolved in the shareholders’ meeting in the following year.

XXVII. Capital risk management

The capital management of the Company and its subsidiaries is for effective use of capital and ensuring a smooth operation by having the debt and equity balance optimized. The overall strategy of the Company and its subsidiaries was without any change made in January 1~ March 31, 2015. The capital structure of the Company and its subsidiaries is composed of net liabilities and equity without the need of complying with other external capital requirements. The Company and its subsidiaries have capital structure reviewed on a quarterly basis, including the consideration of capital costs and related risks. Currently, the equity in the capital structure is far greater than liabilities and it will be used to pay for dividend or debt; also, added with the investment in financial instruments to improve the Company’s profits and to manage the capital structure.

XXVIII. Financial instruments

• (I) Information on fair value – the book value of financial instruments not on the basis of fair value and financial assets with significant difference from fair value:

Financial assets Held-to-maturity financial assets	March 31, 2015	March 31, 2015	December 31, 2014	December 31, 2014	March 31, 2014	March 31, 2014
	Book value	Fair value	Book value	Fair value	Book value	Fair value
	$ 107,656	$ 90,230	$ 108,860	$ 90,968	$ 104,802	$ 86,424

• (II) Information on fair value – financial instruments on the basis of fair value

• Fair value Level

Fair value Level
March 31, 2015	Level 1	Level 2	Level 3	Total
	$ 1,608,162 180,134 –	$ – – 41,502	$ – – –	$ 1,608,162 180,134 41,502
Financial assets measured at fair value through profit and loss Fund beneficiary certificate Domestic listed stock Credit linked note Available-for-sale financial assets Domestic listed stock Emerging stock Domestic unlisted (Non-OTC) stock
	$ 1,788,296	$ 41,502	$ –	$ 1,829,798
	$ 196,802 – –	$ – – –	$ – 420,657 84,381	$ 196,802 420,657 84,381
	$ 196,802	$ –	$ 505,038	$ 701,840

(Continuing)

• 34 -

(Continued)

December 31, 2014	Level 1 $ 1,008,766 265,237 – $ 1,274,003 $ 220,684 – – $ 220,684 $ 1,876,440 247,835 – $ 2,124,275 $ 160,025 – – $ 160,025	Level 2 $ – – 72,601 $ 72,601 $ – – – $ – $ – – 79,556 $ 79,556 $ – – – $ –	Level 3 $ – – – $ – $ – 440,981 84,260 $ 525,241 $ – – – $ – $ – 289,439 79,476 $ 368,915	Total
				$ 1,008,766 265,237 72,601
Financial assets measured at fair value through profit and loss Fund beneficiary certificate Domestic listed stock Credit linked note Available-for-sale financial assets Domestic listed stock Emerging stock Domestic unlisted (Non-OTC) stock March 31, 2014
				$ 1,346,604
				$ 220,684 440,981 84,260
				$ 745,925
				$ 1,876,440 247,835 79,556
Financial assets measured at fair value through profit and loss Fund beneficiary certificate Domestic listed stock Credit linked note Available-for-sale financial assets Domestic listed stock Emerging stock Domestic unlisted (Non-OTC) stock
				$ 2,203,831
				$ 160,025 289,439 79,476
				$ 528,940

Level 1 and Level 2 fair value measurement inter-transfer had not occurred in January 1~ March 31, 2015 and 2014.

1. Adjustment of the financial assets with Level 3 fair value measurement

Balance at beginning of period Recognized in other comprehensive income (loss) Addition Disposal Balance at ending of period	Available-for-sale financial assets	Available-for-sale financial assets
	Without market price available	Investments in equity instruments
	January 1 ~ March 31, 2015	January1 ~ March 31, 2014
	$ 525,241 ( 20,203 ) – – $ 505,038	$ 317,062 28,007 57,600 ( 33,754 ) $ 368,915

All profits or losses recognized in other comprehensive income are related to the unquoted equity instruments at the balance sheet date and are recognized in the available-for-sale financial assets unrealized profit and loss under other equity account.

1. The valuation techniques and input value of measurement of Class 3 fair value

2. 35 -

3. (1) If the stocks traded in the emerging stock market have an active market for transaction, the fair value of which shall be the closing price as of the balance sheet date adjusted for liquidity risk premium or based on the appraisal report of external experts in the field.

4. (2) The fair value of stocks not listed in TWSE (GTSM) shall be assessed with reference to the nearest net value or transaction price.

5. (II) Types of financial instruments

Types of financial instruments
Financial assets	March 31, 2015 $ 273,087 1,556,711 701,840 107,656 2,496,651 728,152	December 31, 2014 $ 490,756 855,848 745,925 108,860 2,433,959 737,099	March 31, 2014
			$ 363,099 1,840,732 528,940 104,802 2,253,812 731,067
Measured at fair value through profit and loss Held-for-trading financial assets Designated to be measured at fair value through profit and loss Available-for-sale financial assets (including noncurrent) Held-to-maturity investments Loans and receivables (Note 1) Financial liabilities
Measured at amortized cost (Note 2)

• Note 1: Balance shall cover the loan assets and receivables on the amortized cost of cash and cash equivalents, other financial assets, investment in debt instruments with no active market, note receivables, account receivables (related parties), other receivables, and refundable security deposits.

• Note 2: The balance amount of financial liabilities, including short-term loans, short-term bills payable, accounts payable (including related party), and other payables, is measured at amortized cost.

• (III) Financial risk management purpose and policy

The primary financial instruments of the Company and its subsidiaries include the investment in equity and bonds, account receivables, account payables, short-term loans, and payable short-term notes. The financial management function provides services for all related functional departments and coordinates the operation in the domestic and international financial markets. Through the analysis of risk intensity and scope and the execution of internal risk reporting and supervision of the management of the financial risk the Company and its subsidiaries exposed, the risk entails market risk (exchange risk, interest risk, and other risk from pricing), credit risk, and liquidity risk.

The Company and its subsidiaries avoid risk exposure through derivative financial instruments to mitigate the impact of those risks. The use of derivative financial instruments is regulates by the policies approved by the Board of Directors of the Company and its subsidiaries, which includes exchange rate risk, interest rate risk, credit risk, and the use of derivative financial instruments and non-derivative financial instruments; also, the written investment principles of residual liquidity. Internal auditors continue to review the compliance of policies and limit of risk exposure. The Company and its subsidiaries did not conduct any financial instruments (including derivative financial instruments) transaction for investment purpose.

1. Market risk

The main financial risks of the Company and its subsidiaries arising from operating activities include foreign exchange rate risk and interest rate risk. The Company and its

• 36 -

subsidiaries have not had the market risk exposure of financial instruments and the management and measurement methods for such risk exposure changed.

(1) Exchange rate risk

The non-functional currency denominated transactions conducted by the Company and its subsidiaries are with exchange rate risk exposure resulted. The Company and its subsidiaries have nearly 38% of the operating income denominated in non-functional currencies that is within the scope of the Company’s policy for the management of exchange rate risk exposure; also, utilize forward foreign exchange contracts to manage risk or mitigate exchange rate risk exposure with the future receivables and payables denominated in the same currency.

For information on the monetary assets and liabilities denominated in non-functional currencies as of the balance sheet date of the Company and its subsidiaries, refer to Note 31.

Sensitivity analysis

The Company and its subsidiaries are mainly affected by the fluctuations of USD and RMB exchange rate. The table below shows the sensitivity analysis of any change in the exchange rate between the functional currency and other relevant currencies by±3%, which is the tolerable range of reasonable exchange fluctuation of the Company and its subsidiary in the assessment.

The sensitivity analysis includes only the outstanding foreign monetary items at each balance sheet date. Scenario 1 in the following table indicates the profit and loss of the Company and its subsidiaries when the functional currency against the USD and RMB appreciated by 3%. Scenario 2 in the following table indicates the profit and loss of the Company and its subsidiaries when the functional currency against the USD and RMB depreciated by 3%.

Profit and loss in Scenario 1 Profit and loss in Scenario 2	USD effect (Note) January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 ($ 15,802 ) ($ 7,622 ) 15,802 7,622	USD effect (Note) January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 ($ 15,802 ) ($ 7,622 ) 15,802 7,622	RMB effect (Note) January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 ( $ 3,676 ) ( $ 1,350 ) 3,676 1,350	RMB effect (Note) January 1 ~ March 31, 2015 January 1 ~ March 31, 2014 ( $ 3,676 ) ( $ 1,350 ) 3,676 1,350
	($ 15,802 ) 15,802	($ 7,622 ) 7,622	( $ 3,676 ) 3,676	( $ 1,350 ) 1,350

Note: The primary source is the outstanding cash and cash equivalents, receivables, investment in debt instrument with no active market, short-term loans, payables and other payables denominated in relevant currencies without being hedged for cash flows as of the balance sheet date of the Company and its subsidiaries.

The exchange rate sensitivity of the Company and its subsidiaries in January 1~ March 31, 2015 was increased mainly due to the increase of USD and RMB assets. The management believes that the sensitivity analysis is not representative of the inherent risk of exchange rate since the foreign currency risk exposure at balance sheet date does not reflect the interim risk exposure; also, the sales denominated in USD will be affected by customer orders and shipping schedules; furthermore, the RMB exchange rate will vary depending on the assets investment position.

• (2) Interest rate risk

The loans of the Company and its subsidiaries are mainly short-term loans with an interest rate based on the NTD market interest rates, since the loan term is limited to six months; therefore, the interest rate sensitivity is low. In addition, the cash and cash equivalent of the Company and its subsidiaries is much greater than liabilities and bank loan can be settled at any time; therefore, interest rate risk has little impact on the

• 37 -

Company and its subsidiaries.

The book amount of the financial assets and financial liabilities with interest rate risk exposure at the balance sheet date of the Company and its subsidiaries is as follows:

With fair value interest rate risk Financial assets With cash flow interest rate risk Financial assets Financial liabilities		March 31, 2015	December 31, 2014	March 31, 2014
		$ 530,228	$ 790,985	$ 464,213
		924,123 117,259	787,101 100,441	618,024 69,201

(3) Other price risk

The risk exposure of position from the investment of stocks, fund certificates issued by listed companies and securities circulated in the emerging stock market by the Company and its subsidiaries has been managed by different risk investment portfolios and assets allocations. The equity price of the Company and its subsidiaries is concentrated at the stocks and funds market of Taiwan and valuation has been made monthly on the basis of the closing price of the equity securities and the net asset value of the funds.

Sensitivity analysis

The following sensitivity analysis is performed in accordance with the equity price risk exposure at the balance sheet date. Considering the market price fluctuation of the Company’s main investment targets, the fluctuation range of 6% is the base for the sensitivity analysis of equity securities.

If the equity price fluctuates by±6%, there will be a change in the earnings before taxation due to the change in the fair value of the financial assets at fair value through profits and loss by NT$107,298 thousand on the basis of the position of equity securities investment held at NT$1,985,098 thousand as of March 31 2015. Other equity will also encounter a change of NT$11,808 thousand of the fair value of financial assets available for sales The earnings before taxation will encounter a change of NT$127,457 thousand at fair value for the financial assets at fair value through profit and loss on the basis of the position of equity securities investment amounted to NT$2,284,300 thousand held on March 31 2015. Other equity will also encounter a change of NT$9,601 thousand due to the fair value of the financial assets available for sale.

2. Credit risk

Credit risk refers to the financial losses of the Company and its subsidiaries arising from the default or bankruptcy of the counterparty. The maximum risk comes from the delinquent accounts receivables of the customers. The main customers of the Company and its subsidiaries are with good credit; also, a credit rating company is commissioned annually to investigate the credit status of the customers with a credit report issued. The business unit bases on the credit report to have customers classified with credit line granted. In addition, the credit rating company will have the customer credit status composed into a weekly report for the reference of the business units, if necessary; the customers will be requested to provide collaterals or to pay cash for each transaction.

• 38 -

The business units through external credit investigation and industry visitation control and understand the credit status of customers. The Company and its subsidiaries have not experienced any bad debt in the past five years; therefore, the credit risk is insignificant.

The notes receivables and accounts receivables of the customers with high credit risk of the Customer and its subsidiaries are as follows:

Customer A Customer B Customer C Customer D		March 31, 2015 $ 115,738 90,562 54,739 45,885 $ 306,924	December 31, 2014 $ 127,634 39,156 72,071 66,816 $ 305,677		March 31, 2014
					$ 149,155 48,252 83,714 204,067
					$ 485,188

3. Liquidity risk

The Company and its subsidiaries have supported business operation through management and maintaining sufficient position of cash equivalent or easily realizable financial instruments. In addition, sign a credit contract with financial institutions to maintain appropriate amount in order to support the business operation of the Company.

The equity in the capital structure of the Company and its subsidiaries is far greater than the liabilities; also, cash and cash equivalent is sufficient to repay bank loans and the banking facilities of the Company and its subsidiaries; also, the bank credit line and remaining credit amount is sufficient; therefore, there is not any liquidity risk.

Loan from banks is a vital source of liquidity to the Company and its subsidiaries. Until March 31 2015, December 31 2014, and March 31 2014, the available short-term credit limit from banks to the Company and its subsidiaries was NT$3,977,798 thousand, NT$ 3,993,754 thousand and NT$ 4,124,635 thousand, respectively.

XXIX. Related party transactions

The transactions conducted between the Company and its subsidiaries with related party are as follows:

(I) Operating income

ws: Operating income
Account	Type of relatedparty	January 1 ~ March 31, 2015	January 1 ~ March 31, 2014
Sales income Labor service income	Other related party Parent company Sister company Parent company	$ 273,074 5,196 3,518 $ 281,788 $ 20,895	$ 534,913 4,523 6,199 $ 545,635 $ 16,109

(II) Purchase

Purchase
Type of relatedparty Parent company Sister company	January 1 ~ March 31, 2015 $ 488,159 185,373 $ 673,532	January 1 ~ March 31, 2014
			$ 815,106 319,332 $ 1,134,438

• 39 -

The Company and the parent company had a purchase contract for Naphtha products and coal tar signed in March 2013 and July 2010, respectively. In addition, the Company and the sister company had a purchased contract for Naphtha products and coal tar signed in May 2008 for a period of 5 years; also, the contract will be extended automatically for five years each time upon maturity if there is not any objection raised by either party. The price of coal tar purchase is based on the parent company’s purchase cost of coal, oil price, and monthly exchange rate. The purchase price of Naphtha products is mainly based on the benzene price of CPC Corporation, Taiwan. The purchases referred to above are paid with a letter of credit at sight issued; also, for any price adjustment according to market price, it will be settled separately. Some sales to the parent company and sister company will be charged at the cost plus additional percentage; also, the sales to other related party is charged in accordance with the agreed pricing formula. The sales and purchases referred to above of the Company, except for the labor service income from the parent company, are without similar transactions for comparison; also, are not significantly different from regular trading.

In addition, in January 2008 the Company had signed a contract with the parent company for fine coke processing for a period of five-year; also, the contract will be extended automatically for 5-year each time upon maturity if there is not any objection raised by either party.

(III) Accounts receivable from related party (excluding lending of fund to the related party)

Account	Type of relatedparty	March 31, 2015 $ 10,414 1,650 115,738 $ 127,802 $ 173,380 1,080 $ 174,460	December 31, 2014 $ 8,249 1,123 127,634 $ 137,006 $ 69,601 995 $ 70,596	March 31, 2014
Accounts receivable Other receivables	Parent company Sister company Other related party Parent company Sister company			$ 7,049 2,456 149,155
				$ 158,660
				$ 36,965 1,196
				$ 38,161

The outstanding receivable from related party is without collateral collected. Receivables from related parties have not been recognized for provision for bad debts in the periods of January 1 to March 31, 2015 and 2014.

(IV) Payables to related party

Payables to related party
Account	Type of relatedparty	March 31, 2015 $ 205,958 202 $ 206,160 $ 13,966 3,614 $ 17,580	December 31, 2014 $ 255,415 683 $ 256,098 $ 14,558 5,224 $ 19,782	March 31, 2014
Accounts payable Other payables	Parent company Sister company Parent company Sister company			$ 316,799 497
				$ 317,296
				$ 11,056 4,666
				$ 15,722

The outstanding payables to related party are without any collateral collected.

• 40 -

• (V) Long-term prepaid rent

Long-term prepaid rent
Type of relatedparty	March 31, 2015 $ 32,679	December 31, 2014 March 31, 2014
Sister company		$ 33,454 $ 33,981

The Company prepaid rent for the plant to its affiliates and the lease term is 45 years (Until January 2059) for using the plant site. The rent for the periods of January 1 to March 31, 2015 and 2014 amounted to NT$1,088 thousand and NT$1,198 thousand, respectively.

• (VI) Capital gain from the disposition of real property for investment

Type of relatedparty January 1 ~ March 31, 2015 Sister company	Disposalprice $ 98,667	Disposalprofit
		$ 66,609

• (VII) Lending of fund to related party (book in “Other receivables”)

Type of relatedparty Parent company	March 31, 2015 $ –	December 31, 2014 $ 300,000	March 31, 2014
			$ 300,00 0

The Company provide short-term loan to its parent company and the interest rate for the loan is based on the average interest rate offered by a financial institution for time deposit of the same term or R/Prate at the subprime money market effective in the last 30 days. The interest rate on March 31 2015, December 31 2014, and March 31 2014 was 0.57%~0.69%, 0.57%~0.69%, and 0.57%~0.68%, respectively.

The lending of fund to the parent company was unsecured loan with an interest income of NT$112 thousand and NT$453 thousand generated in January 1 ~ March 31, 2015 and 2014, respectively.

(VIII) Other related party transactions

1. Leased land and factories

The Company has leased the current factory land from the parent company with three contracts signed. The annual rent amount is calculated according to 3% of the announced total present value or 6% of the announced total land value. The three contracts are signed for a period of 5 years (ending in December 2015), 5 years (ending in December 2017), and 10 years (ending in June 2019), respectively. Rent is to be paid once every six-month; also, the annual rent expense was NT$3,918 thousand and NT$3,161 thousand in January 1 ~ March 31, 2015 and 2014, respectively.

The Company has leased the coke plant from the parent company for a period up to December 2017 with the rent paid once every six-month; also, the annual rent expense werw NT$613 thousand and NT$628 thousand in January 1 ~ March 31, 2015 and 2014, respectively.

The Company and sister company have signed a land and warehouse lease contract for a period up to August 2017; also, the annual rent expense was NT$360 thousand in January 1 ~ March 31, 2015 and 2014, respectively.

The Company and other non-related party have no similar transactions available for comparison.

1. Leased office building

2. 41 -

The Company has leased office buildings and office from the parent company for a period up to October and December 1,557, respectively; also, the annual rent expense was NT$1,550 thousand and NT$1,2016 thousand, in January 1 ~ March 31, 2015 and 2014, respectively. The Company and other non-related party have no similar transactions available for comparison.

3. Rent income

As described in Annex XVIII, the Company and the parent company have signed a land lease contract (located in Shout-Kong District, Kaohsiung City) with the rent advanced once every six-month and for a period up to December 2015. The annual rental income (included in non-operating income - other income) was NT$2,980 thousand and NT$2,607 thousand in January 1 ~ March 31, 2015 and 2014, respectively. In addition, the Company and sister company have signed a land and housing equipment rental contract with the rent advanced once every six-month. The annual rental income (included in non-operating income - other income) were NT$240 thousand and NT$675 thousand in January 1 ~ March 31, 2015 and 2014, respectively.

4. Public fluid and reservoir

The Company’s factory located inside the parent company’s plant; also, the primary energy needed for production is supplied by the parent company. The Company is to pay the parent company on a monthly basis for public fluid and reservoir rent, including electricity, wastewater treatment, waste gas treatment, consumption of steam, and coke ovens, in accordance with the market price or with the cost plus percentage. The expenses referred to above amounted to NT$107,578 thousand and NT$119,484 thousand in January 1 ~ March 31, 2015 and 2014, respectively. The Company and other non-related party have no similar transactions available for comparison.

5. Technical service fees

The Company commissions the parent company to provide technical services, including Isotropic graphite block material, Ultracapacitor activated carbon electrode development, and the assessment of soft asphalt applied to fuel. The fees for technical services amounted to NT$5,000 thousand in January 1 ~ March 31, 2015 and 2014, respectively.

(IX) Reward to the management

Reward to the management
Short-term employee benefits Post-employment benefits	January 1 ~ March 31, 2015 $ 11,127 112 $ 11,239	January 1 ~ March 31, 2014
			$ 14,982 107 $ 15,089

The remuneration to the directors and the management is determined by the Remuneration Committee in accordance with the personal performance evaluation and market trends.

• 42 -

XXX. Material contingent liability and unrecognized contractual commitments

The Company had had the following significant commitments as of March 31, 2014:

• (I) The balance of unused L/C of the Company for buying materials and merchandises amounted to NT$602,978 thousand.

• (II) The contract sum for the construction work of fixed assets bound by agreement amounted to NT$185,747 thousand and the portion of contract sum not being performed amounted to NT$111, 172 thousand.

XXXI. Information on financial assets and liabilities in foreign currencies with significant influence

The following information is presented based on the currencies beyond the functional currency of respective entities and the disclosed exchange rates referred to the conversion rate between respective foreign currencies to the functional currency. Information on assets and liabilities denominated in foreign currencies with significant influence:

Unit: Foreign currency in Thousands / NT$ Thousands; Exchange rate: NT$

March 31, 2015 Financial assets Monetary items USD USD RMB RMB Japanese yen Non-monetary items Financial assets measured at fair value through profit and loss NTD RMB Financial liabilities Monetary items USD USD December 31, 2014 Financial assets Monetary items USD USD RMB RMB Japanese yen Non-monetary items Financial assets measured at fair value through profit and loss NTD Financial liabilities Monetary items USD USD	Foreign currency	Exchange rate	Book amount (NTD)
	$ 19,708 25 15,923 8,372 51,941 28,157 6,090 1,262 1,643 14,403 419 8,335 7,178 53,841 34,492 293 949	31.3 (USD：NTD) 6.2054 (USD：RMB) 5.044 (RMB：NTD) 0.1612 (RMB：USD) 0.2604 (Japanese yen：NTD) 0.0319 (NTD：USD) 0.1983 (RMB：NTD) 31.3 (USD：NTD) 6.2054 (USD：RMB) 31.65 (USD：NTD) 6.215 (USD：RMB) 0.1609 (RMB：USD) 5.092 (RMB：NTD) 0.2646 (Japanese yen：NTD) 0.0316 (NTD：USD) 31.65 (USD：NTD) 6.215 (USD：RMB)	$ 616,867 795 80,315 42,227 13,525 28,157 30,720 39,494 51,432 455,858 13,248 42,441 36,549 14,246 34,492 9,288 30,043

(Continuing)

• 43 -

(Continued)

inued)
March 31, 2014	Foreign currency	Exchange rate	Book amount (NTD)
	$ 8,660 3,000 8,184 28,823 322	30.47 (USD：NTD) 4.9 (RMB：NTD) 0.1608 (RMB：USD) 0.0328 (NTD：USD) 30.47 (USD：NTD)	$ 263,859 14,700 40,100 28,823 9,799
Financial assets Monetary items USD RMB RMB Non-monetary items Financial assets measured at fair value through profit and loss NTD Financial liabilities Monetary items USD

The exchange gain/loss from the exchange of foreign currencies (realized and unrealized) by the Company and its subsidiaries in the periods of January1 to March 31, 2015 and 2014, was capital loss of NT$3,414 thousand and capital gain of NT$6,026 thousand, respectively. There is a great variety of the functional currencies for the Company and its subsidiaries in foreign exchange transactions and it is not possible to disclose the gain or loss from the exchange of all foreign currencies without significant influence.

XXXII. Supplementary disclosures

• (I) Significant transactions and (II) Transfer investment business information

• Lending of fund: Attachment I

• Making of endorsement: None

• The holding of securities at the end of the period (excluding the holding of the investees and associates): Attachment II.

• The cumulative buying and selling of particular security amounting to NT$300 million or more than 20% of the paid-in capital: no.

• The acquisition of real property for an amount more than NT$300 million or more than 20% of the paid-in capital: None

• The disposal of real property for an amount more than NT$300 million or more than 20% of the paid-in capital: None

• The amount of purchase from and selling of products to related parties amounting to NT$100 million or more than 20% of the paid-in capital: Attachment III.

• Receivables from related parties amounting to NT$100 million or more than 20% of the paid-in capital: Attachment IV.

• Derivatives transaction: None

• Miscellaneous: the business relation and major transactions between the parent company and subsidiaries and the amount: Attachment V.

• Information on direct investment: Attachment VI

• (III) Investment in Mainland China

• Name of the invested company in Mainland China, major business operation, paid-in capital, investment method, funds inward and outward remittance, shareholding ratio, investment

• 44 -

profit and loss, book amount of investment at yearend, and investment gains and losses remitted inward and limit of investment in Mainland China: Attachment VII

1. The following significant transactions occurred with the invested company in Mainland China directly or indirectly by the third region, and the price, payment terms, and unrealized gains and losses:

2. (1) Purchase amount and percentage and the balance of prepayments and percentage at the end of the year: In the periods of January 1 to March 31, 2015 and 2014, the Company has purchased from CSCC (Changzhou), a subsidiary, amounting to NT$20,235 thousand (or 3% of consolidated purchase). The transaction price is relevant with the price with unrelated parties and the term is prepayment before shipment. There is no significant unrealized gain and the aforementioned transaction has been settled at the time of compiling the consolidated financial statement.

3. (2) Sale amount and percentage and the related accounts receivable balance and percentage at yearend: The Company had made sales to Changzhou China Steel Chemical Material Technology Company, the subsidiary, for an amount of NT$26,377 thousand (accounted for 2% of the net consolidated operating income) in January 1~ March 31, 2015; the transaction price is equivalent to the practice with the non-related party; also, a payment term of OA/180days (open account) without any significant unrealized gains and losses. The accounts receivable for an amount of NT$52,371 thousand (accounted for 9% of the consolidated accounts receivable) was to be collected as of March 31, 2014 and the transaction referred to above had been written-off at the time of preparing the consolidated financial statements.

4. (3) Property transaction amount and the profit and loss amount resulted: None

5. (4) The ending balance of endorsement and guarantee of check or collaterals being pledged, and the purpose: no.

6. (5) The upper limit of financing, ending balance, interest range, and total interest in current period: no.

7. (6) Other transactions that significantly affect the current profit or loss or financial position: None

XXXIII. Department Information

The information is provided to the decision-maker of operation for the allocation of resources and assessment of department performance, focusing on the type of every payment made or labor service provided. The reporting departments of the Company and subsidiary are as follows:

• (I) China Steel Chemical Corporation (CSCC) / Changzhou China Steel Chemical Material Technology Company (CCSCMTC) - Production and marketing of chemical products

• (II) EGI – Trade of chemical products.

• (III) Ever Wealthy / Ever Glory / China Steel Chemical Material Technology Company (CSCMTC) - Investments

• (IV) The analysis of the revenue of the Company and its subsidiaries and the result of operation by segment is shown below:

• 45 -

January1 ~ March 31, 2015	CSCC / CCSCMTC		EGI	Jing-Yu / Jing Ying / CSCMTC	Adjustment and written-off		Consolidation
	$ 1,470,901 153,197 $ 1,624,098 $ 349,507 1,790 25,767 6,265 ( 727 ) 66,280 448,882 ( 55,588 ) $ 393,294 $ 2,179,406 172,053 $ 2,351,459 $ 667,571 2,172 44,556 6,275 ( 488 ) 12,125 732,211 ( 106,934 ) $ 625,277	$	89,971 –	$ 25,834 813 $ 26,647 $ 25,154 – – 875 ( 54 ) – 25,975 ( 1,261 ) $ 24,714 $ 35,380 ( 6,921 ) $ 28,459 $ 34,445 206 – 415 – ) – 35,066 ( 4,091 ) $ 30,975	$ – ( 154,010 ) ( $ 154,010 ) ( $ 19,618 ) – ( 8,178 ) ( 409 ) – – ( 28,205 ) – ( $ 28,205 ) $ – ( 165,132 ) ( $ 165,132 ) $ 554 – ( 26,779 ) ( 554 ) – – ( 26,779 ) – ( $ 26,779 )	( (	$ 1,586,706 – $ 1,586,706 $ 355,560 2,306 17,589 6,731 781 ) 67,793 449,198 56,849 ) $ 392,349 $ 2,390,796 – $ 2,390,796 $ 702,790 4,837 17,777 6,136 ( 488 ) 10,862 741,914 ( 111,025 ) $ 630,889
Income from customers other than the Company and subsidiaries Income from the Company and subsidiaries Total income Department interest Interest income Portion of earnings from associates recognized under the equity method Other income Interest expense Other profit and loss Consolidated net income before tax Income tax expense Consolidated net income January1 ~ March 31, 2014
		$	89,971
		$	517 516 – – – 1,513
			2,546 –
		$	2,546
		$ 176,010 – $ 176,010 $ 220 2,459 – – – ( 1,263 1,416 – $ 1,416	$ 176,010 –
Income from customers other than the Company and subsidiaries Income from the Company and subsidiaries Total income Department interest Interest income Portion of earnings from associates recognized under the equity method Other income Interest expense Other profit and loss Consolidated net income before tax Income tax expense Consolidated net income
			$ 176,010
			1,416 –
			$ 1,416

Earnings by segment refer to the profit earned by respective functional departments, excluding the allocation of management cost from the corporate headquarters and remuneration to directors and shareholders, rental income, interest income, disposition of real property, profit or loss of plant and equipment, the capital gain from the disposition of non-current assets, capital gains from investment held for disposal, net exchange gain/loss from foreign currencies, valuation gain/loss of financial instruments, interest expense, and income tax expense. This measurement amount is provided to the decision-maker of operation for allocating resources to each department and assessing its performance.

• 46 -

(V) Total assets and liabilities of each department

			December 31,	December 31,
	March 31, 2015			2014	March 31, 2014
Department assets
Chemicals department
Production and sale	$	7,137,772	$	6,766,202	$	7,294,118
Trading		440,740		434,502		393,980
Investment department		1,520,800		1,484,699		1,260,197
	$	9,099,312	$	8,685,403	$	8,948,295
Department liabilities
Chemicals department
Production and sale	$	1,085,106	$	1,069,699	$	1,199,905
Trading		15,663		15,420		16,214
Investment department		40,610		4,448		6,410
	$	1,141,379	$	1,089,567	$	1,222,529

• 47 -

China Steel Chemical Corporation (CSCC) and Subsidiaries Lending of Funds

January 1 to March 31, 2015

Attachment I	Attachment I												Unit: NT$ Thousands, unless otherwise stated	Unit: NT$ Thousands, unless otherwise stated	Unit: NT$ Thousands, unless otherwise stated	Unit: NT$ Thousands, unless otherwise stated
No.	Lending Company	Borrower	Account	Related party	Current highest balance amount	Balance at ending ofperiod	Actual credit amount implemented	Interest rate interval (%)	Nature of lending of funds	Transacti on amount	Reason for needing short-term loans	Amount of allowance for bad debt	Collateral		Lending of fund limit for each individual	Total limit of financing to thirdparties
													Title	Value
0 1	The Company Ever Wealthy	China Steel Corporation Changzhou China Steel Chemical Material Technology Company	Other receivable s Other receivable s	Yes Yes	$ 300,000 34,500 (CNY6,900 thousand)	$ 300,000 34,500 (CNY6,900 thousand)	$ – 33,694 (CNY6,900 thousand) (Note 4)	0.57~0.69 0.88	Note 1 Note 1	$ – –	Working capital Working capital	$ – –	None None	$ – –	$ 780,683 (Note 2) 221,204 (Note 3)	$ 1,561,365 (Note 2) 442,407 (Note 3)

Note 1: It is necessary to arrange short-term loans.

Note 2: According to the Procedures for Lending of Funds by the Company, the total loan amount and lending of fund to individual is limited to 20% and 10% of the net value of the Company, respectively.

Note 3: According to the procedure for financing third parties instituted by subsidiaries, the total limit of financing third parties and the financing to particular third party shall not exceed 20% and 10% of the net worth of the Company, respectively.

Note 4: It has been written-off at the time of preparing the consolidated financial statements.

• 48 -

China Steel Chemical Corporation (CSCC) and Subsidiaries Marketable Securities Held at Yearend

March 31 2015

			March 31 2015
Attachment II						Unit: NT$ Thousands, unless otherwise stated
HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			End ofperiod			Remark
				Shares or units		Book amount	Shareholding ratio	Market price or net equity
The Company	Common stock China Development Financial Holding Corporation Beneficiary certificate Shinkong Lucky Star Money Market Fund PineBridge Taiwan Money Market Securities Investment Trust Fund Prudential Financial Money Market Fund SinoPac Money Market Fund JIH SUN Money Market Fund PineBridge Emerging Market Asia-Pacific Strategic Bond Fund Shin Kong Global ETF Fund Taishin Emerging Markets Bond Fund JIH SUN Global Emerging Bond Fund Prudential Bond Fund PineBridge Global Multi-Strategy High Yield Bond Fund Mirae Asset Solomon Money Market Fund TCB Fund of Emerging Markets Bond Taishin RMB Money Market Fund		Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value throughprofit and loss - current	132,000 6,445,268 10,372,390 7,781,722 1,688,714 11,136,908 1,000,000 1,000,000 1,000,000 2,893,025 1,855,804 1,562,879 8,065,232 1,913,217 300,000		$ 1,432 $ 98,319 140,135 120,957 23,146 162,166 10,531 10,000 9,892 30,274 20,098 19,740 100,106 19,606 15,467		$ 1,432 $ 98,319 140,135 120,957 23,146 162,166 10,531 10,000 9,892 30,274 20,098 19,740 100,106 19,606 15,467

(Continuing)

• 49 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			End ofperiod	End ofperiod	End ofperiod	End ofperiod	Remark
				Shares or units		Book amount	Shareholding ratio	Market price or net equity
	Yuanta China High Yield Dim Sum Bond Fund Yuanta S&P GSCI Gold ER Futures ETF Prudential Financial Asia Bond Cathay Emerging China Bond JF (Taiwan) First Money Market Fund Hua Nan Yung Chang Kirin Money Market Fund Hua Nan Yung Chang Phoenix Fund Union Money Market Fund Mega International Diamond Fund Jih Sun China High Yield Bond Fund Alliance Bernstein Global High Yield Bond Fund Jih Sun China Money Market Fund Prudential Financial RMB Money Market Fund Normura Money Market Fund Structured instruments Yuanta Securities – Pan Jit 7th linked notes Yunata Securities-2ndTranche of Structured Note issued by ShareHope Medicine Yuanta Securities – Apexbio 1st linked notes Preferred stock China Steel Corporation	Parent company	Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Available-for-sale financial assets - current	300,000 784,929 928,031 966,950 2,011,074 4,750,142 15,993,764 4,619,578 4,060,155 2,000,000 1,000,000 2,000,000 3,000,000 3,738,830 229,000		$ 15,252 9,890 10,375 10,468 30,026 56,034 256,250 60,038 50,040 19,999 10,000 20,000 30,057 60,013 $ 1,418,879 $ 17,035 7,012 17,455 $ 41,502 $ 9,549			$ 15,252 9,890 10,375 10,468 30,026 56,034 256,250 60,038 50,040 19,999 10,000 20,000 30,057 60,013 $ 1,418,879 $ 17,035 7,012 17,455 $ 41,502 $ 9,549

(Continuing)

• 50 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			Yearend	Yearend	Yearend	Yearend	Remark
				Shares or units		Book amount	Shareholding ratio	Market price or net equity
Ever Wealthy	Common stock ADIMMUNE Corporation Asia Pacific Telecom China Steel Corporation Financial bond Taiwan Business Bank Subordinated Debt Common stock Taiwan Business Bank Taiwan Cogeneration Corporation Ta Chen Stainless Pipe Co., Ltd. Bank of Kaohsiung Hua Nan Financial Holding Company Mega Financial Holding Company Taichung Commercial Bank Beneficiary certificate Yuanta S&P GSCI Gold ER Futures ETF Prudential Financial Money Market Fund Union Emerging Asia Bond Fund Allianz Global Investors All Seasons Return Fund of Bond Funds Shin Kong Multi‐Return Fund of Funds Cathay Taiwan Money Market Pinebridge China Balanced Fund Fubon China New Balanced Income Fund	Parent company	Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Bond investment without market price - noncurrent Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current	1,498,747 1,000,000 2,556,915 1,065,114 84,145 414,480 677,528 3,310,200 2,000,000 800,000 2,000,000 1,865,812 1,000,000 693,568 1,000,000 807,416 2,000,000 1,000,000		$ 41,440 14,300 66,480 $ 122,220 $ 50,000 $ 10,119 2,280 8,766 6,240 59,253 51,900 8,520 $ 147,078 $ 25,200 29,002 11,018 10,109 10,770 9,910 20,000 10,000 $ 126,009			$ 41,440 14,300 66,480 $ 122,220 $ 50,000 $ 10,119 2,280 8,766 6,240 59,253 51,900 8,520 $ 147,078 $ 25,200 29,002 11,018 10,109 10,770 9,910 20,000 10,000 $ 126,009

(Continuing)

• 51 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			Yearend	Yearend	Yearend	Yearend	Remark
				Shares or units		Book amount	Shareholding ratio	Market price or net equity
Ever Glory International Co., Ltd.	Common stock CCSC Parent company China Steel Corporation Asia Pacific Telecom Common stock TA CHEN International Steel Corp. Huasheng Venture Capital Company Zu-Kao Engineering Company Lianshensun Venture Capital Company E-ONE MOLI ENERGY CORP. Yung Loong Engineering Corp. National Kaohsiung First University of Science and Technology Entrepreneurship Asia Hepato Gene Co. Kai Yi Technology Industrial Company Hong Kong Forefront Company Financial bond Taiwan Business Bank Subordinated Debt Sunny Bank Subordinated Debtrice - noncurrent 20,000 20,000 Unsecured Corporate Bond issued by Ton Yi Enterprise Holding (Caymans) Limited. Common stock Taiwan Cooperative Bank Taiwan Life Insurance Co., Ltd. Beneficiary certificate INVESTCO US SENIOR LOAN FUND ING(L) Renta Asian Bond Fund	Parent company Ultimate parent company	Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Bond investment without market price - noncurrent Bond investment without market price - noncurrent Bond investment without market price - noncurrent Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current	6,397,537 2,226,265 500,000 17,762,500 1,349,460 1,476,892 450,000 40,463 1,540,000 300,000 133,300 275,000 665 1,888,728 63,909 10,253 301		$ 950,034 57,883 7,150 $ 1,015,067 $ 402,081 15,032 18,515 6,289 61 60,060 3,000 – – – $ 505,038 $ 50,000 20,000 45,441 $ 115,441 $ 29,952 1,672 $ 31,624 $ 47,589 15,685 $ 63,274	3 2 7 1 – 4 9 2 18 –		$ 950,034 57,883 7,150 $ 1,015,067 $ 402,081 15,032 18,515 6,289 61 60,060 3,000 – – – $ 505,038 $ 50,000 20,000 45,441 $ 115,441 $ 29,952 1,672 $ 31,624 $ 47,589 15,685 $ 63,274	Note 4 Note 3 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Full appropriation for impairment loss Full appropriation for impairment loss Full appropriation for impairment loss

(Continuing)

• 52 -

(Continued)

	HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			Yearend	Yearend		Remark
					Shares or units		Book amount	Shareholdin gratio	Market price or net equity
		Structured instruments Industrial Bank of Taiwan–Hybrid Dual Range Accrual Note (Underlying AUD / US) Industrial Bank of Taiwan–Hybrid Dual Range Accrual Note (Underlying JPY / US) Industrial Bank Co.–Hybrid Dual Range Accrual Note (Underlying EUR / US) Financial bond Russian Agricultural Bank Bond Vneshtorgbank Corporate Bond GAZPROM BANK Corporate Bond Australia and New Zealand Banking Group Bond Road King Infrastructure Limited Corporate Bond		Held-to-maturity financial assets - noncurrent Held-to-maturity financial assets - noncurrent Held-to-maturity financial assets - noncurrent Bond investment without market price - noncurrent Bond investment without market price - noncurrent Bond investment without market price - noncurrent Bond investment without market price - noncurrent Bond investment without market price - noncurrent	2,000 20,000 2,000 2,000 2,000,000		$ 46,856 45,541 15,259 $ 107,656 $ 9,516 9,990 6,385 4,223 10,089 $ 40,203		$ 39,973 36,954 13,303 $ 90,230 $ 9,516 9,990 6,385 4,223 10,089 $ 40,203

Note 1: It is based on the most recent net equity unaudited by a CPA.

Note 2: On the basis of the net amount of the emerging stock market price adjusted for liquidity discount as of the end of March 2015 Note 3: It is based on the price in the appraisal report issued by an external expert.

Note 4: It has been written-off at the time of preparing the consolidated financial statements.

• 53 -

China Steel Chemical Corporation (CSCC) and Subsidiaries

The purchase and sale conducted with the related party for an amount more than NT$100 million or more than 20% of the paid-in capital

January 1 to March 31, 2015

Attachment III

Unit: NT$ Thousands, unless otherwise stated

Buyer(Seller)	Counterparty	Relationship		Transaction	Transaction		The reasons for the trade terms different from regular transactions	The reasons for the trade terms different from regular transactions	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Remark
									Balance	Percentage of notes and accounts receivable (payable)
			Purchase(Sale)	Amount	Percentage of total purchase (sale) (%)	Creditperiod
							Unitprice	Credit period
The Company Ever Glory International Co., Ltd.	China Steel Corporation China Synthetic Rubber Corporation Ever Glory International Co., Ltd. Dragon Steel Corporation. The Company	Parent company Other related party Subsidiary Sister company Parent company	Purchase Sale Sale Purchase Purchase	$ 488,159 ( 273,074 ) ( 106,585 ) 185,373 106,585	63 ( 17 ) ( 7 ) 24 100	Letter of Credit at sigh Monthly open account Monthly open account Letter of Credit at sigh Monthly open account	Note 1 Note 1 – Note 1 –	Note 1 Note 1 – Note 1 –	( $ 205,958 ) 115,738 33,844 – ( 33,844 )	( 80 ) 18 5 – ( 100 )	Note 2 Note 2

Note 1: Please refer to Note XXIX.

Note 2: It has been written-off at the time of preparing the consolidated financial statements.

• 54 -

China Steel Chemical Corporation (CSCC) and Subsidiaries

The receivable from the related party for an amount more than NT$100 million or more than 20% of the paid-in capital

March 31 2015

Attachment IV

Unit: NT$ Thousands, unless otherwise stated

Accounts receivables booked	Counterparty	Relationship	Receivables from relatedparty	Turnover rate	Delinquent receivables from related party	Delinquent receivables from related party	Collection of delinquent receivables	Amount of allowance for bad debt
					Amount	Process
The Company	China Synthetic Rubber Corporation China Steel Corporation	Other related party Parent company	$ 115,738 169,560 (Note )	2.24 (Note)	$ – –	– –	$ 115,738 33,924	$ – –

Note: The difference of prices for materials.

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China Steel Chemical Corporation (CSCC) and Subsidiaries

The business relationship and material transactions conducted between the parent company and its subsidiaries

January 1 to March 31, 2015

Attachment V

Unit: NT$ Thousands, unless otherwise stated

No.	Trader	Counterparty	Relationshipwith Trader		Transaction	Transaction
				Account	Amount	Sales term	Percentage of consolidated operating income or total assets (%)
0	The Company	Ever Glory International Co., Ltd. Changzhou China Steel Chemical Material Technology Company Changzhou China Steel Chemical Material Technology Company	Parent company v. subsidiary Parent company v. subsidiary Parent company v. subsidiary	Sale Sale Purchase	$ 106,585 26,377 20,235	Cost plus percentage Cost plus percentage Cost plus percentage	7 2 1

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China Steel Chemical Corporation (CSCC) and Subsidiaries Information related to the invested company January 1 to March 31, 2015

Attachment VI

Unit: NT$ Thousands, unless otherwise stated

InvestingCompany	Invested Company	Location	Main business operation	Original investment amount	Original investment amount	Held at the end ofperiod.	Held at the end ofperiod.	Held at the end ofperiod.	Held at the end ofperiod.	Current profit (loss) of the invested company	Current investment profit (loss)recognized	Remark
				End of March 2015	12/31/2014	Shares	Ratio (%)		Book amount
The Company Ever Wealthy	Ever Glory International Co., Ltd. Ever Wealthy HIMAG Li Qinglong Investment Company Gao Rui Investment Company Shang Yang Venture Capital Company CHC RESOURCES CORPORATION TAIAN TECHNOLOGIES CORPORATION Yun Hung Investment Company Chi Hong Venture Capital Company United Steel International Development Co. China Steel Structure Co., Ltd. (CSSC) Hong Chuan Investment Company Shenlida Investment Company PROTOP TECHNOLOGY CO., LTD. TTMC HIMAG China Steel Structure Co., Ltd. (CSSC) Ever Glory China Steel Chemical Material Technology Company (CSCMTC)	British Cayman Islands Kaohsiung City Pingtung County Kaohsiung City Kaohsiung City Kaohsiung City Kaohsiung City Taipei City Kaohsiung City Taipei City British Virgin Islands(BVI) Kaohsiung City Kaohsiung City Kaohsiung City Kaohsiung City Kaohsiung City Pingtung County Kaohsiung City Kaohsiung City Samoa	International trade General investment business Magnetic core and magnetic powder production and sales General investment business General investment business General investment business Blast furnace cement and slag production and sales and industrial waste treatment Biotechnology services General investment business General investment business General investment business Steel structure design, production, and sales General investment business General investment business General investment business Target and bimetallic tube sales Magnetic core and magnetic powder production and sales Steel structure design, production, and sales General investment business General investment business	$ 39,920 300,083 47,950 7,000 15,070 23,520 91,338 2,295 450,000 50,000 68,838 13,675 9,000 8,400 10,495 45,987 33,015 56,667 153,000 79,572	$ 39,920 300,083 47,950 7,000 15,070 23,520 91,338 2,295 450,000 50,000 68,838 13,675 9,000 8,400 10,495 45,987 33,015 56,667 153,000 79,572	1,300,000 104,574,982 1,801,002 700,000 1,196,000 2,352,000 13,653,947 222,400 59,339,570 5,000,000 2,450,000 600,069 900,000 840,000 897,000 6,119,748 1,320,609 2,000,896 15,300,000 2,656,000	100 100 15 35 40 6 6 5 9 5 5 – 45 35 30 8 11 1 51 100		$ 391,593 1,433,154 42,910 14,447 27,687 40,632 288,878 4,349 524,851 73,502 103,037 13,554 $ 2,958,594 $ 18,459 17,492 17,354 106,712 31,467 53,069 157,274 69,449 $ 471,276	$ 2,545 24,847 12,859 13 1,623 9,824 241,983 5,703 ( 6,842 ) 13,872 ( 13,699 ) 31,683 ( 2 ) 531 875 ( 29,451 ) 12,859 31,683 ( 133 ) 881	$ 2,545 5,633 1,929 5 649 631 14,616 285 ( 629 ) 693 ( 685 ) 95 $ 25,767 ( $ 1 ) 186 262 ( 2,927 ) 1,415 36 ( 67 ) 881 ($ 215 )	Subsidiary (Note) Subsidiary (Note) Subsidiary (Note) Subsidiary (Note)

Note: It has been written-off at the time of preparing the consolidated financial statements.

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China Steel Chemical Corporation (CSCC) and Subsidiaries Investment in Mainland China

January 1 to March 31, 2015

Attachment VII

Unit: NT$ Thousands, unless otherwise stated

Invested Company in Mainland China	Main business operation	Paid-in capital	Investment method	Accumulated outward remittance of investment from Taiwan at the beginning of period. (Note 1)	Investment amount remitted outward or inward of the current	Investment amount remitted outward or inward of the current	Accumulated outward remittance of investment from Taiwan at the end of period. (Note 1)	Current profit (loss) of the invested company	Shareholdin g ratio of direct or indirect investment – ending (%) (%)	Current investment profit (loss) recognized (Note 2)	Book value of investment at the end of period.	Repatriated return on investment by the end of the period.
					Outward remittance	Inward remittance
Ningbo Huayang Aluminum Ltd. Changzhou China Steel Chemical Material Technology Company	Manufacturing, processing, and developing new alloy materials and selling self-manufactured products Processing and sale of mesophase carbon microspheres Products	US$49,000 thousand US$2,656 thousand	Investment in Mainland China with remittance via third region Investment in Mainland China with remittance via third region	$ 76,685 (US$2,450 thousand) 83,133 (US$2,656 thousand)	$ – –	$ – –	$ 76,685 (US$2,450 thousand) 83,133 (US$2,656 thousand)	($ 12,524 ) 881	5 100	( $ 626 ) 881 (Note 4)	$ 101,709 69,450 (Note 4)	$ – –

Accumulated investment remitted from Taiwan to Mainland China at the end of period (Note 1).	Investment amount approved by the Investment Commission, MOEA (Note 1)	Investment in Mainland China subject to the investment limits set by the Investment Commission, MOEA (Note 3)
$159,818 (US$5,106 thousand)	$159,818 (US$5,106 thousand)	$4,684,096

Note 1: The aforementioned USD was based on the exchange rate of 31.3 to NTD as of March31 2015.

Note 2: The basis for recognition of investment gain/loss is classified as follows: (1) the audited financial statements of the parent company in Taiwan; (2) the unaudited financial statements compiled by the investees in Mainland China.

Note 3: The investment limit amount is calculated in accordance with the “Investment or Technical Cooperation in Mainland China Review Principle” of the Investment Commission, MOEA dated 08.29.2008 as follows: Equity $7,806,827x60% = $4,684,096

Note 4: It has been written-off at the time of preparing the consolidated financial statements.

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