CSCC - Interim / Quarterly Report 2015

Stock Code: 1723

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Financial Statements and Independent Auditor’s Report Q2 of 2015 and 2014

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

§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) Exchange rate of financial assets and financial liabilities in foreign currency (XIII) Supplementary disclosures 1. Material transaction related information 2. Transfer investment business information 3. Investment in Mainland China (XIV) Department Information	Page 1 2 3 4 5~6 7 8~10 11 11 11~17 17~18 18 19~42 43~46 – 46 – 46 47~48 48 48 48~49 49~51	Note to financial statements
		– – – – – – – I II III IV V VI~XXVIII XXIX – XXX – XXXI XXXII XXXIII XXXIII XXXIII XXXIV

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Balance Sheet

June 30, 2015, December 31 2014 and June 30, 2014

Unit: NT$ Thousands

Code	Assets	June 30, 2015 (Audited)	June 30, 2015 (Audited)	December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)	Code	Liabilities and Shareholders’ equity	June 30, 2015 (Audited)	June 30, 2015 (Audited)		December 31, 2014 (Audited after recompilation)	December 31, 2014 (Audited after recompilation)		June 30, 2014 (Audited after recompilation)	June 30, 2014 (Audited after recompilation)
		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 XI, & 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 and XXIX) 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	$ 906,600 2,311,329 177,379 9,422 489,595 114,512 161,282 – 396,545 – 174,600 68,923	10 26 2 – 6 1 2 – 4 – 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	2100 2110 2170 2180 2200 2230 2300 21XX 2570 2640 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX 3X2X	Current liabilities Short-term loan (Note XIX) Short-term bills payable (Note XIX) Accounts payable Accounts payable – related party (Note XXIX) Other payable (Note XX, & XXIX) Current income tax liabilities Other current liabilities Total current liabilities Noncurrent liabilities Deferred income tax liabilities Net determined benefit liabilities – non-current (Note III & IV) Total noncurrent liability Total liability Shareholders’ Equity (Note XXII) Common stock capital Additional paid-in capital Retained earnings (Note III) Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury stock Total Shareholders’ equity Non-controlling interests (Note XXII) Total equity Total Liabilities and Shareholders’ equity	$ 46,454 45,000 23,011 188,215 2,193,191 122,045 33,378 2,651,294 – 130,317 130,317 2,781,611 2,369,044 604,207 2,167,302 242,136 775,300 3,184,738 165,340 ( 144,216 ) 6,179,113 – 6,179,113 $8,960,724	1 1 – 2 25 1 – 30 – 1 1 31 26 7 24 3 9 36 2 ( 2 ) 69 – 69 100	(	$ 100,441 – 24,524 256,098 356,036 187,738 30,011 954,848 1,663 133,056 134,719 1,089,567 2,369,044 515,023 1,948,583 242,136 2,215,199 4,405,918 317,045 162,034 ) 7,444,996 150,840 7,595,836 $ 8,686,403	1 – – 3 4 2 1 11 – 2 2 13 27 6 22 3 26 51 3 ( 2 ) 85 2 87 100	(	$ 11,734 35,000 43,140 299,878 2,224,454 221,925 29,903 2,866,034 – 125,996 125,996 2,992,030 2,369,044 432,345 1,948,583 242,136 1,258,473 3,449,192 167,372 167,082 ) 6,250,871 149,322 6,400,193 9,392,223	– 1 1 3 24 2 – 31 – 1 1 32 25 4 21 3 13 37 2 ( 2 ) 66 2 68 100
		4,810,187	54	4,386,230	50
		479,282 106,143 205,053 1,268,631 1387,736 563,513 40,297 31,025 1,587 31,765 35,505	5 1 2 14 16 6 1 – – – 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
		4,150,537	46	4,299,173	50
		$ 8,960,724	100	$ 8,685,403	100

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on August 11 2015)

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Income Statement

April 1 to June 30, 2015 and 2014.

January 1 to June 30, 2015 and 2014

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

	April 1 to June 30,2015	April 1 to June 30,2015	April 1 to June 30, 2014. (Recompiled)	April 1 to June 30, 2014. (Recompiled)
	Amount	%	Amount	%		Amount		%		Amount	%
$ 11,574,389 17,400 1,591,789 1,114,378 477,411 30,403 38,613 17,340 86,356 391,055 11,272 ( 5,096 ) 15,159 ( 380 ) 20,955 412,010 ( 59,179 ) 352,831 ( 5,516 )		99 1 100 70 30 2 2 1 5 25 1 ( 1 ) 1 – 1 26 ( 4 ) 22 –			$ 3,132,551 45,944 3,178,495 2,268,948 909,547 60,742 49,079 53,111 162,932 746,615 20,309 62,697 32,748 ( 1,161 ) 114,593 861,208 ( 116,028 ) 745,180 ( 9,884 )		99 1 100 72 28 2 1 2 5 23 1 2 1 – 4 27 ( 3 24 –	99 1	$ 4,709,976 82,186 4,792,162 3,215,671 1576,491 81,086 73,387 68,868 223,341 1353,150 22,925 24,807 38,857 ( 1,174 ) 85,415 1,438,565 ) ( 216,382 ) 1,222,183 1,017		98 2 100 67 33 2 2 1 5 28 – 1 1 – 2 30 ( 4 ) 26 –
								100 72
								28
								2 1 2
								5
								23
								1 2 1 –
								4
								24
								–

(Continued)

(Continued)
Code 8362 Available-for-sale financial assets unrealized valuation profit 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	April 1 to June	30,2015	April 1 to June 30, 2014 (Recompiled)		January1 to June 30,2015		January 1 to June 30, 2014 (Recompiled)
	Amount	%	Amount	%	Amount ( $ 74,839 ) ( 66,651 ) ( 151,374 ) $593,806 $ 745,127 53 $745,180 $ 593,422 384 $593,806 $ 3.23 $ 3.22	%	Amount	%
	( $ 45,179 ) ( 47,501 ) ( 98,196 ) $254,635 $ 352,713 118 $352,831 $ 254,517 118 $254,635 $ 1.53 $ 1.52	( 3 ) ( 3 ) ( 6 ) 16	$ 69,044 538 62,116 $ 653,410 $ 590,353 941 $ 591,294 $ 652,607 803 $ 653,410 $ 2.57 $ 2.56	3 –		( 3 ) ( 2 ) ( 5 ) 19	$ 52,108 ( 45,045 ) 8,080 $1,230,263 $ 1,221,883 300 $1,222,183 $ 1,230,440 ( 177 ) $1,230,263 $ 5.31 $ 5.29	1 ( 1 ) – 26
				2
				27

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on August 11 2015)

China Steel Chemical Corporation (CSCC) and Subsidiaries Consolidated Statement of Retained Earnings

January 1 to June 30, 2015 and 2014

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

Unit: NT$ Thousands

					Sharehold	Sharehold	’ Equity										Non-controlling interests (Note XXII)	Total equity
Capital stock		Additional paid-in capital		Retained	earnings				Other	equityitems(Note		XXII)		Treasurystock		Total
								d fi	Exchange ifference on the basis of the nancial reports of foreign operations	U of av	nrealized equity financial assets ailable for sale		Total
Shares (1,000 shares)	Common stock capital		Legal reserve	Special reserve	Unappropriated earnings		Total
236,904 –	$ 2,369,044 –	$ 515,023 –	$ 1,948,583 –	$ 242,136 –		$ 2,215,495 ( 296 ) 2,215,199 ( 218,719 ) (1,966,307 ) (2,185,026 ) 745,127 – 745,127 – – $ 775,300 $2,223,888 ( 220,991 ) (1,966,307 ) (2,187,298 ) 1,221,883 – 1,221,883 – – $1,258,473	$ 4,406,214 ( 296 ) 4,405,918 – ( 1,966,307 ) ( 1,966,307 ) 745,127 – 745,127 – – $3,184,738 4,193,616 – ( 1,966,307 ) ( 1,966,307 ) 1,221,883 – 1,221,883 – – $3,449,192		$ 27,989 – 27,989 – – – – ( 14,281 ) ( 14,281 ) – – 13,708 ($ 2,154 ) – – – – ( 3,639 ) ( 3,639 ) – – ( $ 5,793 )		$ 289,056 – 289,056 – – – – ( 137,424 ) ( 137,424 ) – – $ 151,632 160,969 – – – – 12,196 12,196 – – $173,165		$ 317,045 – 317,045 – – – – ( 151,705 ) ( 151,705 ) – – $ 165,340 $ 158,815 – – – – 8,557 8,557 – – $ 167,372		( $ 16,034 ) – ( 162,034 ) – – – – – – 17,818 – ( 144,216 ) ($167,082 ) – – – – – – – – ( $167,082 )	$ 7,445,292 ( 296 ) 7,444,996 – ( 1,966,307) ( 1,966,307) 745,127 ( 151,705) 593,422 107,002 – $6,179,113 $6,986,104 – ( 1,966,307) ( 1,966,307) 1,221,883 8,557 1,230,440 634 – $6,250,871	$ 150,840 – 150,840 – – – 53 331 384 – ( 151,224 ) $ – $ 161,259 – – – 300 ( 477 ) ( 177 ) – ( 11,760 ) $ 149,322	$ 7,596,132 ( 296 ) 7,595,836 – (1,966,307 ) (1,966,307 ) 745,180 ( 151,374 ) 593,806 107,002 ( 151,224 ) $6,179,113 $7,147,363 – (1,966,307 ) (1,96,307 ) 1,222,183 8,080 1,230,263 634 ( 11,760 ) $6,400,193
236,904	2369,044	515,023	1,948,583	242,136
– –	– –	– –	218,719 –	– –
–	–	–	218,719	–
– –	– –	– –	– –	– –
–	–	–	–	–
–	–	89,184	–	–
–	–	–	–	–
236,904	$ 2,369,044	$ 604,207	$ 2,167,302	$ 242,136
236,904	$ 2,369,044	$ 431,711	$ 1,727,592	242,136
– –	– –	– –	220,991 –	– –
–	–	–	220,991	–
– –	– –	– –	– –	– –
–	–	–	–	–
–	–	634	–	–
–	–	–	–	–
236,904	$ 2,369,044	432,345	$ 1,948,583	242,136

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on August 11 2015)

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Statement of Cash Flow

January 1 to June 30, 2015 and 2014

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

Unit: NT$ Thousands

		Unit: NT$ Thousands
Code Cash flow from operating activities A10000 Earnings before taxation in current period A20010 Profits and losses not affecting cash flow A20100 Depreciation A20200 Amortization A20400 Net profit of financial assets measured at fair value through profit and loss A20400 Held-for-trading financial instruments net profit A20900 Interest expense A21200 Interest income A21300 Dividend income A22300 Portion of incomes from associates and joint ventures recognized under the equity method A22500 Property, plant, and equipment disposal and obsolescence loss (profit) A23000 Capital gains from disposition of non-current assets for disposal A23100 Loss (profit) from the disposal of investment A23700 Inventory loss in valuation and obsolescence A30000 Change in operating assets and liabilities - net A31110 Held-for-trading financial assets A31130 Note receivable A31150 Accounts receivable A31160 Accounts receivable – related party A31180 Other receivables A31200 Inventories A31240 Other current assets A32150 Accounts payable A32160 Accounts payable – related party A32180 Other payables (Continuing)	January 1 to June 30, 2015 $ 861,208 135,459 1,587 ( 7,499 ) ( 6,103 ) 1,161 ( 5,766 ) – ( 32,074 ) ( 156 ) ( 66,609 ) 1,100 9,392 267,643 ( 2,368 ) ( 81,455 ) 22,494 ( 2,552 ) 39,933 1,477 ( 1,513 ) ( 67,883 ) ( 129,632 )	January 1 to June 30, 2014 (Recompiled)
		$ 1,438,565 138,133 2,113 ( 24,297 ) ( 8,621 ) 1,174 ( 9,794 ) ( 700 ) ( 43,237 ) 81 – ( 34,110 ) 14,109 25,397 9,712 ( 144,508 ) ( 13,100 ) 280,602 ( 63,061 ) ( 2,269 ) 17,841 ( 27,403 ) ( 95,657 )

(Continued)

(Continued)
January 1 to June 30, 2015 Code A32230 Other current liabilities $ 3,367 A32240 Net determined benefit liabilities ( 2,739 ) A33000 Cash inflow from operating activities 938,472 A33500 Income tax paid ( 181,037 ) AAAA Net cash inflow from operating activities 757,435 Cash flow from investing activities B00100 Acquisition of financial assets measured at fair value through profit and loss designated at initial recognition ( 1,942,151 ) B00200 Proceeds from disposal of financial assets measured at fair value through profit and loss designated at initial recognition 721,050 B00300 Acquisition of available-for-sale financial assets – B00400 Proceeds from the disposal of available-for-sale financial assets 13,325 B00500 De-capitalization of available-for-sale financial assets and refund of stock capital liquidation B00600 Investment in debt instruments with no active market ( 45,441 ) B00700 Proceeds for investment in debt instruments with no active market B02300 Decrease of cash from disposition of subsidiaries ( 151,224 ) B02600 Proceeds from disposition of non-current assets for disposal 98,667 B02700 Acquisition of property, plant, and equipment ( 98,927 ) B02800 Disposal of the property, plant, and equipment 647 B03700 Decrease (increase) of refundable deposit 880 B04100 Decrease of other receivables 303,265 B05400 Acquisition of investment property ( 10,525 ) B06600 Decrease of other financial assets 58,700 B06700 Increase of other noncurrent assets ( 718 ) B07300 Increase of long-term prepaid rent – B07300 Decrease of other current assets – B07500 Interest received 6,534 B07600 Dividend collected 2,207 BBBB Net cash outflow from investing activities ( 1,043,711 ) Cash flow from financing activities C00100 Increase of short-term loans 1,785,499 C00200 Decrease of short-term loans ( 1,839,486 ) C00500 Increase of short-term bills payable 240,000	January 1 to June 30, 2014 (Recompiled)
	$ 210 ( 2,189 ) 1,458,991 ( 212,971 ) 1,246,020 ( 2,184,366 ) 1,083,153 ( 95,100 ) 33,754 1,499 ( 15,847 ) 9,824 – – ( 111,499 ) 196 ( 246 ) – – 129,464 – ( 38,221 ) 3,000 10,424 3,622 ( 1,170,343 ) 2,553,995 ( 2,614,418 ) 35,000

January 1 to June 30,
2015
Code
A32230
Other current liabilities
$ 3,367
A32240
Net determined benefit liabilities
(
2,739 )
A33000
Cash inflow from operating activities
938,472
A33500
Income tax paid
(
181,037 )
AAAA
Net cash inflow from operating activities
757,435
Cash flow from investing activities
B00100
Acquisition of financial assets measured at fair value
through profit and loss designated at initial
recognition
(
1,942,151 )
B00200
Proceeds from disposal of financial assets measured
at fair value through profit and loss designated at
initial recognition
721,050
B00300
Acquisition of available-for-sale financial assets
–
B00400
Proceeds from the disposal of available-for-sale
financial assets
13,325
B00500
De-capitalization of available-for-sale financial
assets and refund of stock capital liquidation
B00600
Investment in debt instruments with no active market
(
45,441 )
B00700
Proceeds for investment in debt instruments with no
active market
B02300
Decrease of cash from disposition of subsidiaries
(
151,224 )
B02600
Proceeds from disposition of non-current assets for
disposal
98,667
B02700
Acquisition of property, plant, and equipment
(
98,927 )
B02800
Disposal of the property, plant, and equipment
647
B03700
Decrease (increase) of refundable deposit
880
B04100
Decrease of other receivables
303,265
B05400
Acquisition of investment property
(
10,525 )
B06600
Decrease of other financial assets
58,700
B06700
Increase of other noncurrent assets
(
718 )
B07300
Increase of long-term prepaid rent
–
B07300
Decrease of other current assets
–
B07500
Interest received
6,534
B07600
Dividend collected
2,207
BBBB
Net cash outflow from investing activities
(
1,043,711 )
Cash flow from financing activities
C00100
Increase of short-term loans
1,785,499
C00200
Decrease of short-term loans
(
1,839,486 )
C00500
Increase of short-term bills payable
240,000

January 1 to June 30,
2014
(Recompiled)

$ 210
(
2,189 )
1,458,991
(
212,971 )
1,246,020
(
2,184,366 )
1,083,153
(
95,100 )
33,754
1,499
(
15,847 )
9,824
–
–
(
111,499 )
196
(
246 )
–
–
129,464
–
(
38,221 )
3,000
10,424
3,622
(
1,170,343 )
2,553,995
(
2,614,418 )
35,000

(Continuing)

(Continued)

(Continued)
Code 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 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 to June 30, 2015 ( $ 195,000 ) – 107,002 ( 1,328 ) 96,687 ( 1,739 ) ( 191,328 ) 1,097,928 $ 906,600	January 1 to June 30, 2014 (Recompiled)
		$ – ( 7 ) – ( 1,198 ) 26,628 ) ( 575 ) 48,474 509,436 $ 557,910

The notes hereinafter are an integral part of the financial statements. (Refer to the Auditor’s Report issued by Deloitte Taiwan on August 11 2015)

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

January 1 to June 30, 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 June 30 2015 and June 30 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 August 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.

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.

10 -

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 XXVIII

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 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:

Assets, Liabilities, and Shareholders’ Equity effect January 1, 2014 Investment under the equity method Deferred income tax assets Accrued pension liabilities Net determined benefit liabilities Retained earnings	Amount before recompilation $ 1,341,972 $ 42,629 $ 129,229 $ – $ 4,193,616

(Continuing)

11 -

(Continued)

June 30, 2014 Investment under the equity method Deferred income tax assets Accrued pension liabilities Net determined benefit liabilities Retained earnings December 31, 2014 Investment under the equity method Deferred income tax assets Accrued pension liabilities Net determined benefit liabilities Retained earnings The influence on comprehensive income	Amount before recompilation	Applicable in first-use	Amount after recompilation
	$ 1,275,620 $ 43,038 $ 126,972 $ – $ 3,449,263 $ 1,380,634 $ 42,644 $ 134,172 $ – $ 4,406,214 $ 114,837 $ 21,084 $ 105,363 $ 591,328 $ 223,268 $ 38,867 $ 216,394 $ 1,222,254	( $ 10 ) $ 12 ( $ 126,972 ) $ 127,045 ( $ 71 ) ( $ 296 ) $ – ( $ 134,172 ) $ 134,172 ( $ 296 ) $ 36 ( $ 4 ) ( $ 6 ) ( $ 34 ) $ 73 ( $ 10 ) ( $ 12 ) ( $ 71 )	$ 1,275,610 $ 43,050 $ – $ 127,045 $ 3,449,192 $ 1,380,338 $ 42,644 $ – $ 134,172 $ 4,405,918 $ 114,873 $ 21,080 $ 105,357 $ 591,294 $ 223,341 $ 38,857 $ 216,382 $ 1,222,183
April 1 to June 30, 2014 Operating expense Portion of earnings from associates recognized under the equity method Income tax expense Net income January 1 to June 30, 2014 Operating expense Portion of earnings from associates recognized under the equity method Income tax expense Net income

The earnings per share of the Company and its subsidiaries from April 1 to June 30, 2014 and January 1 to June 30, 2014, were unaffected. The influence on the consolidated assets, liabilities, and equity of the Company and subsidiaries as of June 30, 2015, and the consolidated comprehensive income from April 1 to June 30, 2015 and January 1 to June 30, 2015, was insignificant.

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.”

12 -

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.

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 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)

Newly published / amended / revised standards and interpretations	IASB effective date(No
“2010~2012 Annual improvements”	July 1, 2014 (Note 2)
“2011~2013 Annual improvements”	July 1, 2014
“2012~2014 Annual improvements”	January 1, 2016 (Note 4)
IFRS 9 “Financial Instruments”	January 1, 2018
IFRS 9 and IFRS 7 Amendment “Mandatory effective date and	January 1, 2018
transitional disclosure”
IFRS 10 and IAS 28 Amendment “Assets sales or input between	January 1, 2016 (Note 3)
investors and their associates or joint venture”
IFRS 10, IFRS 12, and IFRS 28 Amendment “Investment entity:	January 1, 2016
Application of the exceptions in the consolidated financial
statements”
IFRS 11 Amendment “Acquisitions of Interests in Joint Operations”	January 1, 2016
IFRS 14 “Regulatory deferral account”	January 1, 2016
IFRS 15 “Revenue from contracts with customers”	January 1, 2017
IAS 1 Amendment “Disclosure plan”	January 1, 2016
IAS 16 and IAS 38 Amendment “Clarification of acceptable methods	January 1, 2016
of depreciation and amortization”
IAS 16 and IAS 41 Amendment “Agriculture: Plantation”	January 1, 2016
IAS 19 Amendment “Defined benefit plans: Employee appropriation”	July 1, 2014
IAS 36 Amendment “Non-financial assets recoverable amount	January 1, 2014
disclosure”
IAS 39 Amendment “Derivatives contract replacement and hedge	January 1, 2014
accounting continuity”
IFRIC 21 “Taxation”	January 1, 2014

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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:
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

14 -

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.

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.”

15 -

5. 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.

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.

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.

2012~2014 Annual improvements

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

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

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compiled based on historical cost.

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

Class 1 input value: the quotes (before adjustment) from active market of the same assets or liabilities available on the assessment day.
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.
Class 3 input value: unobservable input value of assets or liabilities.
(III) Consolidation basis

The detail, proportion of shareholding, and business items of the subsidiaries are stated in Note XV and Table 7.

(IV) Note to other major accounting policy

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

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.

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.

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VI. Cash and cash equivalent

VI.	Cash and cash equivalent	Cash and cash equivalent
VII.	June 30, 2015 Cash on hand and revolving fund $ 330 Bank checks and demand deposits 837,844 Cash equivalent Bank time deposits with the original maturity date due in three months or less 68,426 Commercial paper – $ 906,600 Financial instruments measured at fair value through profit and June 30, 2015 Financial assets measured at fair value through profit and loss Non-derivative financial assets Fund beneficiary certificate $ 2,008,583 Credit linked note 40,117 Domestic listed stock 33,413 2,082,113 Held-for-tradingfinancial assets Non-derivative financial assets Fund beneficiary certificate 53,160 Domestic listed stock 176,056 229,216 Derivative financial assets Forward exchange contract – $ 2,311,329		December 31, 2014 $ 331 439,912 158,250 499,435 $ 1,097,928 loss-Current December 31, 2014 $ 753,478 72,601 29,769 855,848 255,288 235,468 490,756 – $ 1,346,604		June 30, 2014
					$ 330 427,825 79,811 49,944
					$ 557,910
					June 30, 2014
		June 30, 2015
		$ 2,008,583 40,117 33,413		$ 753,478 72,601 29,769	$ 2,333,231 89,542 48,537
		2,082,113		855,848	2,471,310
		53,160 176,056		255,288 235,468	142,608 234,729
		229,216		490,756	377,337
		–		–	259
		$ 2,311,329		$ 1,346,604	$ 2,848,906

The purpose of the Company in the engagement in forwards trade is to hedge the risk deriving from the fluctuation of exchange rate on the purchase agreements. Since the forwards contracts are not qualified as effective conditions for hedging that hedge accounting is not applicable. The outstanding forward foreign exchange contracts at the balance sheet date are as follows:

June 30, 2014	Currency	Maturitydate	Contract amount(NT$ Thousands)
	USD against NTD	2014.07.25	USD4,000/NTD119,688
Pre-sell forward exchange

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VIII. Available-for-sale financial assets

Available-for-sale financial assets
Current	June 30, 2015 December 31, 2014		June 30, 2014
	$ 177,379 $ 394,868 84,414 $ 479,282	$ 220,684 $ 440,981 84,260 $ 525,241	$ 205,736
Domestic investment Listed stock Noncurrent
			$ 344,532 83,717
Domestic investment Emerging stock Unlisted (Non-OTC) stock
			$ 428,249

IX. Held-to-maturity financial assets

Held-to-maturity financial assets
Noncurrent	June 30, 2015 $ 106,143	December 31, 2014 $ 108,860	June 30, 2014
			$ 102,721
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	June 30, 2015 $ 3,440 7~9 10~13 years	December 31, 2014 $3,440 7~9 11~14 years	June 30, 2014
			$3,440
			7~9 11~14 years

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 June 30, 2015 and June 30, 2014, the accumulated amount of disposition of the Company and its subsidiaries in the previous 3 fiscal years amounting to NT$85,482 thousand (USD2,770 thousand) and NT$91,686 thousand (USD3,070 thousand), respectively, which accounted for 28% and 30% of the investment held to maturity, respectively.

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X. Bond investment without market price - noncurrent

Subordinated bonds - Taiwan Business Bank Subordinated bonds - Sunny Bank Subordinated bonds - AN Z Bank Corporate Bond -Cayman Ton Yi Industrial Holdings Limited Corporate bond – Road King Infrastructure Limited Corporate bond – Vneshtorgbank Corporate bond - Russian Agricultural Bank Corporate bond - GAZPROM BANK Corporate Bond – Shimao Property Holdings Ltd.	June 30, 2015		December 31, 2014 $ 100,000 20,000 4,270 – 10,183 10,083 9,604 6,457 – $ 160,597	June 30, 2014
	$ 100,000 20,000 4,163 45,441 9,933 9,844 9,376 6,296 –			$ 100,000 20,000 – – – 9,526 – 6,092 14,681
	$ 205,053			$ 150,299

The subsidiary purchased the bond issued by Cayman Ton Yi Industrial Holdings Limited amounted to RMB9,000 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)

	June 30, 2015 $ 9,422 $ 604,107	December 31, 2014 $ 7,054 $ 546,417	June 30, 2014
Note receivable arising from business operation Accounts receivable			$ 9,113
			$ 866,495

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.

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

the aging account is shown below:
Not overdue Under 30 days 31 days ~ 60 days 61 days ~ 90 days	June 30, 2015	December 31, 2014	June 30, 2014
	$ 602,930 691 – 486	$ 528,148 11,995 6,274 –	$ 864,331 2,164 – –
	$ 604,107	$ 546,417	$ 866,495

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XII. Inventories

Inventories
Finished goods Work-in-process goods Raw material Substances Instruments	June 30, 2015 $ 189,086 112,920 36,630 39,517 18,392 $ 396,545	December 31, 2014 $ 290,589 93,460 15,781 41,075 5,722 $ 446,627	June 30, 2014
			$ 302,873 85,367 7,212 28,962 156
			$ 424,570

As of June 30, 2015, December 31 2014, and June 30, 2014, the provision for devaluation of inventory and idle inventory amounted to NT$66,897 thousand, NT$70,579 thousand, and NT$75,579 thousand, respectively.

The cost of sales related to inventory in the periods of from April 1 to June 30, 2015 and January 1 to June 30, 2015, and April 1 to June 30, 2014 and January 1 to June 30, 2014, amounted to NT$1,100,898 thousand, NT$1,622,673 thousand, NT$2,240,814 thousand, NT$3,189,738 thousand, respectively, which included provisions for devaluation of inventory and idle inventory amounting to NT$6,605 thousand, NT$5,283 thousand, NT$9,392 thousand, and NT$14,109 thousand, respectively.

XIII. Available-for-sale noncurrent assets – December 31, 2014

Available-for-sale noncurrent assets–December 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 XXIX.

XIV. Other financial assets - current

Other financial assets-current
Time deposits with the original maturity date exceeding three months Annual interest rate (%)	June 30, 2015 $174,600 1.345~1.36	December 31, 2014 $233,300 1.13~1.36	June 30, 2014
			$289,600
			1.13~1.36

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XV. Subsidiaries

The main business entities of the consolidated financial statements:

InvestingCompany	Subsidiaries Ever Wealthy International Co., Ltd. (Ever Wealthy) Ever Glory International Co., Ltd. (EGI) Ever Glory Investment Co. (Ever Glory) China Steel Chemical Material Technology Company (CSCMTC) Changzhou China Steel Chemical Material Technology Company (Changzhou CCSCMTC)	Nature of business	Shareholding ratio June 30, 2015 December 31, 2014 June 30, 2014 100 100 100 100 100 100 – 51 51 100 100 100 100 100 100	Shareholding ratio June 30, 2015 December 31, 2014 June 30, 2014 100 100 100 100 100 100 – 51 51 100 100 100 100 100 100	Shareholding ratio June 30, 2015 December 31, 2014 June 30, 2014 100 100 100 100 100 100 – 51 51 100 100 100 100 100 100
The Company Ever Wealthy International Co., Ltd. China Steel Chemical Material Technology Company (CSCMTC)		General investment business International trade General investment business General investment business Processing and sale of mesophase carbon microspheres Products	100 100 – 100 100	100 100 51 100 100	100 100 51 100 100

Ever Glory was dissolved under a resolution of the General Meeting of shareholders held on September 30 2014 with completion of liquidation procedures on April 24 2015.

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	June 30, 2015 $ 242,493 491,504 733,997 534,634 $ 1,268,631	December 31, 2014 $ 275,203 532,774 807,977 572,361 $ 1,380,338	June 30, 2014
			$ 240,082 476,684
			716,766 558,844
			$ 1,275,610

(I) Associates of significant influence

Associates of significant influence
Company CHC Resources Yun Hung	Proportion of	shareholdingand votingrights(%)
	June 30, 2015	December 31, 2014 6 9	June 30, 2014
	6 9		6 9

The business nature, principal place of business and country of incorporation of the aforementioned associates are shown in Table 7 “Information on Investees”.

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

below:
CHC Resources	June 30, 2015 $ 1,049,989	December 31, 2014	June 30, 2014
		$ 962,603	$ 1,011,757

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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
						December 31,
			June	30, 2015			2014	June		30, 2014
Current assets			$	1,876,324		$	1,928,291	$	1,829,106
Noncurrent assets				4,641,736			4,505,402		4,191,203
Current liabilities		(		1,937,269	)	(	1,291,894 ) (		1,782,681 )
Noncurrent liabilities		(		453,299	)	(	458,109 ) (			157,638 )
Equity				4,127,492			4,683,690		4,079,990
Non-controlling interests		(		112,705	)	(	127,356 ) (			105,113 )
			$	4,014,787		$	4,556,334	$	3,974,877
The proportion of shareholding by the
Company and its subsidiaries (%)				6			6			6
Equity entitled to the Company and	its
subsidiaries			$	242,493		$	275,203	$		240,082
Book amount			$	242,493		$	275,203	$		240,082
							January 1 to
	April 1 to June April 1 to June June 30,								January 1 to
		30,	2015	30, 2014			2015		June 30, 2014
Operating income	$	1,963,230 $			1,730,890 $ 3,891,057				$	3,386,582
Net income	$		217,331 $			262,933 $ 461,957			$	480,244
Other comprehensive income (loss)	(		26,051 )			8,334 ( 41,636 )			(	10,957 )
Total comprehensive income	$		191,280 $			271,267 $ 420,321			$	469,287
Yun Hung
						December 31,
			June 30, 2015				2014	June		30, 2014
Current assets			$	6,734		$	575 $			1,111
Noncurrent assets				6,390,371			6,832,189		6,329,092
Current liabilities		(		1,054,669	)	(	1,041,742 ) ( $		1,148,857 )
Equity			$	5,342,436		$	5,791,022 $		5,181,346
The proportion of shareholding by the
Company and its subsidiaries (%)				9			9			9
Equity entitled to the Company and	its
subsidiaries			$	491,504		$	532,774 $			476,684
Book amount			$	491,504		$	532,774 $			476,684

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April 1 to June 30, 2014	January 1 to June 30,2015 $ 7 ( $ 12,561 ) ( 436,026 ) ( $ 448,587 ) January 1 to June 30, 2015	January 1 to June 30, 2014	January 1 to June 30, 2014
		$ 339 ( $ 12,635 ) ( 488,260 ) ( $ 500,895 ) January 1 to June 30, 2014
$ 235,319 126,654	$ 88,630 ( 414,754 ) ( $ 326,124 )		$ 242,379 114,204
$ 361,973			$ 356,583

(II) Information on separate associates of insignificant influence

The Company and its subsidiaries hold more than 20% of the shares of the investees and the CSC and affiliates, and are accounted for under the equity method.

XVII. Property, plant, and equipment

January 1 to June 30, 2015

January 1 to June 30,	2015
Cost Balance- January 1, 2015 Addition Disposal Exchange difference - net Balance as of June 30, 2015 Accumulated depreciation Balance- January 1, 2015 Depreciation Disposal Exchange difference - net Balance- June 30, 2015 Net amount – December 31, 2014 Net amount – June 30, 2015	Land	House and building $ 399,522 40,351 – – $ 439,873 $ 190,554 10,523 – – $ 201,077 $ 208,968 $ 238,796	Machinery equipment	Transportation equipment $ 91,638 5,661 ( 2,381 ) ( 34 ) $ 94,884 $ 55,953 6,466 ( 2,169 ) ( 6 ) $ 60,244 $ 35,685 $ 34,640	Miscellaneous equipment	Construction in progress Total
	$ 60,698 – – – $ 60,698 $ – – – – $ – $ 60,698 $ 60,698		$ 3,338,563 19,051 ( 3,479 ) ( 599 ) $3,353,536 $ 2,408,172 114,581 ( 3,200 ) ( 8 ) $2,519,545 $ 930,391 $ 833,991		$ 80,614 4,139 ( 113 ) ( 55 ) $ 84,585 $ 55,681 3,889 ( 113 ) ( 3 ) $ 59,454 $ 24,933 $ 25,131	$ 170,724 $ 4,141,759 23,756 92,958 – ( 5,973 ) – ( 688 ) $ 194,480$4,228,056 $ – $ 2,710,360 – 135,459 – ( 5,482 ) – ( 17 ) $ –$2,840,320 $ 170,724$1,431,399 $ 194,480$1,387,736

January 1 to June 30, 2014

Cost		Land $ 104,724 – – – $ 104,724	House and building $ 428,720 – – ( – $ 428,720	Machinery equipment	Transportation equipment $ 82,364 5,891 ( 1,521 ) ( 26 ) $ 86,708	Miscellaneous equipment Construction inprogress	Total
				$ 3,155,639 112,141 3,563 ) – $3,264,217		$ 73,861 $ 99,762 1,289 ( 12,903 ) ( 619 ) – ( 5 ) – $ 74,526$ 86,859	$ 3,945,070 106,418 ( 5,703 ) ( 31 ) $4,045,754
Balance – January 1, 2014 Addition Disposal Exchange difference - net Balance – June 30, 2014

(Continuing)

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(Continued)

inued)
Accumulated depreciation	Land	House and building	Machinery equipment	Transportation equipment	Miscellaneous equipment	Construction inprogress	Total
	$ – – –	$ 198,756 10,600 –	$ 2,181,573 118,589 ( 3,520 ) $ 2,296,642 $ 967,575	$ 45,471 5,754 ( 1,333 ) $ 49,892 $ 36,816	$ 50,068 3,190 ( 573 ) $ 52,685 $ 21,841	$ – – –	$ 2,475,868 138,133 ( 5,426 ) $ 2,608,575 $ 1,437,179
Balance – January 1, 2014 Depreciation Disposal Balance- June 30, 2014 Net amount – June 30, 2014
	$ –	$ 209,356				$ –
	$ 104,724	$ 219,364				$ 86,859

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:

ollows:
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 to June 30, 2015

January 1 to June 30, 2015
Cost	Land	House and building	Total
	$ 561,813 10,525 $ 572,338 $ 8,825 $ 552,988 $ 563,513	$ 47,665 – $ 47,665 $ 47,665 $ – $ –	$ 609,478 10,525 $ 620,003 $ 56,490 $ 552,988 $ 563,513
Balance- January 1, 2015 Addition Balance- June 30, 2015 Accumulated depreciation and depletion
Balance- January 1 and June 30, 2015 Net amount – December 31, 2014 Net amount – June 30, 2015

25 -

January 1 to June 30, 2014

January 1 to June 30, 2014
Cost	Land	House and building	Total $ 582,031 $ 41,011 $ 541,020
	$ 549,845 $ 8,825 $ 541,020	$ 32,186 $ 32,186 $ –
Balance- January 1 and June 30, 2014 Accumulated depreciation and depletion
Balance- January 1 and June 30, 2014 Net amount – June 30, 2014

The Company and its subsidiaries have 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 June 30, 2015, December 31, 2014, and June 30, 2014 was NT$808,704 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 presented by real property appraiser under Class 3 input value and with reference to comparison of the transaction price in the real estate market, the income method, and the land development analysis method. The significant and unobservable input value includes the rate of capitalization of return and related fee rates in March 2015, December 2013, and March 2013.

The investment property is proprietary interest of the Company and its subsidiaries.

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

XIX Loans

(I) Short-term loans

s Short-term loans
			December 31,
	June	30, 2015		2014	June	30, 2014
Unsecured loans
Letter of credit loans	$	46,454	$	100,441	$	11,734

The interest rate for the financing of the aforementioned L/C was 1.3467%, 1.33%~1.56%, and 1.326% as of June 30, 2015, December 31 2014, and June 30, 2014, respectively.

(II) Short-term bills payable

The payable commercial papers before maturity are:

26 -

June 30, 2015

June 30, 2015
Guarantor/underwriter	Face amount	Discount amount	Book amount	Interest rate interval (%)	Name of collaterals	Book value of collaterals
Mega Bills Finance Corporation June 30, 2014 Guarantor/underwriter	$ 45,000	$ –	$ 45,000	1.118 Interest rate interval (%)	None Name of collaterals	$ –
	Face amount	Discount amount $ –	Book amount			Book value of collaterals
Mega Bills Finance Corporation	$ 35,000		$ 35,000	1.098	None	$ –

XX. Other payables

Other payables
Dividend payable Salaries and incentives payable Employee bonus and directors and supervisors remuneration payable Repair materials fee payable Equipment payable Others (mainly freight, commission, and insurance expense)	June 30, 2015 $ 1,970,643 83,876 47,871 43,914 8,547 38,340 $ 2,193,191	December 31, 2014 $ 4,336 113,232 125,509 44,700 7,900 60,359 $ 356,036	June 30, 2014
			$ 1,982,491 72,716 69,969 26,193 496 72,589
			$ 2,224,454

XXI. Post-employment benefit plan

Determined benefit plan related pension expense recognized in the period of April 1 to June 30, 2015 and 2014, and January 1 to June 30, 2015 and 2014, was based on the pension cost rate under actuarial calculation as of December 31 2014 and December 31 2013, respectively, which amounted to NT$2,103 thousand, NT$2,103 thousand, NT$4,205 thousand, and NT$4,206 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	June 30, 2015	December 31, 2014	June 30, 2014
	300,000	300,000 $ 3,000,000 236,904 $ 2,369,044	300,000 $ 3,000,000 236,904 $ 2,369,044
	$ 3,000,000 236,904 $ 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.

27 -

(II) Additional paid-in capital

Additional paid-in capital
Applied to make up loss, distribute cash, or replenish capital stock (Note) Stock issued with premium Treasury stock trading Inapplicable for any purpose Changes in net equity of associated company under the equity method		June 30, 2015 $ 218 599,180 4,809 $ 604,207	December 31, 2014 $ 218 509,996 4,809 $ 515,023		June 30, 2014
					$ 218 427,450 4,677 $ 432,345

Note: This type of capital surplus could be appropriated for covering loss carried forward. If there is no loss, the Company may pay out as cash dividend or capitalize as equity capital. For capitalization of capital surplus, the upper limit is at 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.

(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:

Appropriate 10% of the earnings as legal reserve.
Special reserve is appropriated in accordance with the operating needs, laws, and regulations of the year.
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 Company’s dividend policy is to focus on dividend stability and growth by referring to future operating conditions; also, the Company should have not less than 50% of the distributable earnings, if any, distributed, of which, cash dividend may not be less than 50% of the amount distributed.

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

According to the amendment to the Company Act in May 2015, dividend and bonus are only for shareholders. Employees are not the beneficiaries of distribution of earnings. The Company plans to amend the articles of incorporation in the regular session of the General Meeting of shareholders for FY2016 in line with the aforementioned amendment of law. The estimates of employee bonus and remuneration to directors and shareholders in the periods of April 1 to June 30, 2015 and 2014, and January 1 to June 30, 2015 and 2014 and the actual distribution amount for FY2014 and FY2013 were specified in Note XXIV (IV) Employee Benefits.

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

28 -

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.

The Company has held regular sessions of General Meeting of shareholders in June 2015 and June 2014 with resolutions of the distribution of earnings for FY2014 and FY2013 as follows:

follows:
Legal reserve Cash dividend	Earnings distribution		Dividendper share(NT$)
	2014	2013	2014	2013
	$ 218,719 1,966,307	$ 220,991 1,966,307	$ 8.3	$ 8.3
	$ 2,185,026	$ 2,187,298

(IV) Other equity items

Exchange difference from financial statement conversion of foreign operation

	January1	January1	January1	to June 30, 2015	January1 to June 30, 2014	January1 to June 30, 2014
Balance at beginning of period			$	27,989	( $	2,154 )
Exchange difference arising from the
conversion of the net assets of
foreign operating		(		9,884 )		1,017
Exchange difference share of the
associated company under the equity
method		(	$	4,397 )	( $	4,656 )
Balance at ending of period			$	13,708	( $	5,793)
Unrealized profit and loss of the available-for-sale financial assets
	January1 to June 30, 2015				January1 to June 30, 2014
Balance at beginning of period		$		289,056	$	160,969
Unrealized gain (loss) of the
disposition of financial assets	(			75,514 )		52,585
The disposition of financial assets
available for sale was reclassified 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	(			62,254 )	(	40,389 )
Balance at ending of period		$		151,632	$	173,165

Unrealized profit and loss of the available-for-sale financial assets
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(V) Non-controlling interests

Non-controlling interests
Balance at beginning of period Attributable to non-controlling interests share Net income Unrealized gain (loss) of the disposition of financial assets Subsidiary’s dividend distribution Disposition of equities of subsidiaries Balance at ending of period	January1 to June 30, 2015 $ 150,840 53 331 – ( 151,224 ) $ –	January1 to June 30, 2014
		$ 161,259 300 ( 477 ) ( 11,760 ) – $ 149,322

(VI) Treasury stock

Ever Wealthy International Co., Ltd., 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 International Co., Ltd. is disclosed as follows (Unit: Thousand shares).

January 1 to June 30, 2015

At beginning		ofperiod		Sold in currentperiod			Endingofperiod
Shares		Book value	Shares	Book value Selling price		Shares	Book value Marketprice
6,548 $		162,034	720 $ 17,818 $		107,002	5,828	$ 144,216 $	810,028
January 1 to		June 30, 2014
At beginning	ofperiod			Sold in currentperiod			Endingofperiod
Shares	Book value		Shares	Book value Selling price		Shares	Book value Marketprice
6,752 $		167,082		– $ – $	–	6,752	$ 167,082 $	1,306,422

Subsidiary Ever Wealthy sold the shares of the Company under its holding in the period of January 1 to June 30, 2015 for the proceeds of NT$107,002 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

Sales income Labor service income Dividend income Net income (loss) from held-for-trading financial assets Net loss of financial assets measured at fair value through profit and loss Associated companies and joint ventures profit share under the equity method Profit from financial assets sold	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
	$ 1,574,389 18,946 – ( 1,546 ) – – – $ 1,591,789	$ 2,370,669 19,042 700 8,568 ( 367 ) 2,754 – $ 2,401,366	$ 3,132,551 39,841 – 6,103 – – –	$ 4,709,976 35,151 700 8,270 ( 69 ) 4,380 33,754 $ 4,792,162
			$ 3,178,495

XXIV. Net income before tax

Net income before tax includes the following items:

(I) Other income

Other income
Rent income (Note XXIX) Interest income Others	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
	$ 3,613 3,460 $ 4,199	$ 3,772 4,957 $ 3,223	$ 7,463 5,766 $ 7,080	$ 7,544 9,794 $ 5,587
	$ 11,272	$ 11,952	$ 20,309	$ 22,925

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(II) Other profit and loss

Other profit and loss
Foreign exchange (loss) - net Profit (loss) from the disposal of property, plant, and equipment Capital gains from disposition of non-current assets for disposal Net profit of financial assets measured at fair value through profit and loss Profit from the valuation of the held-for-trading financial assets Profit from the valuation of the held-for-trading financial liabilities Profit from the disposal of investment Other losses	April 1 to June 30, 2015	April 1 to June 30, 2014 ( $ 6,211 ) ( 148 ) – 20,044 260 – – – $ 13,945	January 1 to June 30, 2015	January 1 to June 30, 2014
	( $ 7,817 ) ( 2 ) – 2,732 – – – ( 9 ) ( $ 5,096 )		( $ 11,231 ) 156 66,609 7,499 – – – ( 336 ) $ 62,697	( $ 185 ) ( 81 ) – 24,366 260 91 356 – $ 24,807

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

Total foreign exchange profit Total foreign exchange loss Net exchange loss Depreciation and amortization Property, plant, and equipment Long-term prepaid rent	April 1 to June 30, 2015	April 1 to June 30, 2015	April 1 to June 30, 2014 $ 1,171 ( 7,382 ) ( $ 6,211 ) April 1 to June 30, 2014 $ 70,696 2,113 $ 72,809	January 1 to June 30, 2015	January 1 to June 30, 2014	January 1 to June 30, 2014
	$ 7,673 ( 15,490 ) ( $ 7,817 ) April 1 to June 30, 2015			$ 7,737 ( 18,968 ) ( $ 11,231 ) January 1 to June 30, 2015	$ 7,787 ( 7,972 ) ( $ 185 ) January 1 to June 30, 2014
		$ 64,213 955 $ 65,168		$ 135,459 1,587 $ 137,046		$ 138,133 2,113 $ 140,246

(III) Depreciation and amortization

(Continuing)

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(Continued)

	April 1 to June	April 1 to June	April 1 to	April 1 to	January 1 to	January 1 to	January 1 to	January 1 to
		30, 2015	June	30, 2014	June	30, 2015	June	30, 2014
Depreciation summarized by
function
Operating cost	$	59,044	$	66,729	$	125,578	$	130,347
Operating expense		5,169		3,967		9,881		7,786
	$	64,213	$	70,696	$	135,459	$	138,133
Amortization summarized by
function
Operating cost	$	955	$	–	$	1,587	$	–
Operating expense		–		2,113		–		2,113
	$	955	$	2,113	$	1,587	$	2,113

(IV) Employee benefit expense

Employee benefit expense
Short-term employee benefits Salary Labor and health insurance Others Post-employment welfare (Note XXI) Defined contribution plan Defined benefit plan Summarized by function Operating cost Operating expense	April 1 to June 30, 2015	April 1 to June 30, 2014		January 1 to June 30, 2015		January 1 to June 30, 2014
	$ 97,155 3,512 2,890 103,557 1,105 2,103 3,208 $ 106,765 $ 57,448 49,317 $ 106,765		$ 116,823 5,376 3,690 125,889 787 2,103		$ 203,354 7,044 5,243 215,641 2,035 4,205 6,240 $ 221,881 $ 141,547 80,334 $ 221,881	$ 227,754 8,775 7,797 244,326 1,573 4,206 5,779 $ 250,105 $ 143,830 106,275 $ 250,105

			2,890				5,779
			$ 128,779				$ 250,105
			$ 67,532 61,247				$ 143,830 106,275
			$ 128,779				$ 250,105

According to the amendment to the Company Act in May 2015, the fixed amount of profit for current period or the proportion for employee remuneration must be explicitly stated in the articles of incorporation. However, the Company has not yet revised the policy of employee remuneration in line with the aforementioned amendment of law. The Company estimates employee bonus and remuneration to directors and supervisors based on the amount of distribution in the past, which was 5% and 1%, respectively. The estimates are:

33 -

Employee bonus Remuneration to directors and supervisors	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014 $ 58,308 11,661
	$ 21,966 3,802	$ 30,229 6,045	$ 40,364 7,507

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.

The Company has held regular sessions of General Meeting of shareholders in June 2015 and June 2014 with resolutions of the distribution of employee bonus and remuneration to directors and shareholders (in cash) for FY2014 and FY2013 as follows:

Employee bonus Remuneration to directors and supervisors	2014 $104,591 20,918	2013
		$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.

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

XXV. Income tax

(I) Income tax recognized in profit and loss

Income tax expenses include the following:

Income tax expenses include	the following:
Current income tax Generated in current period Unappropriated earnings additional tax levy Tax adjustment of prior periods Deferred income tax Generated in current period	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
	$ 67,114 – ( 7,572 ) ( 363 ) $ 59,179	$ 103,532 2,645 ( 193 ) ( 627 ) $ 105,357	$ 122,916 – ( 7,572 ) 684 $ 116,028	$ 215,031 2,645 ( 193 ) ( 1,101 ) $ 216,382

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(II) Income Tax Integration

Income Tax Integration
Unappropriated earnings Unappropriated earnings after 1998 Shareholder tax credit account balance Tax credit ratio of earnings distribution (%)	June 30, 2015 $ 775,300 $ 405,145 2014(estimated)	December 31, 2014 June 30, 2014 $ 2,215,199 $ 1,258,473 $ 204,245 $ 414,265 2013(actual) 18.63
		$

	18.29

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 declaration of income tax by subsidiaries Ever Wealthy and Ever Glory to FY2013 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:

Net income

Net income
Net income attributable to the Company’s shareholders Shares The weighted average common stock shares issued	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015
	$ 352,713	$ 590,353	$ 745,127
	April 1 to June 30, 2015	April 1 to June 30, 2014
	236,904	236,904	236,904

(Continuing)

35 -

(Continued)

inued)
Less: the holding of treasury stocks of the Company by subsidiaries Calculation of the basic earnings per share of the weighted average quantity of shares Add: Potential common stock shares with dilution effect – employee bonus Calculation of the diluted earnings per share of the weighted average quantity of shares	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
	6,130	6,752	6,267	6,752
	230,774 909	230,152 761	230,637 1,001	230,152 826
	231,683	230,913	231,638	230,978

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~ June 30, 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 at fair value and financial assets with significant difference from fair value:

Financial assets Held-to-maturity financial assets	June 30, 2015	June 30, 2015	December 31, 2014	December 31, 2014	June 30, 2014	June 30, 2014
	Book value	Fair value	Book value	Fair value	Book value	Fair value
	$ 106,143	$ 81,882	$ 108,860	$ 90,968	$ 102,721	$ 88,152

36 -
(II) Information on fair value – financial instrument at fair value
Fair value Level

Fair value Level
June 30, 2015	Level 1	Level 2	Level 3	Total
	$ 2,061,743 209,469 – – $ 2,271,212 $ 177,379 – – $ 177,379 $ 1,008,766 265,237 – $ 1,274,003 $ 220,684 – – $ 220,684 $ 2,475,839 283,266 – – $ 2,759,105 $ 205,736 – – $ 205,736	$ – – 40,117 – $ 40,117 $ – – – $ – $ – – 72,601 $ 72,601 $ – – – $ – $ – – 89,542 259 $ 89,801 $ – – – $ –	$ – – – –	$ 2,061,743 209,469 40,117 – $ 2,311,329 $ 177,379 394,868 84,414 $ 656,661 $ 1,008,766 265,237 72,601 $ 1,346,604 $ 220,684 440,981 84,260 $ 745,925 $ 2,475,839 283,266 89,542 259 $ 2,848,906 $ 205,736 344,532 83,717 $ 633,985
Financial assets measured at fair value through profit and loss Fund beneficiary certificate Domestic listed stock Credit linked note Forward exchange contract Available-for-sale financial assets Domestic listed stock Emerging stock Domestic unlisted (Non-OTC) stock December 31, 2014
			$ –
			$ – 394,868 84,414
			$ 479,282
			$ – – –
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 June 30, 2014
			$ –
			$ – 440,981 84,260
			$ 525,241
			$ – – – –
Financial assets measured at fair value through profit and loss Fund beneficiary certificate Domestic listed stock Credit linked note Forward exchange contract Available-for-sale financial assets Domestic listed stock Emerging stock Domestic unlisted (Non-OTC) stock
			$ –
			$ – 344,532 83,717
			$ 428,249

37 -

Level 1 and Level 2 fair value measurement inter-transfer had not occurred in January 1 to June 30, 2015 and 2014.

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
	Investment in equityinstruments with nopublicquotation.
	January1 to June 30, 2015 $ 525,241 ( 45,959 ) – – $ 479,282	January1~ June 30, 2014
		$ 317,062 88,840 57,600 ( 35,253 ) $ 428,249

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.

The valuation techniques and input value of measurement of Class 3 fair value
- (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.
- (2) The fair value of stocks not listed in TWSE (GTSM) shall be assessed with reference to the nearest net value or transaction price.
(II) Types of financial instruments

June 30, 2015 December 31, 2014 June 30, 2014

Financial assets
Measured at fair value through profit and
loss
Held-for-trading financial assets	$	229,216 $	490,756 $	377,596
Designated to be measured at fair
value through profit and loss		2,082,113	855,848	2,471,310
Available-for-sale financial assets
(including noncurrent)		656,661	745,925	633,985
Held-to-maturity investments		106,143	108,860	102,721
Loans and receivables (Note 1)		2,062,651	2,433,959	1,968,447
Financial liabilities
Measured at amortized cost (Note 2)		2,495,871	737,099	2,614,206

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.
38 -

(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 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 35% 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.

The book value of monetary assets and liabilities of non-functional currencies of the Company and subsidiaries as of the balance sheet date was stated in Note 32.

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%.

39 -

Profit and loss in Scenario 1 Profit and loss in Scenario 2	USD effect(Note)	USD effect(Note)	RMB effect(Note)	RMB effect(Note)
	January 1 to June 30, 2015	January 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
	( $ 21,194 ) 21,194	( $ 10,036 ) 10,036	( $ 7,170 ) 7,170	( $ 1,634 ) 1,634

Note: It is mainly derived from the cash and cash equivalents, receivables, bond investment without market price, payables, and other payables denominated in foreign currency without cash flow hedging arranged at each balance sheet date by the Company and its subsidiaries.

The exchange rate sensitivity of the Company and its subsidiaries in January 1~ June 30, 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 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 Financial liabilities With cash flow interest rate risk Financial assets Financial liabilities	June 30, 2015	December 31, 2014	June 30, 2014
	$ 193,026 45,000 827,697 46,454	$790,985 – 787,101 100,441	$ 314,405 35,000 439,461 11,734

(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

40 -

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 there is a change in the equity price by ±6%, and on the basis of the position of equity securities investment of NT$2,448,591 thousand on June 30, 2015, earnings before taxation will increase or decrease by NT$136,273 thousand due to the fair value of financial assets at fair value through profit and loss;

Other equity will increase/decrease by NT$10,643 thousand due to the fair value of the financial assets available for sale. Earnings before taxation will increase/decrease by NT$165,546 thousand due to the fair value of the financial assets at fair value through profits and loss based on the position of equity securities investment amounting to NT$2,964,841 thousand as of June 30, 2015. Other equity will increase/decrease by NT$12,344 thousand due to the fair value of 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. 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		June 30, 2015 $ 105,590 77,137 53,472 $ 236,199	December 31, 2014	December 31, 2014		June 30, 2014
				$ 127,634 66,816 72,071 $ 266,521		$ 177,686 205,752 86,795 $ 470,233

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 June 30 2015, December 31 2014, and June 30 2014, the available short-term credit limit from banks to the Company and its subsidiaries was NT$3,969,676 thousand, NT$ 3,993,754 thousand and NT$ 4,149,862 thousand, respectively.

41 -

XXIX. Related party transactions

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

(I) Operating income

Operating income
Account	Type of relatedparty	April 1 to June 30, 2015 $ 316,211 3,472 3,047 $ 322,730 $ 18,947	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
Sales income Labor service income	Other related party Parent company Sister company Parent company		$ 512,646 4,745 5,592	$ 589,285 8,668 6,565	$ 1,047,559 9,268 11,791
			$ 522,983	$ 604,518	$ 1,068,618
			$ 19,042	$ 39,842	$ 35,151

(II) Purchase

Purchase
Type of relatedparty	April 1 to June 30, 2015 $ 486,962 196,567 $ 683,529	April 1 to June 30, 2014 $ 805,937 307,119 $ 1,113,056	January 1 to June 30, 2015 $ 975,121 381,940 $ 1,357,061	January 1 to June 30, 2014
Parent company Sister company				$ 1,621,043 626,451
				$ 2,247,494

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, the Company had signed a contract with the parent company in January 2008 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.

42 -

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

Account	Type of relatedparty	June 30, 2015	December 31, 2014	June 30, 2014
Accounts receivable Other receivables	Parent company Sister company Other related party Parent company Sister company	$ 7,836 1,086 105,590	$ 8,249 1,123 127,634	$ 9,291 3,818 177,686
		$ 114,512	$ 137,006	$ 190,795
		$ 83,436 70,328	$ 69,601 995	$ 24,301 64,242
		$ 153,764	$ 70,596	$ 88,543

The outstanding receivable from related party is without collateral collected. No provision for bad debts for the receivables from related parties in the periods of January 1 to June 30, 2015 and 2014.

(IV) Payables to related party

and 2014. Payables to related party
Account	Type of relatedparty	June 30, 2015	December 31, 2014	June 30, 2014
Accounts payable Other payables	Parent company Sister company Parent company Sister company	$ 187,528 687	$ 255,415 683	$ 299,050 828
		$ 188,215	$ 256,098	$ 299,878
		$ 3,130 1,572	$ 14,558 5,224	$ 6,639 28,359
		$ 4,702	$ 19,782	$ 34,998

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

(V) Long-term prepaid rent

Long-term prepaid rent
Type of relatedparty Sister company	June 30, 2015	December 31, 2014 $33,454	June 30, 2014
	$31,765		$35,438

The subsidiaries prepaid rent to affiliates for plant space and the contract term is 45 years (until January 1 2059) and lease the plant site from the affiliates (until January 2034)

The rent for the periods of April 1 to June 30, 2015 and 2014, and from January 1 to June 30, 2015 and 2014, amounted to NT$1,070 thousand, NT$915 thousand, NT$2,158 thousand, and NT$2,113 thousand, respectively.

(VI) Acquisition of investment property

NT$2,113 thousand, respectively. Acquisition of investment property
Type of relatedparty Sister company	Proceeds for acquisition
	April 1 to June 30, 2015 $10,525	January1 to June 30, 2015
		$10,525

43 -

(VII) Capital gain from the disposition of real property

Type of relatedparty January 1 to June 30, 2015 Sister company	Proceeds from disposition $98,667	Disposalprofit
		$66,609

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

Type of relatedparty Parent company	June 30, 2015 December 31, 2014 June 30, 2014
	$ – $ 300,000 $ –

The Company provides short-term loans to the parent company; also, the loan interest rate is calculated in accordance with the purchase of short-term time deposit denominated in the same currency from general financial institutions within 30-day from the interest accrual date or the repurchase interest rate in a secondary money market. The interest rate on December 31 2015 was 0.57%~0.69%

The loan to parent company in the period of April 1 to June 30, 2014, and from January 1 to June 30, 2015 and 2014, were unsecured loans. Related interest incomes amounted to NT$481 thousand, NT$112 thousand, and NT$934 thousand, respectively.

(IX) Other related party transactions

1. Leased land and factories

The Company lease the plant site from the parent company under three lease agreements and the annual rent was based on 3% of the announced present value or 6% of the total announced land price. The agreements have terms of 5 years (until December 2015), 5 years (until December 2017), and 10 years (until June 2019), respectively. Rent will be paid once semi-annually. The rent for the periods of April 1 to June 30, 2015 and 2014, and from January 1 to June 30, 2015 and 2014, amounted to NT$3,919 thousand, NT$3,163 thousand, NT$7,837 thousand, and NT$6,324 thousand, respectively.

The Company also leased the coke plant from the parent company with lease term ends in December 2017. Rent is payable once semi-annually. The rent for the periods of April 1 to June 30, 2015 and 2014, and from January 1 to June 30, 2015 and 2014, amounted to NT$613 thousand, NT$629 thousand, NT$1,226 thousand, and NT$1,257 thousand, respectively.

The Company has entered into a lease agreement on land and warehouse space with its affiliates and the lease term ends in August 2017. The rent for the periods of April 1 to June 30, 2015 and 2014, and from January 1 to June 30, 2015 and 2014, amounted to NT$321 thousand, NT$361 thousand, NT$681 thousand, and NT$721 thousand, respectively.

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

2. Leased office building

The Company has leased office buildings and office from the parent company for a period up to October and December 2016, respectively; also, the annual rent expense was NT$1,568 thousand, NT$1,558 thousand, NT$3,118 thousand and NT$3,115 thousand, in April 1 to June 30, 2015 and January 1 to June 30, 2015, and April 1 to June 30, 2014, respectively. The Company and other non-related party have no similar transactions available for comparison.

Rent income
44 -

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, NT$2,608 thousand, NT$5,960 thousand and NT$5,215 thousand in April 1 to June 30, 2015 and January 1 to June 30, 2015, and April 1 to June 30, 2014 and January 1 to June 30, 2014, respectively. The Company has entered into lease agreement on land, housing, and equipment with affiliates. Rent is payable once semi-annually. The rent (recognized as non-operating income – other incomes) for the periods of April 1 to June 30, 2014, and from January 1 to June 30, 2015 and 2014, amounted to NT$675 thousand, NT$240 thousand, and NT$1,350 thousand, 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 aforementioned expenses for the periods of April 1 to June 30, 2015 and 2014, and from January 1 to June 30, 2015 and 2014, amounted to NT$99,611 thousand, NT$121,594 thousand, NT$207,189 thousand, and NT$241,078 thousand, respectively. The Company does not have any transactions with non-related parties that could be used for comparison.

5. Technical service fees

The Company has appointed the parent company to provide technical services in the development and application of graphite blocks and high softening point asphalt. The fee for the service in the periods of January 1 to June 30, 2015 and 2014 amounted to NT$5,000 thousand and NT$5,000 thousand, respectively.

(VIII) Reward to the management

I) Reward to the management
Short-term employee benefits Post-employment benefits	April 1 to June 30, 2015	April 1 to June 30, 2014	January 1 to June 30, 2015	January 1 to June 30, 2014
	$ 11,639 111	$ 13,041 107	$ 22,766 223	$ 28,023 214
	$ 11,750	$ 13,148	$ 22,989	$ 28,237

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

XXX. Material contingent liability and unrecognized contractual commitments

The Company had had the following significant commitments as of June 30, 2015:

(I) The Company has opened unused L/C with balance of NT$583,688 thousand for the purchase of materials and merchandises.
(II) The Company has signed agreement on construction work with contract sum amounting to NT$184,246 thousand with NT$125,037 thousand not being performed.

XXXI. Material post events

For the procurement of new production facility, as of July 2015 the Board resolved to acquire the land located at Pingnan Section of Fangliao Village at Pintung County from an unrelated party at the transaction price of NT$1,083,260 thousand. Payment will be effected in 4 phases as stated in the agreement. The first payment of NT$100,000 thousand has been effected in August 2015.

45 -

XXXII. Exchange rate of financial assets and financial liabilities in foreign currency

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

June30,2015	Foreign currency	Exchange rate	Book amount(NTD)
	$ 25,162 25 39,582 8,474 31,868 6,175 78 279 2,017 14,403 419 8,335 7,178 53,841 34,492 293 949 1,548 10,266 1,307 3,026 8,293 29,933	30.86(USD`：`NTD) 6.205(USD`：`RMB) 4.973(RMB`：`NTD) 0.1611(RMB`：`USD) 0.0324(NTD`：`USD) 4.973(RMB`：`NTD) 34.46 (EUR: NTD) 30.86(USD`：`NTD) 6.205(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) 0.033(NTD`：`USD) 29.865(USD`：`NTD) 6.208(USD`：`RMB) 4.811(RMB`：`NTD) 0.161(RMB`：`USD) 0.033(NTD`：`USD)	$ 776,500 784 196,843 42,143 31,868 30,708 2,688 8,595 62,235 455,858 13,248 42,441 36,549 14,246 34,492 9,288 30,043 1,548 306,594 39,040 14,558 39,896 29,933
Financial assets Monetary items USD USD RMB RMB Non-monetary items Financial assets measured at fair value through profit and loss NTD RMB Financial liabilities Monetary items EUR USD USD December31,2014
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 June30,2014
Financial assets Monetary items NTD USD USD RMB RMB Non-monetary items Financial assets measured at fair value through profit and loss NTD

(Continuing)

46 -

(Continued)

inued)
Financial liabilities Monetary items USD USD	Foreign currency	Exchange rate	Book amount(NTD)
	$ 300 72	29.865 (USD`：`NTD) 6.208 (USD`：`RMB)	$ 8,955 2,150

The exchange loss from the exchange of foreign currencies (realized and unrealized) by the Company and its subsidiaries in the periods of January1 to June 30, 2015 and 2014, was NT$11,231 thousand and NT$185 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.

XXXIII. 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): Table Attachment II.
The cumulative buying and selling of particular security amounting to NT$300 million or more than 20% of the paid-in capital: Table 3
The acquisition of real property amounting to NT$300 million or more than 20% of the paid-in capital: None
The disposition of real property amounting to NT$300 million or more than 20% of the paid-in capital: None
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: Attachment IV
The receivable from the related party for an amount more than NT$100 million or more than 20% of the paid-in capital: Attachment V
Derivatives transaction: None
Others: The business relationship and material transactions and transaction amount conducted between the parent company and its subsidiaries and between the subsidiaries: Attachment VI
Information related to the invested company: Attachment VII
(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 profit and loss, book amount of investment at yearend, and investment gains and losses remitted inward and limit of investment in Mainland China: Attachment VIII
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:
- (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 June 30, 2015, the Company has purchased from CSCC (Changzhou), a subsidiary, amounting to NT$37,195 thousand (or 2% 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
47 -

gain and the aforementioned transaction has been settled at the time of compiling the consolidated financial statement.

(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$41,502 thousand (accounted for 1% of the net consolidated operating income) in January 1~ June 30, 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$62,235 thousand (accounted for 10% of the consolidated accounts receivable) was to be collected as of June 30, 2015 and the transaction referred to above had been written-off at the time of preparing the consolidated financial statements.
(3) Property transaction amount and the profit and loss amount resulted: None
(4) The ending balance of endorsement and guarantee of check or collaterals being pledged, and the purpose: None.
(5) The upper limit of financing, ending balance, interest range, and total interest in current period: None.
(6) Other transactions that significantly affect the current profit or loss or financial position: None

XXXIV. 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 International Co., Ltd. / Ever Glory Investment Co. / China Steel Chemical Material Technology Company (CSCMTC) - Investments
48 -

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

January1 to June 30, 2015		EGI		Adjustment and written-off
	$ 3,008,721 239,536 $ 3,248,257 $ 741,588 3,103 45,117 13,811 ( 1,264 ) 58,150 860,505 ( 111,553 ) $ 748,952 $ 4,469,114 271,743 $ 4,740,857 $ 1,305,878 4,328 81,343 12,952 ( 1,122 ) 24,209 1,427,588 ( 211,980 ) $ 1,215,608	$ 164,346 –	$ 5,428 93,063 $ 98,491 $ 96,696 1,705 – 1,549 ( 123 ) – 99,827 ( 4,475 ) $ 95,352 $ 47,036 5,962 $ 52,998 $ 45,886 1,702 – 1,274 ( 52 ) – 48,810 ( 4,402 ) $ 44,408	$ – ( 332,599 ) ( $ 332,599 ) ( $ 92,246 ) ( 226 ) ( 12,369 ) ( 817 ) 226 – ( 105,432 ) – ( $ 105,432 ) $ – ( 277,705 ) ( $ 277,705 ) $ 1,095 – ( 42,486 ) ( 1,095 ) – – 42,486 ) – $ 42,486 )	$ 3,178,495 – $ 3,178,495 $ 746,615 5,766 32,748 14,543 ( 1,161 ) 62,697 861,208 ( 116,028 ) $ 745,180 $ 4,792,162 – $ 4,792,162 $ 1,353,150 9,794 38,857 13,131 ( 1,174 ) 24,807 1,438,565 ( 216,382 ) $ 1,222,183
Income from customers other than the Company and subsidiaries Income from the Company and subsidiaries Total income Department interest Interest income The portion of earnings from associates and joint ventures 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 to June 30, 2014
		$ 164,346
		$ 577 1,184 – – – 4,547
		6,308 –
		$ 6,308
		$ 276,012 –
Income from customers other than the Company and subsidiaries Income from the Company and subsidiaries Total income Department interest Interest income The portion of earnings from associates and joint ventures recognized under the equity method. Other income Interest expense Other profit and loss Consolidated net income before tax Income tax expense Consolidated net income
		$ 276,012
		$ 291 3,764 – – – 598
		4,653 –
		$ 4,653

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.

49 -

(V) Total assets and liabilities of each department

			December 31,	December 31,
		June 30, 2015		2014	June	30, 2014
Department assets
Chemicals department
Production and sale	$	7,173,982	$	6,766,202	$	7,524,396
Trading		492,974		434,502		460,381
Investment department		1,293,768		1,484,699		1,407,446
	$	8,960,724	$	8,685,403	$	9,392,223
Department liabilities
Chemicals department
Production and sale	$	2,715,079	$	1,069,699	$	2,924,634
Trading		15,592		15,420		16,416
Investment department		50,940		4,448		50,980
	$	2,781,611	$	1,089,567	$	2,992,030

50 -

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

January 1 to June 30, 2015

Attachment I

Unit: NT$ Thousands, unless otherwise stated

No.	LendingCompany	Borrower	Account	Relatedparty	Current highest balance amount	Balance at ending of period	Actual credit amount implemented	Interest rate interval (%)	Nature of lending of funds	Transaction amount	Reason for needing short-term loans	Amount of allowance for bad debt	Collateral	Collateral	Lending of fund limit for each individual	Total limit of financing to third parties
													Title	Value
0 1	The Company Ever Wealthy International Co., Ltd.	China Steel Corporation Changzhou China Steel Chemical Material Technology Company	Other receivables Other receivables	Yes Yes	$ 300,000 34,500 (RMB6,900 thousand)	$ – 34,500 (RMB6,900 thousand)	$ – 33,694 (RMB6,900 thousand) (Note 4)	0.57~0.69 0.88	Note 1 Note 1	$ – –	Working capital Working capital	$ – –	None None	$ – –	$ 617,911 (Note 2) 221,204 (Note 3)	$ 1,235,823 (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 Procedures for Lending of Funds by the subsidiaries, the total loan amount and lending of fund to individual is limited to 20% and 10% of the net value of the subsidiaries, respectively. Note 4: It has been written-off at the time of preparing the consolidated financial statements.

51 -

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

June 30, 2015

Attachment II

Unit: NT$ Thousands, unless otherwise stated

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			End ofperiod	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 Yuanta Money Market Fund Mirae Asset Solomon Money Market Fund TCB Fund of Emerging Markets Bond Taishin RMB Money Market Fund Alliance 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 through profit and loss - current Financial assets measured at fair value throughprofit and loss - current	132,000 9,065,230 10,372,390 6,496,804 230,446 9,079,506 2,884,901 1,000,000 1,000,000 2,893,025 1,855,804 12,676,343 12,090,640 1,913,217 300,000 4,243,798		$ 1,545 $ 138,470 140,291 101,135 3,163 132,401 30,282 9,820 9,705 29,746 19,791 150,141 150,278 19,390 15,358 50,056		$ 1,545 $ 138,470 140,291 101,135 3,163 132,401 30,282 9,820 9,705 29,746 19,791 150,141 150,278 19,390 15,358 50,056

(Continuing)

52 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			End ofperiod	End ofperiod		Remark
				Shares or units		Book amount	Shareholding ratio	Market price or net equity
	Cathay Taiwan Money Market JP Morgan Emerging Dual-Profit Balanced Fund Cooperative Bank Money Market Fund Manulife Financial USD High Yield Bond Fund Sinopac RMB Bond Fund Yuanta China High Yield Dim Sum Bond Fund Yuanta S&P GSCI Gold ER Futures ETF Prudential Financial Asia Bond Cathay Emerging China Bond JP Morgan Primary Money Market Fund Hua Nan Kirin Money Market Fund Hua Nan Phoenix Money Market 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		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 Financial assets measured at fair value through profit and loss - current Financial assets measured at fair value through profit and loss - current	7,742,858 1,500,000 10,000,000 2,000,000 2,000,000 300,000 784,929 928,031 966,950 6,029,102 10,164,144 11,868,933 4,619,578 4,060,155 2,000,000 1,000,000 2,000,000 3,000,000 3,738,830		$ 95,157 14,377 100,095 19,718 19,999 15,349 9,372 10,256 10,469 90,122 120,040 190,400 60,119 50,114 20,501 9,800 19,924 30,038 60,098 $ 1,945,975		$ 95,157 14,377 100,095 19,718 19,999 15,349 9,372 10,256 10,469 90,122 120,040 190,400 60,119 50,114 20,501 9,800 19,924 30,038 60,098 $ 1,945,975

(Continuing)

53 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			End ofperiod	End ofperiod		Remark
				Shares or units		Book amount	Shareholding ratio	Market price or net equity
Ever Wealthy International Co., Ltd.	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 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	Parent company 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 Available-for-sale financial assets - current 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 throughprofit and loss - current	229,000 1,498,747 1,000,000 2,556,915 2,663,114 84,145 414,480 677,528 3,310,200 2,000,000 2,000,000 2,000,000		$ 17,036 7,030 16,051 $ 40,117 $ 9,549 31,324 12,400 63,028 $ 116,301 $ 50,000 $ 25,326 2,255 6,611 6,308 58,756 55,600 21,200 $ 176,056 $ 23,880		$ 17,036 7,030 16,051 $ 40,117 $ 9,549 31,324 12,400 63,028 $ 116,301 $ 50,000 $ 25,326 2,255 6,611 6,308 58,756 55,600 21,200 $ 176,056 $ 23,880

(Continuing)

54 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account		End ofperiod	End ofperiod	End ofperiod		Remark
				Shares or units	Book amount		Shareholding ratio	Market price or net equity
Ever Glory International Co., Ltd.	Pinebridge China Balanced Fund Fubon China New Balanced Income Fund Common stock CCSC 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 Unsecured Corporate Bond issued by Ton Yi Enterprise Holding (Caymans) Limited. Common stock Taiwan Cooperative Bank Beneficiary certificate INVESTCO US SENIOR LOAN FUND ING(L) Renta Asian Bond Fund	Parent company Ultimate parent company	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 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	2,000,000 1,000,000 5,827,537 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 1,973,279 10,253 301	$	19,383 9,897 53,160 810,028 54,878 6,200 871,106 376,094 14,879 18,774 6,289 186 60,060 3,000 – – – 479,282 50,000 20,000 45,441 115,441 31,868 47,217 15,391 62,608	3 2 7 1 – 4 9 2 18 –	$ 19,383 9,897 $ 53,160 $ 810,028 54,878 6,200 $ 871,106 $ 376,094 14,879 18,774 6,289 186 60,060 3,000 – – – $ 479,282 $ 50,000 20,000 45,441 $ 115,441 $ 31,868 $ 47,217 15,391 $ 62,608	Note 3 Note 2 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Full appropriation for impairment loss Full appropriation for impairment loss Full appropriation for impairment loss
					$
					$
					$
					$
					$
					$
					$
					$ $

					$

(Continuing)

55 -

(Continued)

HoldingCompany	Type and name of marketable securities	Relationship with marketable securities issuer	Account			Yearend	Yearend		Remark
				Shares or units		Book amount	Shareholding ratio	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		$ 46,198 44,901 15,044 $ 106,143 $ 9,376 9,844 6,296 4,163 9,933 $ 39,612		$ 37,587 32,611 11,684 $ 81,882 $ 9,376 9,844 6,296 4,163 9,933 $ 39,612

Note 1: It is based on the most recent net equity unaudited by a CPA. Note 2: It is based on the price in the appraisal report issued by an external expert. Note 3: It has been written-off at the time of preparing the consolidated financial statements.

56 -

China Steel Chemical Corporation (CSCC) and Subsidiaries

Cumulative purchase or sale of the same marketable security for an amount more than NT$300 million or more than 20% of the paid-in capital January 1 to June 30, 2015

				January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015	January 1 to June 30, 2015
Attachment III				Unit: NT$ Thousands, unless otherwise stated
Buyer or Seller	Type and name of marketable securities	Account	Counterparty	Relationship	Beginningof theyear		Purchase(Note)		Sale				Yearend		Remark
					Shares	Amount	Shares	Amount	Shares	Selling price	Book cost	Disposal profit (loss)	Shares	Amount
The Company	Hua Nan Phoenix Money Market Fund	Financial assets measured at fair value through profit and loss - current			–	$ –	22,853,308	$ 366,213	10,984,375	$ 176,075	$ 175,813	$ 262	11,868,933	$ 190,400

Note: The purchase amount of the current includes proceeds and profit and loss in valuation.

57 -

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 June 30, 2015

Attachment IV

Unit: NT$ Thousands, unless otherwise stated

											Notes and accounts receivable	Notes and accounts receivable	Notes and accounts receivable
												(payable)
					Transaction				The reasons for the trade terms				Percentage of
						Percentage of			different from regular transactions				notes and
						total purchase (sale)			Unit price	Credit period			accounts receivable
Buyer(Seller)	Counterparty	Relationship	Purchase(Sale)		Amount		(%)	Creditperiod				Balance	(payable)	Remark
The Company	China Steel Corporation	Parent company	Purchase	$	975,121		63	Letter of Credit at sigh	Note 1	Note 1	( $	187,528 )	( 87 )
	China Synthetic Rubber	Other related party	Sale	(	589,285 )	(	19 )	Monthly open account	Note 1	Note 1		105,590	15
	Corporation
	Ever Glory International Co., Ltd.	Subsidiary	Sale	(	160,839 )	(	5 )	Monthly open account	–	–		87,668	12	Note 2
	Dragon Steel Corporation.	Sister company	Purchase		379,195		24	Letter of Credit at sigh	Note 1	Note 1		–	–
Ever Glory International	The Company	Parent company	Purchase		160,839		100	Monthly open account	–	–	(	87,668 )	( 100 )	Note 2
Co., Ltd.

Note 1: Please refer to Note XXIX.

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

58 -

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

June 30, 2015

Attachment V

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	Other related party	$ 105,590	5.05	$ –	–	$ 105,590	$ –

59 -

China Steel Chemical Corporation (CSCC) and Subsidiaries

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

January 1 to June 30, 2015

Attachment VI					Unit: NT$ Thousands, unless otherwise stated	Unit: NT$ Thousands, unless otherwise stated	Unit: NT$ Thousands, unless otherwise stated
No.	Trader	Counterparty	Relationshipwith Trader		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	$ 160,839 41,502 37,195	Cost plus percentage Cost plus percentage Cost plus percentage	5 1 1

60 -

China Steel Chemical Corporation (CSCC) and Subsidiaries Information related to the invested company

January 1 to June 30, 2015

			Information related to the invested company January 1 to June 30, 2015	Information related to the invested company January 1 to June 30, 2015	Information related to the invested company January 1 to June 30, 2015
Attachment VII									Unit: NT$ Thousands, unless otherwise stated
InvestingCompany	Invested Company	Location	Main business operation	Original investment amount		Held at the end ofperiod.			Current profit (loss) of the invested company	Current investment profit (loss) recognized	Remark
				End of June 2015	December 31,2014	Shares	Ratio (%)	Book amount
The Company Ever Wealthy International Co., Ltd.	Ever Glory International Co., Ltd. Ever Wealthy International Co., Ltd. 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 Investment Co. 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 – 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 – 2,656,000	100 100 15 35 40 6 6 5 9 5 5 – 45 35 30 8 11 1 – 100	$ 389,841 1,348,672 44,304 13,480 24,156 38,966 242,493 3,310 491,504 62,418 99,798 13,108 $ 2,772,050 $ 17,259 15,987 15,609 102,268 32,489 51,482 – 71,401 $ 306,495	$ 6,309 95,244 22,508 34 3,025 42,361 449,001 10,292 ( 12,561 ) 23,011 ( 49,476 ) 83,977 5 977 1,768 ( 48,396 ) 22,508 83,977 108 3,824	$ 6,309 6,060 3,376 12 1,210 2,719 27,148 515 ( 1,156 ) 1,150 ( 2,474 ) 248 $ 45,117 $ 2 342 531 ( 4,311 ) 2,476 286 55 3,824 $ 3,205	Subsidiary (Note) Subsidiary (Note) Subsidiary (Note) Subsidiary (Note)

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

61 -

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

January 1 to June 30, 2015

Attachment VIII

Unit: NT$ Thousands, unless otherwise stated

Invested Company in Mainland China	Main business operation	Paid-in capital	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	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	Shareholding ratio of direct or indirect investment – ending (%) (%)	Current investment profit (loss) recognized (Note 2)	Book value of investment at the end ofperiod.	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	$ 75,607 (US$2,450 thousand) 81,964 (US$2,656 thousand)	$ – –		$ – –	$ 75,607 (US$2,450 thousand) 81,964 (US$2,656 thousand)	($ 46,867 ) 3,824	5 100	($ 2,343) (1) 3,824 (1) (Note 4)	$ 98,568 71,402 (Note 4)	$ 5,439 –


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)
$157,571 (US$5,106 thousand)			$157,571 (US$5,106 thousand)				$3,707,468

Note 1: The aforementioned USD was based on the exchange rate with NTD at 30.86 as of June 30, 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 $6,179,113x60% = $3,707,468

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

62 -

AI assistant

CSCC — Interim / Quarterly Report 2015

51903_rns_2015-12-24_ffb9a856-222a-4c98-a9e4-7da9ed08191e.pdf

China Steel Chemical Corporation (CSCC) and Subsidiaries

§Table of Contents§

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Balance Sheet

June 30, 2015, December 31 2014 and June 30, 2014

Unit: NT$ Thousands

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Income Statement

April 1 to June 30, 2015 and 2014.

January 1 to June 30, 2015 and 2014

(Continued)

China Steel Chemical Corporation (CSCC) and Subsidiaries Consolidated Statement of Retained Earnings

January 1 to June 30, 2015 and 2014

Unit: NT$ Thousands

China Steel Chemical Corporation (CSCC) and Subsidiaries

Consolidated Statement of Cash Flow

January 1 to June 30, 2015 and 2014

(Continued)

(Continued)

I. Company background

II. Financial statements approval date and procedures

1. IFRS 10 “Consolidated Financial Statements”

3. IFRS 13 “Fair value measurement”

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

5. IAS 19 Amendment “Employee Benefits”

6. ”2009~2011 Annual improvements”

The recognition and measurement of financial assets

Impairments of financial assets

3. 2010~2012 Annual improvements

4. 2011~2013 Annual improvements

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

IV. Material accounting polices summary

(I) Statement of compliance

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

VI. Cash and cash equivalent

VIII. Available-for-sale financial assets

IX. Held-to-maturity financial assets

X. Bond investment without market price - noncurrent

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

XII. Inventories

XIV. Other financial assets - current

XV. Subsidiaries

VXI. Investment under the equity method

CHC Resources

XVII. Property, plant, and equipment

January 1 to June 30, 2015

January 1 to June 30, 2014

(Continued)

XVIII. Investment property

January 1 to June 30, 2015

January 1 to June 30, 2014

XIX Loans

(I) Short-term loans

June 30, 2015

XX. Other payables

XXI. Post-employment benefit plan

XXII Equity

(I) Common stock capital

(II) Additional paid-in capital

(IV) Other equity items

(V) Non-controlling interests

(VI) Treasury stock

XXIII. Revenue

XXIV. Net income before tax

(II) Other profit and loss

(III) Depreciation and amortization

(Continued)

(IV) Employee benefit expense

XXV. Income tax

(II) Income Tax Integration

(III) Tax audit

XXVI. Earnings per share

Net income

(Continuing)

(Continued)

XXVII. Capital risk management

XXVIII Financial instruments

CSCC Interim / Quarterly Report 2015