CSRC — Audit Report / Information 2018

Nov 14, 2018

International CSRC Investment Holdings Co., Ltd. and Subsidiaries (Formerly China Synthetic Rubber Corporation)

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

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders International CSRC Investment Holdings Co., Ltd. (Formerly China Synthetic Rubber Corporation)

Opinion

We have audited the accompanying consolidated financial statements of International CSRC Investment Holdings Co., Ltd. and its subsidiaries (the Group), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Key Audit Matters

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

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

Authenticity of Recognition of Operating Revenue of Carbon Black Segment

The operating revenue of the Group was NT\$24,431,724 thousand in 2018. Compared with the operating revenue of NT\$20,113,757 thousand in 2017, the year-on-year increase in revenue was NT\$4.317.967 thousand, and the annual growth rate was 21%. The increase in revenue that resulted from the operating revenue of the carbon black segment was \$2,862,307 thousand, which accounted for 66% of the total increase. The increase in operating revenue of the carbon black segment in 2018 was mainly due to changes in raw material prices, market supply and economic conditions.

For the accounting policies, accounting estimates, estimation uncertainty and disclosure related to the validity of recognition of operating revenue, refer to Notes 4, 5 and 37.

We understood and conducted control tests on the design and implementation effectiveness of internal controls related to the validity of recognition of operating revenue of the carbon black segment; and assessed the rationality of the growth of the operating revenue in the carbon black segment through comparison, analysis and inquiring the Company. We also verified orders, delivery notes and invoices for carbon black through sampling, and analyzed the relevance between the prices of major raw materials and carbon black sales unit prices in the carbon black segment.

Other Matter

Of the subsidiaries included in the consolidated financial statements, the consolidated financial statements of CCC USA Corp. and its subsidiaries were not audited by us, but such statements were audited by other auditors. Our opinion, insofar as it relates to the amounts included for these subsidiaries, is based solely on the report of other auditors. The total assets of these subsidiaries constituted 23% (NT\$11,430,104 thousand) and 24% (NT\$8,671,677 thousand) of the consolidated total assets as of December 31, 2018 and 2017, respectively, and total revenue constituted 30% (NT\$7,374,592 thousand) and 27% (NT\$5,357,310 thousand) of consolidated total revenue for the years ended December 31, 2018 and 2017, respectively.

We have also audited the parent company only financial statements of International CSRC Investment Holdings Co., Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have both issued an unmodified opinion.

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

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

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

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

• 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit $2.$ procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• 1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• 1. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• 1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• 1. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors' report are Mei-Hui Wu and Cheng-Hung Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China

March 22, 2019

Notice to Readers

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

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

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

	2018		2017
ASSETS	Amount	$\%$	Amount	$\frac{0}{2}$
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)	\$14,840,549	30	\$8,486,360	23
Financial assets at fair value through profit or loss - current (Notes 4 and 7)	917,885	$\overline{2}$	944,828	3
Financial assets at fair value through other comprehensive income - current (Notes 4, 8 and 33)	2,638,985	5
Available-for-sale financial assets - current (Notes 4, 9 and 33)		ä,	2,326,682	6
Notes receivable, net (Notes 4, 11 and 33)	729,446	$\overline{2}$	485,049	$\mathbf{1}$ 12
Accounts receivable, net (Notes 4, 11 and 33)	5,124,017 14,605	10	4,168,680 4,165	$\sim$
Accounts receivable from related parties (Notes 4 and 32) Current tax assets (Notes 4 and 25)	23,384	÷,	13,736	$\sim$
Inventories (Notes 4, 12 and 33)	3,406,010	$\overline{\phantom{a}}$	2,267,535	6
Prepayments for lease (Note 17)	6,678		6,503
Other financial assets - current (Note 33)	196,773		150,725
Other current assets (Note 18)	556,225	$\perp$	578,091	$\overline{2}$
Total current assets	28,454,557	57	19,432,354	53
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)	992
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8)	4,503,875	9	3,248,972	9
Available-for-sale financial assets - non-current (Notes 4 and 9) Financial assets measured at cost - non-current (Notes 4 and 10)			310,743	$\mathbf{1}$
Property, plant and equipment (Notes 4, 5, 13 and 33)	13,975,543	28	11,790,860	32
Investment properties (Notes 4 and 14)	391,466	$\mathbf{1}$	408,998	$\mathbf{I}$
Goodwill (Notes 4 and 15)	244,148		232.332	$\mathbf{1}$
Other intangible assets (Notes 4 and 16)	250,604	$\mathbf{I}$	297.593	$\mathbf{1}$
Deferred tax assets (Notes 4 and 25)	457,855	$\mathbf{I}$	294,854	$\mathbf{1}$
Prepayments for equipment	1,105,380 212,741	$\overline{c}$ $\overline{a}$	4,009 21,516
Other financial assets - non-current Long-term prepayments for lease (Note 17)	255,399	1	238,992	$\mathbf{I}$
Other non-current assets (Notes 4, 18 and 22)	81,578	$\overline{a}$	62,439	$\overline{\phantom{a}}$
Total non-current assets	21,479,581	$-43$	16,911.308	-47
TOTAL	\$49,934,138	100	\$36,343,662	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES Short-term borrowings (Notes 19 and 33)	\$6,795,753	14	\$ 5,357,830	15
Short-term bills payable (Note 19)	619,307	$\mathbf{1}$	249,992	$\mathbf{I}$
Notes payable	1,349
Trade payables (Note 20)	1,222,145	3	1,096,027	$\overline{3}$
Trade payables to related parties (Note 32)	140,157	3	95,061 1,245,030	$\overline{\phantom{a}}$ $\overline{4}$
Other payables (Notes 21 and 32)	1,655,281 118,349		54,340
Current tax liabilities (Notes 4 and 25) Current portion of long-term borrowings (Notes 19 and 33)	445,713	ı	789,317	$\overline{2}$
Other current liabilities	97,368	ž.	79,251	$\overline{a}$
Total current liabilities	11,095,422	22	8,966,848	25
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 19 and 33)	4,200,780	9	5,259,205	15
Provisions - non-current (Notes 4 and 22)	12,218		10,213	4
Deferred tax liabilities (Notes 4 and 25) Net defined benefit liabilities (Notes 4 and 22)	2,190.581 111,633	4	1,477,532 120,876
Other non-current liabilities	68,178		42,192
	6,583,390	13	6,910,018	19
Total non-current liabilities
Total liabilities	17,678,812	$-35$	15,876,866	44
EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION Ordinary shares	8,714,457	18	6,285,870	18
Capital surplus	8,894,609	$\frac{18}{2}$	3,713,759	10
Retained earnings
Legal reserve	2,291,740	5	2,064.398	5
Special reserve	645,316 5,275,420	$\mathbf{1}$ 10	645,316 4,256,084	$\overline{c}$ 12
Unappropriated earnings Total retained earnings	8,212,476	16	6,965,798	19
Other equity	4,059,637	$_{8}$	2.907.208	8
Treasury shares	(290.088)	(1)	(290,088)	(1)
Total equity attributable to owners of the Corporation	29,591,091	59	19,582,547	54
NON-CONTROLLING INTERESTS	2,664,235	$\overline{\phantom{0}}^6$	884,249	$\overline{\phantom{0}}^2$
Total equity	32,255,326	$-65$	20,466,796	- 56
TOTAL	\$49,934,138	100	\$36,343,662	100

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

(With Deloitte & Touche auditors' report dated March 22, 2019)

(Formerly China Synthetic Rubber Corporation)

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

	2018		2017
	Amount	$\frac{0}{0}$	Amount	$\frac{0}{0}$
NET OPERATING REVENUE (Notes 4 and 32)	24,431,724 S.	100	\$20,113,757	100
OPERATING COSTS (Notes 12, 22, 24 and 32)	17,854,852	73	14,544,257	72
GROSS PROFIT	6,576,872	27	5,569,500	28
OPERATING EXPENSES (Notes 11, 22, 24 and 32) Selling and marketing expenses General and administrative expenses Research and development expenses	401,392 1,128,978 416,367	2 $\overline{4}$ $\overline{2}$	388,929 907,224 632,509	2 5 $\overline{3}$
Total operating expenses	1,946,737	8	1,928,662	10
INCOME FROM OPERATIONS	4,630,135	19	3,640,838	18
NON-OPERATING INCOME AND EXPENSES (Notes 4 and 24) Other income Other gains and losses Finance costs	404,727 (111, 313) (354, 668)	$\overline{2}$ (1) (1)	337,734 (118, 527) (294, 832)	$\overline{2}$ (1) (1)
Total non-operating income and expenses	(61, 254)		(75,625)
INCOME BEFORE INCOME TAX	4,568,881	19	3,565,213	18
INCOME TAX EXPENSE (Notes 4 and 25)	(1,316,422)	(6)	(1,264,827)	(6)
NET INCOME	3,252,459	13	2,300,386	12
OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain on investments in equity instruments at fair value through other	7,584		(5,545)
comprehensive income	313,755	$\mathbf{1}$		(Continued)

(Formerly China Synthetic Rubber Corporation)

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

	2018		2017
	Amount	$\frac{0}{0}$	Amount	$\frac{0}{0}$
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations	\$ 201,113	$\mathbf{1}$	\$ (572,061)	(3)
Unrealized gain on available-for-sale financial assets			232,177
Other comprehensive income (loss)	522,452	$\overline{2}$	(345, 429)	(2)
TOTAL COMPREHENSIVE INCOME	\$ 3,774,911	15	1,954,957	10
NET INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests	\$ 2,994,196 258,263	12	2,273,428 \$ 26,958 2,300,386	11
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests	3,252,459 \$ \$ 3,494,838 280,073	$\overline{13}$ 14	$\mathbb{S}$ 1,997,723 (42,766)	11 10
	3,774,911	$\frac{15}{2}$	1,954,957	10
EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 25)
Basic Diluted	4.18 4.18		3.35 3.35

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

(Concluded) (With Deloitte & Touche auditors' report dated March 22, 2019)

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

					Equity Attributable to Owners of the Corporation (Note 23)
						Unrealized Gain	Other Equity
Share Capital	Shares		Retained Earnings		Differences on Translating Foreign Exchange	Assets at Fair Value (Loss) on Financial Through Other	Unrealized Gain $(Loss)$ on
Ordinary Shares	Subscribed in Advance	Legal Reserve	Special Reserve	Unappropriated Earnings	Operations	Comprehensive Income	Available-for-sale Financial Assets	Treasury Shares	Total	Non-controlling Interests	Total Equity
5,986,543 ç,	3,694,767 Ŝ,	\$1,917,297	648,929 $\mathbf{S}$	3,329,086 $\mathbf{v}$	202,125 Ŝ,	S	\$ 2,975,227	(290.088) ÿ,	\$18,463,886	927,062 Ø,	\$19,390,948
		147,101							(897,981)		(897, 981)
6.285.870	3,694,767	2,064,398	648,929	1,984,677							18,492,967
	16,934								16,934		16,934
	2,058								2,058		2.058
				(73)					$\widehat{\mathbb{C}}$	(25)	(98)
										(22)	(22)
			(3,613)	3,613
				2,273,428					2,273,428	26,958	2,300,386
				(5,561)	(505, 408)		235,264		(275, 705)	(69, 724)	(345, 429)
				2,267,867	(505, 408)		235,264		1,997.723	(42,766)	1,954,957
6,285,870	3,713,759	2,064,398	645,316	4,256,084	(303, 283)		3,210,491	(290,088)	19,582,547	884,249	20,466,796
				6,790		3,868,014	(3,210,491)		664,313	2,590	666,903
6,285,870	3,713,759	2,064,398	645,316	4,262,874	(303, 283)	3,868,014		(290,088)	20,246,860	886,839	21,133,699
628,587		227,342		$\begin{array}{c} (227.342) \ (1.131.457) \ (628.587) \end{array}$					(1,131,457)		(1,131,457)
6,914,457	3,713,759	2,291,740	645,316	2,275,488	(303, 283)	3,868,014		(290,088)	19,115,403	886,839	20,002,242
1,800,000	5,032,000								6,832,000		6,832,000
	21,338								21,338		21,338
										(37,508)	(37,508)
	118,804								118,804	1,533,504	1,652,308
										1,327	1,327
	8,708								8,708		8,708
				2,994,196					2,994,196	258,263	3,252,459
				5.736	180,091	314,815			500,642	21,810	522,452
				2,999,932	180,091	314,815			3,494,838	280,073	3,774,911
8.714.457	8 8.894.609	2,291.740	645.316	5,275.420	(123.122)	$\frac{4.182.829}{2}$		C200.088	160165757	$$ -2.664.235$	8 32.255.326
	299,327				$(147, 101)$ $(897, 981)$ $(299, 327)$	202,125		2,975,227	(290,088)	17,565,905	927,062

The accompanying notes are an integral part of the consolidated financial statements. (With Delvitte & Touche auditors' report dated March 22, 2019)

(Formerly China Synthetic Rubber Corporation)

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

	2018	2017
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$\mathbb{S}$ 4,568,881	\$ 3,565,213
Adjustments for:
Depreciation	858,773	773,296
Amortization	65,668	69,374
Net gain on financial assets at fair value through profit or loss	(3,077)	(2,490)
Interest expense	352,573	292,916
Interest income	(37,979)	(18, 238)
Dividend income	(209, 503)	(204, 059)
Compensation costs of share-based payments	35,302	9,926
Loss on disposal of property, plant and equipment and scrap	73,713	44,580
Gain on disposal of investment properties		(270, 125)
Gain on disposal of investments	(595)	(772)
Net gain on disposal of subsidiaries		(2,271)
Impairment loss recognized on financial assets	42,955	16,992
Impairment loss recognized on non-financial assets (reversal of
impairment loss)	(44, 571)	138,676
Unrealized (gain)/loss on foreign exchange	28,898	(44, 128)
Other non-cash items	31,752
Changes in operating assets and liabilities
Financial assets held for trading	30,595	300,772
Notes receivable	(253, 488)	(261, 456)
Accounts receivable	(983,066)	(1,032,422)
Accounts receivable from related parties	(10, 440)	504
Inventories	(1,102,875)	(482, 133)
Other current assets	(12,984)	(77, 365)
Other financial assets	(37, 115)	171,675
Notes payable	1,349
Trade payables	131,487	290,398
Trade payables to related parties	45,096	10,781
Other payables	367,784	340,586
Provisions	1,755	1,097
Other current liabilities	29,770	59,702
Net defined benefit liabilities	2,797	(23, 786)
Cash generated from operations	3,973,455	3,667,243
Interest received	32,228	17,658
Income tax paid	(689,009)	(1,076,783)
Net cash generated from operating activities	3,316,674	2,608,118
		(Continued)

(Formerly China Synthetic Rubber Corporation)

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

	2018	2017
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other comprehensive
income	\$ (277, 457)	\$
Proceeds from capital reduction of financial assets at fair value through
other comprehensive income or loss	680
Purchase of available-for-sale financial assets		(170, 210)
Proceeds from capital reduction of financial assets measured at cost		2,916
Net cash inflow on disposal of subsidiaries	(37,508)	93,977
Acquisition of property, plant and equipment	(2,965,200)	(3,417,722)
Proceeds from disposal of property, plant and equipment	9,710	43
Proceeds from disposal of investment properties		437,006
Increase in other financial assets	(192, 885)	(10, 365)
Increase in other non-current assets	(64, 483)	(2, 538)
Decrease (increase) in prepayments for equipment	(1, 102, 893)	15,912
Other dividends received	209,503	204,059
Net cash used in investing activities	(4,420,533)	(2,846,922)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings	1,523,870	1,613,864
Increase in short-term bills payable	369,315	165,053
Proceeds from long-term borrowings	904,470	2,921,040
Repayments of long-term borrowings	(2,447,838)	(697,718)
Increase in other non-current liabilities	25,892	4,240
Dividends paid to owners of the Corporation and non-controlling
interest	(1,110,119)	(881, 047)
Proceeds from issuance of ordinary shares	6,832,000
Interest paid	(353, 597)	(278, 452)
Change in non-controlling interests	1,653,635	(47)
Net cash generated from financing activities	7,397,628	2,846,933
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS	60,420	(348, 033)
NET INCREASE IN CASH AND CASH EQUIVALENTS	6,354,189	2,260,096
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	8,486,360	6,226,264
CASH AND CASH EQUIVALENTS, END OF PERIOD	14,840,549	8,486,360

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

(With Deloitte & Touche auditors' report dated March 22, 2019)

(Concluded)

(Formerly China Synthetic Rubber Corporation)

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

1. GENERAL INFORMATION

International CSRC Investment Holdings Co., Ltd. (formerly China Synthetic Rubber Corporation) (the "Corporation") was incorporated on June 15, 1973 with a factory located inside the Linyuan Petrochemical Industrial Zone in Kaohsiung City, which produces carbon black, a material for tire and other rubber products. The power and steam co-generation system started operations in December 1993. The Corporation also engages in biotechnology research and development. The Corporation's shares are listed on the Taiwan Stock Exchange.

The Corporation spun off and assigned the business related to the domestic Carbon Black Business (including assets, liabilities and business) to the Company's wholly-owned subsidiary, Linyuan Advanced Materials Technology Co., Ltd., the business related to the Biotechnology Business (including assets, liabilities and business) to the Company's wholly-owned subsidiary to be newly established, Circular Commitment Company. After the spin-off, the Corporation transformed into an investment holding Corporation. The spin-off was approved in the shareholders' meeting on June 26, 2018. The Corporation applied for continuing listed on the Taiwan Stock Exchange. The application was approved by Taiwan Stock Exchange on July 17, 2018 with Official Letter No. 1070012290. The spin-off record date was scheduled on October 1, 2018.

Approved by the Ministry of Economic Affairs on October 15, 2018, China Synthetic Rubber Corporation is renamed as "International CSRC Investment Holdings Co., Ltd.". The Company will continue listing with its same stock code: 2104. The Chinese stock short name will be "International CSRC."

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Corporation's board of directors on March 22, 2019.

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

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

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

1) Amendment to IFRS 2 "Classification and Measurement of Share-based Payment Transactions"

The amendment requires that market condition and non-vesting condition should be taken into account and vesting conditions, other than market conditions, should not be taken into account when estimating the fair value of a cash-settled share-based payment at the measurement date. Instead, they should be taken into account by adjusting the number of awards included in the measurement of the liability arising from the transaction. The amendment should be applied to cash-settled share-based payment transactions that are unvested as of January 1, 2018.

2) IFRS 9 "Financial Instruments" and related amendments

assets

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

Classification, measurement and impairment of financial assets

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

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

		Measurement Category		Carrying Amount
Financial Assets	IAS 39	IFRS 9		IAS 39		IFRS 9	Remark
Cash and cash equivalents	Loans and receivables	Amortized cost	S.	8,486,360	S.	8,486,360
Equity securities	Available-for-sale	Fair value through other comprehensive income ( i.e. FVTOCI) - equity instruments		5,886,397		6.552,328	b)
Mutual funds	Held-for-trading	Mandatorily at FVTPL		944,828		945,800	a)
Notes receivable. accounts receivables and other financial	Loans and receivables	Amortized cost		4,830,135		4,830,135	$\mathbf{c}$ )

Financial Assets		IAS 39 Carrying Amount as of January 1, 2018		Reclassifi- cations		Remea- surements		IFRS 9 Carrying Amount as of January 1, 2018		Retained Earnings Effect on January 1, 2018		Other Equity Effect on January 1, 2018	Remark
FVTPL	s	944.828	S	986	S	(14)
Add: Reclassification from available-for-sale (IAS 39)		986		(986)		-
		945.814				(14)	S	945,800	S	(14)	s	$\overline{a}$	a)
FVTOCI-Equity instruments				5.885.411		666.917
Add: Reclassification from available-for-sale (IAS 39)		5.885.411		(5.885.411)
		5.885.411				666,917		6.552.328		6.804		657.523	b)
Amortized cost		13.316.495						13.316.495					c)
		\$20,147,720				666,903		\$20.814.623		6.790		657.523

• a) Overseas unlisted funds previously classified as available-for-sale under IAS 39 were classified mandatorily as at FVTPL under IFRS 9, because the contractual cash flows are not solely payments of principal and interest on the principal outstanding and they are not equity instruments. The retrospective adjustment resulted in a decrease of \$14 thousand in retained earnings on January 1, 2018.
• b) The Group elected to designate all its investments in equity securities previously classified as available-for-sale under IAS 39 as at FVTOCI under IFRS 9, because these investments are not held for trading. As a result, the related other equity - unrealized gain (loss) on available-for-sale financial assets of \$3,210,491 thousand was reclassified to other equity unrealized gain (loss) on financial assets at FVTOCI.

Investments in unlisted shares previously measured at cost under IAS 39 have been designated as at FVTOCI under IFRS 9 and were remeasured at fair value. Consequently, an increase of \$666,917 thousand was recognized in financial assets at FVTOCI and \$657,523 thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI on January 1, 2018.

The Group recognized under IAS 39 impairment loss on certain investments in equity securities previously measured at cost and the loss was accumulated in retained earnings. Since those investments were designated as at FVTOCI under IFRS 9 and no impairment assessment is required, an adjustment was made that resulted in a decrease of \$6,804 thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI and an increase of \$6,804 thousand in retained earnings on January 1, 2018.

• c) Notes receivable, accounts receivables and other receivables that were previously classified as loans and receivables under IAS 39 were classified as at amortized cost with an assessment of expected credit losses under IFRS 9.
• 3) IFRS 15 "Revenue from Contracts with Customers" and related amendment

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

b. Amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC) and Interpretations of IAS (SIC) (collectively, the "IFRSs") endorsed by the FSC for application starting from 2019

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

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
• Note 2: The FSC permits the election for early adoption of the amendments starting from January 1, 2018.
• Note 3: The Group shall apply these amendments to plan amendments, curtailments or settlements occurring on or after January 1, 2019.
• IFRS 16 "Leases"

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

Definition of a lease

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

The Group as lessee

Upon initial application of IFRS 16, the Group will recognize right-of-use assets and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value and short-term leases will be recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group will present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities will be classified within financing activities; cash payments for the interest portion will be classified within financing activities. Currently, payments under operating lease contracts are recognized as expenses on a straight-line basis. Prepaid lease payments for land use rights of land located in the People's Republic of China are recognized as prepayments for leases. Cash flows for operating leases are classified within operating activities on the consolidated statements of cash flows. Leased assets and finance lease payables are recognized for contracts classified as finance leases.

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

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

The Group expects to apply the following practical expedients:

• 1) The Group will apply a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
• 2) The Group will account for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.

For leases currently classified as finance leases under IAS 17, the carrying amount of right-of-use assets and lease liabilities on January 1, 2019 will be determined as the carrying amount of the leased assets and finance lease payables as of December 31, 2018.

The application of IFRS 16 is not expected to have a material impact on the accounting of the Group as lessor.

Upon initial application of the above amendments, the anticipated impact on assets, liabilities and equity is set out below:

	Carrying Amount as of December 31, 2018	Adjustments Arising from Initial Application	Adjusted Carrying Amount as of January 1, 2019
Right-of-use assets	\$	\$374,851	\$374,851
Total effect on assets		\$374,851	\$374,851
Lease liabilities - current Lease liabilities - non-current	\$	54,712 \$ 320,139	54,712 S 320,139
Total effect on liabilities		374,851	\$374,851

Except for the above impacts, as of the date the consolidated financial statements were authorized for issue, the Group continues assessing other possible impacts that application of the aforementioned amendments and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers will have on the Group's financial position and financial performance and will disclose these other impacts when the assessment is completed.

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

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

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value.

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

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

c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;
• 2) Assets expected to be realized within 12 months after the reporting period; and
• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

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

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

• d. Basis of consolidation
• 1) Principles for preparing consolidated financial statements

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

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

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

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

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

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

2) Subsidiaries included in consolidated financial statements

				% of Ownership December 31
Investor	Investee	Main Business	2018	2017	Remark
International CSRC	CSRC (BVI) Ltd.	Investment	100.00	100.00
Investment Holdings Co., Ltd.	CS Development & Investment Co.	Investment	100.00	100.00
	Consolidated Resource Co.	Carbon black production and sale	100.00	100.00	÷.
	Linyuan Advanced Materials Technology Co., Ltd.	Carbon black production and sale	100.00		e)
	Circular Commitment Company	Investment	100.00	÷,	f)
	Synpac-Kingdom Pharmaceutical Co., Ltd.	Pharmaceutical production and sale	$\overline{a}$	$\ddot{\phantom{1}}$	$(b)$ , c)
	Yun Cheng Investment Corporation	Investment	94.69	94.69	b)
	Synpac (North Carolina) Inc.	Pharmaceutical research and development	88.46	88.46
	Synpac Ltd.	Investment	75.00	75.00
	CCC USA Corp.	Investment	66.67	66.67
	E-One Moli Energy Corp.	Lithium battery production and sale	49.65	55.90	d)
	Sole Energy Tech. Corp.	Fabrication of lithium battery production and sale	$\blacksquare$	26.23	a), g)
CSRC (BVI) Ltd.	CSRC (Singapore) Pte. Ltd. Continental Carbon Eco Tech Pvt	Investment Carbon black production and sale	100.00 0.01	100.00 $\blacksquare$	h)
	Ltd.
CSRC (Singapore) Pte. Ltd.	CSRC China Corporation	Carbon black production and sale	100.00	100.00
	CSRC China (Anshan) Corporation	Carbon black production and sale	100.00	100.00
	CSRC China (Chongqing) Corporation	Carbon black production and sale	100.00	100.00
	Continental Carbon India, Ltd.	Carbon black production and sale	100.00	100.00
	Continental Carbon Eco Tech Pvt Ltd.	Carbon black production and sale	99.99	$\overline{a}$	h)
CS Development $&$ Investment Co.	Sole Energy Tech. Corp.	Fabrication of lithium battery production and sale	$\overline{\phantom{a}}$	36.17	a), g)
	SVC Services, LLC	Investment service	99.90	99.90
	SVC Management, LLC	Investment consultation	99.90	99.90
	E-One Moli Energy Corp. Synpac-Kingdom Pharmaceutical	Lithium battery production and sale Pharmaceutical production and sale	4.89 $\tilde{\phantom{a}}$	9.74 $\tilde{\phantom{a}}$	d) $(b)$ , c)
	Co., Ltd. Yun Cheng Investment	Investment	0.33	0.33	b)
	Corporation
Consolidated Resource Co.	E-One Moli Energy Corp.	Lithium battery production and sale	0.03	0.06	d)
Yun Cheng Investment Corporation	Synpac (North Carolina), Inc.	Pharmaceutical research and development	11.54	11.54	b)
Synpac (North Carolina) Inc.	Synpac Venture Capital, L.P.	Investment	99.90	99.90
SVC Management, LLC	Synpac Venture Capital, L.P.	Investment	0.10	0.10
CCC USA Corp.	Continental Carbon Company	Carbon black production and sale	100.00	100.00
	CCC Transport Company	Carbon black transport	100.00	100.00
	3C Infocorp	Technology service	100.00	100.00
	Continental Carbon Nanotechnologies, Inc.	Carbon nanotubes production and sale	100.00	100.00
Continental Carbon Company	Continental Carbon Company Europe SPRL	Carbon black sales	100.00	100.00
E-One Moli Energy Corp.	E-One Holdings Ltd.	Investment	100.00	100.00	u,
	Sole Energy Tech. Corp.	Fabrication of lithium battery production and sale	$\overline{\phantom{a}}$	16.50	$a)$ , $g)$
E-One Holdings Ltd.	E-One Moli Holdings (Canada) Ltd.	Investment	100.00	100.00
E-One Moli Holdings (Canada) Ltd.	E-One Moli Energy (Canada) Ltd.	Lithium battery research and development and sale	100.00	100.00

Remark:

• a) Sole Energy Tech. Corp.'s shareholders resolved that the Company would dissolve and cease operations on June 30, 2017 in the shareholders' meeting held on June 29, 2017.
• b) Synpac-Kingdom Pharmaceutical Co., Ltd. completed a spin-off of the Company's operations to Yun Cheng Investment Corporation on September 28, 2017.

• c) The Group disposed of its subsidiary Synpac-Kingdom Pharmaceutical Co., Ltd. on November 22, 2017.

• d) E-One Moli Energy Corp. completed the registration change of capital reduction and issuance of ordinary shares for cash in February 9, 2018. The Group reduced its percentage of ownership from $65.70\%$ to $54.57\%$ .

• e) Linyuan Advanced Materials Technology Co., Ltd. completed its incorporation registration on May 3, 2018.
• f) Circular Commitment Company completed its registration of incorporation on October 8, 2018.
• g) The Group completed the liquidation of its subsidiary Sole Energy Tech. Corp. on December 12, 2018.
• h) Continental Carbon Eco Tech Pvt Ltd. completed its registration of incorporation on October 10, 2018.
• 3) Subsidiaries excluded from consolidated financial statements: None.
• 4) There are no subsidiaries that have material non-controlling interests.

e. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

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

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

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

For the purpose of presenting consolidated financial statements, the functional currencies of the Group entities (including subsidiaries in other countries that use currency different from the currency of the Corporation) are translated into the presentation currency - the New Taiwan dollar as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income and attributed to the owners of the Corporation and non-controlling interests as appropriate.

f. Inventories

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

g. Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are carried at cost, less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Depreciation of property, plant and equipment is recognized mainly using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effects of any changes in estimates accounted for on a prospective basis.

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

h. Investment properties

Investment properties are properties held to earn rentals.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

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

i. Goodwill

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

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

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

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

i. Intangible assets

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

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

k. Impairment of tangible and intangible assets other than goodwill

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

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

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

$\mathbf{1}$ Financial instruments

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

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

1) Financial assets

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

a) Measurement category

2018

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

i. Financial assets at FVTPL

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

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

ii. Financial assets at amortized cost

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

• The financial asset is held within a business model whose objective is to hold financial $\mathbf{i}$ assets in order to collect contractual cash flows; and
• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

• i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset; and
• ii) Financial assets that have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.

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

iii. Investments in equity instruments at FVTOCI

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

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

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

2017

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

i. Financial assets at fair value through profit or loss

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

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset. The manners of the determinations of fair value were set out in Note 31.

ii. Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables or financial assets at fair value through profit or loss.

Available-for-sale financial assets are measured at fair value. Dividends on available-for-sale equity investments are recognized in profit or loss. Changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when such investments are disposed of or are determined to be impaired.

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

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

iii. Loans and receivables

Loans and receivables, including cash and cash equivalents, notes receivable, accounts receivable, accounts receivable from related parties, and other receivables (included in the consolidated balance sheet under other financial assets - current) are measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables when the effect of discounting is immaterial.

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

b) Impairment of financial assets

2018

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivables) and lease receivables.

The Group always recognizes lifetime Expected Credit Losses (i.e. ECLs) for accounts receivables and lease receivables.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment gain or loss in profit or loss for financial assets stated above with a corresponding adjustment to their carrying amount through a loss allowance account.

2017

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

For financial assets carried at amortized cost, such as accounts receivable and notes receivable, such assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

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

For all other financial assets, objective evidence of impairment could include significant financial difficulty of the issuer or counterparty, breach of contract, such as a default or delinguency in interest or principal payments, it becoming probable that the borrower will enter bankruptcy or financial re-organization, or the disappearance of an active market for that financial asset because of financial difficulties.

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

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

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

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

c) Derecognition of financial assets

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

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

2) Equity instruments

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments issued by a group entity are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

• 3) Financial liabilities
• a) Subsequent measurement

All the financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

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

m. Provisions

Provisions, including those arising from contractual obligations specified in service concession arrangements to maintain or restore infrastructure before it is handed over to the grantor and levies imposed by governments, are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

n. Revenue recognition

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

1) Sale of goods

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

• a) The Group has transferred to the buyer the significant risks and rewards of ownership of the goods:
• b) The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
• c) The amount of revenue can be measured reliably;
• d) It is probable that the economic benefits associated with the transaction will flow to the Group; and
• e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.
• 2) Royalties

Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreement provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.

3) Dividend and interest income

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

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

o. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

p. Employee benefits

1) Short-term employee benefits

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

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

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

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group's defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

3) Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for a defined benefit plan except that remeasurement is recognized in profit or loss.

q. Cash-settled share-based payments arrangements

For cash-settled share-based payments, a liability is recognized for the goods or services acquired, measured initially at the fair value of the liability incurred. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognized in profit or loss.

Taxation $\mathbf{r}$

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

1) Current tax

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

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

2) Deferred tax

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

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carry forward and unused tax credits for purchases of machinery, equipment and technology and research and development expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred taxes for the period

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

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

6. CASH AND CASH EQUIVALENTS

		December 31
		2018	2017
Bank deposits	S	8,020,012	\$ 5,586,175
Cash equivalent (investments with original maturities of less than 3 months)
Repurchase agreements collateralized by commercial papers		3,459,661	2,565,816
Time deposits		3,359,819	333,205
Cash on hand		1,057	1,164
		14.840.549	8,486,360

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

		December 31
	2018	2017
Financial assets at FVTPL - current
Financial assets held for trading Non-derivative financial assets Mutual funds		944.828
Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds	\$917.885
Financial assets at FVTPL - non-current
Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Overseas unlisted funds	992
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME -

2018 $\mathbf{r}$ $\sim$

8.

	December 31, 2018
Current
Domestic investments Listed shares and emerging market shares	\$2,638,985
Non-current
Domestic investments Listed shares and emerging market shares Unlisted shares	\$3,568,437 935,438
	4.503.875

These investments in equity instruments are held for medium to long-term purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI. These investments in equity instruments were classified as available-for-sale under IAS 39. Refer to Note 3, Note 9 and Note 10 for information relating to their reclassification and comparative information for 2017.

Dividend income from financial assets at FVTOCI of \$209,503 thousand in 2018 has not been derecognized in the current period.

The financial asset at FVTOCI financial assets pledged as collateral for bank borrowings were set out in Note 33.

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

	December 31, 2017
Domestic investments
Listed shares and emerging market shares Current Non-current	\$2,326,682 3,248,972
	\$5,575,654

The available-for-sale financial assets pledged as collateral for bank borrowings were set out in Note 33.

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

	December 31, 2017
Available-for-sale financial assets
Domestic unlisted ordinary shares Overseas unlisted ordinary shares Unlisted funds	\$309,757 986
	310.743

Management believed that the above unlisted equity investments held by the Group have fair value that cannot be reliably measured because the range of reasonable fair value estimates was so significant. Therefore, they were measured at cost less impairment at the end of reporting period.

11. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

	December 31
	2018	2017
Notes receivable
Notes receivable Less: Loss allowance	\$ 729,446	485,778 \$ (729) 485,049
Accounts receivable	729,446
Accounts receivable Less: Loss allowance	\$5,222,369 (98, 352)	4, 241, 265 \$ (72, 585)
	5,124,017 ⅀	4,168,680

For the year ended December 31, 2018

The average credit period of sales of goods was 30-60 days. In order to minimize credit risk, the management of the Corporation has delegated proper personnel in accordance with the division of duties responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group's credit risk was significantly reduced.

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all accounts receivables. The expected credit losses on accounts receivables are estimated using a provision matrix by reference to past collecting experience of the debtor, an analysis of the debtor's current financial position and adjusted for general economic conditions of the industry in which the debtors operate. As the Group's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group's different customer base.

The Group recognizes a full loss allowance of each individual accounts receivable or writes off accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation. For accounts receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of accounts receivables based on the Group's provision matrix.

December 31, 2018

				Past Due
	Not Past Due	Less than 90 Davs	91 to 180 Davs	181 to 270 Days	271 to 365 Days	Over 365 Days	Total
Expected credit loss rate	$0\% - 1\%$	$0\% - 25\%$	$0\% - 100\%$	$0\% - 100\%$	$0\% - 100\%$	100%
Gross carrying amount Loss allowance	\$4,601,619	525,095	43.617 \$	4,570 S	8.470 \$	38.998 S	\$5,222,369
(Lifetime ECL)	(11.195)	(23.536)	(12, 274)	(4.281)	(8, 451)	(38.615)	(98, 352)
Amortized cost	\$4,590,424	501,559	31,343	289	19	383	\$5,124,017

The movements of the loss allowance of notes receivable and accounts receivable were as follows:

	For the Year Ended December 31, 2018
	Notes Receivable	Accounts Receivable	Total
Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9	729 S	\$72,585	\$73,314
Balance at January 1, 2018 per IFRS 9 Add: Impairment losses recognized on	729	72,585	73,314
receivables	(730)	43,685	42,955
Less: Amounts written off		(16, 116)	(16, 116)
Foreign exchange gains and losses		(1,802)	(1,801)
Balance at December 31, 2018		98.352	98.352

For the year ended December 31, 2017

The average credit period of sales of goods was 30-60 days. In determining the recoverability of an accounts receivable, the Group considered any change in the credit quality of the accounts receivable since the date credit was initially granted to the end of the reporting period. The Group recognized a full allowance for impairment loss against which receivables arise impairment loss certainly. Allowance for impairment loss is recognized against accounts receivable based on estimated irrecoverable amounts determined by reference to past default experience of the groups of credit of counterparties and an analysis of their current financial position.

The aging of receivables was as follows:

	December 31, 2017
Receivables that are neither past due nor impaired	\$4,096,420
Age of receivables that are past due but not impaired
$1-90$ days	52,699
91-180 days	17,218
181-270 days	972
271-365 days	136
Over 365 days	1,235
	4,168,680

The age of receivables that are past due but not impaired was based on the past due days from end of credit term. For the accounts receivable balances that were past due at the end of the reporting period, the Group did not recognize an allowance for impairment loss because there was no significant change in credit quality and the amounts were still considered recoverable.

The movements of the collectively assessed allowance for impairment loss recognized on notes receivable and accounts receivable were as follows:

	For the Year Ended December 31, 2017
	Notes Receivable	Accounts Receivable	Total
Balance at January 1 Add: Impairment losses recognized on	1,711 S.	\$72,507	\$74,218
receivables	721	8,084	8,805
Less: Effects of changes in consolidated entity	(1,711)	(2,315)	(4,026)
Foreign exchange translation gains and losses		(5,691)	(5,683)
Balance at December 31	729	72.585	73.314

The notes receivable and accounts receivable pledged as collateral for bank borrowings were set out in Note 33.

12. INVENTORIES

	December 31
	2018	2017
Finished goods	\$1,285,549	509,505 S
Semi-finished goods	53,038	39,442
Work in progress	413,309	459,350
Raw materials	1,399,579	1,030,975
Supplies	248,168	148,591
Inventory in transit	6,367	79,672
	\$3,406,010	\$2,267,535

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2018 and 2017 was \$17,854,852 thousand and \$14,544,257 thousand, respectively.

The cost of goods sold for the years ended December 31, 2018 and 2017 included the following:

	For the Year Ended December 31
	2018	2017
Reversal of write-down of inventories Unallocated fixed overhead costs	(44.571) S. 189 351	$$^{(54,256)}$$ \$296,380

Previous write-downs were reversed as a result of deduction of inventories for the years ended December 31, 2018 and 2017.

The inventories pledged as collateral for bank borrowings were set out in Note 33.

13. PROPERTY, PLANT AND EQUIPMENT

	Land		Buildings	Equipment		Other Equipment		Property under Construction		Total
Cost
Balance at January 1, 2017 Additions Disposals and scrap Reclassified	\$ 693,458 3,774	£.	4,400,418 72,906	\$15,639,578 5,930 (90, 791) 1,216,855	S	1,181,593 2,034 (39,076) 33,782	S	3,464,549 3,409,758 (33,749) (1,328,668)		\$25,379,596 3,417,722 (163, 616) (1,351)
Reclassified as investment properties Effect of changes in			(487, 430)							(487, 430)
consolidated entity Effect of foreign currency exchange differences	(6, 406)		(66,710)	(252, 792) (528, 192)		(16, 568) (36, 596)		(269,098)		(269,360) (907,002)
Balance at December 31, 2017	690,826		3,919,184	15,990,588		1,125,169		5,242,792		\$26,968,559
Accumulated depreciation and impairment
Balance at January 1, 2017 Depreciation expense Disposals and scrap Impairment losses Reclassified	\$	\$.	1,799,401 119,947	12,310,727 592,200 (82,095) 81,609 49,466	S	946,238 56,489 (36,898)	S	51,044 (49, 466)	S.	15,107,410 768,636 (118,993) 81,609
Reclassified as investment properties			(74, 049)							(74, 049) (Continued)

	Land	Buildings	Equipment	Other Equipment	Property under Construction	Total
Effect of changes in consolidated entity	\$	S	S (82,077)	\$ (9,995)	\$	S (92,072)
Effect of foreign currency exchange differences		(34, 192)	(435, 408)	(23, 664)	(1.578)	(494, 842)
Balance at December 31, 2017		\$ 1,811,107	\$12,434,422	\$ 932,170		\$15,177,699
Carrying amounts at January 1, 2017 Carrying amounts at	693,458	2,601,017	3,328,851	235,355	3,413,505	\$10,272,186
December 31, 2017	690,826	2,108,077	3,556,166	192,999 S	5,242,792	\$11,790,860
Cost
Balance at January 1, 2018 Additions Disposals and scrap Reclassified Effect of foreign currency	S 690,826 157,939	S 3,919,184 560 (13, 152) 624,920	\$15,990,588 712 (341, 683) 1,191,636	1,125,169 S 5,640 (27,699) 47,264	5,242,792 S. 2,800,349 (6,703) (1,865,306)	\$26,968,559 2,965,200 (389, 237) (1, 486)
exchange differences	204	475	68,819	8,474	151,723	229,695
Balance at December 31, 2018	848,969	4,531,987	\$16,910,072	\$1,158,848	6,322,855	\$29,772,731
Accumulated depreciation and impairment
Balance at January 1, 2018 Depreciation expense Disposals and scrapings Effect of foreign currency	S	\$ 1,811,107 116,246 (1, 341)	\$12,434,422 679,110 (280,004)	S. 932,170 45,885 (24, 469)	S	\$15,177,699 841,241 (305, 814)
exchange differences		140	78,153	5.769		84,062
Balance at December 31, 2018		1,926,152 \$.	\$12,911,681	959,355		\$15,797,188
Carrying amounts at January 1, 2018 Carrying amounts at	690,826 \$	2,108,077	3,556,166	192,999 \$.	5,242,792	\$11,790,860
December 31, 2018	848,969	2,605,835	3,998,391	199,493	6,322,855	\$13,975,543 (Concluded)

As a result of a reduced demand for product A in the markets of some regions, the estimated future cash flows expected to arise from the related equipment was decreased. The Group carried out a review of the recoverable amount of that related equipment and determined that the carrying amount exceeded the recoverable amount. The review led to the recognition of an impairment loss during the year ended December 31, 2017. The Group determined the recoverable amount of the relevant assets on the basis of their value in use. The discount rate used in measuring value in use according to the region was 12.40% during the year ended December 31, 2017.

The review led to the recognition of an impairment loss of \$81,609 thousand during the year ended December 31, 2017, which was recognized in other gains and losses in the statements of comprehensive income.

The above items of property, plant and equipment are depreciated on straight-line basis and declining balance basis over the estimated useful lives of the assets as follows:

a. Straight-line basis

Buildings
Main buildings and improvements	3 to 61 years
Electro - mechanical equipment	10 years
Engineering system	10 years
Network equipment	10 years
Equipment	3 to 22 years
Other equipment	2 to 13 years

b. Declining balance basis

Equipment	10%-20%
Other equipment	30%

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 33.

14. INVESTMENT PROPERTIES

	For the Year Ended December 31
	2018	2017
Cost
Balance at January 1 Disposals Transferred from property, plant and equipment	\$487,430	182,199 \$ (182, 199) 487,430
Balance at December 31	\$487,430	487,430 S
Accumulated depreciation
Balance at January 1 Depreciation expense Disposals Transferred from property, plant and equipment	(78, 432) S. (17, 532)	(15,041) \$ (4,660) 15,318 (74, 049)
Balance at December 31	(95, 964)	(78, 432) S
Carrying amounts at January 1 Carrying amounts at December 31	408,998 391,466	167,158 408,998

The investment properties held by the Group are depreciated by the straight-line basis over the estimated useful lives of 9-55 years.

On December 31, 2018 and 2017, the determination of fair value was not performed by independent qualified professional valuers. The management of the Group used the valuation model that market participants would use in determining the fair value, and the fair value was measured using Level 3 inputs. The valuation was arrived at with reference to the cost approach in the Regulations on Real Estate Appraisal. Cost approach refers to an approach used in estimating the value of the subject property by deducting the accrued depreciation or other items due to be subtracted from the reproduction cost. The fair value was \$398,951 thousand and \$416,717 thousand on December 31, 2018 and 2017, respectively.

On April 27, 2017, the Company's temporary board of directors resolved to dispose of the investment property. The carrying amount of the investment property as of date of transfer was \$166,881 thousand. The proceeds price was \$450,000 thousand (including land value increment tax and other tax expenses \$12,994 thousand). The gain on disposal was \$270,125 thousand. The Company collected the total amount and completed the transfer in May 2017.

15. GOODWILL

	For the Year Ended December 31
	2018	2017
Cost
Balance at January 1 Disposals Effect of foreign currency exchange differences	632,019 S. (34, 462) 15,657	\$784,164 (111, 323) (40, 822)
Balance at December 31	\$613,214	632,019 S.
Accumulated impairment losses
Balance at January 1 Disposals Impairment losses Effect of foreign currency exchange differences	\$ (399,687) 34,462 (3,841)	\$(409,701) 111,323 (111, 323) 10,014
Balance at December 31	\$ (369,066)	\$ (399,687)
Carrying amounts at January 1 Carrying amounts at December 31	232,332 244,148	374,463 232,332

The production capacity of subsidiary of the Group did not turn out as expected. The Group assessed the recoverable amount of goodwill associated with the subsidiary and impairment loss of \$111,323 thousand was recognized on June 30, 2017.

The recoverable amount was determined based on a value-in-use calculation which used the cash flow projections based on financial budgets approved by management covering a 5-year period with the discount rate of 10.09%. Such assumptions were based on past performance of the cash-generating unit and management's expectations of the market development.

16. OTHER INTANGIBLE ASSETS

	Patents	Technology License Agreements	Total
Cost
Balance at January 1, 2017 Derecognized Effects of changes in consolidated entity	704,824 S.	25,999 S (10,999) (9,000)	730,823 S (10, 999) (9,000)
Balance at December 31, 2017	704,824	6,000	710,824 S (Continued)

	Patents	Technology License Agreements	Total
Accumulated amortization and impairment
Balance at January 1, 2017 Amortization expense Disposals Effects of changes in consolidated entity	\$ (360,242) (46,989)	(20, 309) \$ (388) 10,999 3,698	\$ (380, 551) (47, 377) 10,999 3,698
Balance at December 31, 2017	\$ (407, 231)	(6,000) \$	\$ (413,231)
Carrying amounts at January 1, 2017 Carrying amounts at December 31, 2017	344,582 297,593	\$ 5,690	350,272 297,593
Cost
Balance at January 1, 2018	704,824	6,000 S	710,824
Balance at December 31, 2018	704,824 \$	6,000 \$	710,824
Accumulated amortization and impairment
Balance at January 1, 2018 Amortization expense	\$ (407,231) (46,989)	(6,000) S	\$ (413,231) (46,989)
Balance at December 31, 2018	\$ (454,220)	(6,000) \$	\$ (460,220)
Carrying amounts at January 1, 2018 Carrying amounts at December 31, 2018	297,593 250,604	\$ \$	297,593 250,604 (Concluded)

The above items of other intangible assets were amortized on a straight-line basis over the estimated useful lives of the assets as follows:

Patents	15 years
Technology license agreements	4 to 15 years

17. PREPAYMENTS FOR LEASE

	December 31
	2018	2017
Current Non-current	6,678 \$ 255,399	6,503 \$ 238,992
	\$262,077	\$245,495

Prepayments for lease include lease prepayments for rights to use land located in the People's Republic of China; these are amortized over the lease period. The lessor is the Government of the People's Republic of China.

18. OTHER ASSETS

	December 31
	2018	2017
Prepayments for purchases	\$313,210	282,727 $\mathbb{S}$
Excess VAT paid	119,723	179,131
Other prepayments	88,343	66,933
Deferred expenses	40,737	29,606
Spare parts	10,279	38,704
Others	65,511	43,429
	\$637,803	640,530 S.
Current	556,225 \$	\$578,091
Non-current	81,578	62,439
	637,803 S	640,530 S

19. BORROWINGS

a. Short-term borrowings

	December 31
	2018	2017
Credit borrowings Secured borrowings (see Note 33)	\$6,645,753 150,000	\$5,257,830 100,000
	\$6,795,753	\$5,357,830
The ranges of interest rates	$1.00\% - 9.00\%$	$1.20\% - 8.05\%$

b. Short-term bills payable

	December 31
	2018	2017
Commercial paper Less: Unamortized discount on bills payable	\$620,000 693	\$250,000
	\$619,307	\$249,992
The ranges of interest rates Due date	$0.49\% - 0.51\%$ 2019.3.28	$0.45\% - 0.88\%$ 2018.03.22

c. Long-term borrowings

	December 31
	2018	2017
Secured borrowings (see Note 33)	184,290 S	1,054,726 S.
Unsecured borrowings	4,462,203	4,993,796
	4,646,493	6,048,522
Less: Current portions	445,713	789,317
Long-term borrowings	\$4,200,780	\$5,259,205
The ranges of interest rates	$1.31\% - 5.50\%$	$1.31\% - 4.24\%$
Due date	2021.11.23	2021.11.23

On September 27, 2013, E-One Moli Energy Corp. ("E-One") entered into a new five-year syndicated loan agreement with Chinatrust Bank, Mega Bank and 2 other banks. E-One repaid different amounts according to the amortization schedule to different banks from October 2015. The agreement required that the association guarantor (the Corporation) comply with the financial commitment regarding the following financial ratios of the semi-annual and annual consolidated financial statements during the loan period: The current ratio, the ratio of total liabilities to net tangible assets, the interest coverage ratio and net tangible assets. E-One discharged the above debts in October 2018.

On November 23, 2016, Continental Carbon Company ("CCC") entered into a new five-year syndicated loan agreement with Chinatrust Bank and 8 other banks.

The agreement required that the association guarantor (the Corporation) comply with the financial commitment regarding the following financial ratios of the semi-annual and annual consolidated financial statements during the loan period: The current ratio, the ratio of total liabilities to net tangible assets, the interest coverage ratio and net tangible assets.

20. TRADE PAYABLES

No interest was charged on the trade payables. The Group has financial risk management policies to ensure that all payables are paid within the pre-agreed credit terms.

21. OTHER PAYABLES

	December 31
		2018		2017
Payable for salaries and bonuses	\$	324,878	S	140,185
Payable for purchase of equipment, construction and repairing
construction		314,420		187,134
Payable for research fee		256,329		298,692
Payable for cash-settled share-based payment transactions		64,885		55,947
Payable for tax		56,281		41,640
Payable for transportation and selling expenses		43,534		26,328
Payable for water and electricity		38,153		24,059
Compensation payable to directors		37,000		27,000
Others		519,801		444,045
		1.655.28		.245.030

22. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Corporation, Linyuan Advanced Materials Technology Co., Ltd. ("Linyuan Advanced"), Circular Commitment Company ("Circular Commitment"), Sole Energy Tech Corp. ("Sole Energy") and E-One Moli Energy Corp. ("E-One") of the Group adopted a pension plan under the Labor Pension Act (the "LPA"), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages.

The staff of E-One Holdings Ltd. ("E-One Holdings") come from its parent company; thus, E-One Holdings has no pension plan. E-One Moli Holdings (Canada) Ltd. and E-One Moli Energy (Canada) Ltd. have defined contribution plans and make pension fund contributions based on the laws of Canada's government.

The subsidiary, Continental Carbon Company ("CCC"), provides a defined-contribution pension plan for all employees. The company is required to make matching contributions equal to $3\%$ to $6\%$ of participants' salaries.

CSRC China Corporation, CSRC China (Anshan) Corporation, and CSRC China (Chongqing) Corporation as the investment owned by CSRC (Singapore) Pte. Ltd., which are indirectly owned by CSRC (BVI) Ltd. adopted a pension plan under the laws and regulations of China. Under the plan, the subsidiaries are required to contribute a specified percentage of payroll cost to the retirement benefit scheme to manage the funds.

b. Defined benefit plans

The Corporation, Linyuan Advanced, Circular Commitment, Sole Energy and E-One of the Group adopted the defined benefit plan under the Labor Standards Law, under which pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Corporation Linyuan Advanced and E-One contribute amounts equal to 8.7%, 8.7% and 2.0% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee, respectively. Pension contributions are deposited in the Bank of Taiwan in the committee's name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor ("the Bureau"); the Group has no right to influence the investment policy and strategy.

Continental Carbon Company ("CCC") has provided pension plans and postretirement health insurance benefits to its employees since 1996, and related liabilities had been estimated.

Continental Carbon India Ltd. ("CCIL") provides pension plan and compensated absences to its employees, and related liabilities had been estimated.

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

	December 31
	2018	2017
Present value of defined benefit obligation Fair value of plan assets	\$376,152 (264, 519)	414,497 S. (300, 673)
Net defined benefit liabilities	\$111,633	\$113,824
Defined benefit asset (included in other non-current assets)		(7,052)
Defined benefit liabilities	111,633 S.	120,876

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

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liability (Asset)
Balance at January 1, 2017	\$438,390	\$ (292, 314)	146,076 S.
Service cost
Current service cost	1,253		1,253
Net interest expense (income)	16,915	(6,949)	9,966
Recognized in profit or loss	18,168	(6,949)	11,219
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		(20, 473)	(20, 473)
Actuarial (gain) loss - changes in
demographic assumptions	979		979
Actuarial (gain) loss - changes in financial
assumptions	15,069	64	15,133
Actuarial (gain) loss - experience
adjustments	8,622		8,622
Effects of changes in consolidated entity	1,284		1,284 5,545
Recognized in other comprehensive income	25,954	(20, 409) (35,005)	(35,005)
Contributions from the employer	(34, 323)	34,323
Benefits paid Exchange differences on foreign plans	(23,038)	14,547	(8, 491)
		5,134	(5,520)
Effects of changes in consolidated entity	(10, 654)
Balance at December 31, 2017	414,497 S.	\$ (300,673)	\$113,824
Balance at January 1, 2018	414,497 \$	\$ (300,673)	\$113,824
Service cost
Current service cost	2,367		2,367
Net interest expense (income)	4,375	(1,480)	2,895
Recognized in profit or loss	6,742	(1,480)	5,262
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		3,308	3,308
Actuarial (gain) loss - changes in
demographic assumptions	1,270		1,270
			(Continued)

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liability (Asset)
Actuarial (gain) loss - changes in financial
assumptions	(19,528) S.	\$ 49	(19, 479)
Actuarial (gain) loss - experience
adjustments	7,317		7,317
Recognized in other comprehensive income	(10, 941)	3,357	(7, 584)
Contributions from the employer		(9,517)	(9,517)
Benefits paid	(41, 723)	41,723
Exchange differences on foreign plans	7,577	(4,981)	2,596
Others		7,052	7,052
Balance at December 31, 2018	376,152	\$ (264, 519)	111,633 (Concluded)

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

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

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

	December 31
	2018	2017
Discount rate(s)	$1.00\% - 7.50\%$	$1.00\% - 7.50\%$
Expected rate(s) of salary increase	$2.00\% - 6.20\%$	$2.00\% - 6.20\%$

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

	December 31
	2018	2017
Discount rate(s)
$0.25\%$ increase	(3,539)	(3,727)
$0.25\%$ decrease	3,688	3,907
Expected rate(s) of salary increase
$0.25\%$ increase	3,594	3,816
$0.25\%$ decrease	3.470	(3.664)

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

	December 31
	2018	2017
The expected contributions to the plan for the next year	7.396	\$15,062
The average duration of the defined benefit obligation	$6.8 - 24.3$ years	$7-15$ years

The Group's other long-term employee benefits were \$3,848 thousand and \$2,093 thousand (included in the consolidated balance sheet under provisions - non-current) as of December 31, 2018 and 2017, respectively.

23. EQUITY

a. Ordinary shares

	December 31
	2018	2017
Number of shares authorized (in thousands)	1,000,000	1,000,000
Shares authorized	10,000,000	10,000,000
Number of shares issued and fully paid (in thousands)	871,446	628,587
Shares issued	8,714,457 S	6,285,870 S.
Surplus	8,529,343	3,497,343
	17.243.800	9,783,213

The change in shares of the Corporation is mainly due to issuance of ordinary shares for cash and share dividends distributed by transferring retained earnings to share capital.

On May 10, 2018, the Company's board of directors resolved to issue 180,000 thousand ordinary shares, with a par value of NT\$10, for a consideration of NT\$38 per share. On June 15, 2018, the above transaction was approved by the FSC, and the subscription base date was determined as at October 15, 2018, by the board of directors.

The issued ordinary shares, with a par value of NT\$10, carry one voting right per share and carry a right to dividends.

b. Capital surplus

	December 31
	2018	2017
Issuance of ordinary shares	\$8,529,343	\$3,497,343
Treasury shares transactions	222,263	200,925
Employee share options	22,141	13,433
Long-term investments	120,862	2,058
	8.894.609	3.713.759

The capital surplus arising from shares issued in excess of par value (including recognized from issuance of common shares and treasury share transactions) may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation's paid-in capital and to once a year).

The capital surplus from long-term investments and employee share options may not be used for any purpose.

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, where the Corporation made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit unless the legal reserve has reached the Corporation's paid-in capital, and then any remaining profit together with any undistributed retained earnings, setting aside or reversing a special reserve in accordance with the laws and regulations if necessary, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation's board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders' meeting for distribution of dividends and bonus to shareholders.

The Corporation may also opt to transfer retained earnings to capital and distribute share dividends to finance its working capital requirements and major investment plans, but the cash dividend payout ratio should be up to 20% of common dividends. For the policies on distribution of employees' compensation and remuneration of directors and supervisors before and after amendment, please refer to f. employee's compensation and remuneration of directors in Note 24.

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

Items referred to under Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive titled "Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs" should be appropriated to or reversed from a special reserve by the Corporation, refer to Note d. special reserve.

The appropriations of earnings for 2017 and 2016 that were approved in the shareholders' meetings on June 26, 2018 and June 16, 2017, respectively, were as follows:

		Appropriation of Earnings		Dividends Per Share (NTS)
		For the Year Ended December 31		For the Year Ended December 31
	2017	2016	2017	2016
Legal reserve	227,342 \$	147,101	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$
Cash dividends	1,131,457	897,981	1.80	1.50
Share dividends	628,587	299,327	1.00	0.50

The appropriations of earnings for 2018 had been proposed by the Corporation's board of directors meeting on March 22, 2019. The appropriation and dividends per share were as follows:

	Appropriation of Earnings	Dividends Per Share (NTS)
Legal reserve	299.420	S. $\overline{\phantom{a}}$
Cash dividends	1,307,169	1.50
Share dividends	1,132,879	1.30

The appropriation of earnings for 2018 are subject to the resolution by the shareholders in their meeting to be held on June 19, 2019.

d. Special reserve

If the special reserve appropriated on the first-time adoption of IFRSs relates to land, the special reserve may be reversed on the disposal or reclassification of the related assets. A proportionate share of the special reserve relating to exchange differences arising from the translation of the financial statements of foreign operations (including the subsidiaries of the Company) will be reversed on the Group's disposal of foreign operations. On the Group's loss of significant influence, however, the entire special reserve will be reversed.

Appropriations and reversals of special reserve were as follows:

	For the Year Ended December 31 2017 2018 \$645,316
Balance at January 1 Reversals:		\$648,929
Disposal of subsidiary		(3,613)
Balance at December 31	645,316	645,316

e. Non-controlling interests

	For the Year Ended December 31
	2018	2017
Balance at January 1	$\mathbb{S}$ 884,249	\$ 927,062
Retrospective application	2,590
Adjustment balance at January 1	886,839	927,062
Attributable to non-controlling interests
Share of gain for the period	258,263	26,958
Exchange difference arising on translation of foreign entities	21,022	(66, 653)
Unrealized gain on available-for-sale financial assets		(3,087)
Unrealized gain on financial assets at FVTOCI	(1,060)
Remeasurement on defined benefit plans	1.848	16
Increase (decrease) in non-controlling interests	1,533,504	(25)
Liquidation of subsidiaries	(37,508)
Cash dividends distributed by subsidiaries	1,327	(22)
Balance at December 31	\$2,664,235	884,249 S

f. Treasury shares

Number of Increase Decrease Number of During the Shares at Shares at During the Period December 31 Purpose January 1 Period 2018 13,040 Shares held by its subsidiaries $1,186$ 11,854 $\overline{z}$ 2017 11,854 $-11,290$ 564 Shares held by its subsidiaries $\equiv$

(Shares in Thousands)

A subsidiary, CS Development & Investment Co., acquired the Corporation's shares which book value is \$290,088 thousand. As of December 31, 2018 and 2017, the market value of treasury shares was \$507,889 thousand and \$519,803 thousand, respectively. A subsidiary holding treasury shares, shall have shareholders' rights, except that subsidiary holding over 50% of the shares has no rights to participate in any share issuance for cash and to vote.

24. INCOME BEFORE INCOME TAX

Net income from continuing operations includes the following:

a. Other income

	For the Year Ended December 31
	2018	2017
Dividend income	\$209,503	204,059 S.
Technical service income	49,683	46,008
Rental income	41,664	18,533
Interest income	37,979	18,238
Claim income	40,535
Project income		12,249
Others	25,363	38,647
	404,727	337,734

b. Other gains and losses

	For the Year Ended December 31
	2018	2017
Net gain on financial assets at fair value through profit or loss Net foreign exchange gains (losses) Loss on disposal of property, plant and equipment and scrap	3,077 43,973 (73, 713)	S 2,490 (24, 821) (44, 580)
Gain on disposal of investments Impairment loss on property, plant and equipment (see Note 13)	595	772 (81,609)
Gain on disposal of investment properties (see Note 14) Impairment loss on goodwill (see Note 15)		270,125 (111, 323)
Impairment loss on financial assets measured at cost Gain on disposal of a subsidiary Others	(85,245)	(8,187) 2,271 (123, 665)
	\$(111,313)	(118.527

c. Finance costs

	For the Year Ended December 31
	2018	2017
Interest expense (excluded in capitalized interest) Other finance costs	\$352,573 2,095	\$292,916 1.916
	\$354,668	\$294,832

Information about capitalized interest was as follows:

	For the Year Ended December 31
Capitalized interest	2018	2017
	\$191,215	$\frac{1}{2}$ 99,422
Capitalization rate	$3.82\%$	$3.06\%$

d. Depreciation and amortization

	For the Year Ended December 31
	2018	2017
Property, plant and equipment	$\mathbb{S}$ 841,241	768,636 \$
Investment properties	17,532	4,660
Other intangible assets	46,989	47,377
Deferred expenses	18,679	21,997
	\$924,441	842,670 S.
An analysis of depreciation by function
Operating costs	\$775,768	683,361 \$
Operating expenses	83,005	89,935
	\$858,773	773,296 S.
An analysis of amortization by function
Operating costs	\$ 5,613	\$ 8,373
Operating expenses	60,055	61,001
	65,668 \$	69,374 \$

e. Employee benefits expense

	For the Year Ended December 31
	2018	2017
Post-employment benefits
Defined contribution plans	$\mathbb{S}$ 68,305	\$ 57,856
Defined benefit plans (see Note 22)	5,262	11,219
	73,567	69,075
Share-based payments
Cash-settled	26,594	9,926
Equity-settled	8,708
	35,302	9,926
Other employee benefits	2,026,520	1,603,088
Total employee benefit expense	\$2,135,389	1,682,089
An analysis of employee benefits expense by function
Operating costs	1,342,964 S.	1,060,310 \$
Operating expenses	792,425	621,779
	2,135,389	,682,089

f. Employees' compensation and remuneration of directors

The Corporation accrued employees' compensation and remuneration of directors at the rates 0.01%-3% and no higher than 1%, respectively, of net profit before income tax, employees' compensation, and remuneration of directors.

For the years ended December 31, 2018 and 2017, the employees' compensation and the remuneration of directors was as follows:

Amount

	For the Year Ended December 31
	2018	2017
Employees' compensation Remuneration of directors	$\frac{\$}{3.324}$ \$ 37,000	8,000 \$ 27,000

The employees' compensation and the remuneration of directors for the years ended December 31, 2018 and 2017 were approved by the Corporation's board of directors on March 22, 2019 and May 10, 2018, respectively.

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

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

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

25. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of tax expense were as follows:

	For the Year Ended December 31 2018 \$ 741,053 S. 28,051 (2,730) 766,374 548,944 2,708 (1,604) 550,048
Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year and laws			2017
				1,074,729
				12,529
				(53, 743)
				1,033,515
				229,812
Adjustments to deferred tax attributable to changes in tax rates
Others				1,500
				231,312
Income tax expense recognized in profit or loss		1,316,422		,264,827

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

	For the Year Ended December 31
	2018	2017
Income before income tax from continuing operations	4,568,881	\$3,565,213
Income tax expense calculated at the statutory rate	1,433,187 S.	\$ 916,523
Tax-exempt income	(53,995)	(85,033)
Unrecognized loss carryforwards	(55,272)	6,838
Income tax on unappropriated earnings	28,051	12,529
Nondeductible expenses in determining taxable income	(441)	15,631
Unrecognized deductible temporary differences	(105, 612)	(11,509)
Effect of tax rate changes	73,234	463,591
Adjustments for prior years' tax	(2,730)	(53, 743)
Income tax expense	.316.422	.264.82′

In 2017, the applicable corporate income tax rate used by the group entities in the ROC was 17%.

However, the Income Tax Act in the ROC was amended in February 2018 and the corporate income tax rate was adjusted from 17% to 20% effective in 2018. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings will be reduced from $10\%$ to 5%. Tax rates used by other group entities operating in other jurisdictions are based on the tax laws in those jurisdictions.

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

b. Current tax assets and liabilities

	December 31
	2018	2017
Current tax assets Tax refund receivable	23,384	13,736
Current tax liabilities Income tax payable	\$118,349	54.340

c. Deferred tax assets and liabilities

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

For the year ended December 31, 2018

	Opening Balance		Recognized in Profit or Loss		Exchange Differences		Closing Balance
Deferred tax assets
Temporary differences
Provisions on inventories	\$	17,634	\$	(13,292)	\$	93	S	4,435
Defined benefit obligation		26,483		(2,798)		797		24,482
Allowance for impaired
receivables		2,164		1,004		86		3,254
Loss carryforwards		95,559		147,283		5,832		248,674
								(Continued)

	Opening Balance	Recognized in Profit or Loss	Exchange Differences	Closing Balance
Foreign tax credits Others	\$ 115,320 37,694	\$ (12, 435) 31,207	\$ 3,467 1,757	\$ 106,352 70,658
	294,854	150,969	\$ 12,032	457,855 S
Deferred tax liabilities
Temporary differences Unappropriated earnings of
subsidiaries Property, plant and	1,088,633 S	567,768 \$	\$	1,656,401 S.
equipment	246,086 65	134,806 47	10,428	391,320 112
Others	1,334,784	702,621	10,428	2,047,833
Reserve for land value increment tax	142,748			142,748
	1,477,532	702,621	10,428 S	2,190,581 (Concluded)

For the year ended December 31, 2017

		Opening Balance	Recognized in Profit or Loss		Exchange Differences		Effects of Changes in Consolidated Entity		Closing Balance
Deferred tax assets
Temporary differences
Provisions on inventories	\$	14,698	\$	3,952	\$	(77)	\$	(939)	\$	17,634
Defined benefit obligation Allowance for impaired		10,977		18,458		(1, 111)		(1, 841)		26,483
receivables		4,364		(1,616)		(44)		(540)		2,164
Loss carryforwards				97,717		(2, 158)				95,559
Foreign tax credits				117,924		(2,604)				115,320
Others		7,226		33,194		(1,062)		(1,664)		37,694
	\$	37,265		269,629		(7,056)	\$	(4,984)		294,854
Deferred tax liabilities
Temporary differences
Unappropriated earnings			\$		$\mathsf{\$}$		\$			\$1,088,633
of subsidiaries	\$	839,036		249,597
Property, plant and				251,642		(5,556)				246,086
equipment Others		1,863		(1,798)						65
		840,899		499,441		(5, 556)				1,334,784
Reserve for land value
increment tax		142,748								142,748
	\$	983,647	\$	499.441	\$	(5, 556)	\$			\$1,477,532

d. Significant items for which no deferred tax assets have been recognized

	December 31
	2018	2017
Loss carryforwards	1,298,064	1.431.977
Investment credits	155,215	156,936
Investments loss accounted for using the equity method	1,226,331	1,048,823
Book - tax differences in depreciation	109,489	135.303

e. Information about unused investment credits and unused loss carryforwards

As of December 31, 2018, investment tax credits and loss carryforwards comprised of:

Laws and Statutes	Items		Remaining Creditable Amount	Expiry Year
Income Tax Act	Loss carryforwards	$\mathbb{S}$	12,946	2019
			84,939	2020
			106,001	2021
			102,670	2022
			94,374	2023
			76,649	2024
			57,661	2025
			48,579	2026
			12,909	2027
Income Tax Law (China)	Loss carryforwards		105,428	2019
			200,040	2020
			148,045	2021
			9,037	2022
Income Tax Law (United States)	Loss carryforwards		345,544	2030
Income Tax Law (India)	Loss carryforwards		24,085	2021
			72,615	2022
			16,674	2023
			28,542	2024
Income Tax Law (Canada)	Investment tax credits		155,215	Unlimited
			1,701,953

f. Income tax assessments

Income tax returns of the following companies had been assessed by tax authorities:

• 1) Sole Energy Tech Corp. through liquidation
• 2) Consolidated Resource Co. through 2016
• 3) CS Development & Investment Co. through 2016
• 4) E-One Moli Energy Corp. through 2014 and 2016
• 5) The Corporation through 2016

26. EARNINGS PER SHARE

Unit: NT\$ Per Share

	For the Year Ended December 31
	2018	2017
Basic earnings per share
Total basic earnings per share	S 4.18	3.35
Diluted earnings per share
Total diluted earnings per share	4.18	3.35

The weighted average number of shares outstanding used for the earnings per share computation was adjusted retroactively for the issuance of bonus shares on September 2, 2018. The basic and diluted earnings per share adjusted retrospectively for the year ended December 31, 2017 were as follows:

Unit: NT\$ Per Share

	Before Retrospective Adjustment	After Retrospective Adjustment
	For the Year Ended December 31, 2017	For the Year Ended December 31, 2017
Basic earnings per share Diluted earnings per share	3.69 3.69	3.35 3.35

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

Net Income for the Period

	For the Year Ended December 31
	2018	2017
Income attributable to owners of the Corporation Effect of potentially dilutive ordinary shares: Bonus issue to employees	\$2,994,196	\$2,273,428
Earnings used in the computation of diluted earnings per share from continuing operations	- 2.994.196	\$2.273.428

Weighted Average Number of Ordinary Shares Outstanding (In Thousand Shares)

	For the Year Ended December 31
	2018	2017
Weighted average number of ordinary shares used in computation of
basic earnings per share	716,872	678,406
Effect of potentially dilutive ordinary shares:
Bonus issued to employees	174	190
Weighted average number of ordinary shares used in the
computation of diluted earnings per share	717,046	78,596

If the Group offered to settle compensation or bonus paid to employees in cash or shares, the Group assumed the entire amount of the compensation or bonus will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

27. DISPOSAL OF SUBSIDIARIES

• a. On November 13, 2017, the Group entered into a sale agreement to dispose of Synpac-Kingdom Pharmaceutical Co., Ltd., which carried out its entire pharmaceutical manufacturing and sales operations. The disposal was completed on November 22, 2017, on which date control of Synpac-Kingdom Pharmaceutical Co., Ltd. passed to the acquirer.
• 1) Consideration received from the disposal

	Synpac- Kingdom Pharmaceutical Co., Ltd.
Total consideration received	180,866
2) Analysis of assets and liabilities on the date control was lost

	Synpac- Kingdom Pharmaceutical Co., Ltd.
Current assets
Cash and cash equivalents	\$ 86,889
Accounts receivable	63,011
Notes receivable	11,176
Inventories	171,180
Other current assets	13,050
Non-current assets
Property, plant and equipment	177,288
Other non-current assets	26,927
Current liabilities
Short-term borrowings	(165,000)
Commercial paper	(99, 889)
Payables	(46, 871)
Other current liabilities	(48,687)
Non-current liabilities
Other non-current liabilities	(5, 549)
Net assets disposed of	183,525

3) Gain on disposal of subsidiary

	Synpac- Kingdom Pharmaceutical Co., Ltd.
Consideration received Net assets disposed of	180,866 S (183, 525)
Non-controlling interests	9,146
Reclassified from cumulative exchange differences in equity to profit or loss in respect of the subsidiary	(883)
Gain on disposal	5.604

Sole Energy Electronics Tech. (Zhang Jia Gang Free Trade Zone) Ltd. completed the cancellation of registration in January 2017. The loss on disposal of the said subsidiary was \$3,333 thousand and has been reclassified from cumulative exchange differences in equity to profit or loss.

4) Net cash inflow on disposal of subsidiary

	Synpac- Kingdom Pharmaceutical Co., Ltd.
Consideration received in cash and cash equivalents Less: Cash and cash equivalent balances disposed of	180,866 S. (86, 889)
	93,977

b. The liquidation was completed on December 12, 2018, on which date control of Sole Energy Tech Corp. passed to the acquirer.

1) Analysis of liquidation assets and liabilities

$2)$

	Sole Energy Tech Corp.
Cash and cash equivalents Other receivables	\$ 177,384 338
Liquidation of net assets	S. 177,722
Gain on liquidation of subsidiary
	Sole Energy Tech Corp.
Consideration liquidated Liquidation of net assets Non-controlling interests	140,214 S. (177, 722) 37,508

3) Net cash outflow on liquidation of subsidiary

	Sole Energy Tech Corp.
Consideration received in cash and cash equivalents Less: Cash and cash equivalents balances disposed of	\$140,214 (177, 722)
	(37.508)

28. SHARE-BASED PAYMENTS ARRANGEMENTS

a. Cash-settled share-based payments

Information on employee share appreciation rights issued by the Group for the years ended December 31, 2018 and 2017, were as follows:

	For the Year Ended December 31
	2018			2017
	Number of Rights (In Thousands)	Weighted- average Exercise Price (NT\$)	Number of Rights (In Thousands)	Weighted- average Exercise Price (NTS)
Balance at January 1 Rights granted Rights exercised	102 17 (24)	\$2,181 2,758 1,932	87 18 (3)	\$2,106 2,693 2,358
Balance at December 31	95		102
Rights exercisable, end of period	78		85
Weighted-average fair value of rights granted $(\$)$	826		674

Subsidiaries of the Group issued share appreciation rights ("SARs") to certain employees, and paid the intrinsic value of the SARs in cash to the employees at the date of exercise, in accordance with the contract. The fair value of the SARs was determined using the Black-Scholes pricing model.

The Group recorded total expenses of \$26,594 thousand and \$9,926 thousand in respect of the SARs for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, the Group recorded liabilities of \$64,885 thousand and \$55,947 thousand, respectively, and the total intrinsic values of the vested SARs were \$64,885 thousand and \$55,947 thousand, respectively.

b. Cash capital increase reserved for employees

On May 10, 2018, the Company's board of directors resolved to issue 180,000 thousand ordinary shares, with a par value of NT\$10, amounted to \$1,800,000 thousand. The subscription base date was determined as at October 15, 2018. According to Article 267 of ROC Company Act, there shall be 10% of new shares reserved for subscription by the employees. The right to subscription of new shares are reserved for full-time employees. According to IFRS 2 "Share-based Payment", approved by the FSC, the subscription is classified as equity-settled share-based payment.

The cash capital increase reserved for employees granted in August 20, 2018, was priced using the Black-Scholes pricing model and the inputs to the model were as follows:

August 20, 2018

Grant-date share price (NT\$)	41.91
Exercise price (NT\$)	38.00
Expected volatility	$17.56\%$
Expected life (in days)	47
Expected dividend yield	$0.00\%$
Risk-free interest rate	$0.3457\%$

Compensation cost recognized was \$8,708 thousand for the year ended December 31, 2018.

29. OPERATING LEASE ARRANGEMENTS

a. The Group as lessee

The subsidiary, CCC, leases its office, warehouse, transportation equipment and railcar from third parties under several operating lease agreements. Future minimum rentals due are as follows:

	December 31
Not later than 1 year	2018	2017
	52,841	46,326
Later than 1 year and not later than 5 years	180,321	35,188
Later than 5 years	10,105	10,624
	\$243,267	92,138

The subsidiary, E-One Moli Energy Corp. ("E-One"), has leased land from the Tainan Scientific Industrial Park Preparatory Office (now the South Scientific Industrial Park Administrative Bureau) since May 2008 and October 2018, respectively. The lease term is from May 31, 2008 to September 30, 2038. At the end of the lease term, E-One could sign another new contract. In addition, if the government makes a land rental value adjustment, the rental will also be adjusted. Future minimum rentals due are as follows:

	December 31
	2018	2017
Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years	10,940 43,758 86,424	9,943 27,806 37,121
	141,122	74,870

b. The Group as lessor

Operating leases relate to the leasing of investment properties to the subsidiary Yun Cheng Investment Corporation with a lease term from November 20, 2017 to November 19, 2027 and with an option to extend for an additional 5 years. All operating lease contracts contain market review clauses in the event that the lessees exercise their options to renew. The lessees do not have bargain purchase options to acquire the properties at the expiry of the lease periods.

		December 31
	2018	2017
Not later than 1 year	25,200	25,200 S.
Later than 1 year and not later than 5 years	100,800	100,800
Later than 5 years	97,012	121,669
	223,012	\$247,669

30. CAPITAL MANAGEMENT

The Group manages and maintains sufficient capital to expand operations and meet related capital expenditure. The Group manages its capital to maintain the profitability and financial structure, and ensure that it has sufficient financial resources to fund its working capital, capital expenditures, debt repayments and the payment of dividends to shareholders.

31. FINANCIAL INSTRUMENTS

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

The disclosures of fair value are not required for financial instruments that are not measured at fair value with carrying value approximating fair value.

For the financial assets measured at cost in unlisted shares in 2017 that did not have quoted market prices in active market, the Group would spend amounts that would exceed reasonable costs to acquire verified fair value in practice. Therefore, fair value cannot be reliably measured and is not disclosed.

• b. Fair value of financial instruments that are measured at fair value on a recurring basis
• 1) Fair value hierarchy

December 31, 2018

	Level 1		Level 2	Level 3		Total
Financial assets at FVTPL Non-derivative financial assets
Mutual funds Overseas unlisted	\$ 917,885	S	$\overline{\phantom{a}}$	\$ $\overline{\phantom{a}}$	\$	917,885
funds				992		992
	917,885			992	S	918,877 (Continued)

	Level 1	Level 2	Level 3	Total
Financial assets at FVTOCI Investments in equity instruments at FVTOCI Domestic listed shares and emerging
market shares Domestic unlisted	\$6,206,232	\$	$\mathbb{S}$ 1,190	\$6,207,422
shares			935,438	935,438
	\$6,206,232	\$	936,628 S	7,142,860 S. (Concluded)
December 31, 2017
	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL Non-derivative financial assets Mutual funds	944,828 \$	\$	\$	944,828
Available-for-sale financial assets Domestic listed shares and emerging market shares -equity
instruments	5,575,654 S.	\$	\$	5,575,654 S.

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

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

For the year ended December 31, 2018

Financial Assets	Financial Assets at Fair Value Through Profit or Loss	Financial Assets at Fair Value Through Other Comprehensive Income		Total
Balance at January 1, 2018 Recognized in profit or loss Recognized in other comprehensive income (included in unrealized gain/(loss) on financial assets at	\$ 972 20	\$979,043	S.	980,015 20
FVTOCI )		(42, 415)		(42, 415)
Balance at December 31, 2018	992	936,628

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

		Fair Value at December 31, 2018	Valuation Techniques	Significant Unobservable Inputs	Range (Average Weighted)	The Relationship Between Inputs and Fair Value
Financial assets at FVTPL
Overseas unlisted funds	s	992	Balance sheet method	Net assets		When the higher net assets, the higher of fair value
Financial assets at FVTOCI
Equity instruments		936,628	Market approach	P/E	6.54-20.06	When the higher income
				P/B	2.16	multiplier, the higher of
				Lack of liquidity discount	20%	fair value; when the higher lack of liquidity discount, the lower of fair value
			Balance sheet	P/B	1.38	When the higher income
			method	Lack of liquidity	10%	multiplier, the higher of
				discount		fair value; when the
						higher lack of liquidity
						discount, the lower of
						fair value

c. Categories of financial instruments

	December 31
		2018		2017
Financial assets
Fair value through profit or loss (FVTPL)
Held for trading $(1)$	\$	918,877	\$	944,828
Loans and receivables (2)				13,316,495
Financial assets at amortized cost (3)		21,118,131
Available-for-sale financial assets (4)				5,886,397
Financial assets at FVTOCI (5)		7,142,860
Financial liabilities
Amortized cost (6)		15,080,485		14,092,462

• 1) The balances included financial assets at fair value through profit or loss current and financial assets at fair value through profit or loss - non-current.
• 2) The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, notes receivable, accounts receivable, accounts receivable from related parties, other financial assets - current, and other financial assets - non-current.
• 3) The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, accounts receivable, accounts receivable from related parties, other financial assets - current, and other financial assets - non-current.
• 4) The balances included the carrying amount of available-for-sale financial assets current, available-for-sale financial assets - non-current, and financial assets measured at cost - non-current.
• 5) The balances included financial assets at fair value through other comprehensive income current and financial assets at fair value through other comprehensive income - non-current.
• 6) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, trade payables, trade payables to related parties, payables for dividends, other payables, and long-term borrowings (including current portion).

d. Financial risk management objectives and policies

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

1) Market risk

The Group's activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

There had been no change to the Group's exposure to market risks or the manner in which these risks were managed and measured.

a) Foreign currency risk

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period are set out in Note 35.

Sensitivity analysis

The Group was mainly exposed to the U.S. dollars.

The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts the translation at the end of the reporting period for a 1% change in foreign currency rates. When New Taiwan dollars strengthen/weakening 1% against U.S. dollars, the Group's pre-tax profit for the years ended December 31, 2018 and 2017 would decrease/increase of \$33,612 thousand and \$8,695 thousand, respectively.

In management's opinion, sensitivity analysis was unrepresentative of the inherent foreign exchange risk. The exposure at the end of the reporting period did not reflect the exposure during the period because sales is seasonal.

b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates.

The carrying amount of the Group's financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

		December 31
	2018			2017
Fair value interest rate risk
Financial assets	S	6,900,964	S.	3,021,212
Financial liabilities		619,307		249,992
Cash flow interest rate risk
Financial assets		8,038,742		5,606,840
Financial liabilities		11,442,246		11,406,352

Sensitivity analysis

The sensitivity analysis below was determined based on the Group's exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group's pre-tax profit for the years ended December 31, 2018 and 2017 would decrease/increase by \$17,018 thousand and \$28,998 thousand, respectively.

c) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments. The Group adopted sensitivity analysis to measure the equity price risk.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower, the pre-tax other comprehensive income for the year ended December 31, 2018 would increase/decrease by \$357,143 thousand, as a result of the changes in financial assets at fair value through other comprehensive income.

If equity prices had been 5% higher/lower, the pre-tax other comprehensive income for the year ended December 31, 2017 would increase/decrease by \$278,783 thousand, as a result of the changes in fair value of available-for-sale financial assets.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group's maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

The accounts receivable of the Group covers a large number of customers and spreads across different industries and geographical regions. The Group continuously evaluates the business and financial status of the customers and monitors the collection of accounts receivable.

The credit risk on liquid funds and derivatives was limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

The Group's concentration of credit risk of 58% and 54% in total accounts receivable as of December 31, 2018 and 2017, respectively, was related to the Group's five largest customers.

3) Liquidity risk

The Group manages liquidity risk by maintaining a level of cash and cash equivalents, high liquidity in securities, and adequate reserves for bank loan facilities, deemed adequate to ensure the Group maintain enough financial flexibility.

Liquidity and interest risk rate tables

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables excluded interest cash flows.

December 31, 2018

	On Demand or Less than 1 Year	1-2 Years	2-5 Years	5+ Years	Total
Non-derivative financial liabilities
Non-interest bearing Variable interest rate borrowings Fixed interest rate borrowings	3,018,932 S. 7,241,466 619,307 10,879,705	s 214,980 214,980	\$ 3,985,800 3,985,800	-S	3,018,932 S. 11,442,246 619,307 15,080,485 S.
December 31, 2017
	On Demand or Less than 1 Year	1-2 Years	2-5 Years	5+ Years	Total
Non-derivative financial liabilities
Non-interest bearing Variable interest rate borrowings Fixed interest rate borrowings	2,436,118 S. 6,147,147 249,992	\$ 1,777,280	\$ 3,481,925	S.	2,436,118 \$ 11,406,352 249,992
	8,833,257	,777,280	3,481,925		14,092,462

32. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Group and its related parties have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

a. The Group's related parties and their relationship

Related Party Name	Relationship with the Group
China Steel Chemical Corporation	The Group as key management personnel of the entity
Taiwan Cement Corporation	Same with key management personnel
Taiwan Transport & Storage Corporation	Same with key management personnel
TCC Information Systems Corporation	Same with key management personnel
Taiwan Prosperity Chemical Corporation	Same with key management personnel
Dr. Cecilia Koo Botanic Conservation and	Same with key management personnel
Environmental Protection Foundation
LCD Hotels & Resorts Corporation	Same with key management personnel

b. Operating transactions

The prices and payment terms were comparable with those for third parties. The lease agreements between the Group and other related parties referred market price to negotiate the rentals and compliance the payment terms.

		Sale of Goods
		For the Year Ended December 31
	2018	2017
Same with key management personnel	$\mathbb{S}$ 111,318	55,741 \$
		Purchase of Goods
		For the Year Ended December 31
	2018	2017
The Group as key management personnel of the entity Same with key management personnel	1,299,073 10,924	1,017,923 10,447
		Overhead and Operating Expenses
		For the Year Ended December 31
	2018	2017
The Group as key management personnel of the entity Same with key management personnel	P 161,564 \$	82 166,583 Accounts Receivable from Related Parties
		December 31
	2018	2017
Same with key management personnel	14,605	4,165 S
		Trade Payables to Related Parties
		December 31
	2018	2017
China Steel Chemical Corporation Same with key management personnel	139,046 $\mathbb{S}$ 1,111	94,208 \$ 853
	140,157 S	95,061 S

The outstanding trade payables to related parties are unsecured. The outstanding accounts receivable from related parties are unsecured. For the years ended December 31, 2018 and 2017, no impairment losses were recognized for accounts receivable from related parties.

	Other Payables
	December 31
	2018	2017
Same with key management personnel	36.074	26,406

c. Compensation of key management personnel

The compensation of directors and other key management personnel were as follows:

		For the Year Ended December 31
		2018	2017
Short-term employee benefits Post-employment benefits Share-based payments	S	129,106 144 19,238	97,111 367 9,926
		148.488	107.404

33. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for certain short-term borrowings, long-term borrowings, performance guarantees, and other credit accommodations.

	December 31, 2018			December 31, 2017
	Shares		Shares
	(Thousands)	Amount	(Thousands)	Amount
Notes and accounts receivable.		\$1,700,798		\$1,110,647
Inventories		686,618		562,903
Pledged bank deposits (included in
other financial assets - current)		18,730		20,665
Pledged time deposits (included in
other financial assets - current)		81,484		122,191
Property, plant and equipment		716,382		1,062,284
Available-for-sale financial assets -
current
Taiwan Cement Corporation			4,100	149,445
Financial assets at fair value
through other comprehensive
income - current
Taiwan Cement Corporation	4,100	145,960
		3,349,972		3,028,135

34. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of December 31, 2018 and 2017 were as follows:

a. Under a contract effective January 1 to December 31, 2019, Linyuan Advanced Materials Technology Co., Ltd. ("Linyuan Advanced") should buy approximately 6,000 tons of oil per month from China Petroleum Corporation. Linyuan Advanced also entered into oil tank lease agreements with China Petroleum Corporation. The guarantees provided by banks for the aforementioned contracts amounted to \$30,000 thousand.

• b. Linyuan Advanced entered into agreements with China Steel Chemical Corporation ("China Steel") as follows: (1) under a contract effective January 1, 2017 to December 31, 2019, Linyuan Advanced should buy approximately 5,250 tons of carbolic oil 15 per month from China Steel. (2) under a contract effective January 1, 2017 to December 31, 2019, Linyuan Advanced should buy 31,200 to 38,400 tons of carbolic oil 12 from China Steel.
• In November 1998, Synpac (North Carolina), Inc. ("Synpac NC") entered into an option agreement $c.$ with Genzyme Corporation ("Genzyme") in which Synpac NC granted Genzyme, in exchange for US\$1,000 thousand, an option to enter into a development and commercialization agreement. In March 2000, Genzyme exercised its option and entered into an agreement with Synpac NC for Genzyme to have the license to use the technology and intellectual property rights on the prevention and therapy of Pompe Disease. For this license, Genzyme paid Synpac NC US\$19,500 thousand, which Synpac NC recognized as license revenue since Synpac NC has no ongoing research. Under the license agreement, Genzyme will continue developing the technology and will be responsible for obtaining regulatory approval as well as the manufacture, commercialization and distribution of any product resulting from the developed technology. Synpac NC will receive milestone payments depending upon Genzyme's progress and will receive royalties on net sales, milestone, and bonus from Genzyme. Synpac NC transferred intellectual property rights on Pompe Disease to Synpac Venture Capital, L.P. in 2006. Synpac Venture Capital, L.P. started to recognize license revenue in the fourth quarter of 2006.
• d. In June 2011, BRC Rubber & Plastic ("BRC"), a former customer of Continental Carbon Company ("CCC"), filed a lawsuit against CCC with the U.S. District Court ("USDC") for the Northern District of Indiana, alleging that CCC repudiated a five-year supply agreement under which CCC had agreed to supply the customer all of its carbon black requirements, but CCC denied this allegation. In June 2013, USDC passed a decision in favor of BRC. In February 2014, USDC required CCC to compensate BRC with US\$982 thousand. CCC filed an appeal for the judgement. The Court of Appeals passed a decision in favor of CCC and remanded back to the lower court for proceedings consistent. In May 2016, CCC filed a motion for final summary judgement. In July 2017, the court passed a decision in favor of CCC. In October 2017, the appeals court ordered both parties to mediate by telephone with the court mediator, but there were no conclusions or agreements reached during the process. In October 2018, the Seventh Circuit United States Court of Appeals remanded the case to the district court for a trial. Based on the legal update letter from CCC's attorney, BRC's maximum damages appear to range from a low of US\$815 thousand to a high of approximately US\$890 thousand. The case was still in progress. According to the suggestion from CCC's attorney, CCC will proceed to mediation with BRC.
• e. The local taxation bureau levied excise tax on CCIL for using steam and electricity. CCIL filed related documents and records to raise its objection on this levy; as of December 31, 2018, there was \$137,235 thousand (311,277 thousand rupee) of excise tax in progress. CCIL was further fined because it was deemed as not having properly recorded its sales when inventories were transferred to an agent; however, CCIL disagreed with the tax authorities' view that transferring inventories to an agent should be classified as sale and filed lawsuit, and raised an objection in conformity with laws. As of December 31, 2018, there was still \$2,844 thousand (6,450 thousand rupee) of fine. The case was still in progress.
• f. CCC received notification that require carbon black plants in U.S. have to conform to the standard of desulfurization denigration and dislodging particulate matter from U.S. Environment Protection Agency. To comply with U.S. air pollution laws, CCC agreed with U.S. Environment Protection Agency after received notification from the agency on March 23, 2015. CCC promised that (1) construct related environmental protection equipment by installments to conform to the regulations of emission standards before December 31, 2022; (2) advance environmental protection plans, and the related expenditure was approximately US\$550 thousand. As of December 31, 2018, the related expenditure have been paid out.

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group entities' significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2018

	Foreign Currencies	Exchange Rate	Carrying Amount
Financial assets
Monetary items USD USD USD	\$ 115,925 8,494 2,638	30.715 (USD:NTD) 6.8632 (USD:RMB) 1.3603 (USD:CAD)	\$3,560,630 260,887 81,017 \$3,902,534
Financial liabilities
Monetary items USD USD USD	4,423 157 13,046	30.715 (USD:NTD) 6.8632 (USD:RMB) 1.3603 (USD:CAD)	135,837 \$ 4,823 400,720 541,380 \$
December 31, 2017
	Foreign Currencies	Exchange Rate	Carrying Amount
Financial assets
Monetary items USD USD USD	\$ 50,044 5,382 3,461	29.760 (USD:NTD) 6.5342 (USD:RMB) 1.2552 (USD:CAD)	\$1,489,296 160,171 103,002 1,752,469
Financial liabilities
Monetary items USD USD USD USD	14,108 1,960 12,602 1,000	29.760 (USD:NTD) 6.5342 (USD:RMB) 1.2552 (USD:CAD) 63.8499 (USD:INR)	\$ 419,843 58,340 375,030 29,760

For the years ended December 31, 2018 and 2017, net foreign exchange gains (losses) were \$43,973 thousand and \$(24,821) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the group entities.

36. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and investees:
• 1) Financing provided to others. (Table 1)
• 2) Endorsements/guarantees provided. (Table 2)
• 3) Marketable securities held. (Table 3)
• 4) Marketable securities acquired and disposed of at costs or prices of at least NT\$300 million or 20% of the paid-in capital. (Table 4)
• 5) Acquisition of individual real estate at costs of at least NT \$300 million or 20% of the paid-in capital. (Table 5)
• 6) Disposal of individual real estate at prices of at least NT\$300 million or 20% of the paid-in capital. (None)
• 7) Total purchases from or sales to related parties amounting to at least NT\$100 million or 20% of the paid-in capital. (Table 6)
• 8) Receivables from related parties amounting to at least NT\$100 million or 20% of the paid-in capital. (Table 7)
• 9) Trading in derivative instruments. (None)
• 10) Intercompany relationships and significant intercompany transactions. (Table 10)
• 11) Information on investees. (Table 8)
• b. Information on investments in mainland China
• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 9)

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year. (None)
  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year. (None)
  • c) The amount of property transactions and the amount of the resultant gains or losses. (None)

• d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes. (Table 2)

• e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds. (Table 1)
• f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services. (None)

37. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group's reportable segments are carbon black, biotechnology, electronic product and others.

a. Segment revenue and results

			For the Year Ended December 31, 2018
	Carbon Black	Biotechnology	Electronic Product	Others	Total
Segment revenues	\$16,944,116	\$3,986,819	\$3,463,189	\$ 37,600	\$24,431,724
Segment income Other income Other gains and losses Finance costs	\$ 667,925	3,678,608	330,299	\$ (46,697)	\$ 4,630,135 404,727 (111,313) (354, 668)
Income before income tax					\$ 4,568,881
Depreciation and amortization expenses					\$ 924,441
			For the Year Ended December 31, 2017
	Carbon Black	Biotechnology	Electronic Product	Others	Total
Segment revenues	\$14,081,809	3,880,845 \$	2,125,439 \$	\$ 25,664	\$20,113,757
Segment income Other income Other gains and losses Finance costs	509,893 \$	3,133,842 \$	(21, 276) \$	18,379 \$	3,640,838 \$ 337,734 (118, 527) (294, 832)
Income before income tax					\$3,565,213
Depreciation and amortization

The segment revenue reported was generated from external customers. There were no intersegment sales for the years ended December 31, 2018 and 2017.

Segment profit represented the profit before income tax earned by each segment without the allocation of interest income, interest expense, other non-operating income and expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

b. Segment assets and liabilities

			December 31, 2018
	Carbon Black	Biotechnology	Electronic Product	Others	Total
Total segment assets Total segment liabilities	\$22,241,571 12,236,163	7.304,703 2,130,534	5.276.451 2,956,111	\$15,111,413 356,004	\$49,934,138 \$17,678,812
			December 31, 2017
	Carbon		Electronic
	Black	Biotechnology	Product	Others	Total
Total segment assets Total segment liabilities	17,559,296 1,865,045	4,903,581 372,515	3,038,561 2,364,712	10.842.224 274,594	\$36,343,662 \$15,876,866

c. Geographical information

The Group operates in two principal geographical areas: Asia and America.

The Group's revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are detailed below:

		Revenue from External Customers
		For the Year Ended		Non-current Assets
		December 31		December 31
	2018	2017	2018	2017
America	\$10,473,500	8,163,670 S.	8,794,193 S	6,863,077 S
Asia	13,912,504	11,902,886	7,722,666	6,193,662
Others	45,720	47,201
	24,431,724	\$20,113,757	16,516,859	13,056,739

Non-current assets excluded financial instruments and deferred tax assets.

d. Information about major customers

Revenues from the carbon black segment were \$16,944,116 thousand and \$14,081,809 thousand for the years ended December 31, 2018 and 2017, respectively; the amounts included the following:

		For the Year Ended December 31
	2018	2017
Largest customer	\$3,090,377	\$2,607,788
Second customer	1,361,320	1,407,738
Third customer	1,651,762	1,019,735
	6,103,459	\$5.035,261

No other single carbon black customer contributed 10% or more to the Group's revenue for both 2018 and 2017.

INTERNATIONAL CHARGE INTERNATIONAL CHARGE IN A SUBSIDIATION AND CHARGE IN A NUMBER
ע בעונייט טו
	- !

FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)

Note
	4,716,738 (Note 1)	1,716,738 (Note 1)	659,894 (Note 2)	$12,086,436$ (Note 3)
Aggregate Financing Limits
Financing Limit for Each Borrower	$2,358,369$ (Note 1)	2,358,369 (Note 1)	659,894 (Note 2)	$6,043,218$ (Note 3)
Value
Collateral Item
Allowance for Impairment Loss
Reason for Short-term Financing	Operating tumover	Operating turnover	Operating turnover	Operating turnover
Business Transaction Amount
Nature of Financing	Short-term financing	Short-term financing	Short-term financing	Short-term financing
Interest Rate	4.35			4.08
Borrowing Amount Actual	$rac{4}{19}$
	702,900 \$ 670,800 \$ 495,13 150,000) (RMB 150,000) (RMB 110,71	89,440 20,000)	100,000
Related Highest Balance Ending Balance Party for the Period	(RMB	$(RMB$ 20,000 (RMB	100,000	00001 8SN) (00000 8SN) (00000 \$SN) 00000 6SN) (00000 \$SN) (00000 \$SN)
	Y es	Yes	Yes	Yes
Statement Financial Account	Other receivables from related	parties Other receivables from related parties	Other receivables from related parties	Other receivables from related parties
Borrower	CSRC China	(Chongqing) Corporation (Anshan) Corporation CSRC China	Resource Co.
Lender	CSRC China Corporation		CS Development Consolidated $\&$ Investment ්	3 Sympac (North Continental Carolina), Inc. Carbon Company
ż

Note 1: The financing limit of CSRC China (Changqing), CSRC China and CSRC China (Anshan) to direct and indirect wholly owned subsidiaries for each borrower is 200% of the lender's net asset value on its current financial

Note 2: The Financing limit of CS Development & Investment Co. to direct and indirect wholly owned aubsidiaries for each borrower is 40% of the lender's net asset value on its current financial statements.

Note 3: The financing limit of Synpac (North Carolina), Inc. to direct and indirect wholly owned subsidiaries for each borrower is 150% of the lender's net asset value on its current financial statements. The aggregate fin statements.

Note 4: The consolidated subsidiaries' ending balances were excluded from the consolidation.

ANATIONAL CSRC INVESTMENT HOLDINGS CO., LTD. AND SUBSIDIARIES
	l
--------------------------------------
. . . .

ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars)

	Note
	Mainland China Endorsement/ Companies in on Behalf of	ž	ş	$\frac{1}{2}$	ş		$\tilde{z}$	ž		222			Yes	Yes		Yes
	Guarantee Given Guarantee Given Guarantee Given by Subsidiaries Endorsement/ on Behalf of Parent	$\frac{1}{2}$	2	$\frac{1}{2}$	$\frac{1}{2}$		$\frac{1}{2}$		2222				$\frac{1}{2}$	$\frac{1}{2}$		ż
	Endorsement by Parent on Subsidiaries Behalf of	Ýes		yes Yes	Yes		Yes	Yes	Yes	Yes Yes			Yes	Yes		Yes
	Guarantee Limit Endorsement/ Aggregate	\$35,284,037 (Note 3)
Ratio of	Guarantee to Net Equity in Latest Endorsement Accumulated Statements Financial	0.43%		0.83%	.83%		0.82%	7.24%	14.78% 28.99%		0.26%		6.24%	6.18%		11.89%
	Guaranteed by Collaterals Endorsed Amount
	Borrowing Amount Actual	25,000 S		40,000	337,865		33,020	,320,935	,343,836	4,883,685			504,224	866,718		1,724,981
	Guarantee at the End of the Period Endorsement/ Outstanding	100,000 S		195,000	430,010		193,020	1,703,933	3,477,527	6,818,730	60,000		1,468,77	1,453,116		2,797,866
Maximum	Endorsed/ Guaranteed During the Amount Period	100,000	24,368	245,000	431,620		193,020	915,36	3,495,259	7,406,410	60,000		2,132,810	1,612,044		2,797,866
Limits on	Guarantee Given Endorsement on Behalf of Each Party (Note 2)	\$23,522,691
	Relationship	Note 1	Note 1	Note 1	Note 1		Note 1	Note 1	Note 1	Note	Note 1		Note 1	Note 1		Note 1
Endorsee/Guarantee	Name	Consolidated Resource Co.	Synpac Ltd.	CS Development &	E-One Moli Energy (Canada) Investment Co.	لة ا	Linyuan Advanced Materials	E-One Moli Energy Corp. Technology Co., Ltd.	Continental Carbon India Ltd.	Continental Carbon Company	Yun Cheng Investment	Corporation	CSRC China (Chongqing)	CSRC China (Anshan) Corporation	Corporation	CSRC China Corporation
	Endorser/Guarantor	Investment Holdings International CSRC	Co., Ltd.
	Ź.	c

Note 1: Direct or indirect subsidiary.

Note 2: For guarantees provided to a counter-party doing business with the Corporation, the endorsement amount is limited up to 50% of the current business transactions. In addition, the limit on endorsement is up to 100%

Note 3: The aggregate endorsement/guarantee amount of the Corporation for all borrowing companies is limited to 150% of its net asset value based on its current financial statements.

INTERNATIONAL CSRC INVESTMENT HOLDINGS CO., LTD. AND SUBSIDIARIES
	$\sim$
	: :
	$\overline{1}$

MARKETABLE SECURITIES HELD
DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars and U.S. Dollars)

					December 31, 2018
Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	Shares	Carrying Amount	Percentage of Ownership $\binom{0}{0}$	Fair Value (Note 1)	Note
International CSRC Investment Holdings Co., Ltd.	China Steel Chemical Corporation Taiwan Cement Corporation Common share(s)	The Corporation is one of its directors	Financial assets at fair value through other comprehensive income - current	11,759,096	1,610,996 s,	4.96	1,610,996 s,
	O-Bank	Same with key management personnel	Financial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - non-current	17,654,108 92,155,487	3,280,735 141,233	1.80 0.73	3,280,735 141,233	$\ddot{\phantom{1}}$
	Videoland Television Network China Investment Co., Ltd.		inancial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - non-current	14,152,796 6,437,457	465,910 368,223	$4.48$ 5.64	465,910 368,223	$\sim$
	Taiwan Cement Corporation - preferred share Same with key management personnel O-Bank - preferred share Preferred share(s)		inanoial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - non-current	2,000,000 1,755,895	100,000 17,559		100,000 17,559
	Shin Kong Chi-Shin Money Market Fund Yuanta Wan Tai Money Market Fund Cathay Taiwan Money Market Fund Mutual fund(s) BDF II L.P.	$\mathbf{I}$	inancial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - current inancial assets at fair value through profit or loss - current inancial assets at fair value through profit or loss - current	24,417,838 20,054,548 19,590,557	303,470 303,335 992 302,993		303,470 303,335 302,993 992	$\,$ $\,$
CS Development & Investment Co. ("CS Development")	nternational CSRC Investment Holdings Taiwan Cement Corporation Common share(s) Co., Ltd.	Same with key management personnel 100.00% Parent company	inancial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - current	24,969,479 13,039,525	888,913 507,889	0.49 1.50	888,913 507,889	Note 2 ł
	Thina Huan Tung Cement Corp. Yieh United Steel Corporation		inancial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - non-current	349,906 612,360	1,190	0.89 0.01	1,190
	Taiwan Cement Corporation - preferred share Same with key management personnel Preferred share(s)		inancial assets at fair value through other comprehensive income - current	782,130	39,107		39,107
	Nomura Taiwan Money Market Fund Mutual fund(s)		inancial assets at fair value through profit or loss - current	496,309	8,087		8,087
Consolidated Resource Co.	Taiwan Cement Corporation Common share(s)	Same with key management personnel	inancial assets at fair value through other comprehensive income - current	1,497,000	53,293	0.03	53,293
	Taiwan Cement Corporation - preferred share Same with key management personnel Preferred share(s)		inancial assets at fair value through other comprehensive income - current	933,521	46,676		46,676
Yun Cheng Investment Corporation	MegaPro Biomedical Co., Ltd. China Investment Co., Ltd PhytoHealth Corporation Common share(s)		inancial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - non-current inancial assets at fair value through other comprehensive income - non-current	2,367,000 1,531,500 2,014,141	77,921 27,720 23,384	0.75 0.94 4.40	27,720 23,384 77,921
Synpac Ltd.	Glade Remedies Private Limited Common share(s)	23% investee	Financial assets at fair value through other comprehensive income - non-current	23	$\pmb{\cdot}$ USS	23.00	USS

Note 1: The bases of the market value of listed shares and bases, but as and funds, net asset value as of December 31, 2018. Unlisted shares, emerging market shares and funds were measured by valuation techniques and input

Note 2: Please refer to Note 33 to the financial statements.

$-74-$

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST \$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE VEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars and U.S. Dollars)

	Amount	3,157,087 $149,587,047$ $S$ $1.182,759$
Ending Balance	Shares	58,334
	Other djustments	228.539 Note 2) 258.028 Note 2)
	Gain (Loss) on Disposal
Disposal	Carrying Amount
	Amount
	Shares
	Amount	604,616 650,000
Acquisition	Shares	9.097.114 \$ (Note 1) 79,667
	Amount	304,220 ,294,443
Beginning Balance	hares	0,489,933 8,667
	telationship	66.67% subsidiary
	Counterparty	registered share
	Financial Statement Account	equity method original original subscription of a substitution of a system accounted for using $\overline{0}$ original subscription of a Direct and indirect E-One Moli Energy Corp. Investments accounted for using Original subscription of a Direct and indirect equity method
	Type and Name of Marketable Securities	CCC USA Corp.
	Company Name	Investment Holdings nternational CSRC $C_{0.1}$ Ltd.

Note 1: The amount included capital reduction for cover accumulated deficits 55.902.886 shares and issuance of ordinary shares 65.000.000 shares.

Note 2: The amount included share of the other comprehensive income of subsidiaries accounted for using the equity method, exchange differences on translating foreign operations, and so on.

ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST \$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars and U.S. Dollars)

	Event Date	Transaction Payment					Information on Previous Title Transfer If Counterparty Is A Related Party
Property		Amount	Status	Counterparty	Relationship	Property Owner	Relationship	Transaction Date	Amount		Pricing Reference Purpose of Acquisition Terms
protection equipment 2018.12.31 410-15-075-CA Environmental	2018.1.1-	US\$ 11,017 Paid $= 338,387$		Z&F Construction Inc.						comparison and	Bidding price, price Construction of related environmental	None
										price negotiation.	protection equipment by installments to
	2018.1.1-										comply with U.S. air anti-pollution laws.
protection equipment $410-15-075-CA$ Environmental	2018.12.31	US\$ 12,934 Paid 397,268 $\frac{1}{2}$		Hurst, Drew						Bidding price, price comparison and	Construction of related environmental	None
										price negotiation.	protection equipment by installments to
											comply with U.S. air
											anti-pollution laws.

Note: The exchange rate on December 31, 2018 was US\$1=NT\$30.715.

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars)

	Note
	$\frac{1}{2}$ Total			ą,		(80)
				(125, 543)	252,610	(252, 610)
Abnormal Transaction Notes/Accounts/Trade Receivable (Payables)	Ending Balance	Trade payables Trade payables	Accounts receivable	Frade payables	Accounts receivable	rade payables
	Payment Terms
	Unit Price
Transaction Details	Payment Terms	Payable on the 15th of the next month Payable on the 15th of the next month	Receivable on the 15th of the next month	Payable on the 15th of the next month	Receivable on the 120th day	Payable on the 120th day
	%to Total	47	87	59		95
	Amount	\$ 892,054 124,405	124,405	369,814	557,174	557,174
	Purchase/ Sale	Purchase	Sale		Sale	Purchase
	Relationship	The Corporation is one of its directors Purchase 00.00% subsidiary		The Corporation is one of its directors Purchase	Same ultimate parent company	Same ultimate parent company
	Related Party	China Steel Chemical Corporation Consolidated Resource Co.	International CSRC Investment Holdings 100.00% parent company Co., Ltd.	China Steel Chemical Corporation	Continental Carbon Company Europe SPRL
	Buyer	nternational CSRC Investment Holdings Co., Ltd.	Consolidated Resource Co.	Linyuan Advanced Materials Technology Co., Ltd.	Continental Carbon Company	Continental Carbon Company Europe Continental Carbon Company SPRL

Note: The consolidated subsidiaries' ending balances were excluded from the consolidation.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars)

					Overdue	Amounts
Company Name	Related Party	Relationship	Ending Balance Turnover Rate	Amount	Action Taken	Received in Subsequent Period	dlowance for $[$ Impairment
Circular Commitment Company	Synpac Venture Capital, L.P.	Same ultimate parent company	\$387,927
CSRC China Corporation	CSRC China (Anshan) Corporation	Same ultimate parent company	109,324			9,220
E-One Moli Energy Corp.	E-One Moli Energy (Canada) Ltd.	Same ultimate parent company	163,895			43,234
SVC Management, LLC	Synpac Venture Capital, L.P.	Same ultimate parent company	239,918
Continental Carbon Company	Continental Carbon Company Europe SPRL Same ultimate parent company		252,610			46,195

Note: The consolidated subsidiaries' ending balances were excluded from the consolidation.

$\frac{1}{2}$
֧֧֧֧֧֧֧֧֧֧֧֛֧֛֪֧֧֧֛֛֪֪֪֛֚֚֚֚֚֚֚֚֚֚֚֝֝֝֓֝֓֝֬֟֓֝֬֟֓֝֬֟֟֓֝֬֟֓֝֬֟֓֝֬֟֟֓֝֬֜֝֬֜֝֬֟֬֟֝֬֟֝֬֝֬֝֬֜֝֟֝֟
NATIONAL AND A THE A THE TANGER SERVENT DINATION TO A THE CONTRACT OF A TANK A TANK A TANK A TANK OF THE CONTRACT THE CONTRACT OF A TANK AND A TANK A TANK A TANK A TANK A TANK A TANK A TANK A TANK A TANK A TANK A TANK A T
֧֧֧֪֛֪֛֧֪֛֧֪֛֪֛֪֪֛֪֪֛֚֚֝֝֝֬֝֬֝֬֓֝֬֝֬֓֝֬֝֬֝֬֝֬֝֬֝֬֝֬֝֬֟֬֝֓֬֓֬֬֓֬֝֬֝֬

INFORMATION ON INVESTEES
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars, U.S. Dollars and Canadian Dollars)

Subsidiary (Note 7) Subsidiary (Note 5) Subsidiary (Note 6) Subsidiary (Note 8) Subsidiary (Note 8) Associate (Note 7) Note Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Associate Associate (35, 206) (27) Share of Profits $(177,627)$ 81,029 210,748 206,745 159,995 (Loss) (Note 1) 8,483 154,118 1,627,170 234 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 $(5,871)$ Note 4 Note 4 Note 4 šĄ, (368) (73) (235) (3,801) $\frac{1}{2}$ (2.397) (235) (106) (11.095) (2,201) $(176,540)$ $(02,366)$ (177,005) (7,085) (114, 596) (301) (72.267) (7.085) 10,515 (35,161) (106) 1,892,560 179 325,906 79,868 79,868 5,397 673 53,871 325,906 317,017 310,116 325,906 20,290 162,761 2,407,940 8,487 2,407,940 210,749 892,560 $\overline{5}$ 162,761 (Loss) of the Investee (Note 1) US\$ USS US\$ US\$ US\$ US\$ šŞ US\$ US\$ US\$ USS US\$ USS $\ddot{\vec{a}}$ $\ddot{\psi}$ $\downarrow$ J) 4ř ă, J) J) $\downarrow$ $\mathcal{U}$ $\frac{1}{2}$ J) $\mathbf{R}$ SA, (746) (22.913) (889) (27,306) 28,780 180,674 2211 2,019 8,200 67,911 62,014 170,024 937 5,549,402 $\frac{101,023}{3,102,921}$ 1,200,772 601,922 868,037 251,863 22,169 109,785 5,222,287 3,150,915 1,355,588 222,956 301,355 1,112,276 1,182,759 39,094 19,597 28.261 3,876 674 758,300 5,520,080 20,974 3,157,087 299,231 1,561,681 Carrying Amount (Note 1) US\$ US\$ US\$ US\$ US\$ US\$ US\$ USS US\$ US\$ US\$ US\$ US\$ J) $\frac{1}{2}$ $\frac{1}{4}$ $\bar{R}$ k $\bar{4}^{\dagger}$ $\downarrow$ $\frac{1}{2}$ $\mathbf{J}^*$ $\overline{1}$ $\downarrow$ ψĄ, $\frac{1}{10}$ 99.90 100,00 100,00 100.00 100.00 75.00 66.67 49.65 100.00 100.00 100.00 100.00 100.00 99.99 4.89 0.33 0.03 100,001 94.69 88.46 $\Xi$ 99.90 99.90 11.54 100.00 100,00 100,00 100.00 ℅ $\mathbf{t}$ $\blacksquare$ $\mathbf{I}$ $\blacksquare$ $\,$ $\blacksquare$ 10,000 14,735,725 151,300 1,000 335 1,500,000 1,200,000 9,000,000 88,917,134 58,678,592 94,498 164,440 52,173,842 11,500,000 8,100,000 158,334 49,587,047 355,364,539 257,290,790 27,850,000 80,010,000 Shares $\sim$ 152,000 307 300 9,215 6,200 $= 1,733,585$ 72,330 8,885 460,385 2,250 69,109 $\overline{\circ}$ 4,668,680 Ξ 190,433 US\$ 249.091 7,650,830 78,750 $= 2.418,806$ 51,949 $= 1,595,614$ 10,775 198,569 3,053,037 46,100 24,764 150,000 7,792,105 95,878 211,425 ,462,210 $= 1,415,961$ December 31, 2017 (Note 1) 2,707,253 56,441 170'166 58,421 USS US\$ USS USS US\$ US\$ US\$ US\$ US\$ US\$ US\$ $\bar{R}$ $\bar{4}^{\dagger}$ $\frac{1}{2}$ J) łì Ĵ $\mathcal{X}$ $\downarrow$ šĄ, 204,000 300 6,200 2,250 2 6,265,860 $\equiv$ 9,215 190,433 8,200 $\overline{\circ}$ 307 1,733,585 78,750 46,100 51,949 $= 1,595,614$ 8,885 460,404 69,109 8,045,249 198,569 90,000 257,291 7,902,693 2,418,806 251,863 4 10,775 24,764 December 31, 195,878 3,053,037 211,425 3,066,826 3,357,253 56,441 150,000 ,600,100 $= 1,415,961$ 2018 (Note 1) 180,166 US\$ US\$ US\$ US\$ US\$ USS US\$ US\$ USS US\$ US\$ USS . W $\frac{1}{2}$ . If $\frac{1}{41}$ $\downarrow$ $\ddot{\psi}$ $\mathbb{R}^2$ Æ $\mathcal{U}$ $\mathcal{U}$ ωq. Fabrication of lithium battery production and sale Fabrication of lithium battery production and sale Main Businesses and Products Pharmaceutical research and development Pharmaceutical research and development on nanotubes production and sale Lithium battery production and sale Lithium battery production and sale Lithium battery production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Carbon black production and sale Investment consultation Carbon black transport Technology service Investment service Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment $\vec{c}$ Mainland China Mainland China Mainland China Tainan, Taiwan Tainan, Taiwan Tainan, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Location Kaohsiung. Taiwan Singapore U.S.A. USA. B.V.I U.S.A. U.S.A. U.S.A. U.S.A. U.S.A. U.S.A. U.S.A. U.S.A. U.S.A. B.V.I India India India Linyuan Advanced Materials Technology Co., Ltd. Investee Company Continental Carbon Nanotechnologies, Inc. CSRC China (Chongqing) Corporation Continental Carbon Eco Tech Prt Ltd. Continental Carbon Eco Tech Prt Ltd Yun Cheng Investment Corporation Yun Cheng Investment Corporation Synpac (North Carolina), Inc. CSRC China (Anshan) Corporation CS Development & Investment Co. Circular Commitment Company Continental Carbon Company Continental Carbon India Ltd. Synpac (North Carolina), Inc. Synpac Venture Capital, L.P. Synpac Venture Capital, L.P. CSRC (Singapore) Pte. Ltd. Consolidated Resource Co. SVC Management, LLC E-One Moli Energy Corp. E-One Moli Energy Corp. CCC USA Corp. E-One Moli Energy Corp. CSRC China Corporation CCC Transport Company Sole Energy Tech Corp. Sole Energy Tech Corp. SVC Services, LLC CSRC (BVI) Ltd. 3C Infocorp Synpac Ltd. International CSRC Investment Holdings Yun Cheng Investment Corporation CS Development & Investment Co. Investor Company Synpac (North Carolina), Inc CSRC (Singapore) Pte. Ltd. Consolidated Resource Co.			Original Investment Amount	As of December	31,2018	Net Income

				Original Investment Amount			As of December 31, 2018		Net Income
Investor Company	Investee Company	Location	Main Businesses and Products	December 31, December 31,	018 (Note 1) 2017 (Note 1)	Shares	ş.	Carrying Amount (Note 1)	$(Loss)$ of the $\Big $ (Note 1)	IShare of Profits (Loss) (Note 1)	Note
Continental Carbon Company	Continental Carbon Company Europe SPRL	Belgium	thon black sale	USS . Iľ	$^{24}$ 737 $\begin{array}{c c}\n 24 & \text{USS} \ \hline\n 737 & = & \n \end{array}$	$-000$	100.00	6,143 US\$	1,658 200 US\$	55 Note 4	Subsidiary
E-One Moli Energy Corp.	sole Energy Tech. Corp. 5-One Holdings Ltd.	Taipei, Taiwan B.V.I.	Fabrication of lithium battery production and sale Investment	1,580,165	1,580,165 39,600	50,344,940	100.00	(107, 826)		$(18,858)$ Note 4 $(106)$ Note 4	ssociate (Note 7) ubsidiary
E-One Holdings Ltd.	E-One Moli Holdings (Canada) Ltd.	Canada	. Investment	US\$70,329 US\$70,329 $= 2.160,155$ $= 2.160,155$		23,800		$\frac{100.00}{\pi}$ (US\$ 3.512) US\$ (107.871) =	18,843)	$(625)$ Note 4	yabsidiary
E-One Moli Holdings (Canada) Ltd.	E-One Moli Energy (Canada) Ltd.	Canada	ttery research, development and sale ã	$-1.489.390$ = $\frac{1}{2}$ = $\frac{1}{2}$ = $\frac{1}{2}$ CAD 65,961 CAD 65,961		6,649,200		$\begin{bmatrix} (CAD & 4.897) & CAD & (810) \ \mp & (110.574) & \mp & (18.857) \end{bmatrix}$			ubsidiary

Note 1: The average exchange rates for the year ended December 31, 2018 were US\$1 = NT\$30.149, CAD1=NT\$32.3800; the exchange rates on December 31, 2018 were US\$1=NT\$30.715, CAD1=NT\$22,5800.

Note 2: For the information on investments in mainland China, refer to Table 9.

The consolidated subsidiaries' ending balances were excluded from the consolidation. Note $3$ :

Note 4: The share of profits losses of the investee company is not reflected herein as such amount is already included in the share of profits/losses of the investor company.

Linyuan Advanced Materials Technology Co., Ltd. completed its incorporation registration on May 3, 2018. Note 5:

Circular Commitment Company completed its incorporation registration on October 8, 2018. Note 6:

Note 7: The liquidation was settled on December 12, 2018.

Continental Carbon Eco Tech Pvt Ltd. completed its incorporation registration on October 10, 2018. Note _K

(Concluded)

INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars and U.S. Dollars)

						\$17,754,654			(USS 193,391) 5,940,005			\$5,568,353	International CSRC Investment Holdings Co, Ltd
						Stipulated by the Investment Commission, MOEA Upper Limit on the Amount of Investment (Note 3)			Investment Amounts Authorized by Investment Commission, MOEA			Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2018
	1	868,037 28,261	$\begin{array}{c c c c c} (10) & US\mathbf{S} & & & \ (101) & \rightleftharpoons & & & \ \hline \end{array}$ (Note 1) USS $\hat{J}^{\dagger}_{\parallel}$	100.00	$\begin{bmatrix} 100 \ 301 \end{bmatrix}$ (Note 1)	USS 46,100 USS = 1,415,962 =			$= 1,415,962$ US\$46,100		US\$ 46,100 Indirect $= 1,415,962$	Carbon black production and sale	CSRC China (Chongqing) Corporation
	ı	19,597 601,922	$(3,801)$ USS (114,596) = (Note 1) USS $\begin{array}{c} \begin{array}{c} \begin{array}{c} \end{array} \end{array} \end{array}$	100.00	$(3,801)$ (114,596) (Note 1) USS $\frac{1}{2}$	$\begin{bmatrix}\n1.158 & 78,750 \ = 2,418,806\n\end{bmatrix}$			US\$ 78,750 $= 2,418,806$		US\$ 90,850 Indirect $= 2,790,458$	Carbon black production and sale	CSRC China (Anshan) Corporation
	1	US\$ 39,094 $= 1,200,772$	673 (Note 1) USS . If	100.00	673 20,290 (Note 1) US\$ $\hat{J}^{\dagger}_{1}$	$-$ USS 56,441 $=$ 1,733,585			US\$ 56,441 $= 1,733,585$	Indirect	US\$ 53,500 $= 1,643,253$	Carbon black production and sale	CSRC China Corporation
Note	Repatriation of December 31, Accumulated Investment Income as of 2018	Amount as of December 31, Carrying 2018	Investment Gain (Loss)	of Direct or Ownership nvestment Indirect ×	(Loss) of the Net Income Investee	Remittance for December 31, Accumulated Investments from Taiwan Outward 2018 as of	Inflow Investment Flows	Outflow	anuary 1, 2018 Remittance for Accumulated from Taiwan Investments Outward as of	Method of Investment	Paid-in Capital	Main Businesses and Products	Investee Company

Note 1: Investment income (loss) was based on financial statements audited by the parent company's International CSRC Investment Holdings Co., Ltd., or the "Corporation" auditors.

Note 2: Except the average exchange rates for the year ended December 31, 2018 were US\$1=NT\$30,149; the exchange rates on December 31, 2018 were US\$1=NT\$30,715.

Note 3: The investment limit is 60% of the Corporation's net assets.

TABLE 10

INTERNATIONAL CSRC INVESTMENT HOLDINGS CO., LTD. AND SUBSIDIARIES
(Formerly China Synthetic Rubber Corporation)

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2018
(In Thousands of New Taiwan Dollars)

ż.					Transaction Details (Notes 3 and 5)
(Note 1)	Transaction Company	Counterparty	Relationship (Note 2)	Financial Statement Accounts	Amount	Payment Terms	% to Total Sales or Assets
$\circ$	International CSRC Investment Holdings	Consolidated Resource Co.		Operating costs	124,405 S,
	Co, Ltd	Continental Carbon Company		Other receivables from related parties		(Note 4) (Note 4)
		Continental Carbon Company		Management fee income	29,716 55,670	(Note 4)
	CSRC China Corporation	CSRC China (Anshan) Corporation		Accounts receivable from related parties
		CSRC China (Anshan) Corporation		Other receivables	109,324 511,396	(Note 4) (Note 4)
		CSRC China (Anshan) Corporation		Operating revenue	28,963 20,582 12,361 40,760	(Note 4)
		CSRC China (Anshan) Corporation		Interest revenue		(Note 4)
		CSRC China (Chongqing) Corporation		Operating costs		(Note 4)
		Consolidated Resource Co.		Operating revenue		(Note 4)
2	CSRC China (Anshan) Corporation	CSRC China Corporation		Trade payables to related parties	109,324 511,396	(Note 4)
		CSRC China Corporation	$\sim$	Other payables		(Note 4)
		CSRC China Corporation	$\sim$	Operating costs	28,963	(Note 4)
		CSRC China Corporation	$\omega$ un	Interest expense		(Note 4)
		Consolidated Resource Co.		Operating revenue	20,582 42,750	(Note 4)
3	CSRC China (Chongqing) Corporation	CSRC China Corporation	3	Operating revenue	12,361	(Note 4)	$\mathbf{I}$
4	Circular Commitment Company	Synpac Venture Capital, L.P.	3	Accounts receivable from related parties	387,927	(Note $4$ )
5	Consolidated Resource Co.	International CSRC Investment Holdings Co., $\mathbb{E}$	$\mathbf 2$	Operating revenue	124,405	(Note 4)
		CSRC China (Anshan) Corporation		Operating costs
		CSRC China Corporation	$\sim$	Operating costs	42,750 40,760	$(Note 4)$ $(Note 4)$
$\circ$	Synpac (North Carolina), Inc.	Continental Carbon Company	3	Other receivables from related parties	309,135	(Note 4)
$\overline{ }$	Synpac Venture Capital, L.P.	Circular Commitment Company	ω	Trade payables to related parties
		SVC Management, LLC SVC Management, LLC		Trade payables to related parties Management fee	387,927 239,918 54,928	$\begin{array}{l}(\text{Note 4}) \(\text{Note 4}) \(\text{Note 4})\end{array}$
							(Continued)

ż					Transaction Details (Notes 3 and 5)
Note 1)	Transaction Company	Counterparty	Relationship (Note 2)	Financial Statement Accounts	Amount	Payment Terms	% to Total Sales or Assets
$\infty$	SVC Management, LLC	Synpac Venture Capital, L.P. Synpac Venture Capital, L.P.	3 3	Accounts receivable from related parties Operating revenue	54,928 \$239,918	$(Note 4)$ $(Note 4)$
Ò	Continental Carbon Company	International CSRC Investment Holdings Co., E	N	Trade payables to related parties	29,716	(Note 4)
		International CSRC Investment Holdings Co., Ed.		Management fee	55,670	(Note 4)
		Synpac (North Carolina), Inc.		Other payables to related parties	309,135	(Note 4)
		Continental Carbon Company Europe SPRL		Accounts receivable from related parties	252,610	Note 4)
		Continental Carbon Company Europe SPRL		Operating revenue	557,174	(Note4)	$\mathbf{\sim}$
		Continental Carbon Company Europe SPRL		Selling expense	18,365	(Note 4)
		CCC Transport Company		Operating revenue	48,472	(Note 4)
		3C Infocorp		Management fee	55,344	(Note 4)
$\approx$	Continental Carbon Company Europe SPRL	Continental Carbon Company	3	Trade payables to related parties	252,610	Note $4)$
		Continental Carbon Company	$\sim$	Operating costs	557,174	(Note 4)	$\sim$
		Continental Carbon Company	$\sim$	Non-operating income	18,365	(Note 4)
$\equiv$	CCC Transport Company	Continental Carbon Company	3	Operating costs	48,472	(Note 4)	f,
$\overline{5}$	3C Infocorp	Continental Carbon Company	3	Operating revenue	55,344	(Note 4)	ï
$\overline{13}$	E-One Moli Energy Corp.	E-One Moli Energy (Canada) Ltd.	3	Accounts receivable from related parties	163,895	Note 4)
		E-One Moli Energy (Canada) Ltd.		Other payables to related parties	30,124	(Note 4)
		E-One Moli Energy (Canada) Ltd.	ოოო	Operating revenue		(Note 4)
		E-One Moli Energy (Canada) Ltd		Management fee	124,853	(Note 4)
$\overline{4}$	E-One Moli Energy (Canada) Ltd.	E-One Moli Energy Corp.	S	Other receivables	30,124	Note 4)
		E-One Moli Energy Corp.	$\sim$	Trade payables to related parties	163,895	(Note 4)
		E-One Moli Energy Corp.	$\sim$	Operating costs	11,911	(Note 4)
		E-One Moli Energy Corp.		Other operating revenue	124,853	(Note 4)

Note 1: The types of transaction companies are identified by the following numbers in the "No." column:

a. $0$ - parent company;
b. 1 to 14 - subsidiary.

Note 2: The flow of transactions are identified by the following numbers in the "Relationship" column:

a. 1 - from parent company to subsidiary;
b. 2 - from subsidiary to parent company;
c. 3 - between subsidiaries.

Note 3: The ratio of consolidated revenue/assets depends on the account to which it belongs. The profit and loss account is a percentage of consolidated revenue while the assets/liabilities are a percentage of consolidated

Note 4: The transaction terms are comparable with those for third parties.

Note 5: A transaction is disclosed if it amounts to more than \$10,000 thousand.

(Concluded)