GEM - Interim / Quarterly Report 2018

GEM Terminal Ind. Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2018 and 2017 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Stockholders GEM Terminal Ind. Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of GEM Terminal Ind. Co., Ltd. and its subsidiaries (the “Group”) as of March 31, 2018 and 2017 and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three-month periods then ended, and related notes, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting”. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly in all material respects of the financial position of the Group as at March 31, 2018 and 2017, and of its consolidated financial performance and its consolidated cash flows for the three-month periods then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting”.

Deloitte & Touche Taipei, Taiwan Republic of China

May 11, 2018

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 ROC and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the ROC.

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 ROC. 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.

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through other comprehensive income-current (Notes 3, 4 and 7) Available-for-sale financial assets - current (Notes 3, 4 and 8) Notes receivable (Note 9) Accounts receivable, net (Notes 3, 4, 5 and 9 ) Other receivables Current tax assets (Note 4) Inventories (Note 10) Other financial assets - current (Notes 11 and 27) Other current assets (Notes 14 and 27) Total current assets NONCURRENT ASSETS Property, plant and equipment (Notes 13, 27 and 28) Deferred tax assets (Note 4) Prepayments for equipment (Note 27) Other financial assets - noncurrent (Note 11) Long-term prepayments for lease (Notes 14 and 27) Other noncurrent assets Total noncurrent assets TOTAL		March 31, 2018 (Reviewed) Amount % $ 1,222,269 20 113,739 2 - - 176,272 3 1,102,632 18 675 - 1,309 - 1,087,989 17 189,800 3 126,829 2 4,021,514 65 1,933,164 31 145,529 2 30,445 1 1,758 - 91,282 1 6,028 - 2,208,206 35 $ 6,229,720 100	December 31, 2017 (Audited) Amount % $ 1,430,724 22 - - 113,167 2 150,463 2 1,216,725 19 1,774 - 1,250 - 973,975 15 269,963 4 169,358 3 4,327,399 67 1,933,646 30 116,795 2 22,753 - 1,727 - 92,706 1 6,192 - 2,173,819 33 $ 6,501,218 100	March 31, 2017 (Reviewed) LIABILITIES AND EQUITY Amount % CURRENT LIABILITIES $ 1,184,289 20 Short-term borrowings (Notes 17 and 27) Short-term bills payable (Note 17) - - Notes payable (Note 15) 19,741 - Accounts payable (Note 15) 134,341 2 Other payables (Note 16) 923,212 16 Current tax liabilities (Note 4) 1,386 - Long-term borrowings - current portion (Notes 17 and 27) 307 - Other current liabilities 840,823 15 433,553 8 Total current liabilities 124,895 2 NONCURRENT LIABILITIES 3,662,547 63 Long-term borrowings (Notes 17 and 27) Deferred tax liabilities (Note 4) Net defined benefit liabilities (Note 4) 1,866,919 32 117,029 2 Total noncurrent liabilities 54,185 1 3,138 - Total liabilities 93,514 2 6,486 - EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 19) 2,141,271 37 Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity $ 5,803,818 100 TOTAL		March 31, 2018 (Reviewed)		December 31, 2017 (Audited) Amount % $ 834,920 13 100,000 2 148,970 2 590,422 9 185,507 3 7,636 - 716,111 11 3,528 - 2,587,094 40 1,057,653 16 89,965 1 37,722 1 1,185,340 18 3,772,434 58 1,692,000 26 271,315 4 343,170 5 386,197 6 729,367 11 36,102 1 2,728,784 42 $ 6,501,218 100	March 31, 2017 (Reviewed)
						Amount % $ 738,843 12 50,000 1 171,816 3 454,338 7 158,263 2 3,729 - 667,156 11 9,097 - 2,253,242 36 1,097,771 18 103,218 2 37,488 - 1,238,477 20 3,491,719 56 1,692,000 27 271,315 5 343,170 5 355,974 6 699,144 11 75,542 1 2,738,001 44 $ 6,229,720 100			Amount % $ 779,639 13 50,000 1 150,476 3 374,735 6 154,184 3 2,156 - 656,990 11 3,895 - 2,172,075 37 872,157 15 99,196 2 44,260 1 1,015,613 18 3,187,688 55 1,692,000 29 271,315 5 338,662 6 373,437 6 712,099 12 (59,284 ) (1 ) 2,616,130 45 $ 5,803,818 100

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

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Net Loss Per Share) (Reviewed, Not Audited)

OPERATING REVENUE, NET (Notes 4 and 20) OPERATING COSTS (Notes 10, 21 and 26) GROSS PROFIT OPERATING EXPENSES (Notes 21 and 26) Marketing General and administrative Research and development Expected credit loss (Note 9) Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Note 21) Other income Other gains and losses Finance costs Total non-operating income and expenses CONSOLIDATED LOSS BEFORE INCOME TAX INCOME TAX BENEFIT (Notes 4 and 22) CONSOLIDATED NET LOSS OTHER COMPREHENSIVE INCOME (LOSS) (Notes 19 and 21) Items that will not be reclassified subsequently to profit or loss Unrealized loss on investments in equity instruments designated as at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 Amount % $ 930,737 100 849,180 91 81,557 9 35,045 4 50,344 5 3,915 - 4,914 1 94,218 10 (12,661 ) (1 ) 2,494 - (16,360) (2) (13,337 ) (1 ) (27,203 ) (3 ) (39,864) (4) (7,422 ) (1 ) (32,442 ) (3 ) (2,664) - 292 -		2017
				Amount % $ 794,379 100 710,494 89 83,885 11 33,246 4 51,904 7 6,198 1 - - 91,348 12 (7,463 ) (1 ) 7,058 1 (4,942) (1) (12,793 ) (1 ) (10,677 ) (1 ) (18,140) (2) (12 ) - (18,128 ) (2 ) - - - - (Continued)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Net Loss Per Share) (Reviewed, Not Audited)

Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized loss on available-for-sale financial assets Income tax relating to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD NET LOSS ATTRIBUTABLE TO: Owners of the Company TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company NET LOSS PER SHARE (Note 23) Basic Diluted		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 Amount % $ 39,337 4 - - 4,694 - 41,659 4 $ 9,217 1 $ (32,442 ) (3 ) $ 9,217 1 $ (0.19 ) $ (0.19 )		2017
				Amount % $ (166,748) (21) (587) - 3,816 - (163,519 ) (21 ) $ (181,647 ) (23 ) $ (18,128 ) (2 ) $ (181,647 ) (23 ) $ (0.11 ) $ (0.11 )

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

(Concluded)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

		Equity Attributable to the Owners of the Company	Equity Attributable to the Owners of the Company	Equity Attributable to the Owners of the Company
Ordinary Shares $ 1,692,000 - 1,692,000 - - - - $ 1,692,000 $ 1,692,000 - - - $ 1,692,000	Capital Surplus $ 271,315 - 271,315 - - - - $ 271,315 $ 271,315 - - - $ 271,315	Retained Earnings	Total $ 729,367 - 729,367 (32,442) - (32,442 ) 2,219 $ 699,144 $ 730,227 (18,128) - (18,128 ) $ 712,099		Other Equity
				Unrealized Loss on Financial Assets at Fair Value Through Unrealized Loss Other on Available Comprehensive -for-sale Income Financial Assets $ - $ (3,166) (3,166 ) 3,166 (3,166 ) - - - (2,154 ) - (2,154 ) - (2,219 ) - $ (7,539 ) $ - $ - $ - - - - (439 ) - (439 ) $ - $ (439 )	Exchange Differences on Translating Remeasurement Foreign of Defined Operations Benefit Plans $ 33,232 $ 6,036 - - 33,232 6,036 - - 44,031 (218 ) 44,031 (218 ) - - $ 77,263 $ 5,818 $ 97,341 $ 6,894 - - (163,080 ) - (163,080 ) - $ (65,739 ) $ 6,894
		Unappropriated Legal Reserve Earnings $ 343,170 $ 386,197 - - 343,170 386,197 - (32,442) - - - (32,442 ) - 2,219 $ 343,170 $ 355,974 $ 338,662 $ 391,565 - (18,128) - - - (18,128 ) $ 338,662 $ 373,437

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

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated loss before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss recognized Allowance for doubtful accounts Finance costs Interest income Loss on disposal of property, plant and equipment, net Gain on disposal of investments, net Write-down of inventories Other non-cash items Changes in operating assets and liabilities Notes receivable Accounts receivable Other receivables Inventories Other current assets Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liabilities Cash used in operations Interest received Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other financial assets Increase in other noncurrent assets Net cash generated from (used in) investing activities		Three Months Ended March 31	Three Months Ended March 31
		2018 $ (39,864) 62,297 1,342 4,914 - 13,337 (1,789) 2,998 - 12,873 4,159 (25,809) 108,940 - (127,267) 42,529 22,846 (136,084) (16,272) 1,476 (7,324 ) (76,698) 2,888 (4,576 ) (78,386 ) (225,575) 223,807 - - (72,511) 160 80,132 (467 ) 5,546	2017 $ (18,140) 61,222 1,358 - 1,098 12,793 (3,344) 432 (488) 6,445 1,247 11,641 195,479 (5) (101,742) (7,266) (47,744) (156,181) (21,047) (630) (2,471 ) (67,343) 3,755 (12,606 ) (76,194 ) - - (43,186) 23,334 (65,687) 648 (120,421) - (205,312 ) (Continued)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term bills payable Decrease in short-term bills payable Increase in long-term borrowings Repayment of long-term borrowings Interest paid Net cash used in financing activities EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD		Three Months Ended March 31	Three Months Ended March 31
		2018 $ 214,848 (312,550) - (50,000) 254,931 (262,100) (14,156 ) (169,027 ) 33,412 (208,455) 1,430,724 $ 1,222,269	2017 $ 746,279 (756,833) 150,000 (150,000) 100,000 (198,750) (13,907 ) (123,211 ) (129,380 ) (534,097) 1,718,386 $ 1,184,289

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

(Concluded)

GEM TERMINAL IND. CO., LTD. AND SUBSIDAIRIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

GEM Terminal Ind. Co., Ltd. (the “Company”) was incorporated in July 1993 under the laws of the Republic of China (ROC). The Company mainly manufactures and sells the following products:

Series terminals, plug inserts, housing and electronic connectors for AC and DC power cords.
Electric and motor parts terminal.
Electric and communication terminal.
Optical communication passive devices.
Lead frames.

The Company’s shares have been traded on the Taiwan Stock Exchange since September 2001.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were reported to the board of directors for issue on May 11, 2018.

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

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:

IFRS 9 “Financial Instruments” and related amendment

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, 2017, 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 as at January 1, 2017.

		Measurement Category	Measurement Category	Measurement Category			Carrying Amount	Carrying Amount
Financial Assets		IAS 39		IFRS 9			IAS 39	IFRS 9	Remark
Cash and cash equivalents	Loans and	receivables	Amortized	cost		$	1,430,724 $	1,430,724		2)
Equity securities	Available	for sale	Fair value through other				113,167	113,167		1)
			comprehensive		income
			(FVTOCI) - equity
			instruments
Notes receivable and accounts	Loans and	receivables	Amortized	cost			1,367,188	1,367,188		2)
receivable
Other receivables	Loans and	receivables	Amortized	cost			1,774	1,774		2)
Other financial assets (current	Loans and	receivables	Amortized	cost			271,690	271,690		2)
and non-current)
			IAS 39
			Carrying				IFRS 9
			Amount				Carrying
		as	of January 1,	Reclassifi-			Amount as	of
Financial Assets			2018		cations		January 1, 2018		Remark
FVTOCI
Reclassification from		$ -		$	113,167		$ 113,167		1)
available-for-sale (IAS 39)
Amortized cost
Reclassification from loans and			-		3,071,376		3,071,376		2)
receivables (IAS 39)
		$ -		$	3,184,543		$ 3,184,543

1) The Group elected to designated all of 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 loss on available-for-sale financial assets of $3,166 thousand was reclassified to other equity - unrealized loss on financial assets at FVTOCI.
2) Cash and cash equivalents, notes receivable, account receivables, other receivables and other financial assets that were previously classified as loans and receivables under IAS 39 were classified as measured at amortized cost with an assessment of expected credit losses under IFRS 9.
b. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Annual Improvements to IFRSs 2015-2017 Cycle Amendments to IFRS 9 “Prepayment Features with Negative Compensation” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 16 “Leases”	Effective Date Announced by IASB (Note 1)
	January 1, 2019 January 1, 2019 (Note 2) To be determined by IASB January 1, 2019 (Note 3) (Continued)

New IFRSs IFRS 17 “Insurance Contracts” Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures” IFRIC 23 “Uncertainty Over Income Tax Treatments”	Effective Date Announced by IASB (Note 1)
	January 1, 2021 January 1, 2019 (Note 4) January 1, 2019 January 1, 2019 (Concluded)

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

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

Note 3: The FSC announced that IFRS 16 will take effect starting from January 1, 2019.
Note 4: 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.

Under IFRS 16, if the Group is a lessee, it shall recognize right-of-use assets and lease liabilities for all leases on the consolidated balance sheets except for low-value and short-term leases. The Group may elect to apply the accounting method similar to the accounting for operating leases under IAS 17 to low-value and short-term leases. On the consolidated statements of comprehensive income, the Group should present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed by using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal and interest of lease liabilities are both classified within financing activities.

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

When IFRS 16 becomes effective, the Group may elect to apply this standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the initial application of this standard recognized at the date of initial application.

Except for the aforementioned impact, as of the date the consolidated financial statements were reported to the board of directors, the Group is continuously assessing the possible impact that the application of other 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.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of IFRSs annual financial statements.

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 and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and 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. Basis of consolidation

The basis of preparation applied in the consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2017.

See Note 12, table 5 and 6 for the detailed information of subsidiaries (including percentage of ownership and main business).

d. Other significant accounting policy

Except for financial assets, revenue from sale of goods and the following, please refer to the summary of significant accounting policy in the consolidated financial statements for the year ended December 31, 2017.

1) Financial instruments

Financial assets and financial liabilities are recognized when the Group 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 FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

a) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a

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trade date basis.

i Measurement category

2018

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

i) 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 assets in order to collect contractual cash flows; and
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, notes receivable, accounts receivable, other receivables and other financial assets, are measured at amortized cost, which equals to 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.

Cash equivalents include time deposits 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.

ii) 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: available-for-sale financial assets and loans and receivables.

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i) Available-for-sale financial assets

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

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

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

ii) Loans and receivables

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

ii Impairment of financial assets

2018

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

The Group always recognizes lifetime Expected Credit Loss (ECL) for notes receivable and accounts receivable. For all other financial instruments, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

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

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

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2017

Financial assets 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 assets, that the estimated future cash flows of the investment have been affected.

For financial assets carried at amortized cost, such as accounts 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, an increase in the number of delayed payments, as well as observable changes in national or local economic conditions that correlate with defaults on receivables.

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

The carrying amount of a financial asset is reduced by the impairment loss directly for all financial assets, with the exception of accounts receivable, where the carrying amount is reduced through the use of an allowance account. When accounts 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 that are written off against the allowance account.

iii 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.

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 cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2017

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

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cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.

2) Revenue recognition

2018

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

Revenue from sale of goods

Revenue from sale of goods comes from sales of terminals. Sales of terminals are recognized as revenue when the goods are shipped or delivered to the customer’s specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers, and bears the risks of obsolescence. Accounts receivable are recognized concurrently.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2017

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

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.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of risks and rewards of materials ownership.

3) Retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

15 -
4) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income and the tax rate that would be applicable to expected total annual earnings. The effect of a change in tax rate resulting from a change in tax law is recognized consistent with the accounting for the transaction itself which gives rise to the tax consequence, and is recognized in profit or loss or other comprehensive income in full in the period in which the change in tax rate occurs.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Except for the following item, for the critical accounting judgments and key sources of estimation, uncertainty and assumption applied in these consolidated financial statements, please refer to the consolidated financial statements for the year ended December 31, 2017.

Estimated impairment of financial assets

The provision for impairment of accounts receivable is based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. For details of the key assumptions and inputs used, see Note 9. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits with original maturities less than 3 months	March 31, 2018 December 31, 2017 $ 2,788 $ 2,677 831,604 929,940 387,877 498,107 $ 1,222,269 $ 1,430,724	March 31, 2017 $ 2,982 845,820 335,487 $ 1,184,289

The market rate intervals of cash equivalents at the end of the reporting period were as follows:

	March 31,	December 31,	March 31,
	2018	2017	2017
Time deposits (%)	0.55-2.30	0.55-1.98	0.55-1.55

16 -

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT

	March 31, 2018	March 31, 2018
Investments in equity instruments at FVTOCI
Domestic listed shares	$	34,181
Overseas listed shares		79,558
	$	113,739

These investments in equity instruments are not held for trading. 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 and Note 8 for information relating to their reclassification and comparative information for 2017.

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS - CURRENT

Domestic listed shares Overseas listed shares NOTES AND ACCOUNTS RECEIVABLE, NET Notes receivable Notes receivable - operating Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss	December 31, 2017 $ 29,730 83,437 $ 113,167 March 31, 2018 December 31, 2017 $ 176,272 $ 150,463 $ 1,123,258 $ 1,232,198 20,626 15,473 $ 1,102,632 $ 1,216,725	March 31, 2017 $ 369 19,372 $ 19,741 March 31, 2017 $ 134,341 $ 936,673 13,461 $ 923,212

9. NOTES AND ACCOUNTS RECEIVABLE, NET

a. Accounts receivable

For the three months ended March 31, 2018

The average credit period of sales of goods was 30-120 days. In order to minimize credit risk, the management of the Group has delegated a team 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 of each individual trade debt 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.

17 -

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 receivable. The expected credit losses on accounts receivable are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position. 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 writes off a 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 receivable 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 receivable based on the Group’s provision matrix.

March 31, 2018

Not Past Due
Past Due
1to 60 Days
Past Due
61 to 90 Days
Past Due
91 to
180 Days
Expected credit loss rate (%)
0-0.6
2-10
20-40
30-60

Gross carrying amount
$ 1,050,784
$ 54,593
$ 2,615
$ 8,299
Loss allowance (Lifetime ECL)

(5,192
)

(3,006
)

(950
)

(4,531
)

Amortized cost
$ 1,045,592
$ 51,587
$ 1,665
$ 3,768

The movements of the loss allowance of accounts receivable were as follows:
Balance at January 1, IAS 39
Adjustment on initial application of IFRS 9
Balance at January 1, IFRS 9
Add: Net remeasurement of loss allowance
Foreign exchange gains and losses
Balance at March 31, 2018

Past Due
Over
180 Days
Total
50-100
-
$ 6,967
$ 1,123,258
(6,947
)

(20,626
)
$ 20
$ 1,102,632
2018

$ 15,473

-

15,473

4,914

239

$ 20,626

2017

The average credit period of sales of goods was 30-120 days. 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 an allowance for impairment loss of 100% against all receivables over 360 days because historical experience revealed that receivables that are past due beyond 360 days were not collectible. Allowance for impairment loss was recognized against accounts receivable between 0 days and 360 days based on the estimated uncollectible amounts determined by reference to past default experience of the counterparties and an analysis of their current financial position.

There were no accounts receivable that were past due and not impaired at the end of the reporting period. Inspection on customers’ credit was taken regularly and aging analysis was preformed based on the past due date.

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Aging analysis of accounts receivable was as follows:

December 31, 2017 Not past due $ 1,129,514 Past due 1-60 days 90,972 Past due 61-90 days 4,000 Past due 91-180 days 4,414 Past due over 181 days 3,298 $ 1,232,198	March 31, 2017 $ 851,435 79,064 1,462 238 4,474 $ 936,673

Movements of the allowance for impairment loss on accounts receivable were as follows:

Balance, beginning of period Impairment losses recognized Foreign exchange gains and losses Balance, end of period	Collectively Assessed for Impairment
	For the Three Months Ended March 31, 2017 $ 12,988 1,098 (625 ) $ 13,461

b. Credit risk of notes and accounts receivable

The Group’s receivables are significantly concentrated in certain individuals, most of which have similar business operations and economic features. Concentration of credit risk occurs when the counterparties to financial instrument transactions are individuals or groups engaged in similar activities or activities in the same region, which would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.

The balances of the notes and accounts receivable from certain customers with significant carrying amounts as of each reporting date were as follows:

Group A 10. INVENTORIES Finished goods Work in process Raw materials Supplies	March 31, 2018 December 31, 2017 $ 187,894 $ 197,695 March 31, 2018 December 31, 2017 $ 352,418 $ 288,951 269,265 222,672 386,401 373,110 79,905 89,242 $ 1,087,989 $ 973,975	March 31, 2017 $ 180,293 March 31, 2017 $ 302,508 253,943 219,414 64,958 $ 840,823

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The cost of goods sold for the three months ended March 31, 2018 and 2017 included the following items:

For the Three Months Ended March 31 2018 2017 Write-down of inventories $ 12,873 $ 6,445 Others 3,906 41 $ 16,779 $ 6,486 OTHER FINANCIAL ASSETS March 31, 2018 December 31, 2017 March 31, 2017 Time deposits with original maturities more than 3 months $ 161,099 $ 242,176 $ 240,485 Pledge time deposits 25,603 23,459 192,940 Refundable deposits 4,856 6,055 3,266 $ 191,558 $ 271,690 $ 436,691 Current $ 189,800 $ 269,963 $ 433,553 Non-current 1,758 1,727 3,138 $ 191,558 $ 271,690 $ 436,691 a. The market rate intervals of other financial assets at the end of the reporting period were as followings: March 31, 2018 December 31, 2017 March 31, 2017 Time deposits (%) 1.10-1.55 1.10-1.55 1.35-1.55		For the Three Months Ended March 31

11. OTHER FINANCIAL ASSETS

b. Refer to Note 27 for the pledge information of other financial assets.

12. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements were as follows:

Name of Investor Name of Investee Main Businesses and Products The Company Global Electronics Terminal (Cayman) Co., Ltd. (Global (Cayman)) Note 1 Genius Terminal Co., Ltd. (Genius) Notes 1 and 2 GEM Terminal (Cayman) Co., Ltd. (GEM (Cayman)) Note 1 Global (Cayman) Vibo Gem International Co., Ltd. (Vibo) Notes 1 and 2 Global Electronics Terminal (HK) Co., Ltd. (Global (HK)) Note 2	Percentage of Ownership
	March 31, 2018 December 31, 2017 March 31, 2017 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

(Continued)

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Name of Investor Name of Investee Main Businesses and Products Genius Genius Terminal (HK) Ltd. (Genius (HK)) Note 2 GEM (Cayman) Vietnam Gem Electronic and Metal Co., Ltd (GEM (VN)) Note 3 Vibo Suzhou Gem Opto-Electronics Terminal Co., Ltd. (GEM (Suzhou)) Note 3 Dongguan Gem Electronics & Metal Co., Ltd. (GEM (Dongguan)) Note 3	Percentage of Ownership
	March 31, 2018 December 31, 2017 March 31, 2017
	100 100 100 100 100 100 100 100 100 100 100 100

(Concluded)

Note 1: International investment.

Note 2: International trading.

Note 3: Production of hardware; machine processing; electroplating for metal processing; production and processing of molds and related accessories; plastic products and related plastic accessory production.

13. PROPERTY, PLANT, AND EQUIPMENT

The Company purchased land of $7,908 thousand for the purpose of a resort constructed for the employees. However, a part of the land is agricultural land that cannot be transferred to the Company because of statutory limitations; thus, the Company registered the property rights in the name of chairman. The land is mortgaged to the Company and the agreement stipulated unconditional conveyance of the land to the Company.

a. Movements of cost and accumulated depreciation were as follows:

Three months ended March 31, 2018

Cost Balance at January 1, 2018 Additions Disposal Effect of foreign currency exchange differences Balance at March 31, 2018 Accumulated depreciation Balance at January 1, 2018 Depreciation expenses Disposal Effect of foreign currency exchange differences Balance at March 31, 2018 Carrying amounts at December 31, 2017 and January 1, 2018 Carrying amounts at March 31, 2018	Land $ 146,218 - - - $ 146,218 $ - - - - $ - $ 146,218 $ 146,218	Buildings Machinery and Equipment Transportation Equipment $ 1,046,950 $ 1,629,392 $ 57,436 11,595 22,255 743 (5,682 ) (12,064 ) (375 ) 17,710 58,367 1,432 $ 1,070,573 $ 1,697,950 $ 59,236 $ (430,535 ) $ (972,172 ) $ (48,426 ) (11,391 ) (27,817 ) (615 ) 5,682 9,565 354 (17,083 ) (55,540 ) (1,370 ) $ (453,327 ) $ (1,045,964 ) $ (50,057 ) $ 616,415 $ 657,220 $ 9,010 $ 617,246 $ 651,986 $ 9,179	Others $ 690,093 23,095 (9,760 ) 19,909 $ 723,337 $ (361,678 ) (22,474 ) 9,122 (17,131 ) $ (392,161 ) $ 328,415 $ 331,176	Construction in Progress and Equipment to be Inspected $ 176,368 4,068 - (3,077 ) $ 177,359 $ - - - - $ - $ 176,368 $ 177,359	Total $ 3,746,457 61,756 (27,881 ) 94,341 $ 3,874,673 $ (1,812,811 ) (62,297 ) 24,723 (91,124 ) $ (1,941,509 ) $ 1,933,646 $ 1,933,164

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Three months ended March 31, 2017

Cost Balance at January 1, 2017 Additions Disposal Reclassification Effect of foreign currency exchange differences Balance at March 31, 2017 Accumulated depreciation Balance at January 1, 2017 Depreciation expenses Disposal Effect of foreign currency exchange differences Balance at March 31, 2017 Carrying amounts at January 1, 2017 Carrying amounts at March 31, 2017	Land $ 146,218 - - - - $ 146,218 $ - - - - $ - $ 146,218 $ 146,218	Buildings Machinery and Equipment Transportation Equipment $ 1,049,205 $ 1,676,636 $ 56,535 821 6,576 109 (152 ) (7,928 ) (827 ) - 11,272 - (47,370 ) (56,352 ) (2,064 ) $ 1,002,504 $ 1,630,204 $ 53,753 $ (405,473 ) $ (956,901 ) $ (47,939 ) (11,058 ) (29,486 ) (757 ) 138 6,975 789 16,529 16,517 1,705 $ (399,864 ) $ (962,895 ) $ (46,202 ) $ 643,732 $ 719,735 $ 8,596 $ 602,640 $ 667,309 $ 7,551	Others $ 731,408 8,817 (1,443 ) 4,862 (33,756 ) $ 709,888 $ (397,720 ) (19,921 ) 1,368 18,897 $ (397,376 ) $ 333,688 $ 312,512	Construction in Progress and Equipment to be Inspected $ 137,008 20,211 - (16,156 ) (10,374 ) $ 130,689 $ - - - - $ - $ 137,008 $ 130,689	Total $ 3,797,010 36,534 (10,350 ) (22 ) (149,916 ) $ 3,673,256 $ (1,808,033 ) (61,222 ) 9,270 53,648 $ (1,806,337 ) $ 1,988,977 $ 1,866,919

b. Estimated useful lives

Depreciation is provided on a straight-line basis over estimated useful lives as follows:

Buildings
Factory	10-50 years
Main building	5-25 years
The major component part of the factory	5-20 years
The major component part of the office	10-55 years
Machinery and equipment	3-15 years
Transportation equipment	4-12 years
Others	3-20 years

Refer to Note 27 for the carrying amount of property, plant and equipment that were pledged by the Group to secure borrowings/general banking facilities granted to the Group.

c. Investing activities affecting both cash and non-cash items

Acquisition of property, plant and equipment Capitalized interest Increase in prepayments for equipment Decrease in payable for purchase of equipment Cash paid for acquisition of property, plant and equipment		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 61,756 (813) 7,692 3,876 $ 72,511	2017 $ 36,534 (956) 14,645 15,464 $ 65,687

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14. PREPAYMENT FOR LEASE

Current (included in other current assets) Noncurrent (included in long-term prepayments for lease)	March 31, 2018 December 31, 2017 $ 2,342 $ 2,283 91,282 92,706 $ 93,624 $ 94,989	March 31, 2017 $ 1,879 93,514 $ 95,393

Prepayments for lease are for land and property use rights in Mainland China and Vietnam. The amortization period of land use rights in Mainland China is 50 years, which will expire from December 2046 to September 2061 in a row. The amortization periods of land and property use rights in Vietnam are 40-50 years, which will expire from October 2054 to December 2066 in a row. Prepayment for lease with carrying amount of RMB 1,200 thousand is in the process of obtaining the land use right certificate.

Refer to Note 27 for the carrying amount of prepayments for lease that were pledged by the Group to secure borrowings/general banking facilities granted to the Group.

15. NOTES PAYABLE AND ACCOUNTS PAYABLE

The Group’s notes payable and accounts payable were from operating activities and were not secured by collaterals.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms, therefore, no interest was charged on the outstanding accounts payable.

16. OTHER PAYABLES

Payable for purchase of equipment Payable for salaries and bonus Payable for freight Payable for professional service fees Payable for tax Payable for employees compensation and remuneration of directors and supervisors Payable for utilities expense Payable for pension Others	March 31, 2018 December 31, 2017 $ 43,401 $ 47,277 40,892 44,315 15,958 14,019 8,298 8,129 5,591 3,298 2,539 2,539 2,248 8,579 809 7,906 38,527 49,445 $ 158,263 $ 185,507	March 31, 2017 $ 47,865 36,605 9,964 6,477 7,797 3,504 6,608 798 34,566 $ 154,184

Other payables - others were payables for labor and health insurance, rent, and interest, etc.

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17. BORROWINGS

a. Short-term borrowings

Unsecured borrowings Secured borrowings	March 31, 2018 December 31, 2017 $ 142,776 $ 274,774 596,067 560,146 $ 738,843 $ 834,920	March 31, 2017 $ 486,040 293,599 $ 779,639

The annual interest rates of short-term borrowings were as follows:

	March 31,	December 31,	March 31,
	2018	2017	2017
Unsecured borrowings (%)	1.35-1.75	1.23-2.26	1.50-4.35
Secured borrowings (%)	2.97-4.35	2.42-4.35	2.28-4.35

b. Short - term bills payable

The annual interest rates of short-term bills payable were as follows:

	March 31,	December 31,	March 31,
	2018	2017	2017
Short-term bills payable (%)	1.10	1.10-1.16	1.16

The commercial paper as of March 31, 2018 was issued and granted by China Bills Finance Corporation. As of December 31, 2017, commercial papers of $50,000 thousand were issued and granted by China Bills Finance Corporation and International Bills Corporation, respectively. The commercial paper as of March 31, 2017 was issued and granted by DAH CHUNG Bills Finance Corporation. The commercial papers above were issued with one year revolving credit facilities.

c. Long-term borrowings

Unsecured borrowings Secured borrowings Less: Current portion	March 31, 2018 December 31, 2017 $ 1,696,584 $ 1,730,084 68,343 43,680 1,764,927 1,773,764 667,156 716,111 $ 1,097,771 $ 1,057,653	March 31, 2017 $ 1,458,000 71,147 1,529,147 656,990 $ 872,157

The annual interest rates of long-term borrowings were as follows:

	March 31,	December 31,	March 31,
	2018	2017	2017
Unsecured borrowings (%)	1.49-2.09	1.49-2.09	1.49-2.09
Secured borrowings (%)	2.85-3.20	2.85	2.75

24 -

Under the loan agreements with several banks, the Group should maintain certain financial ratios based on reviewed semiannual and audited annual consolidated financial statements. The financial ratio of the Group as of December 31, 2017 and 2016 were in compliance with the requirements stated in the loan agreements.

18. RETIREMENT BENEFIT PLANS

For the three months ended March 31, 2018 and 2017, employee benefit expenses in respect of the Group’s defined benefit retirement plans were $303 thousand and $371 thousand, respectively, and were calculated using the actuarially determined pension cost discount rate as of December 31, 2017 and 2016.

19. EQUITY

a. Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	March 31, 2018 December 31, 2017 221,000 221,000 $ 2,210,000 $ 2,210,000 169,200 169,200 $ 1,692,000 $ 1,692,000	March 31, 2017 221,000 $ 2,210,000 169,200 $ 1,692,000

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

b. Capital Surplus

May be used to offset a deficit, distributed as cash dividends,or transferred to share capital Arising from issuance of common shares Arising from treasury share transactions	March 31, 2018 December 31, 2017 $ 266,411 $ 266,411 4,904 4,904 $ 271,315 $ 271,315	March 31, 2017 $ 266,411 4,904 $ 271,315

The capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).

c. Appropriation of Earnings and Dividend Policy

According the dividend policy in the Articles, where the Company 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, setting aside or reversing special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which

25 -

should be resolved in the stockholders’ meeting for distribution of dividends and bonus to stockholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors, please refer to (f) Employees’ compensation and remuneration of directors and supervisors in Note 21.

The Company’s dividend policy is in line with the Company’s operating scale and research and development needs as well as the status of the economy and industry in order to maintain sound management and promote stockholders’ long-term interests. Thus, the Company adopted Residual dividend policy as its stockholder dividends’ policy. Company’s profits may be distributed in the form of cash and/or stock. However, distribution of profits should preferably be in the form of cash dividend. Cash dividends should be at least 10% of total dividends. But if a cash dividend is less than $0.2, the Company may choose to appropriate stock dividends instead.

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

The deficit compensation for 2017 and the appropriations of earnings for 2016 had been approved in the board of director’s meeting on March 23, 2018 and the stockholders’ meeting on June 14, 2017, respectively. The appropriation of earnings for 2016 was as follow:

Appropriation of Earnings Legal reserve $ 4,508

The deficit compensation for 2017 are subject to the resolution of the stockholders’ meeting to be held on June 13, 2018.

d. Other Equity Items
1) Exchange differences on translating foreign operations

Balance at January 1 Effect of change in tax rate Recognized during the period Exchange differences on translating foreign operations Balance at March 31 Unrealized loss on available-for-sale financial assets Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at March 31, 2018 per IFRS 9		For the Three Months Ended March 31
		2018 2017 $ 33,232 $ 97,341 2,914 - 41,117 (163,080 ) $ 77,263 $ (65,739 ) For the Three Months Ended March 31, 2018 $ (3,166) 3,166 $ -

2) Unrealized loss on available-for-sale financial assets
26 -

	For the Three	For the Three
	Months Ended
	March 31, 2017
Balance at January 1, 2017	$	-
Recognized during the period
Unrealized loss on available-for-sale financial assets		(66)
Reclassification adjustment
Disposal of available-for-sale financial assets		(373 )
Balance at March 31, 2017	$	(439 )

3) Unrealized loss on financial assets at FVTOCI

	For	the Three
	Months Ended
	March 31, 2018
Balance at January 1 per IAS 39	$	-
Adjustment on initial application of IFRS 9		(3,166 )
Balance at January 1 per IFRS 9		(3,166)
Recognized during the period
Unrealized loss - equity instruments		(2,154)
Reclassification adjustment
Disposal of investments in equity instruments		(2,219 )
Balance at March 31	$	(7,539 )

4) Remeasurement of defined benefit plans

Balance at January 1 Effect of change in tax rate Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 6,036 (218 ) $ 5,818	2017 $ 6,894 - $ 6,894

20. OPERATING REVENUE

For the three months ended March 31, 2018 and 2017, operating revenues were arised from contracts with customer by selling terminals products. Please refer to Note 31 the revenue information. The contract balances as of March 31, 2018, December 31, 2017 and March 31, 2017 were all notes receivable and accounts receivable.

21. CONSOLIDATED LOSS BEFORE INCOME TAX

Consolidated loss before income tax was as follows:

27 -

a. Other income

Interest income Others b. Other gains and losses Foreign exchange losses, net Loss on disposal of property, plant and equipment, net Gain on disposal of investments, net Others c. Finance costs Interest expense of borrowings Less: Amounts included in the cost of qualifying assets Information about capitalized interest was as follows: Capitalized interest (classified under property, plant and equipment and prepayments for equipment) Capitalization rate (%) d. Depreciation and amortization Property, plant and equipment Prepayments for lease (including current/noncurrent portion) Other assets		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 2017 $ 1,789 $ 3,344 705 3,714 $ 2,494 $ 7,058 For the Three Months Ended March 31
		2018 2017 $ (13,059) $ (4,823) (2,998) (432) - 488 (303 ) (175 ) $ (16,360 ) $ (4,942 ) For the Three Months Ended March 31
		2018 2017 $ 14,150 $ 13,749 813 956 $ 13,337 $ 12,793 For the Three Months Ended March 31
		2018 2017 $ 813 $ 956 1.33-5.16 1.63-4.08 For the Three Months Ended March 31
		2018 $ 62,297 664 678 $ 63,639	2017 $ 61,222 593 765 $ 62,580

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Other assets were long-term prepayments for computer software, etc.

Analysis of depreciation by function Operating costs Operating expenses Analysis of amortization by function Operating costs Operating expenses e. Employee benefits expense Short-term employee benefits Salary Labor and health Others Post-employment benefits Defined contribution plans Defined benefit plans (Note 18) Analysis of employee benefits expense by function Operating costs Operating expenses		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 2017 $ 53,305 $ 51,104 8,992 10,118 $ 62,297 $ 61,222 $ 69 $ 89 1,273 1,269 $ 1,342 $ 1,358 For the Three Months Ended March 31
		2018 $ 126,352 5,560 7,168 139,080 7,908 303 8,211 $ 147,291 $ 109,018 38,273 $ 147,291	2017 $ 115,969 5,533 7,500 129,002 7,731 371 8,102 $ 137,104 $ 102,501 34,603 $ 137,104

f. Employees’ compensation and remuneration of directors and supervisors

According to the Articles of Incorporation of the Company, the Company accrued employees’ compensation and remuneration of directors and supervisions at rates of no less than 3% and $2,100 thousand, respectively, of net profit before income tax, employees’ compensation and remuneration of directors and supervisors. For the three months ended March 31, 2018 and 2017, the Company had incurred net loss, hence, no employees’ compensation and remuneration of directors and supervisors were accrued for the period.

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.

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The appropriations of employees’ compensation and remuneration of directors and supervisors for 2017 and 2016 resolved by the board of directors on March 23, 2018 and March 23, 2017, respectively, were as below:

Employees’ compensations Remuneration of directors and supervisors	For the Year Ended December 31
	Cash
	2017 2016 $ 439 $ 1,404 2,100 2,100

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

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Company’s board of directors in 2018 and 2017 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

22. INCOME TAX

a. Income tax recognized in profit or loss

The major components of income tax expense were as follows:

Current tax In respect of the current period Adjustments for prior periods Deferred tax In respect of the current period Effect of change in tax rate Income tax benefit recognized in profit or loss		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ - 610 610 4,386 (12,418 ) (8,032 ) $ (7,422 )	2017 $ 1,396 - 1,396 (1,408) - (1,408 ) $ (12 )

The Income Tax Act in the ROC was amended in 2018 and the corporate income tax rate was adjusted from 17% to 20% effective in 2018. The effect of the change in tax rate on deferred tax income to be recognized in profit or loss is recognized in full in the period which the change in tax rate occurs. In addition, the rate of the corporate surtax applicable to 2018 unappropriated earnings will be reduced from 10% to 5%.

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b. Income tax recognized in other comprehensive income (loss)

Deferred tax Effect of change in tax rate In respect of the current period Translations of foreign operations Unrealized loss on available-for-sale financial assets Unrealized loss on financial assets at FVTOCI		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 2,696 1,780 - 510 $ 4,986	2017 $ - 3,668 148 - $ 3,816

c. Income tax assessments

The tax returns of the Company as of 2015 have been assessed by the tax authorities.

GEM (Dongguan) and GEM (Suzhou) had completed the filing of their income tax returns through 2016 with the tax authorities.

23. NET LOSS PER SHARE (EPS)

There is no diluted effect for the three months ended March 31, 2018 and 2017 for net loss incurred in the reporting period. The net loss and weighted average number of ordinary shares outstanding in the computation of EPS were as follows:

Net loss for the periods attributable to owners of the Company

Net loss used in the computation of basic / diluted EPS		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ (32,442 )	2017 $ (18,128 )

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

Weighted average number of ordinary shares in computation of basic /diluted EPS		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 169,200	2017 169,200

If the Company offered to settle compensation paid to employees in cash or shares, the Company assumed the entire amount of the compensation 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.

31 -

24. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns through the optimization of the debt and equity balance. The capital structure of the Group consists of net debt and equity of the Group. The Group is not subject to any externally imposed capital requirements, except to maintain certain financial ratios specified under loan agreements. (Refer to Note 17)

Key management personnel of the Group review the capital structure on a quarterly basis. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the amount of liabilities paid and current assets management to balance its entire capital structure.

25. FINANCIAL INSTRUMENTS

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

The Group’s management considers that the carrying amounts of financial assets and financial liabilities which are not measured at fair value approximate their fair values.

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

March 31, 2018

Financial assets at FVIOCI Investments in equity instruments Domestic listed shares Overseas listed shares December 31, 2017 Available-for-sale financialassets Investments in equity instruments Domestic listed shares Overseas listed shares	Level 1 $ 34,181 79,558 $ 113,739 Level 1 $ 29,730 83,437 $ 113,167	Level 2 $ - - $ - Level 2 $ - - $ -	Level 3 $ - - $ - Level 3 $ - - $ -	Total $ 34,181 79,558 $ 113,739 Total $ 29,730 83,437 $ 113,167

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March 31, 2017

Available-for-sale financialassets Investments in equity instruments Domestic listed shares Overseas listed shares	Level 1 $ 369 19,372 $ 19,741	Level 2 $ - - $ -	Level 3 $ - - $ -	Total $ 369 19,372 $ 19,741

There were no transfers between Level 1 and Level 2 for the three months ended March 31, 2018 and 2017.

c. Categories of financial instruments

		March 31,	December	31,	March 31,
		2018	2017		2017
Financialassets
Loans and receivables (Note 1)	$	-	$ 3,071,376		$ 2,679,919
Available-for-sale financial assets		-	113,167		19,741
Measured at amortized cost (Note 1)		2,693,406		-	-
Financial assets at FVTOCI
Equity instruments		113,739		-	-
Financial liabilities
Measured at amortized cost (Note 2)		3,338,187	3,633,583		3,038,181

Note 1: The balances included in loans and receivables measured at amortized cost, comprise cash and cash equivalents, notes receivable, net of accounts receivable, other receivables and other financial assets.
Note 2: The balances included in financial liabilities measured at amortized cost, comprise short-term borrowings, short-term bills payable, notes payable, accounts payable, 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, notes receivable, accounts receivable, other financial assets, borrowings, short - term bills payable, notes payable and accounts payable. The Group 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 and interest rate risk), credit risk and liquidity risk.

The Group Treasury function reports monthly to the Group's risk management committee.

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1) Market risk

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

a) Foreign currency risk

The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk.

The carrying amounts (including the denominated monetary items in consolidated financial statements which were eliminated) of the Group’s foreign currency denominated monetary assets and monetary liabilities exposing to foreign currency risk at the end of the reporting period are set out in Note 29.

Sensitivity analysis

The Group was mainly exposed to the risks from the fluctuation of USD and HKD.

The following table details the sensitivity to a 1% increase and decrease in the functional currency rate against the relevant foreign currencies of the Group’s outstanding foreign currency denominated monetary items at the end of the reporting period. A positive number below indicates an decrease in pre-tax loss associated with the functional currency.

Profit or loss	USD impact For the Three Months Ended March 31 2018 2017 $ 993 $ 2,561	HKD impact
		For the Three Months Ended March 31
		2018 2017 $ 2,688 $ 1,017

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 risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.

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

	March 31,	March 31,	December 31,	December 31,		March 31,
		2018		2017		2017
Fair value interest rate risk
Financial assets	$	574,579	$	763,742	$	768,912
Financial liabilities		1,270,902		1,540,597		1,543,254
Cash flow interest rate risk
Financial assets		831,472		929,808		845,717
Financial liabilities		1,282,868		1,168,087		815,532

Sensitivity analysis

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

34 -

of the reporting period was outstanding for the whole period.

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax loss for the three months ended March 31, 2018 and 2017 would have been higher/lower by $1,128 thousand and lower/higher by $75 thousand, respectively, which was mainly a result of the changes in floating rate bank deposits and borrowings.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. 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 the counterparties’ failure to discharge an obligation and because of financial guarantees provided by the Group is the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

The Group adopted a policy of only dealing with creditworthy counterparties, and continuously monitoring the credit exposure and credit rating of the counterparties besides, controlling the credit exposure through the credit line limit of counterparties.

The Group’s receivables are significantly concentrated in certain individuals, most of which have similar business operations and economic features. Credit risk concentration occurs when the counterparties to financial instrument transactions are individuals or groups engaged in similar activities or activities in the same region, which would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Accounts receivable from customers with significant carrying amounts are disclosed in Note 9.

3) Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the Group’s funding and liquidity management requirements.

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

Liquidity and interest risk rate tables for non-derivative financial liabilities

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 included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment date.

The maturity dates for non-derivative financial liabilities based on the agreed repayment dates were as follows:

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March31,2018 Fixed interest rate liabilities Variable interest rate liabilities Non-interest bearing December31,2017 Fixed interest rate liabilities Variable interest rate liabilities Non-interest bearing March 31, 2017 Fixed interest rate liabilities Variable interest rate liabilities Non-interest bearing	On Demand or Less than 1 Month $ 51,657 15,326 406,710 $ 473,693 $ 346,945 37,255 556,375 $ 940,575 $ 83,184 1,611 358,529 $ 443,324	1-3 Months $ 170,063 48,232 309,960 $ 528,255 $ 269,475 56,989 303,099 $ 629,563 $ 218,043 46,863 253,457 $ 518,363	3 Months to 1 Year $ 777,077 436,834 65,641 $ 1,279,552 $ 575,877 403,491 63,314 $ 1,042,682 $ 833,147 342,005 62,858 $ 1,238,010	1-5 Years $ 298,939 816,971 -
				$ 1,115,910
				$ 375,316 699,845 -
				$ 1,075,161
				$ 440,956 443,498 525
				$ 884,979

Taking into account the Group’s financial position, management does not believe that it is probable that the banks will exercise their discretionary rights to demand immediate repayment. Management believes that such bank loans will be repaid in one year after the end of reporting period in compliance with the scheduled repayment dates set out in the loan agreements.

The amounts included above for variable interest rate non-derivative financial liabilities were subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

26. TRANSACTIONS WITH RELATED PARTIES

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

a. Related party name and its relationship with the Group

Related Party Name Su, Chung-Hong Su, Tun-Li Su, Tun-Jen Su, Tun-Yi	Relationship with the Group
	Chairman Second-degree relatives of the Company’s Chairman General manager Second-degree relatives of the Company’s Chairman

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b. Compensation of key management personnel

Short-term employee benefits Post-employment benefits		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 2,116 53 $ 2,169	2017 $ 2,192 68 $ 2,260

The remuneration of directors and other members of key management personnel is determined by the remuneration committee having regard to the performance of individuals and market trends.

b. Property lease

The Company leased its Taipei office, factories and storehouse from general manager, Su, Tun-Jen, and second-degree relatives of the Company’s chairman Su, Tun-Li, and Su, Tun-Yi, under one-year operating lease contracts. The rentals for the three months ended March 31, 2018 and 2017 were both $415 thousand and were recorded as operating expenses and manufacturing cost.

The rental terms were determined by negotiation. The rental rates were similar to the local market rate and the payment terms were at arm’s length.

c. Guarantees

The Company’s chairman, Su, Chung-Hong, and second-degree relatives of the Company’s chairman, Su, Tun-Li jointly provided the guarantee for the loans of the Company; the Company’s chairman, Su, Chung-Hong, provided the guarantee for the loans of Genius (HK); and second-degree relatives of the Company’s chairman Su, Tun-Li provided the guarantee for the loans of GEM (VN).

27. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The Group provided the following assets as collateral for the borrowings:

Property, plant and equipment Deposit account (under other financial assets- current) Prepayments for lease (including current portion)	March 31, 2018 December 31, 2017 $ 545,495 $ 326,890 25,603 23,459 24,485 18,318 $ 595,583 $ 368,667	March 31, 2017 $ 389,231 192,940 34,246 $ 616,417

28. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

As of March 31, 2018, significant contingent liabilities and unrecognized commitments of the Group were as follows:

a. The amounts of contracts for the Group’s purchases of properties and materials were $137,637 thousand, of which $110,258 thousand had not been paid.
b. Unused letters of credit for purchases of raw materials amounted to $21,377 thousand.
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29. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Group’s entities and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

		Foreign				Carrying
	Currencies					Amount
	(In	Thousands)	Exchange Rate		(In	Thousands)
March31,2018
Financial assets
Monetary items
USD	$	9,925	29.11	(USD:NTD)	$	288,906
USD		6,071	6.258	(USD:RMB)		176,721
USD		13,517	7.844	(USD:HKD)		393,471
USD		2,068	22,796	(USD:VND)		60,208
HKD		6,153	3.711	(HKD:NTD)		22,835
HKD		90,357	0.798	(HKD:RMB)		335,315
HKD		922	0.127	(HKD:USD)		3,420
					$	1,280,876
Financial liabilities
Monetary items
USD		731	29.11	(USD:NTD)	$	21,283
USD		4,161	6.258	(USD:RMB)		121,140
USD		6,117	7.844	(USD:HKD)		178,057
USD		17,160	22,796	(USD:VND)		499,541
HKD		24,885	3.711	(HKD:NTD)		92,348
HKD		118	0.127	(HKD:RMB)		439
					$	912,808
December 31,2017
Financial assets
Monetary items
USD		8,068	29.8	(USD:NTD)	$	240,433
USD		7,604	6.518	(USD:RMB)		226,620
USD		15,669	7.811	(USD:HKD)		466,937
USD		2,835	22,713	(USD:VND)		84,480
HKD		7,350	3.815	(HKD:NTD)		28,041
HKD		62,060	0.834	(HKD:RMB)		236,760
HKD		950	0.128	(HKD:USD)		3,622
					$	1,286,893
						(Continued)

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		Foreign				Carrying
	Currencies					Amount
	(In	Thousands)	Exchange Rate		(In	Thousands)
Financial liabilities
Monetary items
USD	$	1,032	29.8	(USD:NTD)	$	30,750
USD		4,809	6.518	(USD:RMB)		143,303
USD		6,237	7.811	(USD:HKD)		185,863
USD		15,351	22,713	(USD:VND)		457,467
HKD		16,550	3.815	(HKD:NTD)		63,137
HKD		154	0.834	(HKD:RMB)		588
					$	881,108
March31,2017
Financial assets
Monetary items
USD		5,559	30.330	(USD:NTD)	$	168,610
USD		10,280	6.882	(USD:RMB)		311,803
USD		10,623	7.765	(USD:HKD)		322,198
USD		2,458	22,753	(USD:VND)		74,560
HKD		4,477	3.906	(HKD:NTD)		17,489
HKD		34,747	0.886	(HKD:RMB)		135,720
HKD		947	0.129	(HKD:USD)		3,697
					$	1,034,077
Financial liabilities
Monetary items
USD		545	30.330	(USD:NTD)	$	16,519
USD		6,588	6.882	(USD:RMB)		199,802
USD		4,165	7.765	(USD:HKD)		126,316
USD		9,182	22,753	(USD:VND)		278,480
HKD		14,026	3.906	(HKD:NTD)		54,784
HKD		111	0.886	(HKD:RMB)		435
					$	676,336
					(Concluded)

For the three months ended March 31, 2018 and 2017, realized and unrealized net foreign exchange losses were $13,059 thousand and $4,823 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’s entities.

30. ADDITIONAL DISCLOSURES

a. Information about significant transactions and investees:
1) Financing provided to others: Table 1 (attached).
2) Endorsement/guarantee provided: None.
3) Marketable securities held: Table 2 (attached).
39 -
4) Marketable securities acquired and disposed at cost or price at least NT$300 million or 20% of the paid-in capital: None.
5) Acquisition of individual real estate at cost of at least NT$300 million or 20% of the paid-in capital: None.
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 3 (attached).
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 4 (attached).
9) Trading in derivative instruments: None.
10) Inter - Company business relationship and material transactions and its amount: Table 8 (attached).
11) Information on investees: Table 5 (attached).
b. Information on investments in Mainland China

Information on any investee company in Mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the Mainland China areas: Table 6 (attached).

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

1) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: Table 7 (attached).
2) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Table 3 and Table 7 (attached).
3) The amount of property transactions and the amount of the resultant gains or losses: Table 7 (attached).
4) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: None.
5) The highest balance, the end of period balance, the interest rates range, and total current period interest with respect to financing of funds: Table 1 (attached).
6) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: Table 7 and Table 8 (attached).

31. SEGMENT INFORMATION

Information reported to the Group’s chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on type of goods or services delivered or provided.

40 -

Each entity of the Group is considered separate operating segment by the chief operating decision maker (CODM). For financial statements presentation purposes, these individual operating segments have been aggregated into a single operating segment taking into account the following factors:

a. these operating segments have similar production and sales processes;
b. these operating segments have similar main businesses and products; and
c. the finance and business of these operating segments as to the consolidated financial statements are not material.

The Group’s reportable segments were as follows:

․ The Company
․ GEM (Dongguan) and Genius (HK) consolidated information
․ GEM (Suzhou) and Global (HK) consolidated information
․ Others

Segment revenues and results

The following was an analysis of the Group’s revenue, results from operations, segment assets and liabilities by reportable segment:

The Company GEM (Dongguan)& Genius (HK) For the Three months ended March 31,2018 Revenue from external customers $ 135,174 $ 370,596 Inter - segment revenues 40,346 158,171 Segment revenues $ 175,520 $ 528,767 Segment income (loss) $ (2,366 ) $ 3,937 Other income Other gains and losses Finance cost Consolidated loss before income tax Income tax Consolidated net loss March 31,2018 Segment assets $ 4,801,754 $ 1,685,637 Segment liabilities $ 2,063,753 $ 659,955 For the Three months ended March 31,2017 Revenue from external customers $ 111,703 $ 321,649 Inter - segment revenues 37,369 66,385 Segment revenues $ 149,072 $ 388,034 Segment income (loss) $ (4,232 ) $ 267 Other income Other gains and losses	GEM (Suzhou)& Global (HK) $ 424,955 384,459 $ 809,414 $ (12,567 ) $ 3,198,687 $ 1,132,627 $ 360,831 358,615 $ 719,446 $ (10,937 )	Others $ 12 111,347 $ 111,359 $ (7,307 ) $ 1,014,725 $ 601,880 $ 196 67,774 $ 67,970 $ 4,570	Adjustment and Elimination Consolidated Amount $ - $ 930,737 (694,323 ) - $ (694,323 ) $ 930,737 $ 5,642 $ (12,661 ) 2,494 (16,360 ) (13,337 ) (39,864 ) 7,422 $ (32,442 ) $ (4,471,083 ) $ 6,229,720 $ (966,496 ) $ 3,491,719 $ - $ 794,379 (530,143 ) - $ (530,143 ) $ 794,379 $ 2,869 $ (7,463 ) 7,058 (4,942 ) (Continued)

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The Company GEM (Dongguan)& Genius (HK) Finance cost Consolidated loss before income tax Income tax Consolidated net loss March 31,2017 Segment assets $ 4,344,975 $ 1,854,142 Segment liabilities $ 1,728,845 $ 862,279	GEM (Suzhou)& Global (HK) $ 2,820,425 $ 868,477	Others $ 774,689 $ 379,352	Adjustment and Elimination Consolidated Amount $ (12,793 ) (18,140 ) 12 $ (18,128 ) $ (3,990,413 ) $ 5,803,818 $ (651,265 ) $ 3,187,688 (Concluded)

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TABLE 1

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE THREE MONTHS ENDED March 31, 2018 (In Thousands of New Taiwan Dollars)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance (Note 2)	Actual Borrowing Amount (Notes 2and 3)	Interest Rate	Nature of Financing	Business Transaction Amounts	Reason for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limits	Note
													Item	Value
0 1 2	The Company Vibo Global (Cayman)	GEM (VN) GEM (Suzhou) GEM (Dongguan) Global (HK)	Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties	Yes Yes Yes Yes	$ 233,180 146,050 29,210 11,684	$ 232,880 87,330 29,110 11,644	$ 130,995 - 29,110 11,644	2.1-2.8 2.1-2.8 2.0 2.0-2.8	Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - -	Business development Business development Business development Business development	$ - - - -	- - - -	$ - - - -	$ 547,600 547,600 604,185 608,588	$ 1,095,200 1,095,200 1,208,370 1,217,176	Note 1 Note 1 Note 1 Note 1

Note 1: Under the Company’s and the subsidiaries’ “Operational Procedures for Loaning Funds to Others,” if short-term financing is needed, total amounts of these financings should not exceed 40% of the Company’s and the subsidiaries’ stockholders’ equity, and individual financing should not exceed 20% of the Company’s and the subsidiaries’ stockholders’ equity.

Note 2: The exchange rates on March 31, 2018 were US$1 : NT$29.11.

Note 3: It was eliminated on consolidation.

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TABLE 2

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD March 31, 2018

(In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			March 31, 2018	March 31, 2018	March 31, 2018	March 31, 2018	Note
				Shares		Carrying Amount	Percentage of Ownership	Fair Value
The Company GEM (Suzhou)	Stock ESON Precision Engineering Co., Ltd. Tai Tung Communication Co., Ltd. Innolux Corporation Microdectronics Technology Inc. Asia Pacific Telecom Co., Ltd. Stock Yantai Changya Pioneer Wine Co., Ltd. Industrial Bank Co., Ltd. China Minsheng Banking Corp., Ltd. Bank of Beijing Co., Ltd. Jiugui Liquor Co., Ltd. Bank of Communications Co., Ltd. Shanhai Pudong Development Bank Co., Ltd.	- - - - - - - - - - - -	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current	174,000 388,000 565,000 271,000 530,000 69,990 105,000 124,000 151,000 357,916 160,000 117,000		$ 6,490 7,993 7,402 7,452 4,844 34,181 12,559 8,153 4,609 4,833 38,463 4,600 6,341 79,558 $ 113,739	- - - - - - - - - - - -		$ 6,490 7,993 7,402 7,452 4,844 34,181 12,559 8,153 4,609 4,833 38,463 4,600 6,341 79,558 $ 113,739

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TABLE 3

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 2018

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases/Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Term	Ending Balance	% to Total
GEM (Dongguan) GEM (Suzhou)	Genius (HK) GEM (Dongguan)	Affiliate Affiliate	Sales Sales	$ 186,162 303,297	41 38	120 days after monthly closing 120 days after monthly closing	Note 1 Note 1	Note 2 Note 2	$ 224,265 283,833	37 30	Note 3 Note 3

Note 1: The sales price of finished goods is not significantly different from those to third parties, except for the stated sales price of finished goods, other types of sales price have no comparable transactions with those in the market.

Note 2: The sales payment terms of intercompany sales are not significantly different from those to third parties.

Note 3: It was eliminated on consolidation.

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TABLE 4

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

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

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance (Notes 1 and 3)	Turnover Rate (Note 2)	Amount	Amount	Overdue Actions Taken	Amounts Received in Subsequent Period	Allowance Impairment	for Loss
GEM (Suzhou)	GEM (Dongguan)	Affiliate	$ 283,833	3.72	$	-	-	$ 128,415	$	-
GEM (Dongguan)	Genius (HK)	Affiliate	234,547	3.56		-	-	80,994		-
The Company	GEM (VN)	Subsidaiary	167,383	2.56		-	-	11,457		-

Note1: It included accounts receivable and other receivables.

Note2: The computation of Turnover Rate didn’t include other receivables.

Note3: It was eliminated on consolidation.

46 -

TABLE 5

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of March 31, 2018	As of March 31, 2018	As of March 31, 2018	Net Income (Loss) of the Investee	Share of profit (Loss)	Note
				March 31, 2018	December 31, 2017
						Shares/ Units	%	Carrying Amount
The Company Genius Global (Cayman) GEM (Cayman)	Global (Cayman) GEM (Cayman) Genius Genius (HK) Vibo Global (HK) GEM (VN)	Grand Cayman, Cayman Islands Grand Cayman, Cayman Islands British Virgin Islands Hong Kong Hong Kong Hong Kong Vietnam	International investment International investment International investment and trading, etc. International trading Trading and investment International trading Production of hardware; machine processing; electroplating for hardware processing; production and processing of molds and related accessories; plastic products and related plastic accessory production;	$ 1,295,208 392,669 23,282 90,134 1,541,063 3,747 386,780	$ 1,295,208 392,669 23,282 90,134 1,541,063 3,747 386,780	40,137,814 12,598,333 750,000 21,999,998 359,972,616 1,000,000 386,780	100 100 100 100 100 100 100	$ 2,925,724 320,246 75,129 79,287 3,020,941 7,469 321,809	$ (34,158 ) (9,034 ) 1,519 1,472 (33,903 ) (183 ) (9,306 )	$ (34,194 ) (9,191 ) 1,519 1,489 (33,903 ) (164 ) (8,889 )	Notes 1 and 2 Notes 1 and 2 Note 1 Notes 1 and 2 Note 1 Notes 1 and 2 Notes 1 and 2

Note 1: It was eliminated on consolidation.

Note 2: Net of unrealized profits.

47 -

TABLE 6

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars)

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2018	Net Loss of the Investee	% of Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Notes 1 and 3)	Carrying Amount as of March 31, 2018 (Notes 1 and 3)	Accumulated Repatriation of Investment Income as of March 31, 2018
						Outward		Inward
GEM (Dongguan) GEM (Suzhou)	Production of hardware; machine processing; electroplating for metal processing; production and processing of molds and related accessories; plastic products and related plastic accessory production. Production of hardware; machine processing; electroplating for metal processing; production and processing of molds and related accessories; plastic products and related plastic accessory production.		$ 788,382 1,166,191	The investment was made through a corporation established in a third country to invest in companies located in Mainland China. The investment was made through a corporation established in a third country to invest in companies located in Mainland China.	$ 452,130 741,320	$	- -	$ - -	$ 452,130 741,320	$ (4,691) (17,843)	100 100	$ (4,448) (20,079)	$ 896,585 2,049,437	$ - -
							Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA(Note 2) $1,642,801
Investor Company		Accumulated Outward Remittance for Investment in Mainland China as of March 31, 2018		Investment Amounts Authorized by Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA(Note 2)
The Company		$1,193,450		$1,650,537 (US$56,700 thousand)			$1,642,801

Note 1: Amount was recognized based on the reviewed financial statement.

Note 2: Under the “Principles Governing the Review of Investments or Technical Cooperation in Mainland China” issued by the Investment Commission on August 29, 2008, the maximum amount that can be invested in companies located in mainland China is 60% of the Company’s net value.

Note 3: It was eliminated on consolidation.

48 -

TABLE 7

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

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 FOR THE THREE MONTHS ENDED MARCH 31, 2018

(In Thousands of New Taiwan Dollars)

Investee Company	Counterparty	Transaction Type	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized (Gain) Loss
				Payment Term	Comparison with Normal Transaction	Ending Balance	%
The Company Genius (HK) Global (HK)	GEM (Suzhou) GEM (Dongguan) GEM (Dongguan) GEM (Suzhou)	Sales Purchase Property, plant, and equipment for sale Sales Sales Purchase Sales Purchase	$ 17,961 7,127 20,330 983 67,515 186,162 46,469 85,767	120 days after monthly closing 120 days after monthly closing 120 days after monthly closing 120 days after monthly closing 120 days after monthly closing 120 days after monthly closing 120 days after monthly closing 120 days after monthly closing	No significant difference with those to third parties No significant difference with those to third parties No comparable transactions with those in the market No significant difference with those to third parties No significant difference with those to third parties No comparable transactions with those in the market No significant difference with those to third parties No comparable transactions with those in the market	$ 2,625 (7,153) 3,706 439 33,141 (224,265) 23,399 (84,092)	1 4 30 - 9 76 19 81	$ 3,783 - 6,162 359 - (658) - 846

49 -

TABLE 8

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

INTERCOMPANY BUSINESS RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars)

No.	Investee Company	Counterparty	Nature of Relationship (Note 2)	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions
				Financial Statement Item	Amount (Note 1)	Terms	Percentage of Consolidated Total Gross Sales or Total Assets
0	The Company	Genius (HK) Genius (HK) Genius (HK) Genius (HK) GEM (Suzhou) GEM (Suzhou) GEM (Suzhou) GEM (Suzhou) GEM (VN) GEM (VN) GEM (VN) GEM (VN) GEM (VN) GEM (VN) GEM (Dongguan) GEM (Dongguan)	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Sales Disposal of property, plant and equipment Accounts receivable Other receivables Sales Accounts receivable Disposal of property, plant and equipment Other receivables Sales Accounts receivable Disposal of property, plant and equipment Other receivables Interest income Other receivables Sales Accounts receivable	$ 2,848 2,437 2,814 2,409 17,961 2,625 20,330 3,706 18,554 29,480 6,295 6,305 370 131,598 983 439	Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Annual Interest rates are 2.1%-2.8% According to working, capital conditions to change payment deeding Payment terms are 4 months Payment terms are 4 months	- - - - 2 - 2 - 2 - 1 - - 2 - -
1	GEM (Dongguan)	Genius (HK) Genius (HK) Genius (HK) Genius (HK) GEM (Suzhou) GEM (Suzhou) GEM (Suzhou) GEM (Suzhou)	3 3 3 3 3 3 3 3	Sales Accounts receivable Disposal of property, plant and equipment Other receivables Sales Accounts receivable Disposal of property, plant and equipment Other receivables	186,162 224,265 3,529 10,282 16,230 24,250 621 170	Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months	20 4 - - 2 - - -
2	Genius (HK)	The Company The Company The Company GEM (Dongguan) GEM (Dongguan) GEM (Dongguan) GEM (VN) GEM (VN)	2 2 2 3 3 3 3 3	Sales Accounts receivable Other receivables Sales Accounts receivable Other receivables Sales Accounts receivable	60,654 69,094 23,292 67,515 33,141 415 81,287 98,818	Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months	7 1 - 7 1 - 9 2

(Continued)

50 -

No.	Investee Company	Counterparty	Nature of Relationship (Note 2)	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions
				Financial Statement Item	Amount (Note 1)	Terms	Percentage of Consolidated Total Gross Sales or Total Assets
3	Global (HK)	The Company The Company GEM (Suzhou) GEM (Suzhou) GEM (VN) GEM (VN)	2 2 3 3 3 3	Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable	$ 27,758 11,631 46,469 23,399 46,277 60,692	Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months	3 - 5 - 5 1
4	GEM (Suzhou)	The Company The Company Global (HK) Global (HK) Global (HK) Global (HK) Global (HK) GEM (Dongguan) GEM (Dongguan)	2 2 3 3 3 3 3 3 3	Sales Accounts receivable Sales Accounts receivable Disposal of property, plant and equipment Other receivables Other income Sales Accounts receivable	7,127 7,153 85,767 84,092 4,562 4,031 161 303,297 283,833	Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months	1 - 9 1 - - - 33 5
5	Vibo	GEM (Dongguan) GEM (Dongguan)	1 1	Other receivables Interest income	29,587 146	According to working, capital conditions to change payment deeding Annual Interest rate is 2.0%	- -
6	Global (Cayman)	Global (HK) Global (HK)	1 1	Other receivables Interest income	11,653 59	According to working, capital conditions to change payment deeding Annual Interest rates are 2.0% - 2.8%	- -
7	GEM (VN)	The Compnay The Compnay Genius (HK) Genius (HK) Global (HK) Global (HK)	2 2 3 3 3 3	Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable	2,545 2,498 61,927 20,433 46,875 15,534	Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months Payment terms are 4 months	- - 7 - 5 -

(Concluded)

Note 1: It was eliminated on consolidation.

Note 2: 1) Parent to subsidiary

2) Subsidiary to parent
3) Subsidiary to subsidiary
51 -

AI assistant

GEM — Interim / Quarterly Report 2018

52099_rns_2018-12-20_3787a228-ff28-4642-a5c0-cbf9725969ce.pdf

GEM Terminal Ind. Co., Ltd. and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Conclusion

Notice to Readers

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Net Loss Per Share) (Reviewed, Not Audited)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Net Loss Per Share) (Reviewed, Not Audited)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

GEM TERMINAL IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

GEM TERMINAL IND. CO., LTD. AND SUBSIDAIRIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

IFRS 9 “Financial Instruments” and related amendment

Classification, measurement and impairment of financial assets

IFRS 16 “Leases”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b. Basis of preparation

d. Other significant accounting policy

1) Financial instruments

2017

i) Available-for-sale financial assets

ii) Loans and receivables

ii Impairment of financial assets

2018

2017

2018

Revenue from sale of goods

2017

Sale of goods

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Estimated impairment of financial assets

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS - CURRENT

9. NOTES AND ACCOUNTS RECEIVABLE, NET

For the three months ended March 31, 2018

March 31, 2018

12. SUBSIDIARIES

13. PROPERTY, PLANT, AND EQUIPMENT

Three months ended March 31, 2018

Three months ended March 31, 2017

14. PREPAYMENT FOR LEASE

15. NOTES PAYABLE AND ACCOUNTS PAYABLE

16. OTHER PAYABLES

17. BORROWINGS

a. Short-term borrowings

b. Short - term bills payable

c. Long-term borrowings

18. RETIREMENT BENEFIT PLANS

19. EQUITY

c. Appropriation of Earnings and Dividend Policy

20. OPERATING REVENUE

21. CONSOLIDATED LOSS BEFORE INCOME TAX

a. Other income

22. INCOME TAX

b. Income tax recognized in other comprehensive income (loss)

c. Income tax assessments

23. NET LOSS PER SHARE (EPS)

Net loss for the periods attributable to owners of the Company

24. CAPITAL MANAGEMENT

25. FINANCIAL INSTRUMENTS

March 31, 2017

d. Financial risk management objectives and policies

1) Market risk

a) Foreign currency risk

Sensitivity analysis

GEM Interim / Quarterly Report 2018