Prince Housing & Development Corp. — Annual Report 2016

Dec 19, 2016

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS SEPTEMBER 30, 2016 AND 2015

------------------------------------------------------------------------------------------------------------------------------------ For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars) (The consolidated balance sheets as of September 30, 2016 and 2015 are reviewed, not audited)

			September 30, 2016		December 31, 2015		September 30, 2015
	Assets	Notes	AMOUNT	%	AMOUNT	%		AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 2,098,837	4	\$ 3,800,751	7	\$	2,418,834	4
1110	Financial assets at fair value	6(2) and 8
	through profit or loss - current		271,989	1	479,761	1		310,845	1
1150	Notes receivable, net	6(3)	116,644	-	135,230	-		153,026	-
1170	Accounts receivable, net	6(4)	1,138,283	2	1,861,620	3		809,357	1
1180	Accounts receivable - related	7
	parties		56,610	-	428,646	1		445,534	1
1190	Receivables from customers on	6(5)
	construction contracts		1,715,438	3	1,347,958	2		1,363,260	3
1200	Other receivables	9	29,234	-	69,310	-		75,336	-
130X	Inventories, net	5(2), 6(6)
		and 8	23,458,430	46	22,209,890	41		23,641,646	44
1410	Prepayments		382,300	1	310,651	-		538,416	1
1476	Other financial assets - current	8	1,049,607	2	1,973,705	4		2,099,307	4
1479	Other current assets	6(7)	440,215	1	341,872	1		512,097	1
11XX	Total current assets		30,757,587	60	32,959,394	60		32,367,658	60
	Non-current assets
1510	Financial assets at fair value	6(2) and 8
	through profit or loss - non
	current		178,138	-	77,992	-		77,778	-
1523	Available-for-sale financial	6(8) and 8
	assets - non-current		1,315,933	3	1,564,942	3		1,294,561	3
1543	Financial assets carried at cost	6(9) and 8
	- non-current		877,800	2	887,529	2		887,529	2
1550	Investments accounted for	6(10) and 8
	under equity method		2,055,301	4	2,244,485	4		2,219,283	4
1600	Property, plant and equipment,	6(11) and 8
	net		6,575,600	13	6,742,932	13		6,791,234	13
1760	Investment property - net	6(12) and 8	5,976,069	12	6,043,827	11		6,004,222	11
1780	Intangible assets - net	6(13)	2,255,919	4	2,302,523	4		2,317,158	4
1840	Deferred income tax assets	6(31)	106,649	-	106,459	-		108,165	-
1920	Refundable deposits	7 and 9	602,197	1	627,584	1		632,624	1
1980	Other financial assets - non	8
	current		627,271	1	838,030	2		767,185	2
1990	Other non-current assets		85,280	-	80,214	-		89,640	-
15XX	Total non-current assets		20,656,157	40	21,516,517	40		21,189,379	40
1XXX	Total assets		\$ 51,413,744	100	\$ 54,475,911	100	\$	53,557,037	100

(Continued)

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2016 and 2015 are reviewed, not audited)

			September 30, 2016			December 31, 2015		September 30, 2015
	Liabilities and Equity	Notes	AMOUNT	%		AMOUNT	%	AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(14) and 8 \$	2,357,159	5	\$	2,626,373	5	\$ 3,724,874	7
2110	Short-term notes and bills	6(15) and 8
	payable		259,951	-		1,059,811	2	639,834	1
2150	Notes payable		169,760	-		26,699	-	128,995	-
2170	Accounts payable		2,928,783	6		4,198,917	8	2,973,238	6
2190	Payables to customers on	6(5)
2200	construction contracts Other payables		878,085 880,878	2 2		505,437 1,357,629	1 3	462,228 977,807	1 2
2220	Other payables - related parties 7		59,456	-		169,005	-	105,728	-
2230	Current income tax liabilities		4,439	-		96,030	-	87,427	-
2310	Receipts in advance	6(16)	2,086,397	4		1,875,462	3	3,127,945	6
2320	Long-term liabilities, current	6(17)(18)
	portion	and 8	3,633,904	7		474,592	1	596,870	1
2399	Other current liabilities		37,762	-		20,647	-	97,605	-
21XX	Total current liabilities		13,296,574	26		12,410,602	23	12,922,551	24
	Non-current liabilities
2530	Bonds payable	6(17)	2,500,000	5		4,500,000	8	4,500,000	9
2540	Long-term borrowings	6(18) and 8	9,646,791	19		10,019,911	19	10,107,292	19
2550	Provisions for liabilities - non	6(19)
	current		101,185	-		84,517	-	84,937	-
2570	Deferred income tax liabilities	6(31)	418,224	1		416,005	1	495,468	1
2610	Long-term notes and accounts
	payable		1,369,905	3		1,385,984	3	1,449,773	3
2640	Net defined benefit liability - non-current	6(20)	96,806	-		141,075	-	134,682	-
2645	Guarantee deposits received		146,919	-		135,719	-	146,625	-
2670	Other non-current liabilities	6(10)	207,715	-		207,527	-	180,726	-
25XX	Total non-current
	liabilities		14,487,545	28		16,890,738	31	17,099,503	32
2XXX	Total Liabilities		27,784,119	54		29,301,340	54	30,022,054	56
	Equity attributable to owners of
	parent
	Share capital
3110	Common stock	6(21)	16,233,261	31		16,233,261	30	16,623,418	31
	Capital surplus	6(22)
3200	Capital surplus		2,260,513	5		2,260,513	4	1,929,793	3
	Retained earnings	6(23)(31)
3310	Legal reserve		1,644,576	3		1,420,796	3	1,420,796	3
3350	Unappropriated retained
	earnings		2,007,745	4		3,508,400	6	2,141,479	4
3400	Other equity interest Other equity interest	6(24)	1,165,282	2		1,409,109	2	1,143,487	2
3500	Treasury stocks	6(21) (		1,003)	- (	1,003)	- (	60,440)	-
31XX	Equity attributable to
	owners of the parent		23,310,374	45		24,831,076	45	23,198,533	43
36XX	Non-controlling interest		319,251	1		343,495	1	336,450	1
3XXX	Total equity		23,629,625	46		25,174,571	46	23,534,983	44
	Significant contingent liabilities	9
	and unrecognised contract
	commitments
3X2X	Total liabilities and equity		\$ 51,413,744	100	\$	54,475,911	100	\$ 53,557,037	100

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Expressed in thousands of New Taiwan dollars, except earnings per share) (UNAUDITED)

			Three months ended September 30,			Nine months ended September 30,
				2016		2015		2016		2015
	Items	Notes		AMOUNT	%	AMOUNT	%	AMOUNT	%	AMOUNT	%
4000	Operating revenue	6(26) and 7 \$ 2,458,143			100	\$ 2,299,092	100	\$ 6,567,675	100	\$ 8,030,333	100
5000	Operating costs	6(6)(30)	(	1,585,056) (	65) (	1,409,000) (	61) (	4,223,695) (	64) (	5,093,749) (	64)
5900	Gross profit			873,087	35	890,092	39	2,343,980	36	2,936,584	36
	Operating expenses	6(30) and 7
6100	Selling expenses		(	61,903) (	3) (	60,665) (	3) (	189,831) (	3) (	241,403) (	3)
6200	General and administrative
	expenses		(	577,514) (	23) (	587,664) (	25) (	1,644,310) (	25) (	1,785,397) (	22)
6000	Total operating expenses		(	639,417) (	26) (	648,329) (	28) (	1,834,141) (	28) (	2,026,800) (	25)
6900	Operating profit			233,670	9	241,763	11	509,839	8	909,784	11
	Non-operating income and
	expenses
7010	Other income	6(27)		71,592	3	59,835	2	221,398	3	269,008	4
7020	Other gains and losses	6(2)(28)	(	47,174) (	2)	45,217	2 (	33,802)	-	89,712	1
7050	Finance costs	6(6)(29)	(	58,278) (	2) (	76,444) (	3) (	187,648) (	3) (	254,246) (	3)
7060	Share of profit/(loss) of associates and joint ventures	6(10)
	accounted for under equity
	method			28,409	1 (	51,426) (	2)	70,039	1	17,795	-
7000	Total non-operating
	income and expenses		(	5,451)	- (	22,818) (	1)	69,987	1	122,269	2
7900	Profit before income tax			228,219	9	218,945	10	579,826	9	1,032,053	13
7950	Income tax expense	6(31)	(	52,931) (	2) (	81,489) (	4) (	94,302) (	1) (	185,577) (	2)
8200	Profit for the period		\$	175,288	7	\$ 137,456	6	\$ 485,524	8	\$ 846,476	11
	Other comprehensive income
	Components of other
	comprehensive income that will
	be reclassified to profit or loss
8361	Exchange differences arising
	on translation of foreign
	operations		(\$	46)	-	\$ 301	- (\$	49)	-	\$ 2	-
8362	Other comprehensive (loss) income, before tax, available	6(8)
	for-sale financial assets		(	19,370) (	1)	155,576	7 (	243,778) (	4) (	292,734) (	4)
8300	Total other
	comprehensiveincome (loss)
	for the period		(\$	19,416) (	1)	\$ 155,877	7 (\$	243,827) (	4) (\$	292,732) (	4)
8500	Total comprehensive income for
	the period		\$	155,872	6	\$ 293,333	13	\$ 241,697	4	\$ 553,744	7
	Profit (loss), attributable to:
8610	Owners of the parent		\$	184,742	7	\$ 146,050	6	\$ 508,784	9	\$ 856,486	11
8620	Non-controlling interest		(	9,454)	- (	8,594)	- (	23,260) (	1) (	10,010)	-
			\$	175,288	7	\$ 137,456	6	\$ 485,524	8	\$ 846,476	11
	Comprehensive income (loss)
	attributable to:
8710	Owners of the parent		\$	165,326	6	\$ 301,927	13	\$ 264,957	4	\$ 563,754	7
8720	Non-controlling interest		(	9,454)	- (	8,594)	- (	23,260)	- (	10,010)	-
			\$	155,872	6	\$ 293,333	13	\$ 241,697	4	\$ 553,744	7
	Earnings per share (in dollars)	6(32)
9750	Basic earnings per share		\$		0.11	\$	0.09	\$	0.31	\$	0.53
9850	Diluted earnings per share		\$		0.11	\$	0.09	\$	0.31	\$	0.53

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

			Equity attributable to owners of the parent
					Retained Earnings			Other equity interest
	Notes	Share capital - common stock	Capital surplus	Legal reserve	Unappropriated retained earnings		Exchange differences arising on translation of foreign operations	Unrealized gain or loss on available-for sale financial assets		Treasury stocks	Total		Non controlling interest	Total equity
Nine months ended September 30, 2015
Balance at January 1, 2015		\$ 16,623,418	\$ 1,929,793	\$ 1,180,924	\$ 2,854,738	\$	1,690	\$ 1,434,529	(\$		60,440 ) \$ 23,964,652	\$	346,292	\$ 24,310,944
Appropriations and distribution of 2014 earnings
Legal reserve		-	-	239,872	( 239,872 )		-	-		-	-		-	-
Cash dividends	6(23)	-	-	-	( 1,329,873 )		-	-		-	( 1,329,873 )		-	( 1,329,873 )
Profit (loss) for the period	6(32)	-	-	-	856,486		-	-		-	856,486	(	10,010 )	846,476
Other comprehensive income (loss) for the period	6(8)(24)	-	-	-	-		2	( 292,734 )		-	( 292,732 )		-	( 292,732 )
Changes in non-controlling interest		-	-	-	-		-	-		-	-		168	168
Balance at September 30, 2015		\$ 16,623,418	\$ 1,929,793	\$ 1,420,796	\$ 2,141,479	\$	1,692	\$ 1,141,795	(\$		60,440 ) \$ 23,198,533	\$	336,450	\$ 23,534,983
Nine months ended September 30, 2016
Balance at January 1, 2016		\$ 16,233,261	\$ 2,260,513	\$ 1,420,796	\$ 3,508,400	\$	1,706	\$ 1,407,403	(\$		1,003 ) \$ 24,831,076	\$	343,495	\$ 25,174,571
Appropriations and distribution of 2015 earnings
Legal reserve		-	-	223,780	( 223,780 )		-	-		-	-		-	-
Cash dividends	6(23)	-	-	-	( 1,785,659 )		-	-		-	( 1,785,659 )		-	( 1,785,659 )
Profit (loss) for the period	6(32)	-	-	-	508,784		-	-		-	508,784	(	23,260 )	485,524
Other comprehensive loss for the period	6(8)(24)	-	-	-	-	(	49 ) (	243,778 )		-	( 243,827 )		-	( 243,827 )
Changes in non-controlling interest		-	-	-	-		-	-		-	-	(	984 ) (	984 )
Balance at September 30, 2016		\$ 16,233,261	\$ 2,260,513	\$ 1,644,576	\$ 2,007,745	\$	1,657	\$ 1,163,625	(\$		1,003 ) \$ 23,310,374	\$	319,251	\$ 23,629,625

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

			Nine months ended September 30,
	Notes		2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax		\$	579,826	\$	1,032,053
Adjustments
Income and expenses having no effect on cash flows
Net loss (gain) on financial assets at fair value through profit	6(2)(28)
or loss			7,626	(	110,175 )
Reversal of provision for bad debts	6(3)		-	(	196 )
Write-off of uncollectible accounts	6(3)(4)	(	344 )	(	2,043 )
Share of profit of associates and joint ventures accounted for	6(10)
under equity method		(	70,039 )	(	17,795 )
Loss on disposal of property, plant and equipment			2,425		2,065
Loss on disposal of investment property			1,251		3,371
Depreciation	6(30)		265,603		267,131
Amortization	6(13)(30)		46,637		46,367
Interest expense	6(29)		186,748		253,346
Interest income	6(27)	(	4,211 )	(	5,531 )
Dividend income	6(27)	(	118,461 )	(	161,097 )
Loss (gain) on unrealized foreign exchange			19,392	(	12,825 )
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Financial assets at fair value through profit or loss - current			200,000		37,665
Notes receivable			18,930	(	4,418 )
Accounts receivable			723,337		4,548,045
Accounts receivable - related parties			372,036	(	5,105 )
Receivables from customers on construction contracts		(	367,480 )	(	407,370 )
Other receivables			40,076		211,033
Inventories		(	1,248,561 )	(	2,735,660 )
Prepayments		(	71,649 )	(	108,559 )
Other current assets Financial assets at fair value through profit or loss – non		(	98,343 )		9,707
current		(	100,000 )		-
Other non-current assets		(	5,445 )	(	6,163 )
Net changes in liabilities relating to operating activities
Notes payable			143,061		106,968
Accounts payable		(	1,270,134 )	(	1,289,080 )
Payable to customers on construction contracts			372,648		111,269
Other payables		(	495,585 )	(	134,524 )
Other payables - related parties		(	109,549 )	(	88,273 )
Receipts in advance			210,935		90,810
Other current liabilities			17,115	(	15,702 )
Provisions for liabilities - non-current			16,668		3,217
Net defined benefit liability - non-current		(	44,269 )		5,291
Other non-current liabilities		(	74 )	(	72 )
Cash (outflow) inflow generated from operations		(	779,830 )		1,623,750
Interest received			4,211		4,306
Cash dividend received			356,881		202,137
Interest paid		(	167,914 )	(	214,295 )
Income tax paid		(	183,864 )	(	185,577 )
Net cash flows (used in) from operating activities		(	770,516 )		1,430,321

(Continued)

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

				Nine months ended September 30,
	Notes		2016		2015
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in other financial assets - current		\$	924,098	\$	673,652
Decrease in available-for-sale financial assets - non-current			5,231		33,927
Return of share capital from financial assets carried at cost			9,729		-
Return of share capital from investments accounted for under
equity method			-		30,057
Acquisition of property, plant and equipment	6(11)	(	35,989 )	(	37,833 )
Proceeds from disposal of property, plant and equipment			52		43
Proceeds from disposal of investment property			2,148		1,075
Increase in intangible assets	6(13)	(	33 )	(	530 )
Decrease (increase) in refundable deposits			25,387	(	95,247 )
Decrease in other financial assets - non-current			210,759		144,803
Net cash flows from investing activities			1,141,382		749,947
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings		(	269,214 )		419,290
Decrease in short-term notes and bills payable		(	799,860 )	(	1,463,433 )
Repayment of long-term borrowings		(	6,866,981 )	(	4,709,735 )
Proceeds from long-term borrowings			7,653,173		5,153,727
Decrease in long-term notes and accounts payable		(	16,079 )	(	7,478 )
Increase in guarantee deposits received			11,200		10,078
Cash dividends paid	6(23)	(	1,785,659 )	(	1,329,873 )
Changes in non-controlling interest		(	984 )		168
Net cash flows used in financing activities		(	2,074,404 )	(	1,927,256 )
Effect of exchange rate changes on cash and cash equivalents			1,624		16
Net (decrease) increase in cash and cash equivalents		(	1,701,914 )		253,028
Cash and cash equivalents at beginning of period			3,800,751		2,165,806
Cash and cash equivalents at end of period		\$	2,098,837	\$	2,418,834

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2016 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED) (UNAUDITED)

1. HISTORY AND ORGANIZATION

• (1) Prince Housing & Development Corp. (the "Company") was established in September 1973, under the Company Act and other related regulations. The Company is primarily engaged in the construction, leasing and sale of public housing, commercial building, tourism/recreation place (children's playground, water park, etc.) and parking lot/parking tower, and leasing and sale of real estate. The common shares of the Company have been listed on the Taiwan Stock Exchange since April 1991.
• (2) The main activities of the Company and its subsidiaries (collectively referred herein as the "Group") are provided in Note 4(3) B.
• 1. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on November 3, 2016.

• 1. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC") None.
• (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretatons and amendments endorsed by the FSC effective from 2017 are as follows:

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Investment entities: Applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28)	January 1, 2016
Accounting for acquisition of interests in joint operations (amendments to IFRS 11)	January 1, 2016
IFRS 14, 'Regulatory deferral accounts'	January 1, 2016
Disclosure initiative (amendments to IAS 1)	January 1, 2016
Clarification of acceptable methods of depreciation and amortization (amendments to IAS 16 and IAS 38)	January 1, 2016
Agriculture: bearer plants (amendments to IAS 16 and IAS 41)	January 1, 2016

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Defined benefit plans: employee contributions (amendments to IAS 19R)	July 1, 2014
Equity method in separate financial statements (amendments to IAS 27)	January 1, 2016
Recoverable amount disclosures for non-financial assets (amendments to IAS 36)	January 1, 2014
Novation of derivatives and continuation of hedge accounting (amendments to IAS 39)	January 1, 2014
IFRIC 21, 'Levies'	January 1, 2014
Improvements to IFRSs 2010-2012	July 1, 2014
Improvements to IFRSs 2011-2013	July 1, 2014
Improvements to IFRSs 2012-2014	January 1, 2016

The above standards and interpretations have no significant impact to the Group's financial condition and operating result based on the Group's assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC effective from 2017 are as follows:

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Classification and measurement of share-based payment transactions (amendments to IFRS 2)	January 1, 2018
Applying IFRS 9 'Financial instruments' with IFRS 4'Insurance contracts' (amendments to IFRS 4)	January 1, 2018
IFRS 9, 'Financial instruments'	January 1, 2018
Sale of contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28)	To be determined by International Accounting Standards Board
IFRS 15, 'Revenue from contracts with customers'	January 1, 2018
Clarifications to IFRS 15, 'Revenue fromcontracts with customers' (amendments to IFRS 15)	January 1, 2018
IFRS 16, 'Leases'	January 1, 2019
Disclosure initiative (amendments to IAS 7)	January 1, 2017
Recognition of deferred tax assets for unrealised losses (amendments to IAS 12)	January 1, 2017

Except for the following, the above standards and interpretations have no significant impact to the Group's financial condition and operating result based on the Group's assessment. The quantitative impact will be disclosed when the assessment is complete.

A. IFRS 9, 'Financial instruments'

(a) Classification of debt instruments is driven by the entity's business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive

income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.

• (b) The impairment losses of debt instruments are assessed using an 'expected credit loss' approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses ('ECL') or lifetime ECL (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance).
• B. IFRS 15 "Revenue from contracts with customers"

IFRS 15 "Revenue from contracts with customers" replaces IAS 11 "Construction contracts", IAS 18 "Revenue" and relevant interpretations. According to IFRS 15, revenue is recognised when a customer obtains control of promised goods or services. A customer obtains control of goods or services when a customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset.

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

• Step 1: Identify contracts with customer.
• Step 2: Identify separate performance obligations in the contract(s).

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price.

Step 5: Recognise revenue when the performance obligation is satisfied.

Further, IFRS 15 includes a set of comprehensive disclosure requirements that requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

C. IFRS 16, 'Leases'

IFRS 16, 'Leases', replaces IAS 17, 'Leases' and related interpretations and SICs. The standard requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the compliance statement, basis of preparation, basis of consolidation, and certain significant accounting policies enumerated below, the rest of the significant accounting policies are in agreement with those in Note 4 of the consolidated financial statements for the year ended December 31, 2015. These policies have been consistently applied to all the periods presented, unless otherwise stated.

• (1) Compliance statement
• A. The consolidated financial statements of the Group 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 by the FSC.
• B. These consolidated financial statements should be read along with the consolidated financial statements for the year ended December 31, 2015.
• (2) Basis of preparation
• A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
  • (a)Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
  • (b)Available-for-sale financial assets measured at fair value.
  • (c)Defined benefit liabilities recognized based on the net amount of pension fund assets less unrecognized actuarial gains and present value of defined benefit obligation.
• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the "IFRSs") requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
• (3) Basis of consolidation
• A. Basis for preparation of consolidated financial statements:

Basis for preparation of these consolidated financial statements is the same as that for preparation of the consolidated financial statements as of and for the year ended December 31, 2015.

		Main business	Ownership (%)
Name of investor	Name of subsidiary	activities		September 30, 2016 December 31, 2015	Description
Prince Housing & Development Corp.	Prince Property Management Consulting Co., Ltd.	Real estate managers	100	100	Note 2
	Cheng-Shi Investment Holdings Co., Ltd.	General investments	100	100
	Prince Housing Investment Co., Ltd.	Overseas investment	100	100	Note 2
	BioSun Technology Co., Ltd.	Anti-mildew's import and export	-	100	Notes 2 and 8
	Dong-Feng Enterprises Co., Ltd.	Housebuilders and sales	100	100	Note 2
	The Splendor Hotel Taichung	Hotels and catering	50	50	Notes 1 and 2
	Time Square International Co., Ltd.	Hotels and catering	100	100	Note 2
	Jin-Yi-Xing Plywood Co., Ltd.	Manufacture of plywood	99.65	99.65	Notes 2 and 4
	Prince Industrial Co., Ltd. Development of	public housing and building	100	100	Note 2
	Prince Real Estate Co., Ltd. Real estate trading	and leasing	99.65	99.65	Notes 2 and 4
Prince Property Management Consulting Co., Ltd.	Prince Apartment Management Maintain Co., Ltd.	Management of apartment	100	100	Note 2
	Prince Security Co., Ltd.	Security	100	100	Note 2
Cheng-Shi Investment Holdings Co., Ltd.	Ta-Chen Construction & Engineering Corp.	Construction	100	100
	Prince Utility Co., Ltd.	Electricity and water pipe maintenance	100	100	Note 2
	Cheng-Shi Construction Co., Ltd.	Construction	100	100	Note 2
Ta-Chen Construction & Engineering Corp.	Ta-Chen International	Overseas	-	100	Notes 2 and 7
Ta-Chen International	(Brunei) Corp. Ta Chen Construction	investment Construction	-	100	Notes 2 and 6
(Brunei) Corp.	& Engineering
		Main business		Ownership (%)
Name of investor	Name of subsidiary	activities		September 30, 2015	Description
Prince Housing & Development Corp.	Prince Property Management Consulting Co., Ltd.	Real estate managers		100	Note 2
	Cheng-Shi Investment Holdings Co., Ltd.	General investments		100
	Prince Housing Investment Co., Ltd.	Overseas investment		100	Note 2
	BioSun Technology Co., Ltd.	Anti-mildew's import and export		100	Notes 2 and 8
	Prince Ta-Chen Investment	Greneral investments		-	Notes 2 and 3

B. Subsidiaries included in the consolidated financial statements:

Co., Ltd.

		Main business	Ownership (%)
Name of investor	Name of subsidiary	activities	September 30, 2015	Description
Prince Housing & Development Corp.	Dong-Feng Enterprises Co., Ltd.	Housebuilders and sales	100	Note 2
	The Splendor Hotel Taichung	Hotels and catering	50	Notes 1 and 2
	Time Square International Co., Ltd.	Hotels and catering	100	Note 2
	Jin-Yi-Xing Plywood Co., Ltd.	Manufacture of plywood	99.65	Notes 2 and 4
	Early Success Investments Ltd.	Overseas investment	100	Notes 2 and 5
	Prince Industrial Co., Ltd.	Development of public housing and building	100	Note 2
	Prince Real Estate Co., Ltd. Real estate trading	and leasing	99.65	Notes 2 and 4
Prince Property Management Consulting Co., Ltd.	Prince Apartment Management Maintain Co., Ltd.	Management of apartment	100	Note 2
	Prince Security Co., Ltd.	Security	100	Note 2
Cheng-Shi Investment Holdings Co., Ltd.	Ta-Chen Construction & Engineering Corp.	Construction	100
	Prince Utility Co., Ltd.	Electricity and water pipe maintenance	100	Note 2
	Cheng-Shi Construction Co., Ltd.	Construction	100	Note 2
Prince Ta-Chen Investmet Co., Ltd.	Prince Capital Inc.	Overseas investment	100	Notes 2,3 and 5
Ta-Chen Construction & Engineering Corp.	Ta-Chen International (Brunei) Corp.	Overseas investment	100	Notes 2 and 7
Prince Capital Inc.	Prince Ventures USA Inc.	Overseas investment	100	Notes 2 and 5
Ta-Chen International (Brunei) Corp.	Ta Chen Construction & Engineering (Vietnam) Corp.	Construction	100	Notes 2 and 6

• Note 1: The Group does not directly or indirectly own above 50% of voting shares of The Splendor Hotel Taichung. However, as the Group has control over the finance and operations of the company, it is included in the consolidated financial statements.
• Note2: As the subsidiaries do not meet the definition of significant subsidiaries, their financial statements as of and for the nine months ended September 30, 2016 and 2015 were not reviewed by independent accountants.
• Note 3: The Company entered into a merger agreement with its subsidiary, Prince Ta-Chen Investment Co., Ltd. in May 2015, with the Company as the surviving company and Prince Ta-Chen Investment Co., Ltd. as the dissolved company.

• Note 4: The subsidiary was newly established from the land division of Jm-Yi-Xing Plywood Co., Ltd. on September 1, 2015.

• Note 5:Liquidation of Early Success Investments Ltd., Prince Capital Inc. and Prince Ventures USA Inc. were completed in December 2015.

• Note 6:Ta Chen Construction & Engineering (Vietnam) Corp. has completed liquidation process in May 2016.
• Note 7: Ta-Chen International (Brunei) Corp. has completed liquidation process in August 2016.

Note 8: BioSun Technology Co., Ltd. has completed liquidation process in September 2016.

• C. Subsidiaries not included in the consolidated financial statements: None.
• D. Adjustments for subsidiaries with different balance sheet dates: None.
• E. Significant restrictions: None.
• F. Subsidiaries that have non-controlling interests that are material to the Group:

The Group's non-controlling interest is not material and thus, is not applicable.

(4) Employee benefits

Pensions – Defined benefit plans

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

(5) Income tax

The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The above information is addressed below:

(1) Critical judgements in applying the Group's accounting policies

There is no significant change during the period. Please refer to Note 5 of the 2015 consolidated financial statements.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. If the Group assessed that the net realisable value of inventories on balance sheet date was lower than the cost, the Group would write down the cost of inventories to the net realisable value.

As of September 30, 2016, the carrying amount of inventories was \$23,458,430.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	September 30, 2016	December 31, 2015	September 30, 2015
Cash on hand and revolving funds	\$ 9,860	\$ 8,989	\$ 63,476
Checking accounts and demand
deposits	1,426,722	2,861,201	2,037,358
Time deposits	172,600	590,561	318,000
Repurchase bonds	489,655	340,000	-
	\$ 2,098,837	\$ 3,800,751	\$ 2,418,834

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The repurchase bonds held by the Group has high liquidity, so they were classified as cash equivalents.
• (2) Financial assets at fair value through profit or loss

Items	September 30, 2016	December 31, 2015	September 30, 2015
Current items:
Financial assets held for trading
Listed (TSE and OTC) stocks	\$ 264,520	\$ 264,520	\$ 264,520
Beneficiary certificates	-	200,000	-
	264,520	464,520	264,520
Financial assets held for trading
valuation adjustments	7,469	15,241	46,325
	\$ 271,989	\$ 479,761	\$ 310,845

Items	September 30, 2016	December 31, 2015	September 30, 2015
Non-current items:
Financial assets held for trading
Beneficiary certificates	\$ 176,000	\$ 76,000	\$ 76,000
Financial assets held for trading
valuation adjustments	2,138	1,992	1,778
	\$ 178,138	\$ 77,992	\$ 77,778

A. The Group recognized net (loss) gain of (\$27,920), (\$281), (\$7,626) and \$110,175 for the three months and nine months ended September 30, 2016 and 2015, respectively.

B. Details of the Group's financial assets at fair value through profit or loss pledged to others as collateral are provided in Note 8.

(3) Notes receivable, net

	September 30, 2016		December 31, 2015		September 30, 2015
Notes receivable	\$ 116,644	\$	135,574	\$	153,370
Less: Allowance for doubtful
accounts	-	(	344)	(	344)
	\$ 116,644	\$	135,230	\$	153,026

• A. The Group's notes receivable that were neither past due nor impaired were fully performing in line with the credit standards prescribed based on counterparties' industrial characteristics, scale of business and profitability.
• B. Movement analysis of financial assets that were impaired (allowance for doubtful accounts of notes receivable) is as follows:

		Nine months ended September 30,
		2016	2015
At January 1	\$	344 \$	540
Reversal of impairment		- (	196)
Write-offs during the period	(	344)	-
At September 30	\$	- \$	344

The Group analyses based on any changes to credit quality in note receivable of individual customers from the initial granting date until the financial period-end, historical experience and current financial condition, to estimate the amount that may not be recovered.

C. The Group does not hold any collateral as security.

(4) Accounts receivable, net

		September 30, 2016		December 31, 2015		September 30, 2015
Accounts receivable	\$	1,142,387	\$	1,865,724	\$	814,359
Less: Allowance for doubtful accounts	(	4,104)	(	4,104)	(	5,002)
	\$	1,138,283	\$	1,861,620	\$	809,357

• A.The Group's accounts receivable that were neither past due nor impaired were fully performing in line with the credit standards prescribed based on counterparties' industrial characteristics, scale of business and profitability. Accounts receivable are classified into 3 categories:
• (a) Sale of real estate: collection of customers' loans from banks.
• (b) Construction contracts and sales of service: from customers with optimal collection record.
• (c) Receivables from travel department: mainly from credit card payments.
• B.The ageing analysis of accounts receivable that were past due but not impaired is as follows:

	September 30, 2016		December 31, 2015		September 30, 2015
Up to 60 days	\$	3,211	\$	620	\$	28,167
61 to 120 days		305		414		2,578
121 to 180 days		42		108		526
Over 180 days		1,803		1,895		3,326
	\$	5,361	\$	3,037	\$	34,597

The above ageing analysis was based on past due date.

C.Movement analysis of financial assets that were impaired (allowance for doubtful accounts of accounts receivable) is as follows:

At January 1	Nine months ended September 30,
	2016	2015
	\$ 4,104 \$	7,045
Write-offs during the period	- (	2,043)
At September 30	\$ 4,104 \$	5,002

The Group analyses based on any changes to credit quality in accounts receivable of individual customers from the initial granting date until the financial period-end, historical experience and current financial condition, to estimate the amount that may not be recovered.

D.The Group does not hold any collateral as security.

(5) Construction contracts receivable (payable)

		September 30, 2016		December 31, 2015		September 30, 2015
Aggregate cost incurred plus
recognised profits (less recognised losses)	\$	21,403,318	\$	19,550,455	\$	25,272,502
Less: progress billings	(	20,565,965)	(	18,707,934)	(	24,371,470)
Net balance sheet position for
construction in progress	\$	837,353	\$	842,521	\$	901,032
Presented as:
Due from customers for contract work	\$	1,715,438	\$	1,347,958	\$	1,363,260
Due to customers for contract work	(	878,085)	(	505,437)	(	462,228)
	\$	837,353	\$	842,521	\$	901,032

As of September 30, 2016, December 31, 2015 and September 30, 2015, the retainage relating to construction contracts amounted to \$947,018, \$1,384,110 and \$1,142,006, respectively; the advances received before the related construction contracts are performed amounted to \$719,619.

(6) Inventories

			September 30, 2016
			Allowance for
	Cost		valuation loss		Book value
Land held for construction site	\$ 12,380,092		(\$ 65,372)		\$ 12,314,720
Construction in progress	4,041,071			-	4,041,071
Buildings and land held for sale	5,398,497		( 49,432)		5,349,065
Prepayment for land	227,447			-	227,447
Prepayment for buildings and land	1,482,349			-	1,482,349
Merchandise	43,778		-		43,778
	\$ 23,573,234	(\$	114,804)	\$	23,458,430

			December 31, 2015
	Cost		valuation loss		Book value
Land held for construction site	\$ 12,765,560	(\$	65,372)	\$	12,700,188
Construction in progress	2,457,025			-	2,457,025
Buildings and land held for sale	5,882,639	(	49,432)		5,833,207
Prepayment for land	223,700			-	223,700
Prepayment for buildings and land	947,991			-	947,991
Merchandise	47,779		-		47,779
	\$ 22,324,694	(\$	114,804)	\$	22,209,890

			September 30, 2015
			Allowance for
	Cost		valuation loss		Book value
Land held for construction site	\$ 12,252,091	(\$	65,372)		\$ 12,186,719
Construction in progress	3,831,703			-	3,831,703
Buildings and land held for sale	4,393,321	(	49,432)		4,343,889
Prepayment for land	1,466,664			-	1,466,664
Prepayment for buildings and land	1,766,196			-	1,766,196
Merchandise	46,475		-		46,475
	\$ 23,756,450	(\$	114,804)	\$	23,641,646

A.The cost of inventories recognized as expense for the three months and nine months ended September 30, 2016 and 2015 was \$1,585,056, \$1,409,000, \$4,223,695 and \$5,093,749, respectively, including the amount of \$0, \$0, \$0 and \$2,014, respectively, that the Group wrote down from cost to net realizable value accounted for as cost of goods sold.

• B. Details of the Group's inventories pledged to others as collateral are provided in Note 8.
• C. The interest capitalized as cost of inventory is as follows:

	Three months ended September 30,
Interest paid before capitalization Interest capitalized Annual interest rate used for capitalization	2016	2015
	\$ 115,247	\$ 117,728
	\$ 57,269	\$ 41,584
	0.89%-3.93%	1.52%-2.95%

				Nine months ended September 30,
	2016			2015
Interest paid before capitalization	\$	330,262	\$	357,016
Interest capitalized	\$	143,514	\$	103,670
Annual interest rate used for capitalization	0.89%-3.93%			1.52%-3.20%
D. Details of significant inventories:
(a)Buildings and land in progress
Taipei branch				September 30, 2016 December 31, 2015 September 30, 2015
Prince Yun Ding (XinZhuang Fuduxin)	\$ 1,864,682	\$	1,736,845	\$ 1,663,459
Ling Ko Dist. Li Shing Section No. 1209, etc.	1,434,463		1,376,328	1,349,642
Prince Fu III (Taoyuan Qing Sun Section No. 446)	1,370,882		1,131,432	1,056,191
W Prince (New Taipei City Shing Jheng Section No. 883, etc.)	963,636		962,064	961,506
Bali Dist Chung Chang Section No. 2222 and 211-1, etc.	686,428		685,665	685,665
Jhong Li City Shuang Ling Section No. 1449, etc.	366,471		328,796	307,657
Prince Hua Wei (Shilin Dist. Zhishan Section No. 602, etc.)	178,797		106,680	61,732
	\$ 6,865,359	\$	6,327,810	\$ 6,085,852
Taichung branch				September 30, 2016 December 31, 2015 September 30, 2015
The Cloud Century A (Kao An Section No. 12-16)	\$ 1,102,650	\$	698,401	\$ 577,205
Ping Hsin Section No. 694, etc.	886,577		862,840	863,581
Prince Yu Ding (Hui Li Section No. 195)	814,190		707,080	686,036
Chaotun Section No. 755, etc.	281,665		250,571	250,106
Jin Shuei Dist. Wu Show Section No. 1037, No. 1038, No. 1040, etc.	206,233		195,947	195,947
Hsinfuliao Section No. 1096, No. 1098, NO.1097, No. 1108, etc.	168,240		159,160	159,937
The Cloud Century A (Kao An Section No. 12-12)		-		- 673,817
Chin Fon Gin (Tu Ku Section No. 8-2, etc.)		-		- 732,743
Hai Yan (Tai Huo Section No. 29)		-		- 635,255
Others	75,210		21,900	29,093

3,534,765\$ 2,895,899\$ 4,803,720\$

Tainan branch			September 30, 2016 December 31, 2015 September 30, 2015
Jin Hua Section No. 1361	\$ 688,194	\$ 688,190	\$ 687,247
Prince Feng Yun (Hsin Ying Section No. 841-9)	632,406	564,433	524,317
Jum Fon Huei (Yu Ming Section No. 681-8)	326,700	266,825	237,034
Shan Chia Section No. 939, etc.	152,246	148,499	143,979
Chin An Section No. 296, No. 297, etc.	125,617	95,703	-
Flower Bo Five (Hou Guan Section No. 34, No. 34-1, etc.)	-		- 512,653
Others	3,524	3,524	9,920
	\$ 1,928,687	\$ 1,767,174	\$ 2,115,150
Kaohsiung branch			September 30, 2016 December 31, 2015 September 30, 2015
Ren Wu New Hougang West Section No .42, etc. (Prince Cloud B)	\$ 379,133	\$ 378,865	\$ 30,976
Ren Wu New Hougang West Section No .69, etc. (Prince Cloud C townhouse)	137,214		- -
Ren Wu New Hougang West Section No. 88 experimental house	72,929	73,050	-
Ren Wu New Hougang West Section No. 69-148 etc. (Prince Cloud C apartment)	71,779		- -
Nanzi subsection No. 158 (Prince Yun)	59,026	28,177	35,907
Ren Wu New Hougang West Section No. 90 etc. (Prince Cloud E)	4		- -
Ren Wu New Hougang West Section No. 52, etc. (Prince Cloud D)	-	416,940	-
	720,085	897,032	66,883
Total buildings and land in progress	\$ 13,048,896	\$ 11,887,915	\$ 13,071,605
(b)Land held for construction site
Taipei branch			September 30, 2016 December 31, 2015 September 30, 2015
Zhong Li Pu Ren Lot No. 720, etc.	\$ 140,156	\$ 140,156	\$ 140,156
Others	5,978	5,978	5,978
	\$ 146,134	\$ 146,134	\$ 146,134

Taichung branch			September 30, 2016 December 31, 2015 September 30, 2015
Song Quan Lot No. 164 etc.	\$ 176,296	\$ 176,296	\$ 176,296
Wu Feng Lot No. 365~855 etc.	175,661	175,661	175,661
Tu Ku Section No. 9-7, etc.	55,167	55,167	-
Song Chang Lot No. 557 etc.	19,912	19,912	19,912
Hou Long Zi Section No. 133-004	19,513	19,513	-
Xi Zhou Lot No. 112-54 etc.	11,941	11,941	11,941
Others	18,780	20,446	26,322
	\$ 477,270	\$ 478,936	\$ 410,132
Tainan branch			September 30, 2016 December 31, 2015 September 30, 2015
Shan Zhong Lot No. 1468, 1475 & 1476 etc.	\$ 234,699	\$ 234,699	\$ 234,699
Xue Zhong Lot No. 679, etc.	50,798	50,798	50,798
Yong Kang Ding An Lot No. 879, etc.	28,610	28,610	28,610
Bei An Section No. 54-3, etc.	15,344	15,344	15,344
Chin An Section No. 373, etc	15,139	15,139	15,139
Bao An Lot No. 882, etc.	10,325	10,325	10,325
Ren Wu New Hougang West Section No. 52, etc.	-		- 829,021
Ren Wu New Hougang West Section No. 69, No. 70, etc.	-		- 112,876
Chin An Section No.297, etc.		-	- 79,660
Bei An Section No. 56-10, etc.		-	- 62,056
Others	14,550	14,550	18,833
	\$ 369,465	\$ 369,465	\$ 1,457,361
Kaohsiung branch			September 30, 2016 December 31, 2015 September 30, 2015
Ren Wu New Hougang West Section No. 53, etc.	\$ 987,079	\$ 986,221	\$ -
Ren Wu New Hougang West Section No. 30 & 52-74	407,357	408,037	-
Da Hua Lot No. 434 & 436	13,923	13,923	13,923
	\$ 1,408,359	\$ 1,408,181	\$ 13,923
Total land held for construction site	\$ 2,401,228	\$ 2,402,716	\$ 2,027,550

Taipei branch	September 30, 2016 December 31, 2015 September 30, 2015
Prince Tanmei	\$ 2,270,855	\$	2,270,855	\$	2,270,855
Prince Fu II	501,042		641,311		1,717,469
Taipei Shinyi	106,741		106,741		106,741
Prince Dragon House III	42,432		42,432		42,432
Prince Da Din	12,446		12,446		12,446
Prince Guo Boa	5,738		5,738		5,738
Prince Central Park		-		-	33,689
Others	546		546		546
	\$ 2,939,800	\$	3,080,069	\$	4,189,916
Taichung branch	September 30, 2016 December 31, 2015 September 30, 2015
Chin Fon Gin	\$ 451,667	\$	516,970	\$	-
Prince Fu	27,417		39,528		39,528
Jing Yun Sian	13,418		13,418		13,418
The Cloud Century A	10,138		452,895		-
Hai Yan		-	64,657		-
The Cloud Century B		-		-	28,431
The Cloud Century C		-		-	6,617
Others	10,889		10,889		10,889
	\$ 513,529	\$	1,098,357	\$	98,883
Tainan branch	September 30, 2016 December 31, 2015 September 30, 2015
Flower Bo Five	\$ 1,372,351	\$	1,625,272	\$	-
Tun Sha Building III	28,376		28,376		28,376
Jun Chan LV	19,725		19,725		19,725
Prince Golden Age	19,572		19,572		19,572
Prince WIN-W Suite (A)		-		-	7,402
Others	2,188		2,188		2,188
	\$ 1,442,212	\$	1,695,133	\$	77,263
Kaohsiung branch	September 30, 2016 December 31, 2015 September 30, 2015
Prince Cloud D	\$ 486,691	\$		- \$	-
Prince Hua Yang	81,242		79,875		79,875
Prince Dai Din	10,431		10,431		10,431
	\$ 578,364	\$	90,306	\$	90,306
Total buildings and land held for sale	\$ 5,473,905	\$	5,963,865	\$	4,456,368

(c)Buildings and land held for sale

(d)Prepayment for land

	September 30, 2016			December 31, 2015	September 30, 2015
Tainan branch
Ren Wu New Hougang West Section No. 20, etc.	\$	227,447	\$	223,700	\$ -
Ren Wu Dist. Xia Hai Lot No. 978, etc.		-		-	1,466,664
Total prepayment for land	\$	227,447	\$	223,700	\$ 1,466,664

After the land consolidation, abovementioned Ren Wu Dist. Xia Hai Lot No. 978, etc. became New Hougang West Section No. 20~144-1, etc.

(e)Prepayment for buildings and land

			September 30, 2016 December 31, 2015 September 30, 2015
Taisugar Nanzi Section	\$ 786,213	\$ 258,794	\$ 188,472
Taisugar Kao An Section	658,336	651,397	1,157,542
Prince Yun Ding	37,800	37,800	37,800
Taisugar He Guan Section	-	-	382,382
	\$ 1,482,349	\$ 947,991	\$ 1,766,196

E. Disclosure of significant constructions:

(a) As of September 30, 2016, significant constructions are set forth below:

				Estimated	Percentage		Accumulated
Name of construction contract	Contract amount		construction cost		of completion	construction profit/(loss)
Tainan Spinning Dream Mall	\$	4,842,473	\$	4,742,532	99.08%	\$	99,022
New Construction of Chaojhou Railway Station		4,387,764		4,218,233	97.87%		165,920
Tseng-Wen Reservoir		3,178,480		2,862,176	99.94%		316,114
West Coast Expressway 130K FangLi to Dia An Construction		2,056,675		1,969,427	54.47%		47,524
Taoyuan MRT Airport Line - CU03		1,626,304		1,564,057	100.00%		62,247
San Bau Bei Tou DaYe - New Construction		1,630,427		1,551,397	75.12%		59,367
Improvement plan for High Speed Railway ground access road		1,255,059		1,198,581	98.86%		55,834
in Changhua

(b) As of December 31, 2015, significant constructions are set forth below:

			Estimated	Percentage	Accumulated
Name of construction contract	Contract amount		construction cost	of completion	construction profit/(loss)
Tainan Spinning Dream Mall	\$ 4,842,473	\$	4,742,532	97.51%	\$ 97,452
New Construction of Chaojhou Railway Station	4,274,219		4,104,868	97.55%	165,202
Tseng-Wen Reservoir	3,178,480		2,862,176	99.37%	314,311
West Coast Expressway 130K FangLi to Dia An Construction	2,058,381		1,969,484	34.69%	30,838
Taoyuan MRT Airport Line - CU03	1,631,685		1,570,640	99.36%	60,654
San Bau Bei Tou DaYe - New Construction	1,599,813		1,515,723	46.70%	39,270
Improvement plan for High Speed Railway ground access road	1,210,476		1,156,005	70.82%	38,576
in Changhua

(c) As of September 30, 2015, significant constructions are set forth below:

		Estimated	Percentage	Accumulated
Name of construction contract	Contract amount	construction cost	of completion	construction profit/(loss)
Tainan Spinning Dream Mall	\$ 5,029,591	\$ 4,898,454	89.59%	\$ 117,486
Taipei City Hall Bus Station	4,785,639	4,677,757	99.86%	107,731
New Construction of Chaojhou Railway Station	4,217,480	4,049,711	97.08%	162,870
Tseng-Wen Reservoir	3,161,533	2,850,708	99.00%	307,717
West Coast Expressway 130K FangLi to Dia An Construction	2,058,381	1,969,741	29.03%	25,732
Taoyuan MRT Airport Line - CU03	1,627,671	1,558,409	100.00%	69,262
San Bau Bei Tou DaYe - New Construction	1,521,905	1,430,405	34.56%	31,622
Improvement plan for High Speed Railway ground access road in Changhua	1,210,476	1,156,005	57.04%	31,070

(7) Other current assets

Items	September 30, 2016	December 31, 2015	September 30, 2015
Deferred sales commission	\$ 402,274	\$ 324,072	\$ 474,932
Others	37,941	17,800	37,165
	\$ 440,215	\$ 341,872	\$ 512,097
(8) Available-for-sale financial assets
Items	September 30, 2016	December 31, 2015	September 30, 2015
Non-current items:
Listed ( TSE and OTC ) stocks	\$ 118,198	\$ 121,852	\$ 119,398
Unlisted stocks	42,984	44,561	44,561
	161,182	166,413	163,959
Valuation adjustment of available
for-sale financial assets	1,154,751	1,398,529	1,130,602
	\$ 1,315,933	\$ 1,564,942	\$ 1,294,561

A. The Group recognized (\$19,370), \$155,576, (\$243,778) and (\$292,734) in other comprehensive (loss) gain for fair value change for the three months and nine months ended September 30, 2016 and 2015, respectively.

B. Details of the Group's available-for-sale financial assets pledged to others as collateral are provided in Note 8.

(9) Financial assets carried at cost

Items	September 30, 2016	December 31, 2015	September 30, 2015
Non-current items:
Unlisted stocks	\$ 877,800	\$ 887,529	\$	887,529

A. Based on the Group's intention, its investment in President Energy Development Ltd. and President International Development Corp. should be classified as 'available-for-sale financial assets'.However, as President Energy Development Ltd. and President International Development Corp. stocks are not traded in an active market, and no sufficient industry information of companies similar to President Energy Development Ltd. and President International Development Corp. can be obtained, the fair value of the investment in President Energy Development Ltd. and President International Development Corp. stocks cannot be measured reliably. Accordingly, the Group classified those stocks as 'financial assets measured at cost'.

B. Details of the Group's financial assets measured at cost pledged to others as collateral are provided in Note 8.

(10) Investments accounted for under equity method

	September 30, 2016				December 31, 2015	September 30, 2015
Name of associates	Carrying amount	Percentage of ownership		Carrying amount	Percentage of ownership	Carrying amount	Percentage of ownership
Geng-Ding Co., Ltd.	\$ 324,631	30.00%		\$ 326,189	30.00%	\$ 333,687	30.00%
Uni-President Development Corp.	1,209,786	30.00%		1,365,037	30.00%	1,344,783	30.00%
PPG Investment Inc.	14,858	27.27%		13,621	27.27%	14,531	27.27%
Queen Holdings Ltd.	367,484	27.27%		372,751	27.27%	359,659	27.27%
Ming-Da Enterprise Co., Ltd.	138,542	20.00%		166,887	20.00%	166,623	20.00%
Amida Truslink Assets Management Co., Ltd. (Note)	-	45.21%		-	45.21%	-	45.21%
	\$ 2,055,301		\$	2,244,485		\$ 2,219,283

Note : As of September 30, 2016, December 31, 2015, and September 30, 2015, the book value of the Company's investment in Amida Truslink Assets Management Co., Ltd. was a credit balance thus, the investment was transferred to other non-current liabilities which amounted to \$137,280 \$137,018 and \$110,194, respectively.

Associates

A. The basic information of the associate that is material to the Group is as follows:

Company name	Principal place	Nature of	Method of
	of business	relationship	measurement
Uni President Development Corp.	Taiwan	The Group holds more than 20% of voting rights	Equity method

B. The summarized financial information of the associate that is material to the Group is as follows: Balance sheet

	Uni President Development Corp.
		September 30, 2016		December 31, 2015		September 30, 2015
Current assets	\$	265,865	\$	315,715	\$	356,546
Non-current assets		9,285,351		9,622,107		9,731,621
Current liabilities	(	3,482,658)	(	3,627,239)	(	3,398,385)
Non-current liabilities	(	2,035,938)	(	1,760,396)	(	2,207,173)
Total net assets	\$	4,032,620	\$	4,550,187	\$	4,482,609
Share in associate's net assets	\$	1,209,786	\$	1,365,037	\$	1,344,783

		Uni President Development Corp.
	Three months ended Spetember 30,
		2016		2015
Revenue	\$	215,159	\$	247,796
Profit for the period from continuing operations	\$	10,049	\$	43,952
Total comprehensive income	\$	10,049	\$	43,952
		Uni President Development Corp.
		Nine months ended Spetember 30,
		2016		2015
Revenue	\$	697,237	\$	770,955
Profit for the period from continuing operations	\$	76,432	\$	153,786
Total comprehensive income	\$	76,432	\$	153,786

C. The carrying amount of the Group's interests in all individually immaterial associates and the Group's share of the operating results are summarized below:

As of September 30, 2016, December 31, 2015 and September 30, 2015, the carrying amount of the Group's individually immaterial associates amounted to \$708,235, \$742,430 and \$764,306, respectively.

	Three months ended Spetember 30,
	2016		2015
Profit (loss) for the period from continuing operations	\$ 108,813	(\$	179,432)
Total comprehensive income (loss)	\$ 108,813	(\$	179,432)
	Nine months ended Spetember 30,
	2016		2015
Profit for the period from continuing operations	\$ 184,242	\$	66,584
Total comprehensive income	\$ 184,242	\$	66,584

D. The Group's investments had no quoted market price.

Statements of comprehensive income

• E. Investments accounted for under equity are based on unreviewed financial statements of each investee. Share of profit (loss) of associates recognized was \$28,409, (\$51,426), \$70,039 and \$17,795 for the three months and nine months ended September 30, 2016 and 2015, respectively. Balance of investments was \$1,918,021 and \$2,109,089 as of September 30, 2016 and 2015, respectively. Certain investments accounted for under equity method as of December 31, 2015 are based on financial statements audited by other independent accountants, the related investments amounted to \$575,543.
• F. Details of the Group's investments accounted for under equity method pledged to others as collateral are provided in Note 8.

(11) Property, plant and equipment

A. Details of book values are as follows:

	September 30, 2016	December 31, 2015	September 30, 2015
Land	\$ 2,858,947	\$ 2,858,947	\$ 2,858,947
Buildings	3,268,132	3,391,429	3,432,698
Machinery and equipment	7,296	8,373	8,732
Computer and communication equipment	11,641	15,605	17,183
Transportation equipment	3,866	4,788	3,818
Office equipment	334,749	366,507	381,924
Leasehold improvements	24,653	25,648	-
Other equipment	62,427	66,339	67,444
Construction in progress and
equipment under acceptance	3,889	5,296	20,488
	\$ 6,575,600	\$ 6,742,932	\$ 6,791,234

B. Changes in property, plant and equipment for the period are as follows:

	Nine months ended September 30, 2016
Cost	Opening net book amount		Additions		Disposals		Reclassifications	Closing net book amount
Land	\$	2,858,947	\$		- \$		- \$	- \$	2,858,947
Buildings		4,445,929		1,471	(	197)	3,819		4,451,022
Machinery and equipment		14,476			-		-	-	14,476
Computer and communication equipment		61,662		257			-	-	61,919
Transportation equipment		12,657			- (	1,000)		-	11,657
Office equipment		800,944		24,635	(	17,554)	5,538		813,563
Leasehold improvements		73,533			-		-	-	73,533
Other equipment		91,935		2,055	(	2,178)	21		91,833
Construction in progress and
equipment under acceptance		5,296		7,571		-	( 8,978)		3,889
	\$	8,365,379	\$	35,989 (\$		20,929)	\$ 400	\$	8,380,839

Opening net Closing net Cost book amount Additions Disposals Reclassifications book amount Land 2,858,947\$ -\$ -\$ -\$ 2,858,947\$ Buildings 4,465,549 2,949 23,326)( - 4,445,172 Machinery and equipment 14,476 - - - 14,476 Computer and communication equipment 59,714 1,866 - - 61,580 Transportation equipment 11,729 - 271)( - 11,458 Office equipment 788,300 12,327 3,747)( 190 797,070 Leasehold improvements 47,000 - - - 47,000 Other equipment 90,999 2,607 2,055)( 167 91,718 Construction in progress and prepayments for equipment 2,594 18,084 - 190)( 20,488 8,339,308\$ 37,833\$ 29,399)(\$ 167\$ 8,347,909\$ Nine months ended September 30, 2015

	Nine months ended September 30, 2016
Accumulated depreciation		Opening net book amount		Additions		Disposals	Reclassifications		Closing net book amount
Buildings		\$ 1,054,500		\$ 128,587 (\$			197) \$		- \$ 1,182,890
Machinery and equipment		6,103		1,077			-	-	7,180
Computer and communication equipment		46,057		4,221			-	-	50,278
Transportation equipment		7,869		728 (		806)		-	7,791
Office equipment		434,437				61,824 ( 17,447)		-	478,814
Leasehold improvements		47,885		995			-	-	48,880
Other equipment		25,596		3,812	(	2)	-		29,406
	\$	1,622,447	\$	201,244	(\$	18,452)	\$ -	\$	1,805,239
							Nine months ended September 30, 2015
		Opening net							Closing net
Accumulated depreciation		book amount		Additions		Disposals	Reclassifications		book amount
Buildings	\$	907,885		\$ 127,915 (\$ 23,326)			\$		- \$ 1,012,474
Machinery and equipment		4,667		1,077			-	-	5,744
Computer and communication equipment		39,987		4,410			-	-	44,397
Transportation equipment		7,396		462 (		218)		-	7,640
Office equipment		353,979		64,914 (		3,747)		-	415,146
Leasehold improvements		47,000			-		-	-	47,000
Other equipment		20,428		3,846		-	-		24,274
	\$	1,381,342	\$	202,624	(\$	27,291)	\$ -	\$	1,556,675

C. Details of the Group's property, plant and equipment pledged to others as collateral are provided in Note 8.

(12) Investment property

A. Details of book values are as follows:

	September 30, 2016	December 31, 2015	September 30, 2015
Land	\$ 265,550	\$ 265,550	\$ 203,494
Leased assets-land	2,592,157	2,592,206	2,592,235
Leased assets-buildings	3,118,362	3,186,071	3,208,493
	\$ 5,976,069	\$ 6,043,827	\$ 6,004,222

B. Changes in investment property for the period are as follows:

		Opening net						Closing net
Cost		book amount	Additions		Disposals	Reclassifications		book amount
Land	\$	265,550	\$		- \$	- \$		- \$ 265,550
Leased assets-land		2,592,206			- ( 49)		-	2,592,157
Leased assets-buildings		3,932,498	-	(	4,036)	-		3,928,462
	\$	6,790,254	\$ -	(\$	4,085)	\$ -	\$	6,786,169

				Nine months ended Septmeber 30, 2015
	Opening net						Closing net
Cost	book amount	Additions		Disposals		Reclassifications	book amount
Land	\$ 203,494	\$		- \$	- \$		- \$ 203,494
Leased assets-land	2,592,342		- (	71) (		36)	2,592,235
Leased assets-buildings	3,941,750	-	(	5,259)	(	2,768)	3,933,723
	\$ 6,737,586	\$ -	(\$	5,330)	(\$	2,804)	\$ 6,729,452
				Nine months ended Septmeber 30, 2016
	Opening net						Closing net
Accumulated depreciation	book amount	Additions		Disposals		Reclassifications	book amount
Leased assets-buildings	\$ 746,427	\$ 64,359	(\$	686)	\$	-	\$ 810,100
				Nine months ended Septmeber 30, 2015
	Opening net						Closing net
Accumulated depreciation	book amount	Additions		Disposals		Reclassifications	book amount
Leased assets-buildings	\$ 662,031	\$ 64,507	(\$	884)	(\$	424)	\$ 725,230

C. Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below:

Three months ended September 30,

	2016	2015
Rental revenue from the lease of the investment property	\$ 73,870	\$ 91,769
Direct operating expenses arising from the investment property that generated rental income in the period	\$ 40,190	\$ 39,849
Direct operating expenses arising from the investment property that did not generate rental income in the period	\$ -	\$ -
		Nine months ended September 30,
	2016	2015
Rental revenue from the lease of the investment property	\$ 218,770	\$ 279,412
Direct operating expenses arising from the investment property that generated rental income in the period	\$ 114,735	\$ 116,098
Direct operating expenses arising from the investment property that did not generate rental income in the period	\$ -	\$ -

Direct operating expenses arising from the investment property that did not generate rental income in the period -\$ -\$

D. As of September 30, 2016, December 31, 2015 and September 30, 2015, the fair value of the investment property held by the Group was \$12,885,406, \$12,932,299 and \$12,885,493, respectively. The Group management estimated the fair value based on market evidence on transaction price of similar property and assessed value.

E. Information about the investment property that was pledged to others as collateral is provided in Note 8.

(13) Intangible assets

A. Details of book values are as follows:

	September 30, 2016	December 31, 2015	September 30, 2015
Service concession	\$ 2,254,499	\$ 2,300,439	\$	2,315,752
Software	1,420	1,870		1,120
Trademarks and licences	-	214		286
	\$ 2,255,919	\$ 2,302,523	\$	2,317,158

B. Changes in intangible assets for the period are as follows:

					Nine months ended September 30, 2016
	Opening net						Closing net
Cost	book amount	Additions		Disposals	Reclassifications		book amount
Service concession	\$ 2,868,372	\$	- \$		- \$	- \$	2,868,372
Software	3,762		33		-	-	3,795
Trademarks and licences	3,139	-		-	-		3,139
	\$ 2,875,273	\$	33 \$	-	\$ -	\$	2,875,306
					Nine months ended September 30, 2015
	Opening net						Closing net
Cost	book amount	Additions		Disposals	Reclassifications		book amount
Service concession	\$ 2,868,372	\$	- \$		- \$	- \$	2,868,372
Software	19,559	530	(	17,169)		-	2,920
Trademarks and licences	3,139	-		-	-		3,139
	\$ 2,891,070	\$ 530	(\$	17,169)	\$ -	\$	2,874,431
					Nine months ended September 30, 2016
	Opening net						Closing net
Accumulated Amortization	book amount	Additions		Disposals	Reclassifications		book amount
Service concession	\$ 567,933	\$ 45,940	\$		- \$	- \$	613,873
Software	1,892	483			-	-	2,375
Trademarks and licences	2,925	214		-	-		3,139
	\$ 572,750	\$ 46,637	\$	-	\$ -	\$	619,387
					Nine months ended September 30, 2015
	Opening net						Closing net
Accumulated Amortization	book amount	Additions		Disposals	Reclassifications		book amount
Service concession	\$ 506,680	\$ 45,940	\$		- \$	- \$	552,620
Software	18,756	213	(	17,169)		-	1,800
Trademarks and licences	2,639	214		-	-		2,853
	\$ 528,075	\$ 46,367	(\$	17,169)	\$ -	\$	557,273

C. Details of amortization on intangible assets are as follows:

	Three months ended September 30,
	2016	2015
Operating costs	\$ 15,314	\$ 15,314
Administrative expenses	244	161
	\$ 15,558	\$ 15,475

				Nine months ended September 30,
				2016			2015
Operating costs		\$		45,940	\$		45,940
Administrative expenses				697			427
		\$		46,637	\$		46,367
(14) Short-term borrowings
		September 30, 2016		December 31, 2015			September 30, 2015
Unsecured bank borrowings	\$	2,305,659	\$	1,991,373		\$	2,044,874
Secured bank borrowings		51,500		635,000			1,680,000
	\$	2,357,159	\$	2,626,373		\$	3,724,874
Interest rate range		1.60%~2.10%		1.92%~2.51%			1.92%~2.59%
For details of pledged assets, please refer to Note 8. (15) Short-term notes and bills payable
		September 30, 2016		December 31, 2015			September 30, 2015
Commercial papers	\$	260,000	\$	1,060,000		\$	640,000
Less: Unamortized discount	(	49)	(		189)	(	166)
	\$	259,951	\$	1,059,811		\$	639,834
Interest rate range		1.09%~1.61%		0.55%~2.25%			0.56%~2.46%
A. The above commercial papers were issued by banks and bills financial institutions.
B. For details of pledged		assets, please refer to Note 8.
(16) Receipts in advance
Items		September 30, 2016		December 31, 2015			September 30, 2015
Advance real estate receipts	\$	1,786,160	\$	1,592,844		\$	2,814,605
Advance rent		166,649		158,283			192,041
Other advance receipts		133,588		124,335			121,299
	\$	2,086,397	\$	1,875,462		\$	3,127,945
(17) Bonds payable
		September 30, 2016		December 31, 2015			September 30, 2015
2012 1st secured ordinary bonds payable	\$	2,000,000		\$ 2,000,000		\$	2,000,000
2013 1st secured ordinary bonds		2,500,000		2,500,000			2,500,000
payable

• Less: Expiring within one year 2,000,000)( - 2,500,000\$ 4,500,000\$ 4,500,000\$
• A. The Group issued secured ordinary bonds payable in July 2012. The significant terms of the bonds are as follows:

4,500,000 4,500,000 4,500,000

(a)Total issue amount: \$2,000,000

• (b)Issue price: At par value of \$100 per bond
• (c)Coupon rate: 1.33%
• (d)Terms of interest repayment: The bonds interest is calculated on simple rate every year starting July 2012 based on the coupon rate.
• (e)Repayment term: The bonds are repaid upon the maturity of the bonds.
• (f)Period: 5 years, from July 12, 2012 to July 12, 2017
• (g)The way of security: The bonds are secured by Bank of Taiwan.
• (h)Guarantee Bank: The bonds are guaranteed by Mega International Commercial Bank.
• B.The Group issued secured ordinary bonds payable in November 2013. The significant terms of the bonds are as follows:
• (a)Total issue amount: \$2,500,000
• (b)Issue price: At par value of \$100 per bond
• (c)Coupon rate: 1.55%
• (d)Terms of interest repayment: The bonds interest is calculated on simple rate every year starting November 2013 based on the coupon rate.
• (e)Repayment term: The bonds are repaid upon the maturity of the bonds.
• (f)Period: 5 years, from November 21, 2013 to November 21, 2018
• (g)The way of security: \$1.5 billion and \$1 billion secured by Bank of Taiwan and Agricultural Bank of Taiwan, respectively.

(h)Guarantee Bank: The bonds are guaranteed by Taipei Fubon Commercial Bank.

(18) Long-term borrowings

		September 30, 2016		December 31, 2015		September 30, 2015
Secured bank borrowings	\$	8,922,861	\$	9,635,346	\$	9,695,281
Unsecured bank borrowings		320,000		270,000		420,000
		9,242,861		9,905,346		10,115,281
Less: Current portion	(	1,633,904)	(	474,592)	(	596,870)
		7,608,957		9,430,754		9,518,411
Commerical papers		2,039,600		589,600		589,600
Less: Unamortized discount	(	1,766)	(	443)	(	719)
		2,037,834		589,157		588,881
Total	\$	9,646,791	\$	10,019,911	\$	10,107,292
Range of maturity dates		2017.03.18~2027.11.02		2016.06.24~2027.11.02		2015.11.23~2027.11.02
Range of maturity rates		1.82%~3.00%		1.74%~3.16%		1.82%~3.00%

A.For details of restrictive covenants, please refer to Note 9.

• B. The Group and financial institutions entered into a contract for a syndicated borrowing. The Group shall redraw revolving credit line to issue abovementioned commercial paper during the credit term. For the related information, please refer to Note 9(10) and 9(12).
• C. For details of pledged assets, please refer to Note 8.

(19) Provisions-replacement cost

		Nine months ended September 30,
		2016		2015
At January 1	\$	84,517	\$	81,720
Additions		27,891		22,625
Used	(	11,223)	(	19,408)
At September 30	\$	101,185	\$	84,937

(20) Pension

• A.(a)The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees' service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees'monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions to cover the deficit by next March.
• (b)For the aforementioned pension plan, the Group recognized pension costs of \$948, \$949, \$2,842 and \$2,845 for the three months and nine months ended September 30, 2016 and 2015, respectively.
• (c)Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2017 amounts to \$3,788.
• B. (a)Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The

benefits accrued are paid monthly or in lump sum upon termination of employment.

(b)The pension costs under the defined contribution pension plans of the Company and its domestic subsidiaries for the three months and nine months ended September 30, 2016 and 2015, were \$17,373, \$18,093, \$49,242 and \$46,255, respectively.

(21) Share capital

A. Movements in the number of the Company's ordinary shares outstanding are as follows:

(Units: in thousand shares)

	2016	2015
Shares at January 1 and September 30	1,622,671	1,622,671

• B. The Company's subsidiary, Ta-Chen Construction & Engineering Corp. (Ta-Chen) has acquired the Company's shares in an open market to maintain the equity interest of the Company's shareholders. In order to strengthen management through eliminating interlocking shareholding, the Board of Directors of Ta-Chen has resolved to reduce capital of \$435,025 (elimination of 43,502 thousand shares) by returning the Company's shares (of 39,016 thousand shares) to Cheng-Shi Investment Holdings Co., Ltd. (Cheng-Shi Investment), and set the effective capital reduction date as August 5, 2015. Cheng-Shi Investment's Board of Directors has resolved the capital reduction and set the reduction effective on September 21, 2015, and returned shares to the Company. The registration of changes in capital and capital reduction as approved by the competent authority has been completed on November 18, 2015.
• C. As of September 30, 2016, the Company's authorized capital was \$20,000,000, and the paid-in capital was \$16,233,261 with a par value of NT\$10 per share, consisting of 1,623,326 thousand shares of ordinary stock.
• D. As of September 30, 2016, December 31, 2015 and September 30, 2015, the Company's subsidiary Prince Apartment Management Maintain Co., Ltd. held the Company's stocks to maintain equity interest in the Company. The amount of shares held by the subsidiary was all 655 thousand shares, the average par value was all NT\$1.52 per share, and the fair value was NT\$10.25, NT\$9.40 and NT\$9.93 per share, respectively.

(22) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

		Capital surplus
2016	Share premium	Treasury share transaction	Others	Total
At January 1, 2016 (At September 30, 2016)	\$ 1,375,442	\$ 877,839	\$ 7,232	\$ 2,260,513
			Capital surplus
2015	Share premium	Treasury share transaction	Others	Total
At January 1, 2015 (At September 30, 2015)	\$ 1,408,500	\$ 514,061	\$ 7,232	\$ 1,929,793

(23) Retained earnings

• A. In accordance with the Company's Articles of Incorporation, the Company will take into consideration its future business plans and capital expenditures in determining the amount of earnings to be retained and to be distributed. In accordance with the Company Law, 10% of the current year's earnings, after payment of all taxes and after offsetting accumulated deficit, shall be set aside as legal reserve until the balance of legal reserve is equal to that of issued share capital. Afterwards, an amount shall be appropriated or reversed as special reserve in accordance with applicable legal or regulatory requirements, along with prior years' accumulated unappropriated retained earnings, and then distribution should be in the following order: stock dividend and bonus to shareholders are 50%~100% of the accumulated distributable earnings, and cash dividend is at least 30% of the total stock dividend and bonus; the appropriation of earnings is proposed by the Board of Directors and resolved by the shareholders.
• B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.
• C.The Company recognized dividends distributed to owners amounting to \$1,785,659 (\$1.1 (in dollars) per share) and \$1,329,873 (\$0.8 (in dollars) per share) for the nine months ended September 30, 2016 and 2015, respectively. On June 21, 2016, the stockholders resolved that total dividends for the distribution of earnings for 2015 was \$1,785,659 with \$1.1 (in dollars) per share.

(24) Other equity items

		Available-for-sale investment		Currency translation		Total
At January 1, 2016	\$	1,407,403	\$	1,706	\$	1,409,109
Available-for-sale investment:
-Loss on fair value	(	243,778)			- (	243,778)
Currency translation differences:
-Group		-	(	49)	(	49)
At September 30, 2016	\$	1,163,625	\$	1,657	\$	1,165,282
		Available-for-sale		Currency
		investment		translation		Total
At January 1, 2015	\$	1,434,529	\$	1,690	\$	1,436,219
Available-for-sale investment:
-Loss on fair value	(	292,734)		(	-	292,734)
Currency translation differences:
-Group		-		2		2
At September 30, 2015	\$	1,141,795	\$	1,692	\$	1,143,487

(25) Maturity analysis of assets and liabilities

The construction related assets and liabilities are classified as current and non-current based on the operating cycle. Related recognized amount expected to be recovered or repaid within or after 12 months from the balance sheet date is as follows:

		Within 12 months		Over 12 months	Total
September 30, 2016
Assets
Notes receivable, net	\$	43,749	\$	4,630	\$	48,379
Accounts receivable, net(including related parties)		715,278		344,537		1,059,815
Inventories		6,881,539		16,533,113		23,414,652
Construction contract receivable		647,124		1,068,314		1,715,438
	\$	8,287,690	\$	17,950,594	\$	26,238,284
Liabilities
Notes payable	\$	33,967	\$	11,456	\$	45,423
Accounts payable		2,167,117		671,598		2,838,715
Construction contract payable		759,966		118,119		878,085
	\$	2,961,050	\$	801,173	\$	3,762,223

	Within 12 months	Over 12 months		Total
December 31, 2015
Assets
Notes receivable, net	\$ 44,980	\$		671	\$	45,651
Accounts receivable, net(including related parties) Inventories	1,582,837 8,635,309		13,526,802	597,393		2,180,230 22,162,111
Construction contract receivable	931,727			416,231		1,347,958
	\$ 11,194,853	\$	14,541,097		\$	25,735,950
Liabilities
Notes payable	\$ 11,094	\$			- \$	11,094
Accounts payable	2,510,158			1,529,999		4,040,157
Construction contract payable	406,921			98,516		505,437
	\$ 2,928,173	\$		1,628,515	\$	4,556,688
	Within 12 months		Over 12 months			Total
September 30, 2015
Assets
Notes receivable, net	\$ 62,773	\$		884	\$	63,657
Accounts receivable, net(including related parties)	252,876			853,498		1,106,374
Inventories	8,517,786		15,077,385			23,595,171
Construction contract receivable	\$ 855,530 9,688,965	\$	16,439,497	507,730	\$	1,363,260 26,128,462
Liabilities
Notes payable	\$ 8,130	\$			- \$	8,130
Accounts payable	1,949,460			925,797		2,875,257
Construction contract payable	397,759			64,469		462,228
	\$ 2,355,349	\$		990,266	\$	3,345,615
(26) Operating revenue
						Three months ended September 30,
		2016				2015
Sales revenue	\$	1,410,833		\$		1,726,599
Service revenue			141,704			102,848
Construction contract revenues			819,026			377,814
Service concession revenue

-Operating service revenue 86,580 91,831

2,458,143\$ 2,299,092\$

		Nine months ended September 30,
		2016		2015
Sales revenue	\$	3,749,043	\$	4,830,846
Service revenue		402,143		375,033
Construction contract revenues		2,140,577		2,547,635
Service concession revenue
-Operating service revenue		275,912		276,819
	\$	6,567,675	\$	8,030,333
(27) Other income
		Three months ended Septmeber 30,
		2016		2015
Interest income	\$	176	\$	824
Dividend income		55,765		43,343
Others		15,651		15,668
	\$	71,592	\$	59,835
		Nine months ended September 30,
		2016		2015
Interest income	\$	4,211	\$	5,531
Dividend income		118,461		161,097
Others		98,726		102,380
	\$	221,398	\$	269,008
(28) Other gains and losses
		Three months ended September 30,
		2016		2015
Net loss on financial assets at fair value through
profit or loss	(\$	27,920)	(\$	281)
Net currency exchange (loss) gain	(	13,875)		22,059
Others	(	5,379)		23,439
	(\$	47,174)	\$	45,217

	Nine months ended September 30,
		2016	2015
Net (loss) gain on financial assets at fair value
through profit or loss	(\$	7,626) \$	110,175
Net currency exchange (loss) gain	(	19,392)	12,825
Arbitration expenses and compensation loss (Note)		- (	26,100)
Others	(	6,784) (	7,188)
	(\$	33,802) \$	89,712

Note: Please refer to Note 9(17) for details. (29) Finance costs

	Three months ended September 30,
	2016	2015
Interest expense:
Bank borrowings	\$ 17,348 \$	37,885
Commercial paper	8,514	5,853
Ordinary bond	31,848	32,104
Others	268	302
Other finance expenses	300	300
	\$ 58,278 \$	76,444
	Nine months ended September 30,
	2016	2015
Interest expense:
Bank borrowings	\$ 72,611 \$	138,102
Commercial paper	19,396	21,040
Ordinary bond	92,640	92,670
Others	2,101	1,534
Other finance expenses	900	900
	\$ 187,648 \$	254,246

(30) Expenses by nature

	Three months ended September 30, 2016
		Operating costs		Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	222,995	\$	142,348	\$	365,343
Labor and health insurance fees		18,225		15,791		34,016
Pension costs		9,666		8,655		18,321
Other employee benefit expense		2,371		6,860		9,231
	\$	253,257	\$	173,654	\$	426,911
Depreciation charges	\$	21,394	\$	66,664	\$	88,058
Amortization charges	\$	15,314	\$	244	\$	15,558
	Three months ended September 30, 2015
		Operating costs		Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	229,228	\$	124,393	\$	353,621
Labor and health insurance fees		17,236		15,010		32,246
Pension costs		11,104		7,938		19,042
Other employee benefit expense		2,319		10,085		12,404
	\$	259,887	\$	157,426	\$	417,313
Depreciation charges	\$	21,439	\$	66,645	\$	88,084
Amortization charges	\$	15,313	\$	162	\$	15,475
				Nine months ended September 30, 2016
		Operating costs		Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	668,265	\$	396,008	\$	1,064,273
Labor and health insurance fees		54,022		44,051		98,073
Pension costs		28,530		23,554		52,084
Other employee benefit expense		6,292		28,357		34,649
	\$	757,109	\$	491,970	\$	1,249,079
Depreciation charges	\$	64,359	\$	201,244	\$	265,603
Amortization charges	\$	45,940	\$	697	\$	46,637

	Nine months ended September 30, 2015
	Operating costs		Operating expenses			Total
Employee benefit expense
Wages and salaries	\$	669,339	\$	428,933	\$	1,098,272
Labor and health insurance fees		52,331		40,582		92,913
Pension costs		26,805		22,295		49,100
Other employee benefit expense		6,369		34,348		40,717
	\$	754,844	\$	526,158	\$	1,281,002
Depreciation charges	\$	64,507	\$	202,624	\$	267,131
Amortization charges	\$	45,940	\$	427	\$	46,367

A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute compensation to the employees and pay remuneration to the directors that account for at least 2% and no higher than 3%, respectively, distributable profit of the current period. If a company has accumulated deficit, earnings should be channeled to cover losses.

Employees' compensation can be distributed in the form of shares or in cash. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash.

Abovementioned distributable profit of the current period refers to the pre-tax profit before deduction of employees' compensation and directors' remuneration.

B. For the three months and nine months ended September 30, 2016 and 2015, employees' compensation was accrued at \$23,091, \$2,227, \$56,072, and \$15,149, respectively; while directors' remuneration was accrued at \$7,856, \$3,341, \$19,076 and \$22,724, respectively. The aforementioned amounts were recognised in salary expenses.

The employees' compensation and directors' remuneration were accrued based on the percentage as prescribed in the Company's Articles of Incorporation and distributable profit of current period for the nine months ended September 30, 2016.

Employees' compensation and directors' remuneration of 2015 and 2014 as resolved at the meeting of shareholders were in agreement with those amounts recognised in the 2015 and 2014 financial statements.

Information about employees' compensation and directors' remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

(31) Income tax

A. Income tax expense

(a) Components of income tax expense:

	Three months ended September 30,
		2016		2015
Current tax:
Current tax on profits for the period	(\$	1,889)	\$	15,858
Effects from tax credit of investment		-	(	2,454)
Under provision of prior year's income tax		2,868		18,693
Land value increment tax recognized in income tax for the period		51,323		49,392
Total current tax		52,302		81,489
Deferred tax:
Origination and reversal of temporary differences		5,903		14,508
Net operating loss carryforward	(	5,274)	(	14,508)
Total deferred tax		629		-
Income tax expense	\$	52,931	\$	81,489
				Nine months ended September 30,
		2016		2015
Current tax:
Current tax on profits for the period	\$	33,712	\$	62,261
Tax on undistributed surplus earnings		21,397		82,522
Effects from tax credit of investment	(	24,113)	(	54,070)
Under provision of prior year's income tax		7,836		37,831
Land value increment tax recognized in income tax for the period		53,441		56,689
Total current tax		92,273		185,233
Deferred tax:
Origination and reversal of temporary differences		13,445		23,455
Net operating loss carryforward	(	11,416)	(	23,111)
Total deferred tax		2,029		344
Income tax expense	\$	94,302	\$	185,577

B. As of September 30, 2016, the Company's income tax returns through 2014 have been assessed and approved by the Tax Authority.

C. Unappropriated retained earnings:

	September 30, 2016	December 31, 2015	September 30, 2015
Earnings generated in and after 1998	\$ 2,007,745	\$ 3,508,400	\$ 2,141,479

D.As of September 30, 2016, December 31, 2015 and September 30, 2015, the balance of the imputation tax credit account was \$82,244, \$53,573 and \$24,972, respectively. The creditable tax rate was 4.74% for 2015 and is estimated to be 2.34% for 2016. The tax credits to be allocated to the stockholders are calculated based on the balance of the imputation tax credit account on the day of distribution of dividends. Therefore, the creditable tax rate applicable to the stockholders for the appropriation of earnings generated in and after 1998 shall be adjusted to take into account the tax credits that might incur under the income tax laws up to the distribution date of dividends or earnings.

(32) Earnings per share

	Three months ended September 30, 2016
			Weighted average
			number of ordinary	Earnings
			shares outstanding	per share
Basic earnings per share		Amount after tax	(shares in thousands)	(in dollars)
Profit attributable to ordinary shareholders of the parent	\$	184,742	1,622,671	\$ 0.11
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	\$	184,742	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation		-	2,524
Profit attributable to ordinary shareholders of the parent plus assumed conversion
of all dilutive potential ordinary shares	\$	184,742	1,625,195	\$ 0.11

		Three months ended September 30, 2015
		Weighted average
		number of ordinary	Earnings
		shares outstanding	per share
Basic earnings per share	Amount after tax	(shares in thousands)	(in dollars)
Profit attributable to ordinary shareholders of the parent	\$ 146,050	1,622,671	\$ 0.09
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	\$ 146,050	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees'compensations	-	267
Profit attributable to ordinary shareholders
of the parent plus assumed conversion
of all dilutive potential ordinary shares	\$ 146,050	1,622,938	\$ 0.09
		Nine months ended September 30, 2016
		Weighted average
		number of ordinary	Earnings
		shares outstanding	per share
		(shares in thousands)	(in dollars)
Basic earnings per share	Amount after tax
Profit attributable to ordinary shareholders of the parent	\$ 508,784	1,622,671	\$ 0.31
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	\$ 508,784	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation	-	6,128
Profit attributable to ordinary shareholders
of the parent plus assumed conversion
of all dilutive potential ordinary shares	\$ 508,784	1,628,799	\$ 0.31

		Nine months ended September 30, 2015
		Weighted average
		number of ordinary	Earnings
		shares outstanding	per share
Basic earnings per share	Amount after tax	(shares in thousands)	(in dollars)
Profit attributable to ordinary shareholders of the parent	\$ 856,486	1,622,671	\$ 0.53
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	\$ 856,486	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees'compensations	-	1,819
Profit attributable to ordinary shareholders
of the parent plus assumed conversion
of all dilutive potential ordinary shares	\$ 856,486	1,624,490	\$ 0.53

(33) Operating leases

The Company's subsidiary leases office and business area under non-cancellable operating lease agreements. The lease terms are between 2011 and 2035, and all these lease agreements are renewable at the end of the lease period. Rental payment is calculated based on an agreed upon rate of revenue. The Company's subsidiary recognized rental expense of \$96,811, \$96,811, \$290,434 and \$290,434 for the three months and nine months ended September 30, 2016 and 2015, respectively. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

	September 30, 2016	December 31, 2015	September 30, 2015
Not later than one year	\$ 403,105	\$ 400,563	\$ 399,716
Later than one year but not later than five years	2,039,563	2,034,162	2,031,620
Later than five years	5,669,110	5,977,475	6,080,158
	\$ 8,111,778	\$ 8,412,200	\$ 8,511,494

(34) Non-cash transactions

Investing and financing activities with no cash flow effects:

		Nine-months ended September 30,
	2016			2015
A.Merchandise inventory reclassified to property,
plant and equipment	\$	21	\$	167
B.Investment property reclassified to land and
building held for sale	\$	-	\$	2,380
C.Other assets reclassified to property, plant and equipment	\$	379	\$	-

7. RELATED PARTY TRANSACTIONS

(1) Significant related party transactions and balances

• A. Sales of goods:
• (a)

	Three months ended September 30,
		2016		2015
Construction subcontracting
-Associates	\$	40,561	\$	23,811
-Other related parties		70,696		70,647
	\$	111,257	\$	94,458
			Nine months ended September 30,
		2016		2015
Construction subcontracting
-Associates	\$	96,492	\$	84,044
-Other related parties		143,330		168,888
	\$	239,822	\$	252,932

The contract prices of construction for related parties are based on expected construction cost plus reasonable management expenses and profit, and are determined based on mutual agreements. The construction payments are collected based on the contract terms. As of September 30, 2016, December 31, 2015 and September 30, 2015, the status of the construction of the related parties undertaken by the Group was as follows:

		September 30, 2016		December 31, 2015		September 30, 2015
Associates:
Total amount of construction contracts that were signed but had not been settled yet	\$	526,979	\$	5,435,312	\$	5,680,215
Construction payments received	(	427,836)	(	4,972,256)	(	5,448,043)
Construction payments receivable	\$	99,143	\$	463,056	\$	232,172
Other related parties
Total amount of construction contracts that were signed but had not been settled yet	\$	5,075,733	\$	5,427,516	\$	5,617,505
Construction payments received	(	4,869,689)	(	5,030,549)	(	4,886,286)
Construction payments receivable	\$	206,044	\$	396,967	\$	731,219
(b)
				Three months ended September 30,
Rental income:		2016			2015
-Other related parties		\$	11,574	\$		11,365
				Nine months ended September 30,
Rental income:		2016			2015
-Other related parties		\$	36,129	\$		35,417

Rent is determined by mutual agreements and is collected monthly.

B. Accounts receivable

	September 30, 2016	December 31, 2015		September 30, 2015
Accounts receivable - related parties:
-Associates	\$ 9,174	\$	22,670	\$ 22,358
-Other related parties	47,436		405,976	423,176
	\$ 56,610	\$	428,646	\$ 445,534
C. Other payables
	September 30, 2016	December 31, 2015		September 30, 2015
Rental payable:
-Associates	\$ 59,456	\$	169,005	\$ 105,728
D. Others
(a)				Three months ended September 30,
		2016		2015
Rental expenses:
-Associates	\$	108,095	\$	145,537
-Other related parties		1,649		2,747
	\$	109,744	\$	148,284
		Nine months ended September 30,
		2016		2015
Rental expenses:
-Associates	\$	360,287	\$	403,480
-Other related parties		4,946		2,747
	\$	365,233	\$	406,227
(b)
	September 30, 2016	December 31, 2015		September 30, 2015
Refundable deposits:
-Associates	\$ 68,156 \$	66,266	\$	67,591

E. On June 20, 2006, the Company and China Metal Products Co., Ltd. ("A party") jointly signed a creditor's rights transfer contract with Amida Trustlink Assets Management Co., Ltd. ("B party"). Under the contract, the Company and A party should pay \$2,100,000 each (totaling \$4,200,000) to jointly acquire whole creditor's rights of mortgages, security interests and other dependent claims (collectively referred herein as the creditor's rights) on the Splendor Hotel Taichung Building, and each bears 50% rights and obligations of this acquisition; when all creditor's rights of this object turn into property rights, the Company and A party should pay B party totaling \$1,000,000 as the cost and reward of B party for it is entrusted with the task to help turn the creditor's rights as stated above into property rights, but any excess cost over \$1,000,000 if

incurred on this task shall be borne by B party on its own; the Company should pay B party \$300,000 before June 30, 2006, and the Company and A party should jointly issue a promissory note of \$1,800,000 to B party on the signing date; payment should be done before July 15, 2006. The title to the creditor's rights as stated above had been transferred to the Company and A party on August 2, 2006. Total acquisition price of the creditor's rights amounted to \$5,200,000, which the Company and A party bear 50% of the price each. The Company had paid its share.

F. Certain short and long-term borrowings of the Company were guaranteed by its Chairman and General Manager.

	Three months ended September 30,
		2016		2015
Salaries and other short-term employee benefits	\$	64,823	\$	6,031
Post-employment benefits			-	-
Other long-term benefits			-	-
Termination benefit			-	-
Share-based payment		-		-
	\$	64,823	\$	6,031
		Nine months ended September 30,
		2016		2015
Salaries and other short-term employee benefits	\$	92,772	\$	19,054
Post-employment benefits			-	-
Other long-term benefits			-	-
Termination benefit			-	-
Share-based payment		-		-
	\$	92,772	\$	19,054

(2)Key management compensation

8. PLEDGED ASSETS

The Group's assets pledged as collateral are as follows:

Pledged asset	September 30, 2016	December 31, 2015	September 30, 2015	Purpose
Time deposits, demand deposits and checking deposits (shown as "other financial assets - current" and "other financial assets - non-current")	\$ 1,676,878	\$ 2,811,735	\$ 2,866,492	To obtain a higher credit for client, performance guarantee, construction performance guarantee, short-term and long-term borrowings, short-term commercial papers issue, member reward points and gift coupons trust account
Financial assets at fair value through profit or loss	303,138	320,992		347,778 Construction performance guarantees, short-term and long-term borrowings
Land held for construction site	7,808,509	6,974,863		7,441,766 Short-term borrowings, notes and bills payable and long-term borrwings
Construction in progress	3,303,269	2,133,843		2,697,647 Short-term borrowings, notes and bills payable and long-term borrwings
Buildings and land held for sale	2,270,855		-	- Long-term notes and bills payable
Available-for-sale financial assets	836,586	1,028,798		784,152 Short-term borrowings, notes and bills payable
Financial assets carried at cost	575,426	575,426		575,426 Short-term borrowings, notes and bills payable
Investments accounted for under equity method	1,425,600	1,582,560		1,567,241 Short-term borrowings, notes and bills payable
Land	2,729,051	2,729,051		2,729,051 Construction performance guarantees, short-term borrowings, notes and bills payable and long-term borrowings
Buildings	2,004,276	2,042,803		2,056,791 Short-term borrowings, notes and bills payable and long-term borrowings
Investment property	3,860,782	4,047,218		4,055,619 Construction performance guarantees, short-term borrowings, notes and bills payable and long-term borrowings
	\$ 26,794,370	\$ 24,247,289	\$ 25,121,963

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Summary of endorsements and guarantees and financial support commitments is as follows: A. Summary of endorsements and guarantees provided by the Company to subsidiaries is as follows:

	September 30, 2016			December 31, 2015		September 30, 2015
	Total			Total			Total
	endorsement	Amount		endorsement	Amount		endorsement		Amount
Name of company	amount	drawn		amount	drawn		amount		drawn
The Splendor Hotel Taichung	\$ 2,000,000	\$ 1,694,430	\$	2,000,000	\$ 1,708,520	\$	2,000,000	\$	1,734,883
Ta-Chen Construction & Engineering Corp.	1,900,000		-	1,900,000		-	1,900,000		-
Prince Real Estate Co., Ltd.	2,500,000	780,000		-	-		-
	\$ 6,400,000	\$ 2,474,430	\$	3,900,000	\$ 1,708,520	\$	3,900,000	\$	1,734,883

	September 30, 2016				December 31, 2015			September 30, 2015
	Total				Total			Total
	endorsement		Amount		endorsement	Amount		endorsement		Amount
Name of company	amount		drawn		amount	drawn		amount		drawn
Prince Real Estate Co., Ltd.	\$ 2,500,000	\$	2,035,309	\$	2,500,000	\$ 2,086,198	\$		- \$	-
Dong-Feng Enterprises Co., Ltd.		-		-	1,810,889	1,810,889		1,810,889		1,810,889
Ta-Chen Construction & Engineering Corp.	927,889			-	927,889		-	927,889		-
Prince Utility Co., Ltd.	900,000		638,763		900,000	638,763		900,000		638,763
Jin Yi Xing Plywood Co., Ltd.	-		-		-	-		2,500,000		2,086,198
	\$ 4,327,889	\$	2,674,072	\$	6,138,778	\$ 4,535,850	\$	6,138,778	\$	4,535,850

B. Summary of endorsements and guarantees provided by subsidiaries to the Company is as follows:

C. Summary of endorsements and guarantees provided by subsidiaries to subsidiaries is as follows:

		September 30, 2016			December 31, 2015		September 30, 2015
			Total			Total			Total
	Subsidiaries being		endorsement		Amount	endorsement	Amount		endorsement		Amount
Name of subsidiaries	endorsed/guaranteed		amount		drawn	amount	drawn		amount		drawn
Prince Apartment Management Maintain Co., Ltd.	Prince Security Co., Ltd.	\$	20,000		10,000\$	\$ 20,000	10,000\$	\$		- \$		-
Prince Property Management	Consulting Co., Ltd. Prince Security Co., Ltd.		56,000		10,000	56,000	10,000		-			-
		\$	76,000		20,000\$	\$ 76,000	20,000\$	\$	-		-\$

D. The accumulated operating losses of the subsidiary, the Splendor Hotel, had exceeded 50% of its paid-in capital and its current liabilities were greater than its current assets. The Company was committed to give the Splendor Hotel financial support for its continuing operations for one year from the date of the financial support letter.

(2)Capital expenditures contracted for at the balance sheet date but not yet incurred are as follows:

	September 30, 2016		December 31, 2015	September 30, 2015
Property, plant and equipment	\$	5,170	\$ 9,517	\$ 12,155

(3)Operating lease agreements:

Please refer to Note 6 (33) for details.

• (4)According to the sale contracts, the Company should provide warranty on the house structure and major facilities for one year from the handover day for the houses it sold. However, any damage to the houses caused by disasters, additions to the houses made by the buyers, or events that are not attributed to the Company is not included in the scope of warranty.

• (5)On March 17, 2005, the Company ("A party") signed a contract with National Taiwan University ("B party") relating to the construction and operation of dormitories on Chang-Hsing St. and Shui-Yuan Campus. The major terms of the contract are as follows:

• A. Under the contract, B party should be responsible for acquiring the ownership or land-use right for this project, and let A party use the land; A party must complete the construction within 3 years from the registration of the superficies, and may operate the dormitories for 44 years, collect dormitory rentals and use fees of other facilities from students, and should return the related assets to B party on the expiry of the contract.

• B. A party should give B party a performance guarantee of \$60,000 for the construction on the signing date and \$30,000 for operations before the start of operation. As of September 30, 2016, December 31, 2015 and September 30, 2015, A party had provided performance guarantee with a guarantee letter issued by the bank, all amounting to \$30,000.
• C. A party should pay B party land rentals from the registration of the superficies, according to the terms of the contract, and pay B party operating royalties from the third year of the operation, based on 0.5% of dormitory rentals and use fees of other facilities collected from students.
• D. Terms of restrictions for A party:
• (a)The ratio of A party's own capital utilized in this project to total construction cost of this project should be at least 30%;
• (b)During the operation period, the ratio of shareholders' equity to total assets should be at least 25%; and current ratio (current assets/current liabilities) should be at least 100%;
• (c) All rights acquired by A party under the contract, except for other conditions specified in the contract and approved by B party, should not be transferred, leased, registered as a liability/obligation or become an executed object of civil litigation.
• (6)On May 10, 2005, the Company ("A party") signed a contract with National Cheng Kung University ("B party") relating to the construction and operation of student dormitories and alumni hall. The major terms of the contract are as follows:
• A. Under the contract, B party should be responsible for acquiring the ownership or land-use right for this project, and let A party use the land by way of registration of the superficies; A party must obtain the user license within 3 years after the signing date, and may operate the dormitories and motorcycle parking lots for 35 years from the start of operation and collect dormitory rentals and use fees of other facilities from students for 50 years from the start of construction, and should return the related assets to B party on the expiry of the contract.
• B. A party should give B party performance guarantee of \$50,000 for this project on the signing date, which will be returned in installment according to the contractual terms. As of September 30, 2016, December 31, 2015 and September 30, 2015, A party had provided performance guarantee with a guarantee letter issued by the bank, both amounting to \$20,000.
• C. During the operation period, A party should pay B party dormitory operating royalties based on 2% of annual operating revenue of the dormitories and auxiliary facilities operating royalties

based on 4% of annual operating revenue of the auxiliary facilities. A party should pay such operating royalties for prior year before the end of June every year. Further, according to the superficies contract signed by the two parties, A party should pay B party land rentals from the registration of superficies.

• D. All rights acquired by A party under the contract, except for other conditions specified in the contract and approved by B party, should not be transferred, leased, registered as a liability/obligation or become an executed object of civil litigation.
• (7)The Company signed a syndicated loan contract with 7 banks Mega International Commercial Bank as the lead bank for a credit line of \$2.16 billion. The syndicated loans include long-term (secured) loans and guarantee payments receivable (secured), which are used to fund the construction of dormitories in Changxing St. Campus and Shuiyuan Campus of National Taiwan University. During the loan period, the Company should maintain financial commitments such as current ratio, liability ratio and interest coverage; those financial ratios/restrictions shall be reviewed at least once every year, based on the Company's audited annual non-consolidated financial statements. If the Company violates the above financial commitments, it shall improve its financial position by capital increase or other ways before the end of October of the following year from the year of violation; it would not be regarded as a default if the managing bank confirms that its financial position has improved completely. In case of violation, interest on the loans would be charged at the loan rate specified in the contract plus additional 0.25% per annum from the notification date of the managing bank to the completion date of financial improvement or to the date the Company gains the relief from the consortium for its violation.

• (8)The Company signed a loan contract with Mega International Commercial Bank for a credit line of \$785 million. The loans include long-term (secured) loans and guarantee payments receivable (secured), which are used to fund the construction of student dormitories and alumnus hall of National Cheng Kung University. During the loan period, the Company should maintain financial commitments such as current ratio, liability ratio and interest coverage; those financial ratios/restrictions shall be reviewed at least once every year. Current ratio and liability ratio shall be reviewed based on the Company's audited annual non-consolidated financial statements, and interest coverage based on the Company's revenue and expenditure table for the related project. If the Company violates the above financial commitments, it shall improve its financial position by capital increase or other ways before the end of October of the following year from the year of violation; it would not be regarded as a default if the bank confirms that its financial position has improved completely. In case of violation, interest on the loans would be charged at the loan rate specified in the contract plus additional 0.25% per annum from the notification date of the bank to the completion date of financial improvement or to the date the Company obtains a waiver from the bank for its violation.

• (9)The Company signed a syndicated loan contract with 10 banks Bank of Taiwan Co., Ltd. as the lead bank for a credit line of \$2 billion. The syndicated loans are medium-term (secured) loans, and are used for residential building construction cooperated by the Company and Taiwan Sugar Corporation ("TSC") on Guo-An Sec., Xitun District, Taichung City. Furthermore, the Company shall repay in full for the balance of unpaid principal on maturity date. However, when the buildings in the case are completed and sold or when handling buyer's household debt, borrower should repay the balance of used and unpaid principal for the syndicated loans with 70% of selling consideration. The abovementioned construction has been substantially completed, thus, the Company has repaid in advance in January 2016.

• (10)The Company signed a syndicated loan contract with 3 financial institutions Mega International Commercial Bank as the lead bank for a credit line of \$1.06 billion. The syndicated loans include medium-term (secured) loans and commercial paper guarantees, which are used for purchases of 4 tracts of PingHsin Sections No. 694, 706, 708 and 709 in Taiping Dist., Taichung City and construction payment of residential buildings. Furthermore, the Company shall repay in full for the balance of unpaid principal on maturity date.
• (11)The Company signed a syndicated loan contract with 6 financial institutions CTBC Bank Co., Ltd. as the lead bank for a credit line of \$2.1 billion for medium-term commercial paper, financing the working capital of the Company which provides Tanmei office building as collateral. Commercial papers issued by the Company should be 90 days. However, commercial papers issued in the terms of other commercial papers issued before the due date should be the same. The syndicated loan can be redrawn in the credit term and pay off the loan immediately.
• (12)The Company signed a syndicated loan contract with 3 financial institutions Bank of Taiwan Co., Ltd. as the lead bank for a credit line of \$3.045 billion. The syndicated loans include medium-term guarantee payments receivable (secured) and medium-term commercial paper guarantees (secured). Bank of Taiwan and Agricultural Bank of Taiwan provided medium-term guarantee payments receivable (secured) with a credit line of \$2.545 billion which are used by the Company to apply for the guarantee of corporate bond issued by the bank. International Bills Finance Corp provides medium-term commercial paper guarantees (secured) with a credit line of \$500 million which are used by the Company to repay the borrowing to the financial institutions and improve financial structure. These three financial institutions shall renew the contract with the Company for another 1 year based on their individual commitments and establish the facility documentation, which is similar to the commercial paper guarantees, letter of purchase contract and others. In addition, no matter whether the bondholders receive the payment or not, the banks' guarantee responsibility will be released after the debtor returns the payables to the agency.
• (13)On May 18, 2007, the Company signed a contract with Taiwan Sugar Corporation ("TSC") in relation to cooperative construction of houses. According to the contract, TSC shall provide Lot No. 12-12, Guo-An Sec., Xitun District, Taichung City; the Company shall provide funding for those projects and repurchase houses and land allocated to TSC amounting to \$1,810,889 and shall bear all improvement fees of houses, public facilities and land, selling expenses, and other expenses

or contributed expenses required under the decrees. The Company shall not ask for any compensation for price fluctuations or other reasons. Further, under the contract, the Company shall give TSC performance guarantee amounting to \$181,090, on the signing date, which will be returned in installments according to the contractual terms. The Company had provided performance guarantee with a guarantee letter of the bank as follows:

	September 30, 2016	December 31, 2015	September 30, 2015
Lot No.12-12, and No.601-1 Guo-An Sec.,
Xitun District, Taichung City(Note)	\$ -	\$ 181,090	\$ 181,090
Note: The usage license of the construction was granted in August 2016 and the performance
guarantee was returned in the same month.

(14)On January 20, February 10 and December 27, 2014, the Company signed a contract with Taiwan Sugar Corporation ("TSC") in relation to cooperative construction of houses. According to the contracts, TSC shall provide Taichung City Koan An Section No. 591-1 and Tainan City Hou Guan Section No.34 and Nanzi Dist., Kaohsiung City Nanzi 1st Section No.158, etc; the Company shall provide funding for those projects and repurchase houses and land allocated to TSC amounting to \$638,763, \$830,889 and \$1,255,300, and shall bear all improvement fees of houses, public facilities and land, selling expenses, and other expenses or contributed expenses required under the decrees. The Company shall not ask for any compensation for price fluctuations or other reasons. Further, under the contract, the Company shall give TSC performance guarantee amounting to \$63,880, \$83,080 and \$125,540, respectively, on the signing date, which will be returned in instalments according to the contractual terms. The Company had provided such performance guarantee with guarantee letter of the bank as follows:

	September 30, 2016	December 31, 2015	September 30, 2015
Taichung City Koan An Section No.
591-1	\$ 63,880	\$ 63,880	\$	63,880
Tainan City Hou Guan Section No.
34(Note)	\$ -	\$ 83,100	\$	83,100
Nanzi Dist., Kaohsiung City Nanzi 1st
Section No. 158, etc	\$ 125,600	\$ 125,600	\$	125,600

Note: The construction has been completed in November 2015 and the performance guarantee has been returned in February 2016.

(15)The Company signed an agreement with Mr. Fang Tsai-Yuan and World Vision United Co., Ltd. on March 5, 2012 and July 17, 2012, respectively, for joint construction of houses. Under those agreements, Mr. Fang Tsai-Yuan and World Vision United Co., Ltd., the owners of land, shall provide the land located at Nos. 572 and 602, Sec. Zhi-Shan 1, Shilin District, Taipei City, respectively, and the Company is responsible for the construction; the houses built would be allocated to both sides based on the specified proportion. In addition, the Company shall give performance bond in the amount of \$350,000 and \$19,570 to Mr. Fang Tsai-Yuan and World Vision United Co., Ltd., respectively, which would be returned to the Group in installments. As of September 30, 2016, December 31, 2015 and September 30, 2015, balance of the performance

bonds were as follows:

	September 30, 2016			December 31, 2015	September 30, 2015
No. 602, Sec. Zhi-Shan 1, Shilin
District, Taipei City	\$	350,000	\$	350,000	\$	350,000
No. 572, Sec. Zhi-Shan 1, Shilin
District, Taipei City	\$	19,570	\$	19,570	\$	19,570

• (16)As of September 30, 2016, December 31, 2015 and September 30, 2015, performance guarantee letters issued for construction undertaking, warranty and leases of subsidiary, Ta-Chen Construction & Engineering Corp., amounted to \$397,716、\$572,960 and \$651,240, respectively.
• (17)The Subsidiary, Ta-Chen Construction & Engineering Corp. ("Ta-Chen"), Hung-Yi Construction Corp. and Evergreen International Engineering Corp. ("Evergreen") (collectively referred herein as the "joint contractors") jointly undertook the construction of the new office building of the American Institute in Taiwan. As the joint contractors and the owner of this project both claim the counterparty defaulted on the contract, they terminated the contract and referred the dispute to arbitration. A settlement was reached in August 2013, and the joint contractors would together pay a reconciliation payment amounting to US\$16.4 million, which Ta-Chen pays 68.24%. Ta-Chen has estimated and recognized related arbitration expenses, reconciliation payment and construction loss. Furthermore, the settlement agreement between Ta-Chen and the owner, including tax on settlement of \$30,178 paid to the Taxation Bureau on behalf of the owner, has been reached. As 2 years have passed from the application of tax refunds and the probability of tax refund is remote, the related other receivables were written off and loss of \$30,178 was recognised in 2015.

Furthermore, Ta-Chen has paid the settlement on behalf of the joint contractors. Ta-Chen planned to request Evergreen to pay all payments of \$221,100 on behalf of other joint contractors. As the joint contractors have disagreement regarding the contract, Ta-Chen has filed an arbitration application with the Chinese Arbitration Association, Taipei, and received an arbitration award on March 27, 2015 wherein, Evergreen International Engineering shall pay Ta-Chen a total amount of \$169,765 plus interest at 5% per annum from December 17, 2013 until the date of payment. Additionally, on June 15, 2015, the arbitration court corrected the payment to \$201,427. Ta-Chen reached an agreement with Evergreen on June 18, 2015 that Evergreen shall pay \$195,000 and both sides shall withdraw revocation proceedings or application for compulsory enforcement. Therefore, Ta-Chen has written off other receivables and recognized loss of \$ 26,100 in 2015.

Ta-Chen received the above payment of \$195,000 from Evergreen on June 30, 2015 and the case was closed.

(18)Certain construction contracts undertaken by subsidiary, Ta-Chen Construction & Engineering Corp., specify that default penalty shall be computed according to the contractual terms if the construction is not completed within the prescribed period.

(19)On October 9, 2013, the subsidiary, the Splendor Hotel Taichung, signed a syndicated loan contract with 5 financial institutions, including Taiwan Cooperative Bank, etc., in the amount of \$3.3 million, with Prince Housing & Development Corp. and China Metal Products Co., Ltd. as guarantors. Under the contract, the subsidiary promised its tangible net equity shall not be negative and current ratio, liability ratio, tangible net equity and interest coverage of Prince Housing & Development Corp. and China Metal Products Co., Ltd. shall conform to certain criteria as specified in the contract. If the Splendor Hotel Taichung violates above financial commitments, the managing bank has the right to take the following actions, including but not limited, according to the contract or the resolution of majority of the consortium: 1) request the subsidiary to stop drawing down all or part of the loans; 2) cancel all or part of the credit line of the contract which has not been drawn down yet; 3) announce that all outstanding principal, interest and other accrued expenses payable to the consortium in relation to the loan contract should mature immediately; 4) inform the managing bank of the demand for subsidiary's payment of the promissory note acquired under the loan contract; 5) inform the managing bank to exercise creditor's right of mortgage; 6) exercise contract transfer right, or other rights given by the laws, the loan contract or other relevant documents; 7) take other actions as resolved by the majority of the consortium.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Group's capital management is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditure, obligation repayment and dividend distribution. The Group adjusts borrowing amount in accordance with construction progress and capital needed for operations.

(2) Financial instruments

A. Fair value information of financial instruments

The carrying amount of cash and cash equivalents and financial instruments measured at amortized cost (including notes and accounts receivable, other receivables, other financial assets, refundable deposits, short-term borrowings, short-term notes and bills payable, notes and accounts payable, other payables, corporate bonds payable, long-term borrowings, long-term notes and accounts payable and guarantee deposits received) are approximate to their fair values. Furthermore, the Group's management believes the carrying amounts of financial assets and liabilities not measured at fair value are approximate to their fair value or their fair value cannot be reliably measured. Thus, the carrying amount is the estimated fair value. The fair value

information of financial instruments measured at fair value is provided in Note 12(3).

• B. Financial risk management policies
• (a)The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial position and financial performance.
• (b) Risk management is carried out by a central treasury department (Group's finance & accounting division) under policies approved by the Board of Directors. Group's finance & accounting division evaluates and hedges financial risks in close cooperation with the Group's operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
• C. Significant financial risks and degrees of financial risks
• (a) Market risk

Foreign exchange risk

The Group operates internationally and the currencies primarily used are NTD and USD. Foreign exchange risk arises from recognized assets and liabilities and net investments in foreign operations. Management has set up a policy to require the Group entities to manage their foreign exchange risk against their functional currency. The Group entities are required to manage their entire foreign exchange risk exposure with the Group finance & accounting division. Foreign exchange risk does not have significant impact to the Group.

Interest rate risk

The Group's interest rate risk arises from short-term and long-term borrowings (not including commercial paper). Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's borrowings at variable rate were denominated in the NTD. If interest rates on borrowings had been 0.1% basis point higher/lower with all other variables held constant, pre-tax profit for the nine months ended September 30, 2016 and 2015 would have been \$11,600 and \$13,840 lower/higher, respectively.

Price risk

The Group has investments in equity instruments, and the prices would change due to the

change of the future value of investee companies. However, the Group has set a stop-loss point and it was assessed that the Group was not exposed to significant price risk. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, pre-tax profit for the nine months ended September 30, 2016 and 2015 would have increased/decreased by \$44,052 and \$34,052, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by \$16,118 and \$16,396, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

• (b) Credit risk
• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. Credit risk arises from cash and deposits with banks and financial institutions, including outstanding receivables.
• ii. The Group's receivables, which are the receivables from pre-selling of housing before completing construction and transferring the title, are installments received from customers of pre-construction real estate. Therefore, it was assessed that the Group was not exposed to significant credit risk from receivables.
• iii. For the nine months ended September 30, 2016 and 2015, the management does not expect any significant losses from non-performance by these counterparties.
• (c) Liquidity risk
• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group's finance & accounting division. Group's finance & accounting division monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times.
• ii. The table below analyses the Group's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

		September 30, 2016
	Within 1 year	Between 1 to 3 years	Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 2,380,442	\$	- \$ -
Short-term notes and bills payable	260,000		- -
Notes payable	158,304		- 11,456
Accounts payable	2,257,031	49,925	621,827
Other payables (including related parties)	934,155	5,006	1,173
Guarantee deposits received	82,990	30,422	33,507
Bonds payable (including current portion)	2,065,350	2,577,500	-
Long-term borrowings (including current portion)	1,650,733	7,159,368	3,192,629
Long-term notes and accounts payable	-	751,025	618,880
		December 31, 2015
	Within 1 year	Between 1 to 3 years	Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 2,659,883	\$	- \$ -
Short-term notes and bills payable	1,060,000		- -
Notes payable	26,692		7 -
Accounts payable	2,668,918	654,635	875,364
Other payables (including related parties)	1,520,467	5,461	706
Guarantee deposits received	72,591	27,678	35,450
Bonds payable	65,350	2,104,100	2,500,000
Long-term borrowings (including current portion)	487,551	3,489,212	7,448,165
Long-term notes and accounts payable	-	767,104	618,880

		September 30, 2015
	Within 1 year	Between 1 to 3 years	Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 3,784,616	\$	- \$ -
Short-term notes and bills payable	640,000		- -
Notes payable	128,995		- -
Accounts payable	2,047,211	46,374	879,653
Other payables	1,077,736	5,709	90
Guarantee deposits received	83,252	32,908	30,465
Bonds payable	65,350	2,104,100	2,538,750
Long-term borrowings (including current portion)	623,235	4,298,045	7,673,194
Long-term notes and accounts payable	-	820,965	628,808

(3) Fair value information

• A. Details of the fair value of the Group's financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group's investment property measured at cost are provided in Note 6(12).
• B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks and beneficiary certificates is included in Level 1.
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investment in equity investment without active market is included in Level 3.
• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at September 30, 2016, December 31, 2015 and September 30, 2015 is as follows:

September 30, 2016	Level 1	Level 2		Level 3		Total
Assets:
Recurring fair value measurements Financial assets at fair value through profit or loss
Equity securities Available-for-sale financial assets	\$ 450,127	\$	- \$		- \$	450,127
Equity securities	\$ 1,160,738 1,610,865	\$ - -	\$	155,195 155,195	\$	1,315,933 1,766,060
December 31, 2015	Level 1	Level 2		Level 3		Total
Assets:
Recurring fair value measurements Financial assets at fair value through profit or loss
Equity securities Available-for-sale financial assets	\$ 557,753	\$	- \$		- \$	557,753
Equity securities	\$ 1,364,796 1,922,549	\$ - -	\$	200,146 200,146	\$	1,564,942 2,122,695
September 30, 2015	Level 1	Level 2		Level 3		Total
Assets: Recurring fair value measurements Financial assets at fair value
through profit or loss Equity securities	\$ 388,623	\$	- \$		- \$	388,623
Available-for-sale financial assets Equity securities	1,059,949	-		234,612		1,294,561
	\$ 1,448,572	\$ -	\$	234,612	\$	1,683,184

D.The methods and assumptions the Group used to measure fair value are as follows:

(a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

	Listed shares	Open-end fund
Market quoted price	Closing price	Net asset value

• (b)The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group's credit quality.
• E. For the nine months ended September 30, 2016 and 2015, there was no transfer between Level 1 and Level 2.
• F. The following chart is the movement of Level 3 for the nine months ended September 30, 2016 and 2015:

		2016		2015
		Non-derivative equity		Non-derivative equity
		instruments		instruments
At January 1	\$	200,146	\$	276,597
(Loss) gain recognised in other comprehensive income (Note )	(	44,951)	(	41,985)
September 30	\$	155,195	\$	234,612

Note: Recorded as unrealised valuation gain or loss of available-for-sale financial assets.

• G. For the nine months ended September 30, 2016 and 2015, there was no transfer into or out from Level 3.
• H. Finance and Accounting segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently assessing valuation results and making any other necessary adjustments to the fair value.
• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

				Range
	Fair value at	Valuation	Significant	(weighted	Relationship of inputs
	September 30, 2016	technique	unobservable input	average)	to fair value
Non-derivative equity Unlisted shares	\$ 155,195	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value
				Range
	Fair value at	Valuation	Significant	(weighted	Relationship of inputs
	December 31, 2015	technique	unobservable input	average)	to fair value
Non-derivative equity
Unlisted shares	\$ 200,146	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value
				Range
	Fair value at	Valuation	Significant	(weighted	Relationship of inputs
	September 30, 2015	technique	unobservable input	average)	to fair value
Non-derivative equity
Unlisted shares	\$ 234,612	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value

J. The Group has carefully assessed the valuation models and assumptions used to measure fair value; therefore, the fair value measurement is reasonable. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

			September 30, 2016
				Recognised in profit or		Recognised in other
				loss		comprehensive income
			Favourable	Unfavourable	Favourable	Unfavourable
	Input	Change	change	change	change	change
Financial assets
Equity instruments	42,984	±1%	\$ -	\$ -	\$ 430	(\$ 430)
					December 31, 2015
				Recognised in profit or		Recognised in other
				loss		comprehensive income
			Favourable	Unfavourable	Favourable	Unfavourable
	Input	Change	change	change	change	change
Financial assets
Equity instruments	44,561	±1%	\$ -	\$ -	\$ 446	(\$ 446)
					September 30, 2015
				Recognised in profit or		Recognised in other
				loss		comprehensive income
			Favourable	Unfavourable	Favourable	Unfavourable
	Input	Change	change	change	change	change
Financial assets
Equity instruments	44,561	±1%	\$ -	\$ -	\$ 446	(\$ 446)

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.

B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
• D. Acquisition or sale of the same security with the accumulated cost exceeding \$300 million or 20% of the Company's paid-in capital: Please refer to table 4.
• E. Acquisition of real estate reaching \$300 million or 20% of paid-in capital or more: Please refer to table 5.

• F. Disposal of real estate reaching \$300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching \$100 million or 20% of paid-in capital or more: Please refer to table 6.

• H. Receivables from related parties reaching \$100 million or 20% of paid-in capital or more: Please refer to table 7.
• I. Trading in derivative instruments undertaken during the reporting periods: None.
• J. Significant inter-company transactions during the reporting periods: Please refer to table 8.
• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 9.

(3) Information on investments in Mainland China None.

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions. The Group's corporate composition, basis for segmentation, and basis for measurement of segment's information had no significant changes for the period. The chief operating decision-maker considers the business from a product perspective.

(2) Measurement of segment information

The chief operating decision-maker assesses the performance of the operating segments based on the profit (loss) before taxes. This measurement basis excludes the effects of non-recurring revenues/expenditures from the operating segments. Accounting policies of operating segments are the same as the summary of significant accounting policies in Note 4 to the consolidated financial statements.

(3) Information about segment profit or loss and assets

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

				Nine months ended September 30, 2016
					Write-off and
Item		Construction	Hotel	Others	Adjustment	Total
External operating revenue-net	\$	3,660,497 \$	2,338,821 \$	568,357	\$	- \$ 6,567,675
Internal operating revenue-net		748,210	-	47,607	( 795,817)	-
Total segment revenue		4,408,707	2,338,821	615,964		- 6,567,675
Costs and expenses	(	4,412,729) (	2,054,783) (	462,431)	872,107	( 6,057,836)
Segment (loss) income	(	4,022)	284,038	153,533		509,839
Other income		226,522	5,969	19,075	( 30,168)	221,398
Other gains and losses	(	34,326) (	189)	713		( 33,802)
Finance costs	(	162,175) (	43,935) (	2,440)	20,902	( 187,648)
Share of profit of associates and joint ventures accounted for under equity method		377,315	-	16,773	( 324,049)	70,039
Profit from continuing operations before tax		403,314	245,883	187,654		579,826
Income tax expense	(	66,680) (	25,042) (	2,580)		( 94,302)
Net income for the period	\$	336,634 \$	220,841 \$	185,074		\$ 485,524
Segment assets	\$	46,631,312 \$	7,260,754 \$	2,343,534	(\$ 4,821,856)	\$ 51,413,744

Item		Construction	Hotel	Others		Write-off and Adjustment	Total
External operating revenue-net	\$	4,967,773	\$ 2,513,809 \$	548,751	\$	- \$	8,030,333
Internal operating revenue-net		793,729	-	1,142,292 (		1,936,021)	-
Total segment revenue		5,761,502	2,513,809	1,691,043		-	8,030,333
Costs and expenses	(	5,372,340) (	2,175,400) (	746,566)		1,173,757 (	7,120,549)
Segment income		389,162	338,409	944,477			909,784
Other income		264,591	7,951	25,995 (		29,529)	269,008
Other gains and losses		52,369	156 (	23,289)		60,476	89,712
Finance costs Share of profit (loss) of associates and joint ventures accounted for under equity method	(	233,692) ( 527,994	48,018) ( - (	266) 79,123) (		27,730 ( 431,076)	254,246) 17,795
Profit from continuing operations before tax		1,000,424	298,498	867,794			1,032,053
Income tax expense	(	99,432) (	30,323) (	22,577) (		33,245) (	185,577)
Net income for the period	\$	900,992	\$ 268,175	\$ 845,217		\$	846,476
Segment assets	\$	48,420,649	\$ 7,449,198	\$ 2,267,100	(\$	4,579,910) \$	53,557,037

Nine months ended September 30, 2015

(4) Reconciliation for segment income (loss) and assets

The revenue from external parties, segment income and segment assets reported to the chief operating decision-maker are measured in a manner consistent with the revenue, profit before taxes, and total assets in the financial statements. Information on adjusted consolidated total profit (loss), reportable segment profit after taxes and total assets, and reconciliation for reportable segment assets for this period is provided in Note 14(3).

Loans to others

Nine months ended September 30, 2016

Table 1 Expressed in thousands of NTD

(Except as otherwise indicated)

					Maximum outstanding balance									Collateral
					during the nine					Amount of
					months ended	Balance at				transactions		Allowance for			Limit on loans
No.			General ledger	Is a related	September 30,	Septermber 30,	Actual amount	Interest	Nature of	with the	Reason for short-term	doubtful			granted to a	Ceiling on total
(Note 1)	Creditor	Borrower	account	party	2016	2016	drawn down	rate	loan	borrower	financing	accounts		Item Value	single party	loans granted	Note
0	Prince Housing & Development Corp.	Ta-Chen Construction & Engineering Corp.	Other receivables - related parties	Y	\$ 200,000 \$		- \$ -	2.7	Short term financing	\$ -	Additional operating capital	\$		- None \$ - \$		500,000 \$ 9,324,150 Note 2
1	Prince Security Co., Ltd.	Prince Property Management Consulting Co., Ltd	Other receivables - related parties	Y	15,000	15,000	11,500	2.7	Short term financing	-	Additional operating capital		- None	-	30,000		81,696 Note 3
2	Time Square International Co., Ltd.	Prince Housing & Development Corp.	Other receivables - related parties	Y	200,000		- -	2.7	Short term financing	-	Additional operating capital		- None	-	300,751		300,751 Note 4

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1) The Company is '0'.

(2) The subsidiaries are numbered in order starting from '1'.

Note 2: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in the Company's "Procedures for Provision of Loans" are as follows:

A. Ceiling on total loans to others: 40% of the Company's net worth.

B. Limit on loans to a single party:

(a) Nature of the loan is related to business transactions: Limit to a single party is NT\$1.5 billion or the amount of business transactions between the creditor and borrower in the current year. (b) Nature of loan is for short-term financing: Limit on loans to a single party is NT\$500 million.

Note 3: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in Prince Security Co., Ltd.'s "Procedures for Provision of Loans" are as follows:

A. Limit on total loans to others: 40% of the Company's net worth.

B. Limit on loans to a single party:

(a) Nature of the loan is related to business transactions: Limit to a single party is NT\$20 million or the amount of business transactions between the creditor and borrower in the current year. (b) Nature of loan is for short-term financing: Limit on loans to a single party is NT\$30 million.

Note 4: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in Time Square International Co., Ltd.'s "Procedures for Provision of Loans" are as follows:

A. Limit on total loans to others: 30% of the Company's net worth.

B. Limit on loans to a single party:

(a) Nature of the loan is related to business transactions: Limit to a single party is the amount of business transactions between the creditor and borrower in the current year.

(b) Nature of loan is for short-term financing: Limit on loans to a single party is 30% of the Company's net worth.

Provision of endorsements and guarantees to others

Nine months ended September 30, 2016

Table 2 Expressed in thousands of NTD

(Except as otherwise indicated)

		Party being endorsed/guaranteed			Maximum				Ratio of
					outstanding				accumulated		Provision of	Provision of	Provision of
				Limit on	endorsement/	Outstanding		Amount of	endorsement/	Ceiling on total	endorsements	endorsements	endorsements/
			Relationship with	endorsements/	guarantee	endorsement/		endorsements/	guarantee amount to	amount of	/ guarantees	/ guarantees	guarantees to
			the endorser/	guarantees	amount as of	guarantee amount		guarantees	net asset value of the	endorsements/	by parent	by subsidiary	the party in
Number	Endorser/		guarantor	provided for a	September 30,	at September 30,	Actual amount	secured with	endorser/ guarantor	guarantees	company to	to parent	Mainland
(Note 1)	guarantor	Company name	(Note 2)	single party	2016	2016	drawn down	collateral	company	provided	subsidiary	company	China	Footnote
0	Prince Housing & Development Corp.	Ta-Chen Construction & Engineering Corp.	3	\$ 4,662,075 \$	1,900,000 \$	1,900,000 \$		- \$ -	8%	\$ 11,655,187	Y	N	N	Note 3
0	Prince Housing & Development Corp.	Prince Real Estate Co., Ltd.	2	4,662,075	2,500,000	2,500,000	780,000	-	11%	11,655,187	Y	N	N	Note 3
0	Prince Housing & Development Corp.	The Splendor Hotel Taichung	6	4,662,075	2,000,000	2,000,000	1,694,430	-	9%	11,655,187	Y	N	N	Note 3
1	Dong-Feng Enterprises Co., Ltd.	Prince Housing & Development Corp.	4	2,000,000	1,810,889	-		- -	-	4,000,000	N	Y	N	Note 4
2	Prince Utility Co., Ltd. Prince Housing &	Development Corp.	4	1,000,000	900,000	900,000	638,763	-	834%	2,000,000	N	Y	N	Note 5
3	Prince Real Estate Co., Ltd.	Prince Housing & Development Corp.	4	2,500,000	2,500,000	2,500,000	2,035,309	-	182%	5,000,000	N	Y	N	Note 6
4	Ta-Chen Construction & Engineering Corp.	Prince Housing & Development Corp.	4	1,500,000	927,889	927,889		- -	135%	3,000,000	N	Y	N	Note 7
5	Prince Apartment Management Maintain Co., Ltd.	Prince Security Co., Ltd.	3	20,000	20,000	20,000	10,000	-	29%	50,000	N	N	N	Note 8
6	Prince Property Management Consulting	Prince Security Co., Ltd.	2	56,000	56,000	56,000	10,000	-	33%	120,000	N	N	N	Note 9

Co., Ltd.

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is '0'.

(2) The subsidiaries are numbered in order starting from '1'. The same company will have the same number.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories:

(1) Having business relationship.

(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

(4) The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.

(5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 3:In accordance with the Group's related regulations, the limit on endorsements and guarantees for any single entity is 20% of the Company's net worth based on the latest financial statements and the limit on accumulated amount of transactions

of endorsements and guarantees is 50% of the Company's net worth based on the latest financial statements.

Note 4: In accordance with Dong-Feng Enterprises Co., Ltd.'s related regulations, the limit of endorsements and guarantees for any single entity is \$2,000,000; the total accumulated amount is \$4,000,000.

Note 5: In accordance with Prince Utility Co., Ltd.'s related regulations, the limit of endorsements and guarantees for any single entity is \$1,000,000; the total accumulated amount is \$2,000,000.

Note 6: In accordance with Prince Real Estate Co., Ltd.'s related regulations, the limit of endorsements and guarantees for any single entity is \$2,500,000; the total accumulated amount is \$5,000,000.

Note 7: In accordance with Ta-Chen Construction & Engineering Corp.'s related regulations, the limit of endorsements and guarantees for any single entity is \$1,500,000; the total accumulated amount is \$3,000,000.

Note 8: In accordance with Prince Apartment Management Maintain Co., Ltd.'s related regulations, the limit of endorsements and guarantees for any single entity is \$20,000; the total accumulated amount is \$50,000.

Note 9: In accordance with Prince Property Management Consulting Co., Ltd.'s related regulation, the limit of endorsements and guarantees for any single entity is \$56,000; the total accumulated amount is \$120,000.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

September 30, 2016

Table 3 Expressed in thousands of NTD

(Except as otherwise indicated)

							As of September 30, 2016
			Relationship with the securities
Securities held by	Marketable securities	Name of investee companies	issuer	General ledger account	Number of shares	Book value	Ownership (%)		Fair value	Footnote
Prince Housing & Development Corp.	Stock	Nantex Industry Co., Ltd.	None	Available-for sale financial assets - non-current	6,861,668 \$	154,388	Note 1	\$		22.50 Listed company, Note 3
	Stock	ScinoPharm Taiwan, Ltd.	None	Available-for sale financial assets - non-current	22,698,001	978,284	Note 1			43.10 Listed company, Note 4
	Stock	Simplo Technology Co., Ltd.	None	Available-for sale financial assets - non-current	127,249	13,107	Note 1			103.00 OTC company
	Stock	Universal Venture Capital Investment Corp.	None	Available-for sale financial assets - non-current	1,400,000	13,251	Note 1		9.46
	Stock	Grand Bills Finance Corp.	None	Available-for sale financial assets - non-current	48,672	814	Note 1		16.71
	Stock	Chipwell Tech. Corp.	None	Available-for sale financial assets - non-current	344,488	1,735	Note 1		5.04
	Stock	Nanmat Technology Co., Ltd.	None	Available-for sale financial assets - non-current	1,318,851	15,637	Note 1		11.86
	Stock	Southern Science Joint Development .	None	Available-for sale financial assets - non-current	10,000	107,345	10.00		10,734.50
	Stock	Changing Information Technology Co., Ltd.	None	Available-for sale financial assets - non-current	119,075	1,383	Note 1		11.62
	Stock	Formosoft International Co., Ltd.	None	Available-for sale financial assets - non-current	35,589	140	Note 1		3.93
	Stock	President Energy Development Corp.	None	Financial assets carried at cost - non-current	1,380,000	36,280	6.00		35.06
	Stock	President International Development Corp.	None	Financial assets carried at cost - non-current	87,745,770	841,520	6.63		10.73	Note 5
	Stock	Jia-Cheng Venture Capital Investment Co., Ltd.	None	Financial assets carried at cost - non-current	759,024	-	Note 1		Note 2
	Stock	Jia-Hua Venture Capital Investment Co., Ltd.	None	Financial assets carried at cost - non-current	1,211,228		- 7.90		Note 2
	Stock	Ever-Move Technology Co., Ltd.	None	Financial assets carried at cost - non-current	3,076	-	Note 1		Note 2
	Stock	Chuang-Jing Technology Co., Ltd.	None	Financial assets carried at cost - non-current	12,645	-	Note 1		Note 2
	Stock	Bao-Mao Technology Co., Ltd.	None	Financial assets carried at cost - non-current	27,933	-	Note 1		Note 2
	Stock	Jie-Lun Technology Co., Ltd.	None	Financial assets carried at cost - non-current	17,280	-	Note 1		Note 2
	Stock	Quan-Mao Technology Co., Ltd.	None	Financial assets carried at cost - non-current	341,745		- 6.79		Note 2
	Stock	Wei-Jun Technology Co., Ltd.	None	Financial assets carried at cost - non-current	1,846	-	Note 1		Note 2
	Stock	Chieh-Cheng Technology Co., Ltd.	None	Financial assets carried at cost - non-current	41,343	-	Note 1		Note 2
	Fund	Mega Diamond Money Market Fund	None	Financial assets at fair value through profit or loss - non-current	6,301,406	78,138		-	12.41	Note 6
	Fund	Upamc James Bond Money Market Fund	None	Financial assets at fair value through profit or loss - non-current	6,044,561	100,000		-	16.55
	Repurchase bonds	Mega Bills Finance Co., LTD.	None	Cash equivalents-repurchase bonds	-	100,022		-	-
	Repurchase bonds	International Bills Finance Corp.	None	Cash equivalents-repurchase bonds	-	180,021		-	-

						As of September 30, 2016
Securities held by	Marketable securities	Name of investee companies	Relationship with the securities issuer	General ledger account	Number of shares	Book value	Ownership (%)	Fair value	Footnote
Ta-Chen Construction & Engineering Corp.	Stock	Nantex Industry Co., Ltd.	None	Financial assets at fair value through profit or loss - current	12,088,420 \$	271,989	Note 1	\$ 22.50	Note 7
	Stock	Chipwell Tech. Corp.	None	Available-for sale financial assets - non-current	349,990	1,763	Note 1	5.04
	Stock	Nanmat Technology Co., Ltd.	None	Available-for sale financial assets - non-current	1,479,086	19,287	5.09	11.86
	Repurchase bonds	China Bills Finance Corp.	None	Cash equivalents-repurchase bonds	-	30,000	-	-
	Repurchase bonds	International Bills Finance Corp.	None	Cash equivalents-repurchase bonds	-	80,012	-	-
Time Square International Co.,Ltd.	Repurchase bonds	China Bills Finance Corp.	None	Cash equivalents-repurchase bonds	-	99,600	-	-
Prince Housing Investment Co., Ltd.	Stock	Tou Itsu Investments Inc.	None	Available-for sale financial assets - non-current	600	19	15.00	USD 1.00
Prince Apartment Management Maintain Co., Ltd.	Stock	Prince Housing & Development Corp.	Parent company	Available-for sale financial assets - non-current	655,424	6,161	Note 1	10.25
	Stock	Tainan Spinning Co., Ltd.	None	Available-for sale financial assets - non-current	122,201	1,735	Note 1	14.20
Dong-Feng Enterprises Co., Ltd.	Stock	Nantex Industry Co., Ltd.	None	Available-for sale financial assets - non-current	176,220	4,078	Note 1	22.50
	Stock	Sung Gang Asset Management Co., Ltd.	None	Available-for sale financial assets - non-current	47,968	1,367	Note 1	27.30
Prince Security Co., Ltd.	Stock	Nanmat Technology Co., Ltd.	None	Available-for sale financial assets - non-current	197,211	1,600	Note 1	11.86

Note 1: Percentage of Company's ownership is less than 5%.

Note 2: We have not received the financial statements from management. Thus the net value cannot be measured.

Note 3: 4,088 thousand shares of outstanding common stock were used as collateral for loan.

Note 4: 17,276 thousand shares of outstanding common stock were used as collateral for loan.

Note 5: 60,000 thousand shares of outstanding common stock were used as collateral for loan.

Note 6: 6,301 thousand units of outstanding common stock were used as collateral for loan.

Note 7: 10,000 thousand shares of outstanding common stock were used as collateral for loan.

Prince Housing & Development Corp. and Subsidiaries Acquisition or sale of the same security with the accumulated cost exceeding \$300 million or 20% of the Company's paid-in capital Nine months ended September 30, 2016

																			(Except as otherwise indicated)
					Balance as at		Addition		Disposal
					January 1, 2016			(Note 3)						(Note 3)			Balance as at September 30, 2016
				Relationship
	Marketable			with
	securities	General	Counterparty	the investor	Number of			Number of			Number of					Gain (loss) on	Number of
Investor	(Note 1)	ledger account	(Note 2)	(Note 2)	shares		Amount	shares		Amount	shares		Selling price		Book value	disposal	shares		Amount
Prince Real Estate	Jih Sun Money Market	Financial assets at fair	-	-	13,678,487 \$		200,000	8,052,760 \$		117,910	21,731,247 \$		318,261 \$		317,910 \$	351		- \$		-
Co., Ltd.	Fund	value through profit or
		loss - current

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT\$300 million or 20% of paid-in capital or more.

Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT\$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 4 Expressed in thousands of NTD

Acquisition of real estate reaching \$300 million or 20% of paid-in capital or more

Nine months ended September 30, 2016

Table 5 Expressed in thousands of NTD

(Except as otherwise indicated)

								If the counterparty is a related party, information as to the last transaction of the real estate is disclosed below:			Reason for acquisition of real estate
			Transaction	Status of		Relationship with the	Original owner who sold the real estate to the	Relationship between the original owner and the	Date of the original		Basis or reference used in setting the	and status of the real	Other
Real estate acquired by	Real estate acquired Date of the event		amount	payment	Counterparty	counterparty	counterparty	acquirer	transaction	Amount	price	estate	commitments
Prince Housing & Development Corp. Ren Wu Dist. Xia	Hai Lot No. 978, etc.	2013/06/14 (Note 1)	Note 2	\$	1,115,071 Redevelopment zone of Xia Hai Term, Renwu District, Kaohsiung City	Third party	-	-	-	\$ -	Note 2	For operating use	None
Prince Housing & Development Corp. Nanzi subsection	No. 158,etc.	2014/11/07 (Note 3)	\$ 1,255,309		794,651 Taiwan Sugar Corporation	Third party	-	-	-	-	Market value	For operating use	None

Note 1: The transfer of title took place on settlement date.

Note 2: In order to purchase 67.13% of areas from the north side of the offset-expenditure land in the redevelopment zone, the transaction amount was the expected price including compensation for demolition to all land owners of north side of the offset-expenditure land, compensation for demolition to owners of parkland to be (67.13%), construction expenses in all regions (67.13%) and interests arising from re-planning committee's borrowing from the Group to pay aforementioned expenses.

Note 3: November 7, 2014 was the signing date of the contract. The Company paid \$535,857 for the current period. As of September 30, 2016, the Company has already paid \$794,651.

Purchases or sales of goods from or to related parties reaching NT\$100 million or 20% of paid-in capital or more

Nine months ended September 30, 2016

Table 6 Expressed in thousands of NTD

			Transaction					Differences in transaction terms compared to third party transactions			Notes/accounts receivable (payable)	(Except as otherwise indicated)
Purchaser/seller	Counterparty	Relationship with the counterparty	Purchases (sales)		Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term		Balance	Percentage of total notes/accounts receivable (payable)	Footnote
Prince Housing & Development Corp.	Cheng-Shi Construction Co., Ltd.	Subsidiary	Purchases	\$	317,419	14%	Payments were paid in accordance with the contract terms	It is reasonable compared to the normal tradings	It is reasonable compared to the normal tradings	(\$	38,950)	(2%)
Prince Housing & Development Corp.	Prince Utility Co., Ltd.	Subsidiary	Purchases		181,950	8%	Payments were paid in accordance with the contract terms	It is reasonable compared to the normal tradings	It is reasonable compared to the normal tradings	(	22,575)	(1%)

Prince Housing & Development Corp. and Subsidiaries Receivables from related parties reaching \$100 million or 20% of paid-in capital or more September 30, 2016

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

					Overdue
							Amount collected
		Relationship with the	Balance as at			Action	subsequent to the balance	Allowance for
Creditor	Counterparty	counterparty	September 30, 2016	Turnover rate	Amount	taken	sheet date	doubtful accounts
Prince Housing & Development Corp.	The Splender Hotel Taichung	Subsidiary	Other assets - obligation receivable \$ 575,000	-	\$ -	-	\$ -	\$ -

Significant inter-company transactions during the reporting periods Nine months ended September 30, 2016

Table 8 Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Percentage of
consolidated total

							operating revenues or total
Number	Company name	Counterparty	Relationship	General ledger account	Amount	Transaction terms	assets
0	Prince Housing & Development Corp.	Ta-Chen Construction & Engineering Corp.	The Company to the consolidated subsidiaries	Construction in progress	\$ 121,373	-	0.24%
	Prince Housing & Development Corp.	Prince Utility Co., Ltd.	The Company to the consolidated subsidiaries	Purchases		181,950 Based on mutual agreements	2.77%
0	Prince Housing & Development Corp.	Cheng-Shi Construction Co., Ltd.	The Company to the consolidated subsidiaries	Purchases		317,419 Based on mutual agreements	4.83%
0	Prince Housing & Development Corp.	Cheng-Shi Construction Co., Ltd.	The Company to the consolidated subsidiaries	Construction in progress	416,639	-	0.81%
0	Prince Housing & Development Corp.	The Splender Hotel Taichung	The Company to the consolidated subsidiaries	Endorsement and guarantee		1,694,430 In accordance with endorsement and guarantee procedures	3.30%
0	Prince Housing & Development Corp.	The Splender Hotel Taichung	The Company to the consolidated subsidiaries	Other assets - obligation receivables		575,000 Creditor's rights purchase contract	1.12%
0	Prince Housing & Development Corp.	Prince Real Estate Co., Ltd.	The Company to the consolidated subsidiaries	Endorsement and guarantee		780,000 In accordance with endorsement and guarantee procedures	1.52%
1	Prince Utility Co., Ltd.	Prince Housing & Development Corp.	The consolidated subsidiaries to the Company	Endorsement and guarantee		638,763 In accordance with endorsement and guarantee procedures	1.24%
2	Prince Real Estate Co., Ltd.	Prince Housing & Development Corp.	The consolidated subsidiaries to the Company	Endorsement and guarantee		2,035,309 In accordance with endorsement and guarantee procedures	3.96%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is '0'.

(2) The subsidiaries are numbered in order starting from '1'.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: The table only discloses transaction amounts of NT\$100 million or more.

Information on investees

Nine months ended September 30, 2016

Table 9 Expressed in thousands of NTD

(Except as otherwise indicated)

				Initial investment amount Balance as at	Balance as at		Shares held as at September 30, 2016		Net profit (loss) of the investee for the nine months ended September 30,	Investment income (loss) recognised by the Company for the nine months ended September 30,
Investor	Investee	Location	Main business activities	September 30, 2016	December 31, 2015 Number of shares Ownership (%) Book value				2016	2016	Footnote
Prince Housing & Development Corp. Cheng-Shi Investment Holdings	Co., Ltd.	Taiwan	General investment	\$ 1,146,925 \$	1,146,925	97,504,758	100%	\$ 1,030,189 \$	104,312 \$		118,171 Notes 1 and 2
	Prince Property Management Consulting Co., Ltd.	Taiwan	Management and consulting	181,000	181,000	17,146,580	100%	286,620	15,329		16,302 Notes 1 and 2
	Geng-Ding Co., Ltd.	Taiwan	Hotels and catering	120,000	120,000	18,000,000	30%	324,631	84,807	25,441	Note 4
	Prince Housing Investment Co., Ltd.	British Virgin Islands	Overseas investment	140,413	140,413	428	100%	423,274	35,305	35,305	Note 2
	BioSun Technology Co., Ltd.	Taiwan	Anti-mildew's import and export	-	1,000	-	-		- ( 23) (		23) Note 2 and 9
	Dong-Feng Enterprises Co., Ltd.	Taiwan	Housebuilders and sales	746,431	876,431	4,300,000	100%	( 151,206)	4,284		4,284 Notes 2 and 8
	Uni-President Development Corp.	Taiwan	Leasing of buildings	1,080,000	1,080,000	108,000,000	30%	1,209,786	76,432	22,949	Note 5
	The Splender Hotel Taichung	Taiwan	Hotels and catering	975,000	975,000	97,500,000	50%	315,418 (	46,501) (	23,250)	Note 2
	Time Square International Co., Ltd.	Taiwan	Hotels and catering	600,000	600,000	73,830,000	100%	405,563	122,729	122,729	Note 2
	Jin Yi Xing Plywood Co., Ltd.	Taiwan	Manufacture of plywoods	165,410	165,410	3,938,168	99.65%	( 448,857) (	13)	54,609	Notes 2
	Ming-Da Enterprise Co., Ltd.	Taiwan	Real estate trading	127,400	127,400	9,202,249	20%	138,542	37,546	4,875
	Prince Industrial Co., Ltd.	Taiwan	Development of public housing and building	10,000	10,000	1,000,000	100%	9,536 (	37) (	37)	Note 2
	Prince Real Estate Co., Ltd.	Taiwan	Real estate trading and leasing	470,784	470,784	11,208,632	99.65%	1,212,932 (	2,692) (		4,041) Notes 1 and 2
Cheng-Shi Investment Holdings Co., Ltd	Ta-Chen Construction & Engineering Corp.	Taiwan	Construction	856,566	856,566	90,497,528	100%	769,809	74,734		- Notes 2 and 3
	Prince Utility Co., Ltd.	Taiwan	Electricity water pipe	56,025	56,025	3,070,000	100%	121,068	13,825		- Notes 2 and 3
	Cheng-Shi Construction Co., Ltd.	Taiwan	Construction	208,027	208,027	20,100,000	100%	293,370	13,059		- Notes 2 and 3
Ta-Chen Construction & Engineering Corp.	Ta-Chen International (Brunei) Corp.	Brunei	Overseas investment	-	9,464	-	-		- ( 4,029)		- Notes 2, 3 and 7

					Initial investment amount		Shares held as at September 30, 2016		Net profit (loss) of the investee for the nine months ended	Investment income (loss) recognised by the Company for the nine months ended
				Balance as at	Balance as at				September 30,	September 30,
Investor	Investee	Location	Main business activities	September 30, 2016		December 31, 2015 Number of shares Ownership (%) Book value			2016	2016	Footnote
Prince Housing Investment Co., Ltd.	PPG Investment Inc.	U.S.A	Overseas investment	\$ 56,945 \$	56,945	273	27.27%	\$ 14,858 \$	6,959 \$	-	Note 3
	Queen Holdings Ltd.	British Virgin Islands	Overseas investment	122,034	122,034	2,730	27.27%	367,484	55,510	-	Note 3
Prince Property Management Consulting Co., Ltd.	Prince Apartment Management Maintain Co., Ltd.	Taiwan	Management of apartments	67,853	67,853	3,000,000	100%	74,485	2,998		- Notes 2 and 3
	Prince Security Co., Ltd.	Taiwan	Security	159,611	159,611	13,172,636	100%	214,503	13,044		- Notes 2 and 3
Dong-Feng Enterprises Co., Ltd.	Amida Trustlink Assets Management Co., Ltd.	Taiwan	Development of public housing and building	305,480	305,480	21,644,062	45.21%	( 137,280) (	579)	-	Note 3
Ta-Chen International (Brunei) Corp. Ta Chen Construction	& Engineering (Vietnam) Corp.	Vietnam	Construction		- 9,440	-	-	-	-		- Notes 2, 3 and 6

Note 1: The difference between the income (loss) of the investee and the investment income (loss) of the investee recognised by the Company is the investment income (loss) of the investee recognised by the Company in proportion to the share ownership and unrealised gain (loss) from elimination of inter-Company transactions.

Note 2: Subsidiary.

Note 3: The amount has been included in the profit (loss) of the Company's investee accounted using equity method and has been recognised as gain (loss) on investment.

Note 4: Provided 12,000 thousand shares as collateral.

Note 5: Provided 108,000 thousand shares as collateral.

Note 6: Ta Chen Construction & Engineering (Vietnam) Corp. has completed liquidation process in May 2016.

Note 7: Ta-Chen International (Brunei) Corp. has completed liquidation process in August 2016.

Note 8: Dong-Feng Enterprises Co., Ltd. decreased its capital by \$130,000 in April 2016 and the amount of issued shares eliminated was 13,000 thousand shares.

Note 9: BioSun Technology Co., Ltd. has completed liquidation process in September 2016.