PHD — Audit Report / Information 2016

Dec 19, 2016

PRINCE HOUSING & DEVELOPMENT CORP. PARENT COMPANY ONLY FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 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.

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR16000393

To the Board of Directors and Shareholders of Prince Housing & Development Corp.

Opinion

We have audited the accompanying balance sheets of Prince Housing & Development Corp. (the "Company") as at December 31, 2016 and 2015, and the related statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of other independent accountants (please refer to the "other matter" section of our report), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2016 and 2015, and its financial performance and its cash flows for the years then ended in accordance with the "Regulations" Governing the Preparations of Financial Reports by Securities Issuers".

Basis for opinion

We conducted our audits in accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the "Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained and the report of other independent accountants are sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

The accuracy of building and land sales revenue recognition timing

Description

Please refer to Note 4(29) for accounting policies on sales revenue, and Note 6(25) for details. For the year ended December 31, 2016, building and land sales revenue amounted to NT\$ 5,274,930 thousand, representing 87.85 % of operating revenue.

The Company recognises building and land sales revenue and profit or loss when transferring ownership and handing over the property. Since the Company has diverse customers, the information delivery and recording process between segments in the Company usually involved manual work, and thus may result in inappropriate timing of revenue recognition around the balance sheet date. Considering that the building and land sales revenue form most of the Company's operating revenue, we identified the accuracy of building and land sales revenue recognition timing as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

• A. We obtained an understanding and assessed the reasonableness of internal controls on building and land sales revenue, and tested whether the process of building and land sales revenue recognition timing had been executed effectively, including verifying documents related to the date of ownership transfer and property handover and the accuracy of recognition timing; and
• B. We performed cut-off test on building and land transactions around the end of the reporting period, including verifying land registration, house ownership certificate and customer signed receipts for handing over of property to confirm the building and land sales revenue recognition timing was adequate.

Investments accounted for under equity method- Ta-Chen Construction & Engineering Corp., which was held through subsidiary, Cheng-Shi Investment Holdings Co., Ltd.- recognition of construction revenue- the stage of completion estimate

Description

Please refer to Note 4(13) for accounting policies on investments accounted for under equity method, and Note 6(9) for details.

Ta-Chen Construction & Engineering Corp., which was held by the Company through subsidiary, Cheng-Shi Investment Holdings Co., Ltd., was recognised as a significant company since the financial performance of Ta-Chen Construction & Engineering Corp. had a material effect on the Company's financial statements.

Ta-Chen Construction & Engineering Corp. provided property construction related services. During the duration of a contract, the recognition of revenue is based on the stage of completion of a contract. The stage of completion is determined by reference to the contract costs incurred to date and the proportion that contract costs incurred for work performed to date compared to the estimated total contract costs. Aforementioned estimated total contract costs were based on contract budget details compiled by owner's design drawing, considering the changes in construction scale caused by additional or less work, and the price fluctuations in the recent market to estimate the contract work, overhead and relevant costs.

As the complexity of aforementioned total cost usually involves subjective judgment and contains a high degree of uncertainty, and the estimate of total cost affects the stage of completion and the recognition of construction revenue, thus we consider the reasonableness of the stage of completion which was applied on construction revenue recognition as above mentioned as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. We obtained an understanding of the nature of business and industry of Ta-Chen Construction & Engineering Corp. and assessed the reasonableness of internal process of estimating total construction cost, including the unit of calculation of owner's design drawing, the procedure of estimating each construction cost and overhead, and the consistency of applying the estimation method:

• B. We assessed and tested the internal controls which would affect the changes of estimated total cost of Ta-Chen Construction & Engineering Corp., including verifying the evidence of additional or less work and constructions.
• $C_{\cdot}$ We inspected the constructing site accompanied by the supervisor and other appropriate staff of Ta-Chen Construction & Engineering Corp. at the end of the reporting period to assess the reasonableness of the stage of completion method result.
• We obtained Ta-Chen Construction & Engineering Corp's details of construction profit or loss and $D_{\alpha}$ performed substantive procedures, including randomly checking the incurred cost of current period with the appropriate evidence, and additional or less work with the supporting documents, and recalculated the stage of completion.

Other matter – Scope of the Audit

We did not audit the financial statements of investments recognized under the equity method that are included in the financial statements. Aforementioned investments accounted for under equity method of NT\$ 897,432 thousand and NT\$ 979,024 thousand as at December 31, 2016 and 2015, constituted 2.06% and 2.14% of total assets; comprehensive income of aforementioned company of NT\$ 82,591 thousand and NT\$ (10,924) thousand for the years then ended, constituted 6.60% and (0.50%) of total comprehensive income, respectively. Those financial statements were audited by other independent accountants whose report thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the "Regulations Governing the Preparations of Financial Reports by Securities Issuers", and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor's responsibilities for the audit of the financial statements

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

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• A. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures $B_r$ that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

• C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• D. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the $E.$ disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or $\mathbf{F}_{\cdot}$ business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

Wu Chien-Chih Lin Yi-Chang

For and on behalf of PricewaterhouseCoopers, Taiwan March 22, 2017

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2016 AND 2015
(Expressed in thousands of New Taiwan dollars)

		December 31, 2016		December 31, 2015
Assets	Notes	AMOUNT	$\frac{0}{6}$	AMOUNT	$\frac{0}{2}$
Current assets
Cash and cash equivalents	6(1)	\$ 2,856,845	7.	\$ 2,156,890	5
Current financial assets at fair value	6(2)
through profit or loss		300,000	1
Notes receivable, net	6(3)	88,801		111,588
Accounts receivable, net	6(4)	86,249		826,784	2
Other receivables		1,750		1,718
Other receivables - related parties	7	2,814		61,738
Inventories, net	$6(5)$ , 7 and 8	21, 378, 653	49	21, 312, 926	46
Prepayments		164,216		224,827
Other financial assets - current	8	588,572	1	1,754,990	4
Other current assets	6(6)	246,014	1	297,551	-1
Total current assets		25,713,914	59	26,749,012	58
Non-current assets
Financial assets at fair value through profit $6(2)$ and 8
or loss - non-current		78,253		77,992
Available-for-sale financial assets - non-	$6(7)$ and $8$
current		1,182,023	3	1,542,392	3
Financial assets carried at cost - non-	$6(8)$ and $8$
current		877,800	2	887,529	2
Investments accounted for under equity	$6(9)$ and 8
method		5,373,556	12	5,776,478	13
Property, plant and equipment, net	$6(10)$ and $8$	572,089	1	596,757	-1
Investment property, net	$6(11)$ and $8$	5,970,428	14	6,059,652	13
Intangible assets, net	6(12)	2,239,187	5	2,300,439	5
Refundable deposits	9	431,932	1	493,499
Other financial assets - non-current	8	444,629	1	732,638	2
Other non-current assets	$7$ and $8$	636,640	2	636,640	$\boldsymbol{2}$
Total non-current assets		17,806,537	41	19,104,016	42
Total assets		\$ 43,520,451	100	\$ 45,853,028	100

(Continued)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2016 AND 2015
(Expressed in thousands of New Taiwan dollars)

		December 31, 2016		December 31, 2015	AMOUNT $\frac{0}{2}$
Liabilities and Equity	Notes	AMOUNT	$\frac{1}{2}$
Current liabilities
Short-term borrowings	$6(13)$ and 8	\$ 2,215,659	5	\$ 2, 264, 874	5
Short-term notes and bills payable	$6(14)$ and 8	339,694	1	879,874	2
Notes payable		15,052		11,094
Accounts payable		1,489,408	4	2,348,723	5
Accounts payable - related parties	7	5,948		334, 393	1
Other payables		672,161	2	755,605	2
Other payables - related parties	7			117,450
Current income tax liabilities	6(30)	168,930		73,174
Receipts in advance	6(15)	1,013,366	2	1,634,255	3
Long-term liabilities, current portion	$6(16)(17)$ and 8	3,176,015	7	362,870	1
Other current liabilities		31,324		4,668
Total current Liabilities		9,127,557	21	8,786,980	19
Non-current liabilities
Bonds payable	6(16)	2,500,000	6	4,500,000	10
Long-term borrowings	$6(17)$ and 8	6,811,359	16	6,887,313	15
Provisions for liabilities - non-current	6(18)	75,207		84,517
Net defined benefit liabilities - non-current 6(19)		68,853		106,714
Guarantee deposits received		127,819		127,471	1
Other non-current liabilities	6(9)	513,025	1	528,957	$\mathbf{1}$
Total non-current liabilities		10,096,263	23	12, 234, 972	27
Total Liabilities		19,223,820	44	21,021,952	46
Equity
Share capital
Common stock	6(20)	16, 233, 261	37	16,233,261	35
Capital surplus	6(21)
Capital surplus		2,260,513	5	2,260,513	5
Retained earnings	6(22)(30)
Legal reserve		1,644,576	4	1,420,796	3
Unappropriated retained earnings		3,101,014	7	3,508,400	8
Other equity interest	6(23)
Other equity interest		1,058,270	3	1,409,109	3
Treasury stocks	6(20)	$1,003$ )	٠	1,003)	$\tilde{\phantom{a}}$
Total equity		24, 296, 631	56	24,831,076	54
Total liabilities and equity		\$ 43,520,451	100	\$ 45,853,028	100

The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 22, 2017.

$\overline{\phantom{a}}$

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2016 AND 2015
(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

		Years ended December 31
			2016			2015
Items	Notes		AMOUNT	%		AMOUNT	$\%$
Operating revenue	$6(25)$ and $7$	\$	6,004,370	100	\$	8,763,040	100
Operating costs	$6(5)(12)(29)$ and 7		3,739,186) (	62)		5,631,118	64)
Gross profit			2,265,184	38		3,131,922	36
Operating expenses	$6(29)$ and 7
Selling expenses			336,693) (	$6)$ (		518,199) (	6)
General & administrative expenses			907,006) (	$15)$ (		$1,007,708$ ) (	12)
Total operating expenses			1,243,699) (	$21)$ (		$1, 525, 907$ )	18)
Operating profit			1,021,485	17		1.606,015	18
Non-operating income and expenses
Other income	6(26)		232,977	4		239,732	3
Other gains and losses	6(2)(27)		246,736	4		42,039
Finance costs	$6(5)(28)$ and 7	(	202,374) (	$3)$ (		283,713) (	3)
Share of profit of associates and joint ventures	6(9)
accounted for under equity method, net Total non-operating income and expenses			559,388 836,727	9 14		842,977 841,035	10
Profit before income tax				$\overline{31}$			$10\,$
Income tax expense	6(30)		1,858,212 249,023) (	$\overline{4}$		2,447,050	28
Profit for the year			1,609,189	27	$\overline{\mathbf{z}}$	209,250) 2,237,800	$\overline{2}$ 26
Other comprehensive income
Components of other comprehensive income
that will not be reclassified to profit or loss
Actuarial losses on defined benefit plans	6(19)	(5)	9,292)	$-$ (\$		16,062)
Share of other comprehensive income of
associates and joint ventures accounted for
using equity method, components of other
comprehensive income that will not be
reclassified to profit or loss			2,156			1,669
Components of other comprehensive
income that will not be reclassified to
profit or loss			7,136)			14,393)
Components of other comprehensive income
that will be reclassified to profit or loss
Other comprehensive income, before tax,	6(7)
available-for-sale financial assets		(	355,139) (	$6)$ (		39,276) (	1)
Total Share of other comprehensive income of
associates and joint ventures accounted for
using equity method, components of other comprehensive income that will be reclassified
to profit or loss			4,300			12,166
Components of other comprehensive
income that will be reclassified to profit or
loss			350,839)	6)		27,110)	1)
Other comprehensive loss for the year		\$	357,975)	$6)$ (\$		41,503)	$_{1}$
Total comprehensive income for the year		\$	1,251,214	21	\$	2,196,297	25
Earnings per share (in dollars)	6(31)
Basic carnings per share		$\frac{3}{2}$		0.99	\$		1.38
Diluted earnings per share				0.98	\$		1.36
Assuming the Company treated the stocks held by a subsidiary as long-term investments rather than treasury stock, the pro forma information is as
follows:
Net income		$\overline{\boldsymbol{\mathfrak{s}}}$		1,609,189	\$		2,177,326
Earnings per share (in dollars)

The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 22, 2017.

$\overline{\mathbf{z}}$

Basic earnings per share

$\frac{S}{\sqrt{2}}$

$1.34$

$0.99$

				YEARS ENDED DECEMBER 31, 2016 AND 2015 (Expressed in thousands of New Taiwan dollars)
					Retained Earnings		Other equity interest
	Notes	common stock Share capital -	Capital surplus	Legal reserve	retained earnings Unappropriated	diferences translation operations of foreign Exchange arising on	Unrealized gain available-for- sale financial or loss on assets	Treasury stocks	Total
Year ended December 31, 2015 Balance at January 1, 2015		\$16,623,418	1,929,793 ↔	1,180,924 s	2,854,738 ۄ	1,690 ↔	1,434,529 éĄ.	$60,440$ ) ఆ	\$23,964,652
Distribution of 2014 earnings (Note 1)
Legal reserve				239,872	239,872
Cash dividends	6(22)				,329,873				1,329,873)
Profit for the year	6(31)				2,237,800				2,237,800
Other comprehensive income (loss) for the year	6(7)(19)(23)				14,393)	$\overline{a}$	27,126)		41,503)
Treasury stock transactions	6(20)(21)	390, 157)	330,720					59,437
Balance at December 31, 2015		16,233,261	513 2,260, اچي	1,420,796 ÷,	3,508,400 $\rightarrow$	,706 ⊷	1,407,403 ↔	1,003 اھ	24,831,076 اجي
Year ended December 31, 2016
Balance at January 1, 2016		\$16,233,261	513 2,260, م	1,420,796 ۰Ą	3,508,400 ۰Ą	1,706 ↔	1,407,403 ون	$1,003$ ) ల	\$ 24,831,076
Distribution of 2015 earnings (Note 2)
Legal reserve				223,780	223,780)
Cash dividends	6(22)				,785,659)				,785,659)
Profit for the year	6(31)				,609,189				,609,189
Other comprehensive loss for the year	6(7)(19)(23)				7,136)	,754)	349,085		357,975)
Balance at December 31, 2016		\$16,233,261	2,260,513 اجه	644,576 ÷,	3,101,014 ÷,	$\frac{48}{3}$ ٣	,058,318 ↔	$\frac{1}{2}$ G	24, 296, 631 ÷
		こうしょうしん

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

PRINCE HOUSING & DEVELOPMENT CORP.

l,

Note 1: Employees' bonus of \$43,177 and directors' and supervisors' remuneration 65504,765 have been deducted from the parent company only statement of comprehensive income. There is no difference with the amounts approved

Note 2: Employees' bonus of \$244,705 and directors' and supervisors' remuneration of \$83,250 have been deducted from the parent company only statement of comprehensive income. There is no difference with the amounts approv

appropriation.

appropriation.

The accompanying notes are an integral part of these financial statements.
See report of independent accountants dated March 22, 2017.

$\frac{2}{7}$

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2016 AND 2015
(Expressed in thousands of New Taiwan dollars)

			Years ended December 31
	Notes		2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	1,858,212	\$	2,447,050
Adjustments
Adjustments to reconcile profit (loss)
Gain on financial assets at fair value through profit or loss	6(2)(27)	(	384) (		445)
Provision for bad debts expense transferred to revenue	6(3)				196)
Write-off of uncollectible accounts	6(3)(4)	(	344) (		3,154)
Share of profit of associates and joint ventures accounted	6(9)
for under equity method		(	559,388) (		842,977)
Loss on disposal of property, plant and equipment	6(27)		1,473		4,307
Depreciation	6(29)		113,177		113,475
Amortization	6(12)(29)		61,252		61,253
Interest expense	6(28)		202,373		283,713
Interest income	6(26)		$7,287$ ) (		7,572)
Dividend income	6(26)	€	93,755) (		$134, 112$ )
Gain on disposal of investments accounted for using equity method					469)
Gain (loss) on unrealised foreign exchange			7,185		14,676)
Changes in operating assets and liabilities
Changes in operating assets
Current financial assets at fair value through profit or loss		$\overline{\mathcal{L}}$	299,877)
Notes receivable			23,131		29,859
Accounts receivable			740,535		3,723,258
Other receivables			498		1,574
Other receivables - related parties			58,924	€	59,753)
Inventories		$\overline{\mathcal{L}}$	$65,727$ ) (		$1,899,997$ )
Prepayments			60,611		76,091
Other current assets			51,537		209,694
Other non-current assets					340,669
Changes in operating liabilities
Notes payable			3,958		719
Accounts payable			859,315) (		$1,355$ )
Accounts payable - related parties			$328,445$ ) (		64,325)
Other payables			78,919)		48,993
Other payables - related parties			$117,450$ )		117,450
Receipts in advance			$620,889$ ) (		1,286,992)
Other current liabilities			26,656	$\rightarrow$ (	$33,693$ )
Provisions for liabilities - non-current			9,310)		2,797
Net defined benefit liabilities - non-current			47,154)		1,056
Cash inflow generated from operations			121,278		3, 112, 242
Imterest received Cash dividend received			6,757		7,843
			818,393		270,977
Interest paid			206,898)		284,149)
Income tax paid Net cash flows from operating activities			153,267)		217,155)
			586,263		2,889,758

(Continued)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2016 AND 2015
(Expressed in thousands of New Taiwan dollars)

				Years ended December 31
	Notes		2016		2015
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in other financial assets - current		\$	1,166,418	\$	837,228
Return of share capital from available-for-sale financial
assets - non-current			1,577
Decrease in available-for-sale financial assets - non-current			3,653		3,173
Proceeds from capital reduction of financial assets at cost			9,729
Increase in investments accounted for under the equity
method					$200,000$ )
Return of share capital from investments accounted for
under equity method			220,022		14,286
Proceeds from disposal of investments accounted for using
equity method			990
Acquisition of cash from consolidation					41,683
Acquisition of property, plant and equipment	6(10)	(	$3,101$ ) (		33,747)
Proceeds from disposal of property, plant and equipment			2,343		4,518
Decrease (increase) in refundable deposits			61,567		78,867)
Decrease (increase) in other financial assets - non-current			288,009		211,472)
Net cash flows from investing activities			1,751,207		376,802
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings		t	49,215) (		680,710)
Decrease in short-term notes and bills payable			$540,180$ ) (		1,088,208)
Repayment of long-term borrowings		Ć	$10,763,366$ ) (		4,872,170)
Proceeds from long-term borrowings			11,500,557		5,693,254
Increase (decrease) in guarantee deposits received			348		1,175)
Cash dividends paid	6(22)		1,785,659)		1,329,873)
Net cash flows used in financing activities			$1,637,515$ )		2,278,882)
Net increase in cash and cash equivalents			699,955		987,678
Cash and cash equivalents at beginning of year			2,156,890		1,169,212
Cash and cash equivalents at end of year		\$	2,856,845	\$	2,156,890

The accompanying notes are an integral part of these financial statements.
See report of independent accountants dated March 22, 2017.

PRINCE HOUSING & DEVELOPMENT CORP. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2016 AND 2015

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

1. HISTORY AND ORGANIZATION

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 DATE OF AUTHORIZATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These parent company olny financial statements were authorized for issuance by the Board of Directors on March 22, 2017.

3. 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 Company

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	January 1, 2016
(amendments to IFRS 10, IFRS 12 and IAS 28)
Accounting for acquisition of interests in joint operations	January 1, 2016
(amendments to IFRS 11)
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
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

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
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 Company's financial condition and operating result based on the Company'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 endorsed by the FSC effective from 2017 are as follows:

New Standards, Interpretations and Amendments	Effective date by International 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) IFRS 15, 'Revenue from contracts with customers'	To be determined by International Accounting Standards Board January 1, 2018
Clarifications to IFRS 15, 'Revenue from contracts 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
Transfers of investment property (amendments to IAS 40)	January 1, 2018
IFRIC 22, 'Foreign currency transactions and advance consideration	January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle-Amendments to IFRS 1, 'First-time adoption of International Financial Reporting Standards'	January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle-Amendments to IFRS 12, 'Disclosure of interests in other entities'	January 1, 2017
Annual improvements to IFRSs 2014-2016 cycle-Amendments to IAS 28, 'Investments in associates and joint ventures'	January 1, 2018

Except for the following, the above standards and interpretations have no significant impact to the Company's financial condition and operating result based on the Company'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 or lifetime expected credit losses (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). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.
• 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 recognized 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.

D. Amendments to IAS 40, 'Transfers of investment property'

The amendment clarified that to transfer to, or from, investment properties there must be a change in use. A change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A change in management's intentions, in isolation, does not provide evidence of the change in use. In addition, the amendments added examples for the evidence of a change in use. The examples include assets under construction or development (not completed properties) transfer from investment property to owner-occupied property at commencement of development with a view to owner-occupation and transfer from inventories to investment property at inception of an operating lease to another party.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

These parent company only financial statements are prepared by the Company in accordance with the "Rules Governing the Preparation of Financial Statements by Securities Issuers".

(2) Basis of preparation

• A. Except for the following items, these parent company only 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 the 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 Company's accounting policies. The areas involving a higher degree of judgment

or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

The parent company only financial statements are presented in New Taiwan dollars, which is the Company's functional and presentation currency.

A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within 'other gains and losses'.
• B. Translation of foreign operations

• (a) The operating results and financial position of all the Company entities, associates and jointly controlled entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
  • iii. All resulting exchange differences are recognized in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is an associate or jointly controlled entity, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company still retains partial interest in the former foreign associate or jointly controlled entity after losing significant influence over the former foreign associate, or losing joint control of the former jointly controlled entity, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, if the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(4) Classification of current and non-current items

• A. If assets and liabilities are related to the construction business, they are classified as current or non-current according to their operating cycle; if they are not related to the construction business, they are classified by annual basis.
• B. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
• (b) Assets held mainly for trading purposes;
• (c) Assets that are expected to be realised within twelve months from the balance sheet date;
• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
• C. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
• (a) Liabilities that are expected to be settled within the normal operating cycle;
• (b) Liabilities arising mainly from trading activities;
• (c) Liabilities that are to be settled within twelve months from the balance sheet date;
• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits mature within three months and bonds with call back options meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets held for trading. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term.
• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognised using trade date accounting.
• C. Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.

(7) Available-for-sale financial assets

• A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
• B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognised using trade date accounting.
• C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in 'financial assets measured at cost'.

(8) Receivables

Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable are initially recognized at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(9) Impairment of financial assets

• A. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
• B. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as follows:
• (a) Significant financial difficulty of the issuer or debtor;
• (b) A breach of contract, such as a default or delinquency in interest or principal payments;
• (c) The disappearance of an active market for that financial asset because of financial difficulties;
• (d) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
• (e) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the company, including adverse changes in the payment status of borrowers in the company or national or local economic conditions that correlate with defaults on the assets in the company;
• (f) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered;
• (g) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
• C. When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:
• (a) Financial assets measured at amortised cost

The amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(b) Financial assets measured at cost

The amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(c) Available-for-sale financial assets

The amount of the impairment loss is measured as the difference between the asset's acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from 'other comprehensive income' to 'profit or loss'. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(10) Derecognition of financial assets

The Company derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.
• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.
• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

$(11)$ Inventories

Inventories including "land held for construction", "construction in progress", and "buildings and land held for sale" are stated at cost and evaluated at the lower of cost or net realisable value at the end of period. The individual item approach is used in the comparison of cost and net realisable value. The calculation of net realisable value is based on the estimated selling price in the normal course of business, net of estimated costs of completion and related adjusted selling expenses. The interest costs related to construction in progress are capitalised during the construction.

(12) Construction contracts

In accordance with IFRIC 15, 'Agreements for the Construction of Real Estate', if the buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress, the construction contract meets the definition of construction contract and criteria in IAS 11, 'Construction Contracts'. In accordance with IAS 18, 'Revenue', the Company recognises sales revenue for contracts of presale of buildings that do not meet the definition of construction contract. For transactions that meet the definition of construction contract, the Company recognises contract revenue in accordance with IAS 11.

• (13) Investments accounted for using equity method / subsidiaries, associates
• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
• B. Unrealised profit (loss) arising from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
• C. The Company's share of its subsidiaries' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.
• D. If changes in shareholdings in subsidiaries do not result to a loss on control (transaction with non-controlling interest), transactions shall be considered as equity transactions, which are transactions between owners. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognized in equity.
• E. When the Company loses its control in a subsidiary, the Company revalues the remaining investment in the prior subsidiary at fair value, that fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture, and recognises the difference between fair value and book value in the profit or loss for the period. The accounting treatment on the previously recognized amount related to the subsidiary in other comprehensive income is the same as the basis if the Company directly disposes related assets or liabilities, which means if the Company has recognized gain or loss in other comprehensive income, the Company should reclassify the gain or loss on disposal of related assets or liabilities to profit or loss; and when the Company loses control in the subsidiary, the gain or loss should be reclassified from equity to profit or loss.

• F. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• G. The Company's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in an associate equals or exceeds its interest in the associate, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• H. When changes in an associate's equity are not recognized in profit or loss or other comprehensive income of the associate and such changes do not affect the Company's ownership percentage of the associate, the Company recognises the Company's share of change in equity of the associate in 'capital surplus' in proportion to its ownership.
• I. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
• J. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company's ownership percentage of the associate but maintains significant influence on the associate, then 'capital surplus' and 'investments accounted for under the equity method' shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company's ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
• K. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.
• L. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• M. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• N. Pursuant to the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners' equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

• (14) Property, plant and equipment
• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
• B. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
• D. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings	$50 \sim 60$ years
Computer and commumication equipment	5 years
Transportation equipment	5 years
Office equipment	$5 \sim 10$ years
Leasehold improvements	5 years
Other equipment	5 years

(15) Operating leases (lessor/ lessee)

Rental income from operating leases (excluding any benefits provided to lessee) or payments for operating leases (excluding any benefits received from lessor) are recognized as profit or loss for the period over the leasing period on a straight line basis.

(16) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of $44 \sim 60$ years.

$(17)$ Intangible assets

Intangible assets consist of service concession, which are stated at acquisition cost and amortised on a straight line basis over its useful life of 44 years.

(18) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• (19) Borrowings
• A.Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.
• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawdedown, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
• (20) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(22) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(23) Financial liabilities

Bonds payable

Ordinary corporate bonds issued by the Company are initially recognized at fair value, net of transaction costs incurred. Ordinary corporate bonds are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is accounted for as the premium or discount on bonds payable and presented as an addition to or deduction from bonds payable, which is amortised in profit or loss as an adjustment to the 'finance costs' over the period of bond circulation using the effective interest method.

(24) Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(25) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Pensions

(a) Defined contribution plan

For defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plan
• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of the defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.
• ii. Actuarial gains and losses arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise.
• iii. Past service costs are recognized immediately in profit or loss.
• C. Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• $(26)$ Income tax
• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the non-consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognized deferred income tax assets are reassessed.
• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
• F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.
• (27) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(28) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary share on the effective date of new shares issuance.

• (29) Revenue recognition
• A. Sales of goods

The Company handles entrusted construction, sale and lease of public housings and business buildings. Revenue arising from the sales of goods should be recognized when the Company has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied. For pre-selling of housing that the Company has entrusted to construction companies to build, as stated in Note 4(12), sales revenue is recognized in accordance with IAS 18, 'Revenue'. Thus, the Company has carried over costs and recognized profit or loss when it completes transfer of title and settlement of housing. Only when housing was actually settled (or only when ownership was transferred) before balance sheet date, and related risk return was transferred would sales revenue be recognized.

B. Service concession revenue

Please refer to Note 4(30) for service concession contracts provided by the Company.

(30) Service concession arrangements

• A. The Company was contracted by National Taiwan University (grantor) to provide construction for the government's infrastructure assets for public services and operate those assets for Chang Hsing St. Campus for 44 years and 6 months, and for Shui Yuan Campus for 44 years and 4 months after construction is completed. When the term of operating period expires, the underlying infrastructure assets will be transferred to National Taiwan University without consideration. The Company allocates the fair value of the consideration received or receivable in respect of the service concession arrangement between construction services and operating services provided based on their relative fair values, and recognises such allocated amounts as revenues in accordance with IAS 11, 'Construction Contracts', and IAS 18, 'Revenue', respectively.
• B. Costs incurred on provision of construction services or upgrading services under a service concession arrangement are accounted for in accordance with IAS 11, 'Construction Contracts'.
• C. The consideration received or receivable from the grantor in respect of the service concession arrangement is recognized at its fair value. Such considerations are recognized as a financial asset or an intangible asset based on how the considerations from the grantor to the operator are made as specified in the arrangement.

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

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company'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 Company's accounting policies

A. Financial assets—impairment of equity investments

The Company follows the guidance of IAS 39 to determine whether a financial asset—equity investment is impaired. This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

If the decline of the fair value of an individual equity investment below cost was considered significant or prolonged, the Company would suffer an additional loss in its financial statements, being the transfer of the accumulated fair value adjustments recognized in other comprehensive income on the impaired available-for-sale financial assets to profit or loss or being the recognition of the impairment loss on the impaired financial assets measured at cost in profit or loss.

B. Investment property

The Company uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the ownuse portion accounts for an insignificant portion of the property.

(2) Critical accounting eatimates and assumptions

No 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.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	December 31, 2016	December 31, 2015
Cash on hand and revolving funds	\$ $2,382$ \$	2,548
Checking accounts and demand deposits	2,354,383	1,954,342
Repurchase bonds	500,080	200,000
	\$ 2,856,845	2,156,890

• A. The Company 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 Company has high liquidity, so they were classified as cash equivalents.

(2) Financial assets at fair value through profit or loss

Items		December 31, 2016	December 31, 2015
Current items:
Financial assets held for trading
Beneficiary certificates	S	300,000	S
Non-current items:
Financial assets held for trading
Beneficiary certificates	\$	76,000	- S	76,000
Financial assets held for trading valuation
adjustments		2,253		1,992
		78,253		77,992

A. The Company recognized net gain of \$384 and \$445 for the years ended December 31, 2016 and 2015, respectively.

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

(3) Notes receivable, net

	December 31, 2016 December 31, 2015
Notes receivable	88,801 \$	111,932
Less: Allowance for doubtful accounts	$\sim$ 100 $\mu$	344)
	88,801 \$	111,588

A. The Company'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:

		Years ended December 31
		2016	2015
At January 1	S	344 - S	540
Reversal of impairment		$\blacksquare$
Write-offs uncollectible accounts		344)	196)
At December 31		$\blacksquare$	344

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

(4) Accounts receivable, net

	830.527
3,743)	3,743)
86,249	826.784
	December 31, 2016 December 31, 2015 89,992 \$

A. The Company'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 2 categories:

• (a) Sale of real estate: collection of customers' loans from banks.
• (b) 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:

	December 31, 2016
Up to 60 days	\$	- \$
61 to 120 days	$\bullet$
121 to 180 days	$\overline{\phantom{0}}$		63
Over 181 days	1,117		1,085
	\$		,148

The above is analysed based on number of days overdue.

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

		Years ended December 31,
		2016	2015
At January 1	\$	3,743	6,897
Write-ofs during the period		$\blacksquare$	3,154)
At December 31	S	3,743	3,743

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

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

(5) Inventories

			December 31, 2016
			Allowance for
	Cost		valuation loss	Book value
Land held for construction site	\$ 11,490,725 (\$		65,372) \$	11,425,353
Construction in progress	3,890,666			3,890,666
Buildings and land held for sale	5,023,731 (		49,229)	4,974,502
Prepayment for land	132,652			132,652
Prepayment for buildings and
land	954,027			954,027
Merchandise	1,453			1,453
	\$ 21,493,254	(S)	114,601)	21,378,653
			December 31, 2015
			Allowance for
	Cost		valuation loss	Book value
Land held for construction site	\$ 11,833,606 (\$		65,372) \$	11,768,234
Construction in progress	2,457,025			2,457,025
Buildings and land held for sale	5,963,865 (		49,432)	5,914,433
Prepayment for land	223,700			223,700
Prepayment for buildings and
land	947,991			947,991
Merchandise	1,543			1,543
	\$ 21,427,730	$($ \$	114,804)	\$ 21,312,926

A. The cost of inventories recognized as expense for the years ended December 31, 2016 and 2015 was \$3,739,186 and \$5,631,118, respectively, including the amount of \$203 and \$2,014, respectively that the Company wrote down from cost to net realisable value accounted for as cost of goods sold.

B. Details of the Company's inventories pledged to others as collateral are provided in Note 8.

C. The interest capitalized as cost of inventory is as follows:

	Years ended December 31,
	2016	2015
Interest paid before capitalization	384,261	424,018
Interest capitalized	181,888	140,305
Annual interest rate used for capitalization	2.04%-3.16%	$2.51\% - 3.20\%$

D. Details of significant inventories:

(a) Buildings and land in progress

Taipei branch	December 31, 2016	December 31, 2015
Prince HsinYi (XinZhuang Fuduxin)	\$ 2,022,377	\$ 1,736,845
Ling Ko Dist. Li Shing Section No. 1209, etc.	1,515,855	1,376,328
Prince Fu III (Taoyuan Qing Sun Section No. 446)	1,438,248	1,131,432
Prince W (New Taipei City Shing Jheng Section No. 883, etc.)	950,762	962,064
Bali Dist Chung Chang Section No. 2222 and 211-1, etc.	686,428	685,665
Jhong Li City Shuang Ling Section No. 1449, etc.	447,678	328,796
Prince Hua Wei (Shilin Dist. Zhishan Section No. 602, etc.)	269,237	106,680
	\$ 7,330,585	\$ 6,327,810
Taichung branch	December 31, 2016	December 31, 2015
Ping Hsin Section No. 694, etc.	\$ 897,690	\$ 862,840
Prince Yu Ding (Hui Li Section No. 195)	855,004	707,080
Prince County(Chaotun Section No. 755, etc.)	320,984	250,571
Jin Shuei Dist. Wu Show Section No. 1037, No. 1038, No. 1040, etc.	206,249	195,947
Hsinfuliao Section No. 1096, No.1907, No. 1098, No. 1108, etc.	184,609	159,160
W Epoch(Kao an Section No. 591-1.)	139,576	21,893
The Cloud Century (Kao An Section No. 12-16, etc.)		698,401
Others	$\overline{7}$	7
	\$ 2,604,119	\$ 2,895,899
Tainan branch	December 31, 2016	December 31, 2015
Jin Hua Section No. 1361	\$ 688,200	\$ 688,190
Prince Feng Yun (Hsin Ying Section No. 841-9)	665,265	564,433
Prince Jum Fon Huei (Yu Ming Section No. 681-8)	375,447	266,825
Chin An Section No. 296, No. 297, etc.	156,124	95,703
Shan Chia Section No. 939, etc.	152,384	148,499
Others	3,524	3,524
	\$ 2,040,944	\$ 1,767,174

$\mathcal{A}^{\mathcal{A}}$

Kaohsiung branch		December 31, 2016 December 31, 2015
Prince Cloud B (Ren Wu New Hougang West Section No.42, etc.)	\$	379,133	S	378,865
Prince Cloud C townhouse (Ren Wu New Hougang West Section No .69, etc.)		265,807
Prince Cloud C apartment (Ren Wu New Hougang West Section No. 69-148 etc.)		161,013
Prince Yun (Nanzi subsection No. 158)		125,629		28,177
Ren Wu New Hougang West Section No. 88 experimental house		72,929		73,050
Prince Cloud E (Ren Wu New Hougang West Section No. 90 etc.)		4
Prince Cloud D
(Ren Wu New Hougang West Section No.52, etc.)				416,940
	\$	1,004,515		897,032
Total buildings and land in progress	\$	12,980,163	\$	11,887,915
(b)Land held for construction site
Taipei branch		December 31, 2016		December 31, 2015
Zhong Li Pu Ren Lot No. 720, etc.	\$	140,156	£.	140,156
Others		5,978		5,978
	\$	146,134	\$	146,134
Taichung branch		December 31, 2016		December 31, 2015
Song Quan Lot No. 164, etc.	\$	176,296	\$	176,296
Wu Feng Lot No. 365~855, etc.		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
Hong Long Zub Section No. 133-004		19,513		19,513
Xi Zhou Lot No. 112-54, etc.		11,941		11,941
Others		18,780		20,446
	Ф	477,270	S	478,936
Tainan branch		December 31, 2016		December 31, 2015
Shan Zhong Lot No. 1468, 1475 & 1476, etc.	\$	234,699	S	234,699
Xue Zhong Lot No. 679, etc.		50,798		50,798
Yong Kang Ding An Lot No. 879, etc.		28,610		28,610
Bei An Section No. 54-3, etc.		15,344		15,344
Chin An Section No. 373-377, etc.		15,139		15,139
Bao An Lot No. 882, etc.		10,325		10,325
Others		14,550		14,550
	\$	369,465	\$	369,465

$\sim$

Kaohsiung branch	December 31, 2016			December 31, 2015
Ren Wu New Hougang West Section No. 53, etc.	$\,$	987,079	${\mathbb S}$	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
	$\frac{1}{2}$	1,408,359	\$	1,408,181
Total land held for construction site	\$	2,401,228	${\bf S}$	2,402,716
(c)Buildings and land held for sale
Taipei branch	December 31, 2016			December 31, 2015
Prince Tanmei	\$	2,270,855	\$	2,270,855
Prince Fu II		287,735		641,311
Prince Dragon House III		42,432		42,432
Prince Da Din		12,446		12,446
Prince Guo Boa		5,738		5,738
Taipei Shinyi				106,741
Others		546		546
	\$	2,619,752	\$	3,080,069
Taichung branch	December 31, 2016			December 31, 2015
Chin Fon Gin	\$	403,492	\$	516,970
The Cloud Century Special A		292,529
Prince Fu		27,417		39,528
Jing Yun Sian		13,418		13,418
The Cloud Century A				452,895
Hai Yan				64,657
Others		10,889		10,889
	\$	747,745	\$	1,098,357
Tainan branch	December 31, 2016			December 31, 2015
Flower Bo Five	\$	1,273,009	\$	1,625,272
Tun Sha Building III		28,376		28,376
Jun Chan LV		19,725		19,725
Prince Golden Age		19,572		19,572
Others		2,188		2,188
	\$	1,342,870	\$	1,695,133
Kaohsiung branch	December 31, 2016			December 31, 2015
Prince Cloud D	\$	222,345	\$
Prince Hua Yang		81.242		79,875
Prince Dai Din		9,777		10,431
	\$	313,364	\$	90,306
Total buildings and land held for sale	\$	5,023,731	\$	5,963,865

(d) Prepayment for land
Tainan branch				December 31, 2016 December 31, 2015
Ren Wu New Hougang West Section No. 20, etc.	S	132,652		223,700
(e) Prepayment for buildings and land
				December 31, 2016 December 31, 2015
Taisugar Nanzi Section	\$	786,213	-S	258,794
Taisugar Kao An Section		95,814		651,397
Prince HsinYi (XinZhuang Fuduxin)		72,000		37,800
	\$	954,027	S.	947,991
(6) Other current assets
Items	December 31, 2016			December 31, 2015
Deferred sales commission	\$	\$ 246,014		297,551
(7) Available-for-sale financial assets
Items	December 31, 2016			December 31, 2015
Non-current items:
Listed (TSE and OTC) stocks	\$	104,033 \$		106,684
Unlisted stocks		29,234		29,594
		133,267		136,278
Valuation adjustment of available-for-sale financial
assets		1,048,756		1,406,114
	\$	1,182,023 \$		1,542,392

A. The Company recognized \$355,139 and \$39,276 in other comprehensive income for fair value change and reclassified (\$2,219) and \$0 from equity to profit or loss for the years ended December 31, 2016 and 2015, respectively.

• B. Details of the Company's available-for-sale financial assets pledged to others as collateral are provided in Note 8.
• (8) Financial assets measured at cost

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

A.Based on the Company'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. Thus, the Company classified those stocks as 'financial assets' measured at cost'.

• B.Details of the Company's financial assets measured at cost pledged to others as collateral are provided in Note 8.
• (9) Investments accounted for under the equity method
• A. Details of investments accounted for under the equity method are set forth below:

		December 31, 2016	December 31, 2015
Name of subsidiaries and associates	Carrying amount	Percentage of ownership	Carrying amount	Percentage of ownership
Uni-President Development Corp. \$	1,229,770	30.00%	1,365,037 \$.	30.00%
Prince Real Estate Co., Ltd. (Note 1)	1,210,130	99.65%	1,497,188	99.65%
Cheng-shi Investment Holdings Co., Ltd.	1,007,834	100.00%	904,767	100.00%
Time Square International Hotel	462,969	100.00%	488,834	100.00%
Prince Housing Investment Co., Ltd.	446,709	100.00%	408,008	100.00%
The Splendor Hotel Taichung	328,715	50.00%	338,669	50.00%
Geng-Ding Co., Ltd.	320,555	30.00%	326,189	30.00%
Prince Property Management Consulting Co., Ltd.	282,007	100.00%	270,318	100.00%
Ming-Da Enterprise Co., Ltd.	75,341	20.00%	166,887	20.00%
Jin Yi Xing Plywood Co., Ltd. (Notes 1,2)		99.65%		99.65%
Dong-Feng Enterprises Co., Ltd. (Note 2)		100.00%		100.00%
Others (individually less than 2%)	9.526		10,581
	5,373,556		5,776,478

• Note 1: A newly established company arising from land division of Jin Yi Xing Plywood Co., Ltd. on September 1, 2015.
• Note 2: As of December 31, 2016 and 2015, the book value of the Company's investment in Jin Yi Xing Plywood Co., Ltd. and Dong-Feng Enterprises Co., Ltd. were (\$361,186) and $(151, 839)$ , and $(503, 466)$ and $(125, 491)$ , respectively, which was below zero. Thus, the investments were transferred to other non-current liabilities at \$513,025 and \$528,957, respectively.
• B. Subsidiaries

Please refer to Note 4(3) of the Company's consolidated financial statements for the subsidiaries' information.

C. Associates

• a. The summarized financial information of the associates that are material to the Company is as follows:
• Balance sheet

	Uni President Development Corp.
		December 31, 2016		December 31, 2015
Current assets	\$	265,427	-S	373,344
Non-current assets		9,127,538		9,564,478
Current liabilities		3,319,592) (		3,627,239)
Non-current liabilities		1,974,139)		1,760,396)
Total net assets		4,099,234		4,550,187
Share in associate's net assets		1,229,770		1,365,037
Statements of comprehensive income
		Uni President Development Corp.

	2016	2015
Revenue	981,167		1,066,653
Profit for the year from continuing operations	143,048		221,365
Total comprehensive income	143,048		221,365

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

As of December 31, 2016 and 2015, the carrying amount of the Company's individually immaterial associates amounted to \$395,896 and \$493,076, respectively.

	Years ended December 31,
		2016		2015
Profit for the period from continuing
operations	\$	242,267 \$		276,233
Other comprehensive income- net of tax		1.396
Total comprehensive income		243,663		276,233

• D. The Company's share of profit of subsidiaries, associates and joint ventures accounted for using equity method for the years ended December 31, 2016 and 2015 was \$559,388 and \$842,977, respectively.
• E. The investment income of certain investees for the years ended December 31, 2016 and 2015 accounted for under the equity method was based on their financial statements for the corresponding periods, which were audited by other independent accountants. The investment

(loss) income recognized for these investees for the years ended December 31, 2016 and 2015 was \$84,550 and (\$27,182), respectively. As of December 31, 2016 and 2015, investment balance accounted for under the equity method in these investees were \$897,432 and \$979,024, respectively.

The investees whose financial statements were audited by other independent accountants for the years ended December 31, 2016 and 2015 were as follows:

Prince Property Management Consulting Co., Ltd., Geng-Ding Co., Ltd., Prince Housing Investment Co., Ltd. and Dong-Feng Enterprises Co., Ltd.

F. Details of the Company's investments accounted for under equity method pledged to others as collateral are provided in Note 8.

(10) Property, plant and equipment

A. Details of book values are as follows:

	December 31, 2016		December 31, 2015
Land	\$ 191,884	-\$	191,884
Buildings	302,374		310,533
Computer and communication equipment	9.748		14,340
Transportation equipment	3,303		4,397
Office equipment	40,143		49,493
Leasehold improvements	24,323		25,648
Other equipment	314		462
	\$ 572,089	\$	596,757

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

	Year ended December 31, 2016
Cost	Opening net book amount		Additions	Reclassifications	Closing net book amount
Land	\$ 191,884 \$		$-$ \$		$\blacksquare$	$\boldsymbol{\mathsf{s}}$	$-5$	191,884
Buildings	438,331							438,331
Computer and communication equipment	59,504		485					59,989
Transportation equipment	10,767		- (		1,000			9,767
Office equipment	175,859		2,616		۰			178,475
Leasehold improvements	73,532							73,532
Other equipment	1,914				2)			1,912
	951,791	S	$3,101$ (\$		1,002)	S		953,890

	Year ended December 31, 2015
Cost	Opening net book amount		Additions		Disposals		Reclassifications	Closing net book amount
Land	\$ 191,884 \$			$-$ \$	$\blacksquare$	S	$\sim$	\$	191,884
Buildings	438,331								438,331
Computer and communication equipment	57,556		1,948						59,504
Transportation equipment	9,567		1,200						10,767
Office equipment	171,640		4.219						175,859
Leasehold improvements	47,000		-				26,532		73,532
Other equipment	1,943		- (		29)				1,914
Construction in progress	152		26.380				26,532)
	\$ 918,073	\$	33,747 (\$		29) S		$\blacksquare$	\$	951.791

					Year ended December 31, 2016
Accumulated depreciation	Opening net book amount		Additions		Disposals	Reclassifications		Closing net book amount
Land	\$ 127,798 \$		8,159 \$		$\blacksquare$	\$ $\sim$	\$	135,957
Computer and communication equipment	45,164		5,077		$\blacksquare$			50,241
Transportation equipment	6,370		900		806)			6,464
Office equipment	126,366		11.966			۰		138,332
Leasehold improvemnets	47,884		1.325		-			49,209
Other equipment	1,452		146					1,598
	\$ 355,034	S	27,573	-65	806)	-S ٠	S	381,801

	Year ended December 31, 2015
Accumulated depreciation		Opening net book amount		Additions		Disposals		Reclassifications		Closing net book amount
Buildings	\$	119,639	S	$8,159$ \$		$\overline{\phantom{a}}$	-\$	$\omega$ .	\$	127,798
Computer and communication equipment		39,647		5.517		$\qquad \qquad \blacksquare$				45,164
Transportation equipment		5,745		625		$\overline{\phantom{0}}$				6,370
Office equipment		114,138		12,228		$\overline{\phantom{a}}$		٠		126,366
Leasehold improvements		47,000		884		-				47,884
Other equipment		1,178		274						1,452
		327,347	S	27,687		$\qquad \qquad \blacksquare$			\$	355,034

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

(11) Investment property

A. Details of book values are as follows:

		December 31, 2016	December 31, 2015
Land	S	265,550	265,550
Leased assets-land		2,567,429	2,567,486
Leased assets-buildings		3, 137, 449	3,226,616
		5,970,428	6,059,652

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

						Year ended December 31, 2016
		Opening net								Closing net
Cost		book amount		Additions		Disposals	Reclassifications			book amount
Land	\$	265,550	\$	÷.	\$		\$		\$	265,550
Leased assets-land		2,567,486				57)				2,567,429
Leased assets-buildings		3,967,538				4,352)				3,963,186
	S	6,800,574			(3)	4,409)	S			6,796,165
						Year ended December 31, 2015
		Opening net								Closing net
Cost		book amount		Additions		Disposals	Reclassifications			book amount
Land	\$	203,494	$\mathbf{\hat{S}}$	÷,	\$		\$	62,056	S	265,550
Leased assets-land		2,567,621			(	135)				2,567,486
Leased assets-buildings		3,977,875				10,337)				3,967,538
	\$	6,748,990			(3)	10,472)		62,056		6,800,574
						Year ended December 31, 2016
		Opening net								Closing net
Accumulated depreciation		book amount		Additions		Disposals	Reclassifications			book amount
Leased assets-buildings		740,922		85,604		789)	\$			825,737
						Year ended December 31, 2015
		Opening net								Closing net
Accumulated depreciation		book amount		Additions		Disposals	Reclassifications			book amount
Leased assets-buildings	\$	656,810		85,788	$\left( \mathcal{S}\right)$	1,676)	$\frac{1}{2}$		\$	740,922

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

	Years ended December 31,
	2016	2015
Rental revenue from the lease of the investment property	294,260	294,612
Direct operating expenses arising from the investment property that generated rental income in the period	156,000	157,872
Direct operating expenses arising from the investment property that did not generate rental income in the period

• D. As of December 31, 2016 and 2015, the fair value of the investment property held by the Company was \$12,886,955 and \$12,948,124, respectively. The Company's 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.

(12) Intangible assets

A. Details of book values are as follows:

	December 31, 2016	December 31, 2015
Service concession	2,239,187	2,300,439

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

			Year ended December 31, 2016
Cost	Opening net book amount	Additions	Disposals	Reclassifications	Closing net book amount
Service concession	2,868,372	S			2,868,372
			Year ended December 31, 2015
	Opening net				Closing net
Cost	book amount	Additions	Disposals	Reclassifications	book amount
Service concession	2,868,372	S ٠			2,868,372
			Year ended December 31, 2016
	Opening net				Closing net
Accumulated Amortisation	book amount	Additions	Disposals	Reclassifications	book amount
Service concession	\$ 567,933	61,252 \$	S ۰.	S $\bullet$	629,185 S

				Year ended December 31, 2015
Accumulated Amortisation	Opening net book amount	Additions		Disposals		Reclassifications	Closing net book amount
Service concession	506,680 S	\$	61,253	$\overline{\mathbf{3}}$	${\bf S}$		\$ 567,933
C. Details of amortisation on intangible assets are as follows:
						For the years ended December 31,
				2016			2015
Operating costs-amortization expenses			\$		61,252	\$	61,253
(13) Short-term borrowings
				December 31, 2016			December 31, 2015
Secured borrowings			\$		80,000	$\mathbf{\hat{S}}$	505,000
Unsecured borrowings					2,135,659		1,759,874
			\$		2,215,659	\$	2,264,874
Interest rate range				1.53%~2.06%			1.92%~2.51%
For details of pledged assets, please refer to Note 8.
(14) Short-term notes payable
				December 31, 2016			December 31, 2015
Commercial papers			\$		340,000	\$	880,000
Less: Unamortised discount					306)		126)
			\$		339,694	\$	879,874
Interest rate range				$0.58\%$ ~1.02%			0.55%~0.94%

A. The above commercial papers were issued by banks and bills financial institutions.

B. For details of pledged assets, please refer to Note 8.

(15) Receipts in advance

$\beta$

Item		December 31, 2016	December 31, 2015
Advance real estate receipts	\$	880,026 \$	1,475,394
Advance rent		132,381	158,054
Other advance receipts		959	807
	S	1,013,366	\$ 1,634,255

(16) Bonds payable

		December 31, 2016		December 31, 2015
2012 1st secured ordinary bonds payable	\$	2,000,000	S	2,000,000
2013 1st secured ordinary bonds payable		2,500,000		2,500,000
		4,500,000		4,500,000
Less: Current portion		2,000,000)
	S	2,500,000	S	4,500,000

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

(17) Long-term borrowings

	December 31, 2016	December 31, 2015
Secured bank borrowings	\$ 5,550,034	\$ 6,391,026
Unsecured bank borrowings	100,000	270,000
	5,650,034	6,661,026
Less: Current portion	$1,176,015$ )	362,870)
	4,474,019	6,298,156
Commercial paper	2,339,600	589,600
Less: Unamortised discount	2,260)	443)
	6,811,359	\$ 6,887,313
Range of maturity dates	2017.02.08~2027.11.02	2016.06.24~2027.11.02
Range of interest rates	$0.55\% - 2.70\%$	$1.25\% \sim 3.16\%$

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

• B. The Company and financial institutions entered into a contract for a syndicated borrowing. The Company shall redraw revolving credit line to issue abovementioned commercial paper during the credit term. For the related information, please refer to Note $9(9)$ and $9(11)$ .
• C. For details of pledged assets, please refer to Note 8.
• (18) Provisions-replacement cost

	Years ended December 31,
		2016	2015
At January 1	\$	84,517 \$	81,720
Additions		33,470	30,394
Used		42,780)	27,597)
At December 31	\$	S 75,207	84,517

$(19)$ Pension

A.(a) The Company has 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 contributes 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 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 next year, the Company will make contributions to cover the deficit by next March.

(b) The amounts recognized in the balance sheet are determined as follows:

		December 31, 2016	December 31, 2015
Present value of defined benefit obligations	(\$	$118,729$ (\$)	111,723
Fair value of plan assets		49.876	5,009
Net defined benefit liability	$\binom{6}{5}$	$68,853$ ) (\$	106,714)

(c) Changes in net defined benefit liability are as follows:

		Present value of
	defined benefit			Fair value		Net defined
		obligations	of plan assets			benefit liability
Year ended December 31, 2016
Balance at January 1	$\left( \mathbb{S}\right)$	111,723) \$		$5,009$ (\$		106,714)
Current service cost		645)				645)
Interest (expense) income		1,899)		85		1,814)
		114,267)		5,094		109,173)
Remeasurements:
Change in financial assumptions		3,512)		- (		3,512)
Experience adjustments		$5,738$ ) (		42) (		5,780)
		$9,250)$ (		42)		9,292)
Pension fund contribution				44,824		44,824
Paid pension		4,788				4,788
Balance at December 31	(\$	118,729)	S	49,876	(S)	68,853)

		Present value of
	defined benefit obligations		Fair value		Net defined
			of plan assets		benefit liability
Year ended December 31, 2015
Balance at January 1	$\left( \mathcal{S}\right)$	93,186) \$	$3,590$ (\$		89,596)
Current service cost		522)			522)
Interest (expense) income		1,864)	72		1,792)
		95,572)	3.662		91,910)
Remeasurements:
Change in financial assumptions (		3,526)			3,526)
Experience adjustments		12,625)	89		12,536)
		16,151)	89		16,062)
Pension fund contribution			1,258		1,258
Balance at December 31
	3	111,723)	5,009	$($ \$	106,714)

(d) The principal actuarial assumptions used were as follows:

	Years ended December 31,
	2016	2015
Discount rate	1.40%	1.70%
Future salary increases	1.50%	1.50%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

	Discount rate		Future salary increases
	Increase 0.25%		Decrease 0.25%		Increase $0.25%$		Decrease 0.25%
December 31, 2016 Effect on present value of defined benefit obligation	2,937		3.044	S	2.734	(S	2,655)
	Discount rate			Future salary increases
	Increase 0.25%		Decrease 0.25%		Increase 0.25%		Decrease 0.25%
December 31, 2015 Effect on present value of defined benefit obligation	(2,794)		3.243		2.911	(S	2,575)

The sensitivity analysis above is based on other conditions that are unchanged but only one assumption is changed. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the

balance sheet are the same.

• (e) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2017 amounts to \$764.
• (f) As of December 31, 2016, the weighted average duration of that retirement plan is 11 years.
• B.(a) Effective July 1, 2005, the Company has 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 contributes 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 plan of the Company for the years ended December 31, 2016 and 2015 were \$7,624 and \$7,499, respectively.

(20) Share capital

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

	Years ended December 31
	2016	2015
Shares at January 1 and December 31	1,622,671	1,622,671

• B. The Company's subsidiaries, 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 had been completed on November 18, 2015.
• C. As of December 31, 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 December 31, 2016 and 2015, the Company's subsidiary, Prince Apartment Management Maintain Co., Ltd. held the Company's stocks for maintaining equity interest in the Company. The amount of shares held by the subsidiaries was 655 thousand, the average par value was both NT\$1.52 per share, and the fair value was NT\$10.50 and NT\$9.40 per share, respectively.

(21) 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
Balances as of January 1 and December 31	S	1,375,442	\$	877,839	S	7,232		2,260,513
		Capital surplus
		Share		Treasury share
2015		premium		transaction		Others		Total
Balance at January 1	\$	1,408,500	S	514,061	S	7,232	S	1,929,793
Treasury share transactions		33,058)		363,778				330,720
Balance at December 31		1,375,442		877,839	\$	7,232		2,260,513

(22) 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 amounts 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 years ended December 31, 2016 and 2015, respectively. On March 22, 2017, the Board of Directors proposed that total dividends for the distribution of earnings for 2016 was \$1,623,326 at \$1.0 (in dollars) per share.

(23) 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 at fair value		349,085)		- (	349,085)
Currency translation differences:
-Group				1,754	1,754)
At December 31, 2016	\$	1,058,318	$($ \$	48)	\$ 1,058,270
		Available-for-sale investment		Currency translation	Total
At January 1, 2015	S	1,434,529	\$	1,690	\$ 1,436,219
Available-for-sale investment:
-Loss at fair value		27,126)		- (	27,126)
Currency translation differences:
-Group				16	16
At December 31, 2015		1,407,403	\$	1,706	\$ 1,409,109

(24) 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
December 31, 2016
Assets
Notes receivable, net	S	26,027	S	16,930	-S	42,957
Accounts receivable, net		79,952		3,722		83,674
Inventories		9,290,432		12,086,768		21,377,200
	S	9,396,411	S	12,107,420	\$	21,503,831
Liabilities
Notes payable	\$	15,052	-S		$- S$	15,052
Accounts payable		745,572		678,229		1,423,801
(including related parties)
		760,624	S	678,229	\$	1,438,853

	Within 12 months	Over 12 months			Total
December 31, 2015
Assets
Notes receivable, net	\$ 37,603	\$	671	S	38,274
Accounts receivable, net	820,177		3,722		823,899
Inventories	8,904,870		12,406,513		21,311,383
	\$ 9,762,650	\$	12,410,906	$\mathcal{S}$	22,173,556
Liabilities
Notes payable	\$ 11,094	$\boldsymbol{\mathcal{S}}$		$\mathcal{S}$	11,094
Accounts payable	2,016,244		596,364		2,612,608
(including related parties)
	\$ 2,027,338	\$	596,364	\$	2,623,702
(25) Operating revenue
		Years ended December 31,
			2016		2015
Construction revenues		\$	5,274,930	\$	8,030,232
Rental revenues			353,578		356,161
Service concession revenue
-Operating service revenue			372,719		373,279
Other revenues			3,143		3,368
		\$	6,004,370	\$	8,763,040
(26) Other income
			Years ended December 31,
			2016		2015
Interest income		\$	7,287	\$	7,572
Dividend income			93,755		134,112
Others			131,935		98,048
		\$	232,977	\$	239,732

$\sim 10^7$

(27) Other gains and losses

	Years ended December 31,
		2016	2015
Net currency exchange (losses) gain	(\$	$7,185$ \$	14,676
Net gain on financial assets at fair value through
profit or loss		384	445
Loss on disposal of property, plant and equipment
(including investment property)		$1,473)$ (	4,307)
Others		255,010	31,225
		246,736	42,039

	Years ended December 31,
	2016		2015
Interest expense:
Bank borrowings	\$ 25,660	S	91,341
Commercial paper	30,084		30,373
Ordinary bond	120,946		123,953
Endorsement and guarantee	24,208		36,345
Others	1,476		1,701
	\$ 202,374		283,713

(29) Expenses by nature

$(28)$ Finance costs

	Year ended December 31, 2016
		Operating costs	Operating expenses			Total
Employee benefit expense
Wages and salaries	\$	1.136	- \$	417,054	S	418,190
Labor and health insurance fees				22,279		22,279
Pension costs				10,083		10,083
Other employee benefit expense				22,392		22,392
		1,136		471,808		472,944
Depreciation		85,604		27,573		113,177
Amortisation		61,252				61,252

	Year ended December 31, 2015
		Operating costs		Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	1,351	\$	484,465	-S	485,816
Labor and health insurance fees				17,208		17,208
Pension costs				9,813		9,813
Other employee benefit expense				29,336		29,336
		1,351		540,822		542,173
Depreciation		85,788		27,687		113,475
Amortisation		61,253				61,253

A. According to the Articles of Incorporation of the Company, the ratio of distributable profit of the current year shall not be lower than 2% for employees' compensation and shall not be higher than 3% for directors' and supervisors' remuneration. If a company has accumulated deficit, earnings should be channeled to cover losses.

Employees' compensation will be distributed in the form of cash or shares and includes employees of subsidiaries who satisfy certain conditions and are qualified.

Aforementioned distributable profit of the current year is profit before tax of the current year before deduction of employees' compensation and directors' and supervisors' remuneration.

B. For the years ended December 31, 2016 and 2015, employees' compensation was accrued at \$185,821 and \$244,705, respectively; while directors' and supervisors' remuneration was accrued at \$63,218 and \$83,250, respectively. The aforementioned amounts were recognized in salary expenses.

The employees' compensation and supervisors' and directors' remuneration were accrued based on the percentage as prescribed in the Company's Articles of Incorporation of distributable profit of current year for the year ended December 31, 2016. The distributed amounts resolved by the Board of Directors were in agreement with the accrued amounts. The employees' compensation will be distributed in the form of cash.

Employees' compensation and directors' and supervisors' remuneration for 2015 as resolved by the shareholders during their meeting were in agreement with those amounts recognised in profit or loss for 2015.

Information about employees' compensation and directors' and supervisors' 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.

(30) Income tax

• A. Income tax expense
• (a) Components of income tax expense:

Years ended December 31,
	2016		2015
S			23,311)
	21,397		82,522
	2.535)		11,785
	82,183		138,254
	249,023		209,250
	249,023		209,250
			147,978 (\$

(b) Reconciliation between income tax expense and accounting profit:

	Years ended December 31,
	2016			2015
Tax calculated based on profit before tax and statutory tax rate	\$	315,896	\$	415,999
Effect recognized from adjustments under tax regulations		$143,805$ (		380,099)
Additional 10% tax on undistributed earnings		21,397		82,522
Effect from investment tax credits		$24,113$ ) (		59,211)
Prior year income tax (overestimation) underestimation (		2,535		11,785
Land value increment tax		82,183		138,254
Income tax expense		249,023	S	209,250

B. According to the Act for Promotion of Private Participation in Infrastructure Projects, details of the amount the Company is entitled as investment tax credits and unrecognized deferred tax assets are as follows:

The Company did not have any investment tax credit nor unrecognised deferred tax assets for the year ended December 31, 2016.

December 31, 2015
		Unrecognised
Qualifying items	Unused tax credits		deferred tax assets	Expiry year
Investment	24,113		24.113	2016

C. As of December 31, 2016, the Company's income tax returns through 2014 have been assessed and approved by the Tax Authority

D. Unappropriated retained earnings:

$\bar{\beta}$

	December 31, 2016 December 31, 2015
Earnings generated in and after 1998	$3,101,014$ \$	3,508,400

E. As of December 31, 2016 and 2015, the balance of the imputation tax credit account was \$83,807 and \$53,573, respectively. The creditable tax rate was 4.74% for 2015 and is estimated to be 8.15% 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.

(31) Earnings per share

Year ended December 31, 2016
		Weighted average
		number of ordinary	Earnings
		shares outstanding	per share
			(in dollars)
\$	1,609,189	1,622,671	\$ 0.99
S	1,609,189	1,622,671
		19,768
	1,609,189	1,642,439	0.98
			Amount after tax (shares in thousands)

			Year ended December 31, 2015
			Weighted average
			number of ordinary	Earnings
			shares outstanding	per share
			Amount after tax (shares in thousands)	(in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders	S	2,237,800	1,622,671	\$ 1.38
Diluted earnings per share
Profit attributable to ordinary shareholders	S	2,237,800	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation			27,220
Profit attributable to ordinary shareholders
plus assumed conversion of all dilutive
potential ordinary shares		2,237,800	1,649,891	\$ 1.36
$\mathbf{A}$

(32) Non-cash transactions

Investing and financing activities with no cash flow effects:

	Years ended December 31,
	2016		2015
1. Land held for construction site reclassfied to investment property		$\overline{\phantom{0}}$	62,056
2. Available-for-sale financial assets - non-current, acquired from business combinations	S	$\ddot{\phantom{1}}$	2,186
3. Financial assets measured at cost – non-current, acquired from business combinations	ዩ		11.486

7. RELATED PARTY TRANSACTIONS

$\bar{z}$

(1) Names of related parties and their relationship with the Company

Names of related parties	Relationship with the Company
Cheng-Shi Investment Holdings Co., Ltd. (CSIHC)	The Company's subsidiary
Prince Property Management Consulting Co., Ltd. (PPMCC)	The Company's subsidiary
Dong-Feng Enterprises Co., Ltd.	The Company's subsidiary
Time Square International Co., Ltd.	The Company's subsidiary
Prince Industrial Co., Ltd.	The Company's subsidiary
Prince Real Estate Co., Ltd. (Prince Real Estate)	The Company's subsidiary
Jin Yi Xing Plywood Co., Ltd. (Jin Yi Xing)	The Company's subsidiary

Names of related parties	Relationship with the Company
The Splendor Hotel Taichung (The Splendor)	The Company's subsidiary
Ta-Chen Construction & Engineering Corp.	The subsidiary of CSIHC
(Ta-Chen Construction & Engineering)
Prince Utility Co., Ltd. (Prince Utility)	The subsidiary of CSIHC
Cheng-Shi Construction Co., Ltd.	The subsidiary of CSIHC
(Cheng-Shi Construction)
Prince Security Co., Ltd. (Prince Security)	The subsidiary of PPMCC
Prince Apartment Management Maintain Co., Ltd.	The subsidiary of PPMCC
(Prince Apartment)
Uni-President Development Corp.	The Company's associates
Tainan Spinning Co., Ltd.	The Company's other related party
President Chain Store Corporation	The Company's other related party
Chen Kao-Hui	The Company's Chairman
Hsieh, Ming-Fan	The Company's General Manager

For other related parties over which the Company exercises significant influence but with which the Company had no material transaction, please refer to Note 13 for related information.

(2) Significant related party transactions and balances

A.Sales

(a)Rental income:

	Years ended December 31,
	2016	2015
- Other related parties	47,775	47,334
- Subsidiaries	3,045	3,115
	50,820	50,449

Rent is determined by mutual agreements and is collected monthly.

B.Purchases

(a) Details of the Company's subcontracting to related parties and its purchases from related parties for the years ended December 31, 2016 and 2015 are as follows:

	Years ended December 31,
		2016	2015
Construction subcontracting:
$-$ Subsidiaries	\$	962,976	- \$	1,275,486
Purchases of services:
$-$ Subsidiaries		15,846		10,828
Purchases of goods:
$-$ Subsidiaries		12,074		13,232
Land held for construction site:
$-$ Subsidiaries (Note)				829,021
	\$	990,896	\$	2,128,567

Note: On August 3, 2015, the Company purchased the land of Ren Wu New Hougang West Section No. 52, etc. from Jin Yi Xing. The total purchase amount was \$829,021 and obligation receivable was used to offset partial payment.

The Company subcontracted building construction and utilities engineering to related parties, Ta-Chen Construction Company and Prince Utility Company and Chen-Shi Construction Company. Under those subcontracts, acceptance would be done according to the progress of the construction and engineering; payments would be made based on agreed-upon terms of the two parties. Purchases from related parties, Prince Security Company, Prince Apartment and Chenshi, Construction Company, are based on negotiated terms because the related purchase transactions are unique and not available from third parties.

• (b)As of December 31, 2016 and 2015, unsettled construction contracts that were signed by the Company and Chen-Shi Construction Company totaled \$2,232,449 and \$1,709,505, respectively; payments already made for those contracts amounted to \$493,139 and \$232,839, respectively; and future payments required under those contracts amounted to \$1,739,310 and \$1,476,666, respectively.
• (c)As of December 31, 2016 and 2015, unsettled construction contracts that were signed by the Company and Ta-Chen Construction Company both totaled to \$259,621; payments already made for those contracts amounted to \$180,123 and \$121,373, respectively; and future payments required under those contracts amounted to \$79,498 and \$138,248, respectively.
• (d)As of December 31, 2016 and 2015, unsettled construction contracts that were signed by the Company and Prince Utility Company totaled \$1,240,645 and \$489,411, respectively; payments already made for those contracts amounted to \$233,970 and \$24,500, respectively; and future payments required under those contracts amounted to \$1,006,675 and \$464,911, respectively.

C. Other assets

• (a) 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. The 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. Furthermore, the Company and A party jointly established the Splendor Hotel Taichung and \$450,000 invested in the share capital was drawn down from the abovementioned price of the creditor's rights.
• (b) The Company and China Metal Products Co., Ltd. jointly established The Splendor Hotel Taichung ("A party") by contributing 50% of the investment each. On November 1, 2006, A party signed a certain assets transfer contract with The Splendor Hotel Chunggang ("B party"). Under the contract, A party should pay B party for employees' services, goods purchases and taxes. The above payments of \$352,310 required of A party were made from the share capital of its initial establishment.

The Company's creditor's rights above amounting to \$2,375,000 were originally receivable from B party. After B party and A party signed a certain assets transfer contract in December, 2006, the creditor's right to the above receivables were transferred to A party. And A party repaid \$1,800,000 to the Company in June 2007. As of December 31, 2016 and 2015, the Company's creditor's rights receivable from A party both amounted to \$575,000.

(c) Details of the Company's capital investment in The Splendor Hotel Taichung in the past are as follows:

2006		\$	225,000
2008			105,000
2009			615,000
2010	٠.		30,000
		\$ ------------	975,000

• (d) As of December 31, 2015, the Company paid for the construction of Prince Cloud and received the payment for pre-sale of Prince Cloud on behalf of Prince Real Estate Co., Ltd. which amounted to \$60,680 (shown as other receivables - related parties) and \$117,450 (shown as other payables - related parties), respectively. No such transaction occurred as of December 31, 2016.
• D. Accounts payable

		December 31, 2016 December 31, 2015
Subsidiaries	5.948	S 334,393
E. Rent expense
		Years ended December 31,
	2016	2015
Associates	32,138	29,349

F. The information on endorsement, guarantees and financial support commitments among related parties are described in Note 9(1).

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

(3) Key management compensation

		Years ended December 31,
		2016	2015
Salaries and other short-term employee benefits	S	100,723	-S	140,260
Termination benefits
Post-employment benefits
Other long-term benefits		$\blacksquare$
Share-based payments
		100,723		140,260

8. PLEDGED ASSETS

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

Pledged asset	December 31, 2016	December 31, 2015	Purpose
Demand deposits, certificate of deposit and checking deposit (shown as "other financial assets - current" and "other financial assets - non-current")	1,033,201 S	S 2,487,628	To obtain a higher credit for client, performance guarantee, construction performance guarantee, short-term and long-term borrowings.
Financial assets at fair value through profit or loss	78,253	77.992	Long-term borrowings
Land held for construction	7,808,509	6.974.863	Short-term borrowings, notes and bills payable and long-term borrowings
Construction in progress	2,803,892	2,133,843	Short-term borrowings, notes and bills payable and long-term borrowings
Buildings as held for sale	2,270,855		- Issued long-term notes and bills
Available-for-sale financial assets	757,036		1,028,798 Short-term borrowings, notes and bills payable
Financial assets carried at cost	575,426		575,426 Short-term borrowings, notes and bills payable
Investments accounted for under equity method	1,443,473		1,582,560 Short-term borrowings, notes and bills payable
Land	91.782	91.782	Short-term borrowings, notes and bills payable and long-term borrowings
Buildings and structures	215,511	217,972	Short-term borrowings, notes and bills payable and long-term borrowings
Investment property	3,816,598	4,012,058	Short-term borrowings, notes and bills payable and long-term borrowings
	20,894,536	19,182,922 S

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED 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:

	December 31, 2016		December 31, 2015
		Total				Total
		endorsement		Amount		endorsement		Amount
Name of company		amount		drawn		amount		drawn
The Splendor Hotel Taichung	S	2,000,000	S	1,682,206	S	2,000,000		1,708,520
Prince Real Estate Co., Ltd.		2,500,000		780,000
Ta-Chen Construction & Engineering Corp.		1,900,000				1,900,000
		6,400,000		2.462,206		3,900,000		1,708,520

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

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

C. 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 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) 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.
• (3) Information on the commitments of the Company relating to financial support to related parties is described in Note 7(2).
• (4) 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 December 31, 2016 and 2015, A party had provided performance guarantee with a guarantee letter issued by the bank, both 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.
• (5) 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 student dormitories and motorcycle parking lots for 35 years from the start of operations 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 December 31, 2016 and 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.
• (6) 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 parent company only 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.

• (7) 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.
• (8) 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. Aforementioned case was completed and settled in advance in January 2016.
• (9) 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 as the fund for purchase 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.
• (10) 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. The syndicated loans include medium-term (secured) commercial paper guarantees with the office building in Tanmei as collateral, provided working capital to the Company. The duration of commercial paper should be 90 days, however, commercial paper issued within the duration should have the same maturity date with issued commercial papers. It could be redrawn during the credit period and the Company shall repay in full for the balance of

unpaid principal on maturity date.

• (11) The Company signed a syndicated loan contract with 3 banks Bank of Taiwan Co., Ltd. as the lead bank for a credit line of \$3.045 billion. The syndicated loans include medium-term (secured) guarantee payments receivable and medium-term (secured) commercial paper guarantees. Bank of Taiwan Co., Ltd. and the Agricultural Bank of Taiwan lent medium-term (secured) guarantee payments receivable of \$2,545 million which are used as guarantee for issuing corporate bonds. Prudential Securities lent medium-term (secured) commercial paper guarantees of \$500 million which are used for repayment of financial institutions and to improve the financial structure. Depending on the individual credit line, the Company should renew the contract with the securities annually and sign guarantee letters such as 'guarantee of commercial paper' or 'purchase contract'. 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.
• (12) 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:

		December 31, 2016 December 31, 2015
Lot No. 12-12 and No. $601-1$ Guo-An Sec.,
Xitun District, Taichung City (Note)		181,090

• Note: The case obtained the license of use in August 2016, the guarantee has been returned in the same month.
• (13) 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, 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, respectively, 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 installments according to the contractual terms. The Company had provided such performance guarantee with guarantee letter of the bank as follows:

		December 31, 2016 December 31, 2015
Taichung City Koan An Section No. 591-1	63,880	63,880
Tainan City Hou Guan Section No. 34 (Note)	$\overline{\phantom{a}}$	83,100
Nanzi Dist., Kaohsiung City Nanzi 1st
section No. 158, etc.	125,540	125,600

Note: The case was completed in November 2015, the guarantee has been returned in February 2016.

(14) 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 parties 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 Company in installments. As of December 31, 2016 and 2015, balance of the performance bonds were as follows:

		350,000
		19,570
		December 31, 2016 December 31, 2015 350,000 \$ 19,570 \$

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Company's capital management is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditures, obligation repayment and dividend distribution. The Company 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 amortised cost (including notes and accounts receivable, other receivables, other current 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 and guarantee deposits received) are approximate to their fair values. Furthermore, the Company'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 Company'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 Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial position and financial performance.
• (b) Risk management is carried out by a treasury department (Company's finance & accounting division) under policies approved by the Board of Directors. The Company's finance & accounting division evaluates and hedges financial risks in close cooperation with the Company'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 nonderivative financial instruments, and investment of excess liquidity.
• C. Significant financial risks and degrees of financial risks
• (a) Market risk

Foreign exchange risk

The Company 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 Company to manage its foreign exchange risk against its functional currency. The Company is required to manage its entire foreign exchange risk exposure with the Company treasury. Foreign exchange risk does not have significant impact to the Company.

Interest rate risk

The Company's interest rate risk arises from short-term and long-term borrowings (not including commercial paper). Borrowings issued at variable rates expose the Company 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 Company to fair value interest rate risk. The Company'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 years ended December 31, 2016 and 2015 would have been \$7,866 and \$8,926 lower/higher, respectively.

Price risk

The Company has investments in equity instruments, and the prices would change due to the change of the future value of investee companies. However, the Company has set a stop-loss point and it was assessed that the Company 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 years ended December 31, 2016 and 2015 would have increased/decreased by \$37,600 and \$7,600, 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 \$13,327 and \$13,628 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 Company 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 Company's receivables, which are the receivables from preselling 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 Company was not exposed to significant credit risk from receivables.
• iii. For the years ended December 31, 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 Company and aggregated by the Company's finance $\&$ accounting division. The Company's finance $\&$ accounting division monitors rolling forecasts of the Company'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 Company'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.

		December 31, 2016
		Between 1 to 3 years Over 3 years
\$	2,239,654	\$	\$
	340,000
	15,052
	817,128	678,228
	672,161
	67,150	31,651	29,018
	2,065,350	2,538,750
	1,194,401	4,402,930	2,989,561
		December 31, 2015
	Within 1 year	Between 1 to 3 years Over 3 years
\$	2,300,197	\$	\$
	880,000
	11,094
Accounts payable (including related party)	2,086,752	596,364
	873,055
	71,941	20,138	35,393
	65,350	2,104,100	2,500,000
	Accounts payable (including related party)		Within 1 year

(3) Fair value estimation

• A. Details of the fair value of the Company'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 Company's investment property measured at cost are provided in Note 6(11).
• 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 Company'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 Company'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 December 31, 2016 and 2015, is as follows:

December 31, 2016		Level 1	Level 2		Level 3		Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities	\$	378,253	\$	S.		\$	378,253
Available-for-sale financial assets
Equity securities		1,039,027			142,996		1,182,023
	\$	1,417,280	\$	\$	142,996	\$	1,560,276
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	$\mathbf S$	77,992	S	\$		S.	77,992
Available-for-sale financial assets
Equity securities		1,349,835			192,557		1,542,392
		\$1,427,827	S	\$	192.557	S.	1.620.384

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

The instruments the Company 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 preice	Net asset value

E. For the years ended December 31, 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 years ended December 31, 2016 and 2015:

Non-derivative equity instruments	2016	2015
At January 1	192,557 \$	272,651
Losses recognised in other comprehensive income (Note)	$47,984$ (	80,094)
Proceeds from capital reduction	1,577
At December 31	142,996	192,557

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

• G. For the years ended December 31, 2016 and 2015, there was no transfer into or out from Level 3.
• H. Finance and Accounting department 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:

		Fair value at December 31, 2016	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Non-derivative equity
Unlisted shares	S	142,996	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value
		Fair value at December 31, 2015	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Non-derivative equity
Unlisted shares	\$	192,557	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value

J. The Company 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:

						December 31, 2016
							Recognised in other
					Recognised in profit or loss		comprehensive income
				Favourable	Unfavourable	Favourable		Unfavourable
		Imput	Change	change	change	change		change
Financial assets
Equity instruments	S	29,234	±1%				292 (S)	292)
						December 31, 2015
							Recognised in other
					Recognised in profit or loss		comprehensive income
				Favourable	Unfavourable	Favourable		Unfavourable
		Imput	Change	change	change	change		change
Financial assets

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: Please refer to table 6.
• 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 7.
• H. Receivables from related parties reaching \$100 million or 20% of paid-in capital or more: Please refer to table 8.
• I. Trading in derivative instruments undertaken during the reporting periods: None.
• J. Significant inter-company transactions during the reporting periods: Please refer to table 9.
• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 10.

• (3) Information on investments in Mainland China None.
• 1. SEGMENT INFORMATION

Not applicable.

į
ׇׇ֠֕֞
i

Loans to others

Year ended December 31, 2016

(Except as otherwise indicated) Expressed in thousands of NTD

				) 의	Note 2			Note 3
			Ceiling on total	loans granted.	9,718,652			85,181		138,891 Note 4
		imit on loans	granted to a	$\frac{1}{2}$ single party	500,000 \$			30,000		38,891
			Collateral	$\frac{\text{Item}}{\text{None}} \frac{\text{Value}}{\$} - \frac{\sin}{\$}$				None		None
	Allovance	for	doubtful	$\frac{ac \text{counts}}{a \text{counts}}$
		Reason for	short-term	financing Additional operating capital					Additional operating capital	Additional	operating capital
	Amount of	ransactions	Nature of with the loan borrower
				$\begin{array}{c c}\n & \text{lean} & \text{-}\n\ \hline\n \text{Short-term} & \text{?}\n\ \text{finarcing} & \text{.}\n\end{array}$					Short-term financing	Short-term financing
					2.7			27		27
				$d$ rawn down rate				11,500
		Balance at	General ledger related ended December 31, December 31, Actual amount Interest	2016				15,000
					200,000 \$			15.000		200,000
Maximum	outstanding balance	during the year		2016
		ls a
				account party	Other			Other	receivables-		related parties
						2 Development Construction & receivables -	Engineering Corp. related parties	Prince Security Prince Property	Consulting Co., Ltd related parties Management	Time Square Prince Housing & Other	International Co., Development Corp. receivables -
				Note 1) Creditor Borrower	0 Prince Housing Ta-Chen		Corp.		Co., Ltd.		É
			ż

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 NTS1.5 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 NTS20 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 NTS30 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.

Prince Housing & Development Corp. and Subsidiaries Provision of endorsements and guarantees to others Year ended December 31, 2016

$\overline{\phantom{a}}$

Expressed in thousands of NTD (Except as otherwise indicated)

Party being endorsed/guaranteed

							Outstanding
							endorsement/			Ratio of accumulated			Provision of	Provision of
			Relationship with		Maximum outstanding		guarantee		Amount of	endorsement/guarantee	Ceiling on total	Provision of	endorsements	endorsements/
			the endorser/	Limit on endorsements!	endorsernent/guarantee amount as of December 31,		arnount at		endorsements/	amount to net asset value of	amount of	endorsements	guarantees by	guarantees to the
Number	Endorser		guaranter	guarantees provided for a			December 31,	Actual amount	guarantees secured	the endorser/guarantor	endorsements/	guarantees by parent	subsidiary to parent	party in Mainland
(Note 1)	guarantor	Company name	(Note 2)	single party	š		2016	drawn down	with collateral	company		guarantees provided company to subsidiary	company	Chica	Foolnote
¢	Development Corp. Prince Housing &	Ta-Chen Construction & Engineering Corp	e,	4,859,326	Y)	1,900,000 \$	1,900,000			ž	12,148,116 G)	Þ.	z	z	Note:
÷	Development Corp. Prince Housing &	Prince Real Estate Co., E		4,659,326		1,500,000	1,500,000	780,000		Š	12,148,316	×	z	z	Noke 3
Ξ	Development Corp. Prince Housing &	The Splendar Hotel Taichung		4,859,256		1,000,000	2,000,000	1,682.216		š.	12.148.316	۰	z	z	Note:
	Done-Fong Enterprises $Cn$ , Ltd.	Development Corp. Prince Housing &		2.000,000		1,810,889					4.1880,000	z		z	Note 4
	Prince Utility Co., Ltd.	Development Corp. Prince Housing &		1,000,000		900,000	900,000	638.763		73.96	2,000,000	z		z	Note >
	Prince Real Estate Co., Ltd.	Development Corp. Prince Housing &		2,500,000		2,510,000	2,500,000	2,035,309		23.96	5,000,000	z		z	Naie G
	Ta-Chen Construction A: Engineering Corp.	Development Corp. Prince Housing &		1,500,000		927,889	927.889			129%	3,000,000	z		z	Nute 7
	Management Maintain Prince Apartment Co.11	Prince Security Co., Ltd.		20,000		20,000	20,000	10.000		27%	50,000	z	z	z	Note 8
ø	Management Consulting Prince Property Co., Ltd.	Prince Security Co., Ltd.		56,000		56,000	56,000	10,000		Š	120.000	z	z	z	Nate 9
	(1) The Company is '0'.	Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows: (2) The subsidiaries are numbered in order starting from '1'. The same company will have the same number.

Note 2: Relationship between the endorsen 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 endorseral/guaranteed subsidiary.
(3) The endorser/guarantor parent company and its subsidiaries

Note 3.in accordance with the Group's related regulations, the limit one andorsements and guarantees for any single entity is 20% of the Company's net worth based on the latest financial statements and the limit on accumul of endorsements and guarantees is 50% of the Company's net worth based on the latest financial statements.

Noe 4: In accordance with Dong-Feng Enterprises Co., Lut's retated regulations, the limit of endorsements and guarantes for any single entity is \$2,000,000, the total accordance with Dong-Feng Enterprises Co., Lut's relate

Table 2

Table 3

Prince Housing & Development Corp. and Subsidiaries

Holding of morketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
December 31, 2016

ated) Expressed in thousands of NTD

ï
I

As of December 31, 2016

$\frac{1}{2}$

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
Prince Housing & Development Corp.	Stock	Nantex Industry Co., Ltd.	None	Available-for sale financial assets - non-current	٧Ą 6,861,668	149,927	v, Note 1	21.85	Listed company. Note 3
	Stock	ScinoPharm Taiwan, Ltd.	None	Available-for sale financial assets - non-current	22 698 001	877,778	Note	78.65	Listed company, Note 4
	Stock	Simplo Technology Co., Ltd	None	Available-for sale financial assets - non-current	127,249	11,822	Note	92.90	OTC company
	Stock	Universal Venture Capital Investment Corp.	None	Available-for sale financial assets - non-current	1,400,000	13,570	Note	9,69
	Stock	Grand Bills Finance Corp.	None	Available-for sale financial assets - non-current	48,672	786	Note 1	16.15
	Stock	Chipwell Tech. Corp.	None	Available-for sale financial assets - non-current	344,488	$\frac{1}{2}$	Tais I	4,88
	Stock	Nannat Technology Co., Ltd.	None	Available-for sale financial assets - non-current	1318,851	18,257	$\frac{1}{2}$	13.84
	Stock	Southern Science Joint Development	None	Available-for sale financial assets - non-current	10,000	106,989	10.00	10,698.88
	Stock	Changing Information Technology Co., Ltd.	None None	Available-for sale financial assets - non-current	119,075 35,589	1,603 é	Note 1	13.51
	Stock Stock	President Energy Development Corp. Fornosoft International Co., Ltd.	None	Available-for sale financial assets - non-current Financial assets measured at cost - non-current	1,380,000	36,280	6,00 Note 1	2.95 36.46
	Stock	President International Development Corp.	None	Financial assets measured at cost - non-current	87,745,770	841,520	6,63	10.95	Note:
	Stock	fa-Cheng Venture Capital Investment Co., Ltd.	None	Financial assets measured at cost - non-current	759,024		Note 1
	Stock	ia-Hua Venture Capital Investment Co., Ltd.	None	Financial assets measured at cost - non-current	1,211,228		$\frac{8}{2}$	贵野
	Stock	Ever-Move Technology Co., Ltd.	None	Financial assets measured at cost - non-current	3.076		Note 1
	Stock	Chuang-Jing Technology Co., Ltd.	None	Financial assets measured at cost - non-current	12,645		Note 1	出出出出进出出
	Stock	Bao-Mao Technology Co., Ltd.	None	Financial assets measured at cost - non-current	27,933		Note 1
	Stock	lie-Lun Technology Co., Ltd.	None	Financial assets measured at cost - non-current	17,280		Note 1
	Stock	Quan-Mao Technology Co., Ltd.	None	Financial assets measured at cost - non-current	341,745		5.79
	Stock	Wei-Jun Technology Co., Ltd.	None -	Financial assets measured at cost - non-current	1,846		Note 1
	Stock	Chiels-Cheng Technology Co., Ltd.	None	Financial assets measured at cost - non-current	41,343		Note 1
	Furd	Mega Diamond Money Market Fund	None	Financial assets at fair value through profit or loss - non-current	6,301,406	78.253		12.42	Note 6
	Ĕ Fund	UPAMC James Bond Money Market Yuanta Wan Tai Money Market	Note None	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	6,663,158 6,040,325	100,000 100,000		16.56 15.01
	$\vec{E}$	ih Sun Money Market Fund	None	Financial assets at fair value through profit or loss - current	6,817,980	100,000		14,67
	Repurchase	MEGA BILLS FINANCE CO., LTD.		Cash equivalents-repurchase bonds		150,039
	Repurchase	International Bills Finance Corp.	None None	Cash equivalents-repurchase bonds		150,041
	Repurchase	China Bills Finance Corp.	None	Cash equivalents-repurchase bonds		200,000
Prince Ta-Chen Investment Co., Ltd. (?	Stock	lia-Cheng Venture Capital Investment Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	290,658
	Stock	Chieh-Cheng Technology Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	41,434
	Stock	AIRWAVETECHNOLOGIES,INC	None	Financial assets at fair value through profit or loss - non-current	300,000
	Stock	Ever-Move Technology Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	79.178
	Stock	Bao-Mao Technology Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	960,697		$\frac{5}{2}$
	Stock Stock	Integrated Solutions Technology, Inc. Coyatek Technology , Inc.	None None	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	71,92.3 18.524
	Stock	Quan-Mao Technology Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	9.897
	Stock	ie-Lun Technology Co. Ltd.	None	Financial assets at fair value through profit or loss - non-current	6.617
	Stock	Chuang-Jing Technology Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	4,842
	Sinck	Wei-Jun Technology Co., Ltd.	None	Financial assets at fair value through profit or loss - non-current	ξŌ
	Stock	lia-Hua Venture Capital Investment Co., Ltd.	Note Note	Financial assets at fair value through profit or loss - non-current	179.897
Ta-Chen Construction & Engineering	Stock	Nantex Industry Co., Ltd.		Financial assets at fair value through profit or loss - current	12.088.420	264,132	Tetel	21.85	Note 7
	Stock	Chipwell Tech. Corp.	None	Available-for sale financial assets - non-current	149,990	1,708	Note I	4,88
	Stock	Nanmat Technology Co., Ltd.	Norte None	Available-for sale financial assets - non-current	1,479,086	115,000 20,471	5.09	13,84
	Repurchase Repurchase	International Bills Finance Corp. China Bills Finance Corp.	None	Cash equivalents-repurchase bonds Cash equivalents-repurchase bonds		110,000
	Repurchase	MEGA BILLS FINANCE CO., LTD.	None	Cash equivalents-repurchase bonds		75,000
Prince Utility Co., Ltd	Repurchase	International Bills Finance Corp.	None	Cash equivalents-repurchase bonds		20,000
	Repurchase	China Bills Finance Corp.	None	Cash equivalents-repurchase bonds		20,000
	Repurchase	MEGA BILLS FINANCE CO., LTD.	None	Cash equivalents-repurchase bonds		20,000
Prince Housing Investment Co., Ltd.	Stock	Tou Itsu Investments Inc.	None	Available-for sale financial assets - non-current	600	e,	15.00	USD 1.00

As of December 31, 2016

	Marketable
Securities held by	securities	Name of investee companies	Relationship with the securities issuer	General ledger account	Number of shares		Book value Ownership (%) Fair value		Footnote
rince Apartment Management		Stock Prince Housing & Development Corp.	Parent company	Available-for sale financial assets - non-current			Note 1	0.50
		Tainan Spinning Co., Ltd.	Neis Z	Available-for sale financial assets - non-curren
Dong-Feng Enterprises Co., Ltd.	ಕಿಂಕ ಕ ಕಾಂಕ ಕ ಕಾಂಕ ಕಾ	Nantex Industry Co., Ltd.		Available-for sale financial assets - non-current	44 A 5 A A S S A 5 A S A S A 5 A S A S A		para 2 2 2 2 2	2383 2383
		Sung Gang Asset Management Co., Ltd. Nammat Technology Co., Ltd.	a 22222	Available-for sale financial assets - non-current		$\overline{51}$
rince Security Co., Ltd.				Available-for sale financial assets - non-current		$\frac{80}{2}$	Note I
Theng-Shi Construction Co., Ltd.		JPAMC James Bond Money Market		inancial assets at fair value through profit or loss - current Cash equivalents-repurchase bonds	GHO.362	ÖQ, DIS		Š.
	tepurchase	International Bills Finance Corp.				iook
	Repurchase	MEGA BILLS FINANCE CO., LTD.	None	ash equivalents-repurchase bonds

Note 1: Percentage of Company's overteship is less than 7%.
Note 2: We have not received the function from management. Thus the relate cannot be measured.
Note 4: 11276 thousand states of containing common stock were used

$\frac{1}{2}$

Development Corp. and Subsidiaries ! Prince Housin	ars naid-in cm. the same security with the accumulated cost exceeding \$300 million or $20\%$ of the Cor Acquisition or sale of the	Jut
----------------------------------------------------------	-------------------------------------------------------------------------------------------------------------------------------------------	------------

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

	Narketable			Relationship with	Balance as at		Addition			Disposal			Balance as at December 31.
	securities	General	Counterparty the investor		January 1, 2016		(Note 3)			(Note 3)			2016
Investor	(Note 1)	ledger account	Note 2)	(Note 2)	shares	Amount	shares	Amount		shares Selling price Book value disposal			shares Amount
Prince Real Estate Co., Ltd.	Money Market	UPAMC James Bond Financial assets at fair value through profit or						24,183,754 \$ 400,000 (18,143,429) \$ 300,059 (\$ 300,000) \$					59 6,040,325 \$ 100,000
		loss-current
Prince Real Estate	Yuanta Wan Tai	Financial assets at fair					104,370,090		830,152 ( 97,706,932)	730,285 (	730, 152)	133	6.667,158	00,000
Co., Ltd.	Money Market	value through profit or loss - current
Prince Real Estate Co., Ltd.	Jih Sun Money Market Fund	value through profit or Financial assets at fair					21, 142, 437		310,000 (14,324,457)	210,036 (	210,000)	R	6,817,980	00,000
		$loss - current$
Prince Real Estate Co., Ltd.	Jih Sun Money Market Fund	value through profit or Financial assets at fair loss - current			13,678,487	200,000	8,052.760		$117,910$ (21,731,247)	$318,261$ (	317,910)	351

Note I: Marketable securities in the table refer to stocks, bonds, beneficing vertificates and other related derivative securities.
Note 2: Fill in the columns the counterpary and relationship if securities are accounted f

Table 4, Page 1

Acquisition of real estate reaching \$300 million or 20% of paid-in capital or more Prince Housing & Development Corp. and Subsidiaries

Year ended December 31, 2016

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Reason for

											acquisition of
								Relationship If the counterparty is a related party, information as to the		Basis or reference	real estate and
Real estate			Transaction		Status of			with the last transaction of the real estate is disclosed below		used in setting the status of the real		Other
$acquired$ by	Real estate acquired Date of the event amount			payment		Counterparty		counterparty owner who between the original Amount		$rac{1}{2}$	estate	commitments
Prince Housing	Ren Wu Dist. Xia Hai Lot No. 2013/06/14		Note 2 5 1,115,071			Redevelopment	Third party			Note 2	For operating	None
& Development 978, etc.		(Note 1)				zone of Xia Hai					š
Corp.						Term, Renwu District,
						Kaohsiung City
	Prince Housing Nanzi subsection No. 158 etc.	2014/11/07	\$1255,309		794,651	Taiwan Sugar	Third party			Market value	For operating	None
& Development		(Note 3)				Corporation					use
Corp.

Note 1: The transfer of fitle took phace on settlement date.
Note 2: In order to purchave on settlement date.
and, compensation for dareas from the north side of the offset-expenditure land in the redevelopment zone, the t

Company Name
Disposal of real estate reaching NT\$300 million or 20% of paid-in capital or more Year ended December 31, 2016

Table 6

Expressed in thousands of NTD
(Except as otherwise indicated)

	ther commitmen	None
vis or reference u.	in setting the price	arket valu
Reason for	disposal	The operating L.
Pelationship ww	the seller	None
	Counterparty	Third party
Gain (loss)	on disposal	249,624
tatus of collect.	· proceeds	356,366 \$
Disposal	amount	36,36
	Book value	106,742
Date of	acquisition	012/11/30 (Note \$
ansaction date	late of the event
	cal estate	Xinyi Dist., Taipei 2016/01/25 (Note 1
teal estate		e Compai.

Note 1: Contract date
Note 2: Completion date

$\frac{1}{2}$

Prince Housing & Development Corp. and Subsidiaries

Purchases or sales of goods from or to related parties reaching NTS100 million or 20% of paid-in capital or more
Year ended December 31, 2016

Table 7

Expressed in thousands of NTD

								terms compared to third party Differences in transaction		(Except as otherwise indicated)
		Relationship with the			Transaction			transactions		Notes/accounts receivable (payable)
Purchaser/seller	Counterparty	counterparty				Purchases Amount Percentage of total Credit term		Unit price $\qquad$ Credit term $\qquad$ .		Balance Percentage of Footnote
Corp.	Prince Housing & Development Cheng-Shi Construction Co., Ltd.	Subsidiary	Purchases \$	605,366	13%	Payments were paid It is reasonable It is reasonable (\$ in accordance with compared to the compared to the the contract terms	normal tradings normal tradings		2,380)	(0%)
Prince Housing & Development Prince Utility Co., Ltd. Corp.		Subsidiary	Purchases	300,288	PK.	in accordance with compared to the compared to the Payments were paid It is reasonable It is reasonable the contract terms	normal tradings normal tradings
Cheng-Shi Construction Co., Ltd. Ming-Da Enterprise Co., Ltd.		Affiliated company	(Sales)	122,680)	(1%)	in accordance with compared to the compared to the Payments were paid It is reasonable It is reasonable the contract terms normal tradings normal tradings			2,660	ξ

Table 8							Expressed in thousands of NTD (Except as otherwise indicated)
		yith Relationship	Balance as at		Overdue receivables	subsequent to the Amount collected	Allowance for
Creditor	Counterparty		the counterparty $December 31, 2016$ Turnover rate	Amount	Action taken	balance sheet date doubtful accounts
Prince Housing & Development Corp. The Splender Hotel Taichung		Subsidiary	Other assets
			- obligation receivable
			575,000

Prince Housing & Development Corp. and Subsidiaries

Significant inter-company transactions during the reporting periods Year ended December 31, 2016

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Percentage of

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 accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.
Note 4: The table only discloses transaction amounts of NTS100 million or more.

Prince Housing & Development Corp. and Subsidiaries Year ended December 31, 2016 Information on investees

Expressed in thousands of NTD (Except as otherwise indicated)

(loss) recognised by Investment income Net profit (loss) of the investee	the Company for the for the Year	Year ended ended December	Footnote December 31, 2016 31,2016	Notes I and 2 94,653 V) 71,747 G,		Notes I and 2 13,979 12,820	Note 4 20,950 69,824	Note 2 45,885 45,885	Note 2 and 9 $\tilde{16}$ 16) $\check{\cdot}$	Notes 2 and 8 3,736 3,736	Note 5 42,933 143,048	Note 2 9,954) (808, 61)	Note 2 180,136 180,136	Notes 2 142,279 157 361,186)(	Note 10 31,696 172,444 75,341	Note 2 47) (17) 9.526
			Book value	1,007.834 œ		282,007	320,555	446,709	ŧ	151,839)	1,229,770	328,715	462,969
Shares held as at December 31, 2016			Ownership (%)	100% 97,504 758		100%	30% 18,000,000	100% 428		100% 4,300,000	30% 108,000,000	50% 97,500,000	100% 73,830,000	99 65% 3,938,168	20% 200,000	100% 1,000,000
			Number of shares	1,146,925	17,146,580 181,000		120,000	140,413	1,000	876,431	1,080,000	975,000	600,000	165,410	127,400	10,000
Initial investment amount	Balance as at Balance as at	December 31, December 31,	2015 2016	s, 1,146,925	181,000		120,000	140,413		746,431	1,080,000	975,000	600,000	165,410	3.5.8	10,000
		Main business	activities	မာ investment General	Management and consulting		Hotels and catering	investment	import and export Anti-mildews	Housebuilders and sales	Leasing of buildings	Hotels and catering	Hotels and catering	Manufacture of plywoods	Real estate trading	Development of public housing and building
			Location	Taiwan	Taiwan		Taiwan	British Virgin Overseas Islands	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan
			Investee	Cheng-Shi Investment Holdings Co., Ε	Prince Property Management Consulting Co., Ltd.		Geng-Ding Co., Ltd.	Prince Housing Investment Co., Ltd.	BioSun Technology Co., Ltd.	Dong-Feng Enterprises Co., Ltd.	Uni-President Development Corp.	The Splender Hotel Taichung	Time Square International Co., Ltd.	Jin Yi Xing Plywood Co., Ltd.	Ming-Da Enterprise Co., Ltd.	Prince Industrial Co., Ltd.
			Investor	Development Corp. Prince Housing &

Table 10, Page 1

Table 10

					Initial investment amount		Shares held as at December 31, 2016		Net profit (loss) of the investee	(loss) recognised by Investment income
				Balance as at	Balance as at				for the Year	the Company for the
			Main business	December 31,	December 31,				ended December	Year ended
Investor	Investee	Location	activities	2016	2015	Number of shares Ownership (%)		Book value	31,2016	December 31, 2016	Footnote
Cheng-Shi Investment Holdings Co., Ltd	Ta-Chen Construction & Engineering Corp.	Taiwan	Construction	856,566 s,	856,566 ú	90,497,528	100%	720,876 Ø	o,	Ø 35,262	Notes 2 and 3
	Prince Utility Co., Ltd.	Taiwan	Electricity water pipe	56,025	56,025	3,070,000	100%	122,866		ı 17,703	Notes 2 and 3
Cheng-Shi Investment Holdings Co., Ltd	Cheng-Shi Construction Co., Ltd.	Taiwan	Construction	208,027	208,027	20,100,000	100%	294,76.	16,211		Notes 2 and 3
Ta-Chen Construction & Engineering Corp.	Ta-Chen International (Brunei) Corp.	Brunei	investment Overseas		9,464						Notes $2$ , 3 and 7
Prince Housing Investment $Co.$ Ltd	PPG Investment Inc.	U.S.A	investment Overseas	56,945	56,945	273	27.27%	12,974		1,645)	Note 3
	Queen Holdings Ltd.	British Virgin Overseas Islands	investment	122,034	122,034	2,730	27.27%	390,856		70,315	Note 3
Consulting Co., Ltd.	Prince Property Management Prince Apartment Management Maintain	Taiwan	Management of apartments	67,853	67,853	3,000,000	100%	73,542		2,639	Notes 2 and 3
	Prince Security Co., Ltd.	Taiwan	Security	159,611	159,611	13,172,636	100%	212,952		12,317	Notes 2 and 3
	Dong-Feng Enterprises Co., Amida Trustlink Assets Management Co, Ltd.	Taiwan	Development of public housing	305,480	305,480	21,644,062	45.21%	137,346)		725)	Note 3
Ta-Chen International (Brunei) Corp.	Ta Chen Construction (Vietnam) Corp. & Engineering	Vietnam	Construction		9,440						$-$ Notes 2, 3 and 6

Note 1: The difference between the income (loss) of the investme 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

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 l

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 p