PRINCE HOUSING & DEVELOPMENT CORP. PARENT COMPANY ONLY FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2017 AND 2016

$\overline{\phantom{a}}$

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

PWCR17000341

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, 2017 and 2016, 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, 2017 and 2016, 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.

. . . . . . . . . . . . . . . . . . . .

資誠聯合會計師事務所 PricewaterhouseCoopers, Taiwan 80048 高雄市新興區民族二路 95 號 22 樓 22F, No. 95, Minzu 2nd Rd., Xinxing Dist., Kaohsiung 80048, Taiwan T: +886 (7) 237 3116, F: +886 (7) 236 5631, www.pwc.tw

Key audit matters

Key audit matters are those matters that, in our professional judgement, 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 most significant key audit matters in our audit of the financial statements of the current period are as follows:

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, 2017, building and land sales revenue amounted to NT\$ 4,994,154 thousand, representing 87 % 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 judgement 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 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. 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.
D. We obtained Ta-Chen Construction & Engineering Corp's details of construction profit or loss and 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\$ 147,765 thousand and NT\$ 897,432 thousand as at December 31, 2017 and 2016, constituted 0.34% and 2.06% of total assets; comprehensive income of aforementioned company of NT\$ 650 thousand and NT\$ 82,591 thousand for the years then ended, constituted 0% and 6.60% 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 judgement 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.

B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures 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.
E. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or 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

Wang Kuo-Hua

For and on behalf of PricewaterhouseCoopers, Taiwan March 20, 2018

The accompanying parent company only 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 parent company only 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.

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.

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars)

$\sim 10^{11}$

	Assets	Notes	December 31, 2017	December 31, 2016
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 2,426,891	\$ 2,856,845
1110	Financial assets at fair value	6(2)
	through profit or loss - current		100,620	300,000
1150	Notes receivable, net	6(3)	85,762	88,801
1170	Accounts receivable, net	6(4)	84,876	86,249
1200	Other receivables		47,267	4,564
1220	Current income tax assets		84,095
130X	Inventories, net	$6(5)$ , 7 and 8	21, 244, 527	21, 378, 653
1410	Prepayments		220,905	164,216
1476	Other financial assets - current	8	474,846	588,572
1479	Other current assets	6(6)	213,558	246,014
11XX	Total current Assets		24, 983, 347	25,713,914
	Non-current assets
1510	Financial assets at fair value	$6(2)$ and 8
	through profit or loss - non-
	current		.78,552	78,253
1523	Available-for-sale financial assets 6(7) and 8
	- non-current		1,095,108	1,182,023
1543	Financial assets carried at cost -	$6(8)$ and $8$
	non-current		855,030	877,800
1550	Investments accounted for under	$6(9)$ and 8
	equity method		5,748,873	5,373,556
1600	Property, plant and equipment,	$6(10)$ and 8
	net		552,780	572,089
1760	Investment property, net	$6(11)$ and 8	5,880,560	5,970,428
1780	Intangible assets, net	6(12)	2,177,934	2,239,187
1840	Deferred income tax assets	6(30)	21,515
1920	Refundable deposits	9	421,048	431,932
1980	Other financial assets - non-	8
	current		670,546	444,629
1990	Other non-current assets	7	636,640	636,640
15XX	Total non-current assets		18,138,586	17,806,537
$1\mathbf{XXX}$	Total assets		\$ 43, 121, 933	\$ 43,520,451

(Continued)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars)

	Liabilities and Equity	Notes	December 31, 2017	December 31, 2016
	Current liabilities
2100	Short-term borrowings	$6(13)$ and $8$	\$ 690,000	\$ 2,215,659
2110	Short-term notes and bills payable 6(14) and 8		855,558	339,694
2150	Notes payable		5,793	15,052
2170	Accounts payable		1,083,789	1,489,408
2180	Accounts payable - related parties 7		16,391	5,948
2200	Other payables		525,715	672,161
2230	Current income tax liabilities			168,930
2310	Receipts in advance	6(15)	942,365	1,013,366
2320	Long-term liabilities, current	$6(16)(17)$ and 8
	portion		5,702,613	3,176,015
2399	Other current liabilities		31,684	31,324
21XX	Total current Liabilities		9,853,908	9,127,557
	Non-current liabilities
2530	Bonds payable	6(16)	2,000,000	2,500,000
2540	Long-term borrowings	$6(17)$ and 8	6,596,153	6,811,359
2550	Provisions for liabilities - non-	6(18)
	current		99,539	75,207
2640	Net defined benefit liabilities -	6(19)
	non-current		76,873	68,853
2645	Guarantee deposits received		129,696	127,819
2670	Other non-current liabilities	6(9)	503,494	513,025
25XX	Total non-current liabilities		9,405,755	10,096,263
2XXX	Total Liabilities		19,259,663	19,223,820
	Equity
	Share capital
3110	common stock	6(20)	16,233,261	16, 233, 261
	Capital surplus	6(21)
3200	Capital surplus		2,260,513	2,260,513
	Retained earnings	6(22)(30)
3310	Legal reserve		1,805,495	1,644,576
3350	Unappropriated retained earnings		2,589,627	3, 101, 014
	Other equity interest	6(23)
3400	Other equity interest		974,377	1,058,270
3500	Treasury stocks	6(20)	$1,003$ (	1,003
3XXX	Total equity		23,862,270	24, 296, 631
	Significant contingent liabilities	9
	and unrecognised contract
	commitments
3X2X	Total liabilities and equity		\$ 43, 121, 933 \$	43,520,451

The accompanying notes are an integral part of these parent company only financial statements.

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
FOR YEARS ENDED DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

					Year ended December 31
	Items	Notes		2017		2016
4000	Sales revenue	$6(25)$ and $7$	\$	5,734,056	\$	6,004,370
5000	Operating costs	$6(5)(12)(29)$ and 7		4,420,648)		3.739,186
5900	Gross profit			1,313,408		2.265,184
	Operating expenses	$6(29)$ and 7
6100	Selling expenses			$171,832$ (		336,693
6200	General & administrative expenses			840,629)		907,006
6000	Total operating expenses
6900				1.012.461		1,243,699
	Operating profit			300,947		,021,485
7010	Non-operating income and expenses Other income
7020		6(26)		188,712		232,977
7050	Other gains and losses	6(2)(27)		140,530		246,736
7070	Finance costs Share of profit of subsidiaries, associates	6(5)(28)	0	$132,318$ (		202,374
	and joint ventures accounted for under	6(9)
	equity method, net
				788,953		559,388
7000	Total non-operating income and
	expenses			985,877		836,727
7900	Profit before income tax			1,286,824		1,858,212
7950	Income tax (expense) benefit	6(30)		$5,723$ )		249.023)
8200	Profit for the year		\$	1,281,101	\$	1,609,189
	Other comprehensive income
	Components of other comprehensive
	income that will not be reclassified to
	profit or loss
8311	Other comprehensive income, before tax,	6(19)
	actuarial gains (losses) on defined benefit
	plans		$($ \$	$7,201)$ (\$		9,292)
8330	Share of other comprehensive income of
	subsidiaries, associates and joint ventures
	accounted for under equity method,
	components of other comprehensive
	income that will not be reclassified to
	profit or loss			1,042		2,156
8310	Components of other comprehensive
	loss that will not be reclassified to
	profit or loss			8,243)		7,136)
	Components of other comprehensive
	income that will be reclassified to profit or
	loss
8362	Other comprehensive loss, before tax,	6(7)
	available-for-sale financial assets Total share of other comprehensive		$\mathfrak{c}$	86,405) (		355,139)
8380
	income of subsidiaries, associates and
	joint ventures accounted for under equity method, components of other

	comprehensive income that will be reclassified to profit or loss
				2,512		4,300
8360	Components of other comprehensive
	loss that will be reclassified to profit or loss
				83.893)		350,839)
8300	Other comprehensive loss for the year		(5)	92, 136	(5)	357,975)
8500	Total comprehensive income for the year		\$	1,188,965	↨	1.251.214

	Earnings per share (in dollars)	6(31)
9750	Basic earnings per share		₹	0.79		0.99
9850	Diluted earnings per share		\$	0.78	\$	0.98

	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:
	Comprehensive income		$\overline{r}$	1,281,101	S	1,609,189
	Earnings per share (in dollars)
	Basic earnings per share		\$	0.79	-\$	0.99

The accompanying notes are an integral part of these parent company only financial statements.

			PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (Expressed in thousands of New Taiwan dollars)
					Retained Earnings		Other equity interest
	Notes	common stock Share capital-	Capital surplus	Legal reserve	Unappropriated earnings retained	differences of statements translation operations Financial foreign	Unrealized gain available-for- sale financial or loss on assets	Treasury stocks		Total
Year ended December 31, 2016
Balance at January 1, 2016		\$16,233,261	2,260,513 ₩	\$1,420,796	3,508,400 Ŷ.	1,706 ↮	1,407,403 ↔	G	$1,003$ )	24,831,076 ↮
Distribution of 2016 earnings (Note 1)
Legal reserve				223,780	223,780)
Cash dividends	6(22)				1,785,659)					1,785,659)
Profit for the year	6(31)				1,609,189					1,609,189
Other comprehensive loss for the year	6(7)(19)(23)				$7,136$ )	1,754)	349,085			357,975
Balance at December 31, 2016		\$16,233,261	2,260,513 ⊶∣	\$1,644.576	3,101,014 ↔	╣ ائ	$-058,318$ ادە	$\ddot{\circ}$	$\frac{003}{1}$	24,296,631 ↔
Year ended December 31, 2017
Balance at January 1, 2017		\$16,233,261	2,260,513 ↮	\$1,644.576	3,101,014 Ģ	48) ٩	1,058,318 ⊷	G	$1,003$ )	24,296,631 ↔
Distribution of 2017 earnings (Note 2)
Legal reserve				160,919	160,919)
Cash dividends	6(22)				1,623,326)					1,623,326)
Profit for the year	6(31)				1,281,101					1,281,101
Other comprehensive loss for the year	6(7)(19)(23)				8,243)		83,893			92,136)
Balance at December 31, 2017		\$16,233,261	2,260,513 اپ	\$1,805,495	2,589,627 اچە	$\frac{48}{9}$ €	974,425 ↔	७	$1,003$ )	23,862,270 ↔

Note 1: Employees' compensation of \$244,705 and directors' and supervisors' remuneration of \$83,250 have been deducted from the statements of comprehensive income, and were in agreement with the amount resolved by the Boar

The accompanying notes are an integral part of these parent company only financial statements.

$\frac{2}{7}$

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

			Years ended December 31
	Notes		2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	1,286,824	\$	1,858,212
Adjustments
Adjustments to reconcile profit (loss)
Gain on financial assets at fair value through profit or
loss	6(2)(27)
Write-off of uncollectible accounts	6(3)	(	$2,242$ ) (		384)
Share of profit of subsidiaries, associates and joint	6(9)			€	344)
ventures accounted for under equity method
Loss on disposal of property, plant and equipment	6(27)	(	788,953) (		559,388)
Depreciation			1,640		1,473
Amortization	6(29)		112,269		113,177
	6(12)(29)		61,253		61,252
Interest expense	6(28)		132,318		202,374
Interest income	6(26)	€	$6,787$ ) (		7,287)
Dividend income	6(26)		$90,329$ ) (		93,755)
Loss on unrealised foreign exchange	6(27)		36,866		7,185
Changes in operating assets and liabilities
Changes in operating assets
Current financial assets at fair value through profit or
loss Notes receivable			201,323	$\left($	299,877)
			3,039		23,131
Accounts receivable			1,373		740,535
Other receivables		(	42,528)		59,422
Inventories			134,126	$\sqrt{2}$	$65,727$ )
Prepayments		(	$56,689$ )		60,611
Other current assets			32,456		51,537
Changes in operating liabilities
Notes payable			9,259)		3,958
Accounts payable			$405,619$ ) (		$859,315$ )
Accounts payable - related parties			$10,443$ (		328,445)
Other payables Receipts in advance			$143,671$ ) (		196,369)
Other current liabilities			$71,001$ ) (		620,889)
Provisions for liabilities - non-current			360		26,656
Net defined benefit liabilities - non-current			24,332	$\left($	9,310)
			819		47, 154)
Cash inflow generated from operations Interest received			422,363		121,279
Cash dividend received			6,612		6,757
			459,038		818,393
Interest paid			$135,093$ )		206,899)
Income tax paid			280,263 )		153,267)
Net cash flows from operating activities			472,657		586,263

(Continued)

$\bar{z}$

$\ddot{\phantom{1}}$

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars)

Years ended December 31
Notes 2017	2016
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in other financial assets - current \$ 113,726 \$	1,166,418
Return of share capital from available-for-sale financial
assets - non-current 510	1,577
Decrease in available-for-sale financial assets - non-current	3,653
Proceeds from capital reduction of financial assets
measured at cost 22,770	9,729
Return of share capital from investments accounted for
under equity method	220,022
Proceeds from disposal of investments accounted for under
equity method	990
Acquisition of property, plant and equipment 6(10) $8,760$ ) ( €	3,101)
Proceeds from disposal of property, plant and equipment 4,028	2,343
Decrease in refundable deposits 10,884	61,567
(Increase) Decrease in other financial assets - non-current 225,917)	288,009
Net cash flows (used in) from investing activities 82,759)	1,751,207
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings $1,525,659$ ) (	49,215)
Increase (decrease) in short-term notes and bills payable 515,864	540,180)
Repayment of bonds $2,000,000$ ) (
Proceeds from issuing bonds 2,000,000
Repayment of long-term borrowings 13,777,247) ( $\overline{(\ }$	10,763,366)
Proceeds from long-term borrowings 15,588,639	11,500,557
Increase in guarantee deposit received 1,877	348
Cash dividends paid 6(22) $1,623,326$ )	1,785,659)
Net cash flows used in financing activities 819,852)	1,637,515)
Net (decrease) increase in cash and cash equivalents 429,954)	699,955
Cash and cash equivalents at beginning of year 2,856,845	2,156,890
Cash and cash equivalents at end of year \$ 2,426,891 \$	2,856,845

The accompanying notes are an integral part of these parent company only financial statements.

PRINCE HOUSING & DEVELOPMENT CORP. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

(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 only financial statements were authorized for issuance by the Board of Directors on March 20, 2018.

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

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Amendments to IFRS 10, IFRS 12 and IAS 28, 'Investment entities: Applying the consolidation exception'	January 1, 2016
Amendments to IFRS 11, 'Accounting for acquisition of interests in joint operations'	January 1, 2016
IFRS 14, 'Regulatory deferral accounts'	January 1, 2016
Amendments to IAS 1, 'Disclosure initiative'	January 1, 2016
Amendments to IAS 16 and IAS 38, 'Clarification of acceptable methods of depreciation and amortization'	January 1, 2016
Amendments to IAS 16 and IAS 41, 'Agriculture: bearer plants'	January 1, 2016
Amendments to IAS 19, 'Defined benefit plans: employee contributions'	July 1, 2014
Amendments to IAS 27, 'Equity method in separate financial statements'	January 1, 2016
Amendments to IAS 36	January 1, 2014
Amendments to IAS 39, 'Novation of derivatives and continuation of hedge accounting	January 1, 2014 January 1, 2014
IFRIC 21, 'Levies'
Annual improvements to IFRSs 2010-2012	July 1, 2014
Annual improvements to IFRSs 2011-2013	July 1, 2014
Annual improvements to IFRSs 2012-2014	January 1, 2016

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as follows:

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Amendments to IFRS 2, 'Classification and measurement of share-based payment transactions' Amendments to IFRS 4, 'Applying IFRS 9 Financial instruments with IFRS 4 Insurance contracts'	January 1, 2018 January 1, 2018
IFRS 9, 'Financial instruments'	January 1, 2018
IFRS 15, 'Revenue from contracts with customers'	January 1, 2018
Amendments to IFRS 15 Clarifications to IFRS 15, Revenue from contracts with customers'	January 1, 2018
Amendments to IAS 7 Disclosure initiative'	January 1, 2017
Amendments to IAS 12, 'Recognition of deferred tax assets for unrealised losses'	January 1, 2017
Amendments to IAS 40, Transfers of investment property'	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 financial performance based on the Company's assessment.

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 amortized 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 Group 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'

IFRS15, 'Revenue from contracts with customers' replaces IAS 11 'Construction contracts'. IAS 18 'Revenue' and relevant interpretations. According to IFRS 15, revenue is recognised when a customer obtains control of promised goods or services. A customer obtains control of goods or services when a customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset.

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

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

Step 3: Determine the transaction price

Step 4: Allocate the transaction price.

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

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

C. 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.

When adopting the new standards endorsed by the FSC effective from 2018, the Company will apply the new rules under IFRS 9 retrospectively from January 1, 2018, with the practical expedients permitted under the statement. The significant effects of applying the new standards as of January 1, 2018 are summarized below:

In accordance with IFRS 9, the Company expects to reclassify available-for sale financial assetsnon-current and financial assets at cost-non-current in the amounts of \$1,095,108 and \$855,030 and make an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose, by increasing financial assets at fair value through other comprehensive income. and other equity interest in the amounts of \$1,975,749 and \$25,611, respectively.

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

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

	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Amendments to IFRS 9, 'Prepayment features with negative compensation'	January 1, 2019
Amendments to IFRS 10 and IAS 28, 'Sale of contribution of assets between an investor and its associate or joint venture'	To be determined by International Accounting Standards Board
IFRS 16, 'Leases'	January 1, 2019
IFRS 17, 'Insurance contracts'	January 1, 2021
Amendments to IFRS 19, 'Plan amendment, curtailment or settlemet'
Amendments to IAS 28, 'Long-term interests in associates and joint ventures'	January 1, 2019
IFRIC 23. 'Uncertainty over income tax treatments'	January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019

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

IFRS 16, 'Leases'

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 "Regulations 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 judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement 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 amortized 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 reorganization;
(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.
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.

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	$5 \sim 20$ 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 subcontracts building 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 subcontracted 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 estimates 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, 2017	December 31, 2016
Cash on hand and revolving funds	\$	4.305	2,382
Checking accounts and demand deposits		2,422,586	2,354,383
Repurchase bonds		$\bullet$	500,080
	S	2,426,891	2,856,845

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, 2017		December 31, 2016
Current items:
Financial assets held for trading
Beneficiary certificates	ዩ	100,620	S	300,000
Non-current items:
Financial assets held for trading
Beneficiary certificates	\$	76,000	- S	76,000
Financial assets held for trading valuation
adjustments		2,552		2,253
	\$	78.552		78,253

A. The Company recognized net gain of \$2,242 and \$384 for the years ended December 31, 2017 and 2016, 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, 2017 December 31, 2016
Notes receivable	85.762 \$		88,801

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,
	2017		2016
At January 1		$\sim$	344
Write-ofs during the period			344)
At December 31		۰

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

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

(4) Accounts receivable, net

		December 31, 2017 December 31, 2016
Accounts receivable	88.619 S	89,992
Less: Allowance for doubtful accounts	3,743)	3,743)
	84,876	86,249

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, 2017	December 31, 2016
Up to 60 days	\$ 31S
61 to 120 days	37
121 to 180 days	-
Over 181 days	1,083	1,117
	\$ 1,151	1,117

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,
		-2017		2016
Balance as of January 1 and December 31		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, 2017
				Allowance for
		Cost		valuation loss		Book value
Land held for construction site	\$	9,330,154 (\$		64,249)	$\mathbb{S}$	9,265,905
Construction in progress		5,337,882				5,337,882
Buildings and land held for sale		5,545,621 (		39,329)		5,506,292
Prepayment for land		187,026				187,026
Prepayment for buildings and
land		945,903				945,903
Merchandise		1,519				1,519
	\$	21,348,105	$\left( \mathcal{S}\right)$	103,578)	S	21,244,527
				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	$($ \$	114,601)	\$	21,378,653

A. The cost of inventories recognized as expense for the years ended December 31, 2017 and 2016 was \$4,420,648 and \$3,739,186, respectively, including the amounts of \$11,023 and \$203, 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.
Interest paid before capitalization	2017	2016
	372,538	384,261
Interest capitalized	240,220	181,888
Annual interest rate used for capitalization	2.09%-3.84%	2.04%-3.16%

D. Details of significant inventories:

(a) Buildings and land in progress

Taipei branch	December 31, 2017	December 31, 2016
Ling Ko Dist. Li Shing Section No. 1209, etc.	\$ 1,675,282	\$ 1,515,855
Prince W (New Taipei City Shing Jheng Section No. 883, etc.)	1,035,789	950,762
Bali Dist Chung Chang Section No. 2222 and 211-1, etc.	688,073	686,428
Prince Hua Wei (Shilin Dist. Zhishan Section No. 602, etc.)	591,174	269,237
Jhong Li City Shuang Ling Section No. 1449, etc.	590,070	447,678
Prince HsinYi (XinZhuang Fuduxin)		2,022,377
Prince Fu III (Taoyuan Qing Sun Section No. 446)		1,438,248
	\$ 4,580,388	\$ 7,330,585
Taichung branch	December 31, 2017	December 31, 2016
Prince Yu Ding (Hui Li Section No. 195)	\$ 1,067,003	\$ 855,004
Ping Hsin Section No. 694, etc.	1,053,354	897,690
Prince County(Chaotun Section No. 755, etc.)	475,092	320,984
W Epoch(Kao an Section No. 591-1.)	370,019	139,576
Hsinfuliao Section No. 1096, No.1907, No. 1098, No. 1108, etc.	315,167	184,609
Jin Shuei Dist. Wu Show Section No. 1037, No. 1038,
No. 1040, etc.	206,877	206,249
Others	7	7
	\$ 3,487,519	\$ 2,604,119
Tainan branch	December 31, 2017	December 31, 2016
Prince Feng Yun (Hsin Ying Section No. 841-9)	\$ 897,501	\$ 665,265
Jin Hua Section No. 1361	688,235	688,200
Prince Jum Fon Huei (Yu Ming Section No. 681-8)	585,323	375,447
Chin An Section No. 296, No. 297, etc.	239,505	156,124
Shan Chia Section No. 939, etc.	154,181	152,384
Others	3,738	3,525
	\$ 2,568,483	\$ 2.040.945
Kaohsiung branch
	December 31, 2017	December 31, 2016
Prince Yun (Nanzi subsection No. 158)
Prince Cloud C townhouse (Ren Wu New Hougang West Section No .69, etc.)	\$ 680,998 504,977	\$ 125,629 161,013
Prince Cloud B (Ren Wu New Hougang West Section No.42, etc.)	379,133	379,133
Ren Wu New Hougang West Section No. 88 experimental house	72,929	72,929
Prince Cloud C apartment (Ren Wu New Hougang West Section No. 69-148 etc.)
Others	348	265,807 4
	1,638,385	1,004,515

(b) Land held for construction site
Taipei branch	December 31, 2017	December 31, 2016
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, 2017	December 31, 2016
Wu Feng Lot No. 365~855, etc.	\$ 175,661	\$ 175,661
Song Quan Lot No. 164, etc.	137,697	176,296
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	18,780
	\$ 438,671	\$ 477,270
Tainan branch	December 31, 2017	December 31, 2016
Shan Zhong Lot No. 1468, 1475 & 1476, etc.	\$ 234,699	\$ 234,699
Xue Zhong Lot No. 679, etc.	50,798	50,798
Chin An Section No. 294, etc.	49,640
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
	\$ 419,105	S 369,465
Kaohsiung branch	December 31, 2017	December 31, 2016
Ren Wu New Hougang West Section No. 53, etc.	\$ 968,071	\$ 987,079
Ren Wu New Hougang West Section No. 30 & 52-74	407,357	407,357
Da Hua Lot No. 434 & 436	13,923	13,923
	\$ 1,389,351	$\overline{\mathcal{L}}$ 1,408,359
Total land held for construction site	\$ 2,393,261	$\overline{\mathbf{r}}$ 2,401,227

$-36-$

$\sim 10^{-11}$

(c)Buildings and land held for sale

Taipei branch	December 31, 2017	December 31, 2016
Prince HsinYi (XinZhuang Fuduxin)	\$ 2,012,385	\$
Prince Fu III	1,690,994
Prince Fu II	110,680	287,735
Prince Dragon House III	42,432	42,432
Prince Da Din	12,446	12,446
Prince Guo Boa	5,738	5,738
Prince Tanmei		2,270,855
Others	546	546
	\$ 3,875,221	\$ 2,619,752
Taichung branch	December 31, 2017	December 31, 2016
Chin Fon Gin	\$ 170,233	\$ 403,492
Prince Fu	27,417	27,417
The Cloud Century Special A		292,529
Jing Yun Sian		13,418
Others	6,118	10,889
	\$ 203,768	\$ 747,745
Tainan branch	December 31, 2017	December 31, 2016
Flower Bo Five	\$ 968,124	\$ 1,273,009
Jun Chan LV	19,725	19,725
Prince Golden Age	7,284	19,572
Tun Sha Building III	104	28,376
Others	2,188	2,188
	\$ 997,425	\$ 1,342,870
Kaohsiung branch	December 31, 2017	December 31, 2016
Prince Cloud D	196,339 \$	\$ 222,345
Prince Cloud townhouse	182,449
Prince Hua Yang	81,294	81,242
Prince Dai Din	9,125	9,777
	\$ 469,207	\$ 313,364
Total buildings and land held for sale	\$ 5,545,621	\$ 5,023,731
(d) Prepayment for land
Tainan branch	December 31, 2017	December 31, 2016
Ren Wu New Hougang West Section No. 20, etc.	\$ 187,026	\$ 132,652

$\ddot{\phantom{0}}$

(e) Prepayment for buildings and land

			December 31, 2017 December 31, 2016
Taisugar Nanzi Section	\$	786,213	S. 786,213
Taisugar Kao An Section		159,690	95,814
Prince HsinYi (XinZhuang Fuduxin)			72,000
		945,903	954,027 S.
(6) Other current assets
Items	December 31, 2017		December 31, 2016
Deferred sales commission	213,558	\$	246,014
(7) Available-for-sale financial assets
Items	December 31, 2017		December 31, 2016
Non-current items:
Listed (TSE and OTC) stocks	\$ 103,523	-\$	104,033
Unlisted stocks	29,234		29,234
	132,757		133,267
Valuation adjustment of available-for-sale financial
assets	962,351		1,048,756
	\$ 1,095,108	\$	1,182,023

A. The Company recognized \$86,405 and \$355,139 in other comprehensive loss for fair value change and reclassified \$0 and \$2,219 from equity to loss for the years ended December 31, 2017 and 2016, 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

$(7)$

Items	December 31, 2017 December 31, 2016
Non-current items:
Unlisted stocks	855,030 \$	877.800

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, 2017	December 31, 2016
	Carrying	Percentage of		Carrying	Percentage of
Name of subsidiaries and associates	amount	ownership		amount	ownership
Uni-President Development Corp.	\$ 1,126,160	30.00%	s.	1,229,770	30.00%
Prince Real Estate Co., Ltd.	1,631,241	99.65%		1,210,130	99.65%
Cheng-shi Investment Holdings Co., Ltd.	1,005,752	100.00%		1,007,834	100.00%
Time Square International Hotel	619,079	100.00%		462,969	100.00%
Prince Housing Investment Co., Ltd.	437,255	100.00%		446,709	100.00%
The Splendor Hotel Taichung	308,988	50.00%		328,715	50.00%
Geng-Ding Co., Ltd.	299,577	30.00%		320,555	30.00%
Prince Property Management Consulting Co., Ltd.	281,871	100.00%		282,007	100.00%
Ming-Da Enterprise Co., Ltd.	29.483	20.00%		75,341	20.00%
Jin Yi Xing Plywood Co., Ltd. (Notes)		99.65%		٠	99.65%
Dong-Feng Enterprises Co., Ltd. (Note)		100.00%			100.00%
Others (individually less than 2%)	9,467			9,526
	5,748,873		S	5,373,556

Note: As of December 31, 2017 and 2016, the book value of the Company's investment in Jin Yi Xing Plywood Co., Ltd. and Dong-Feng Enterprises Co., Ltd. were (\$351,682) and (\$151,812), and (\$361,186) and (\$151,839), respectively, which was below zero. Thus, the investments were transferred to other non-current liabilities at \$503,494 and \$513,025, 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, 2017		December 31, 2016
Current assets	\$ 208,093	\$	265,427
Non-current assets	8,703,214		9,127,538
Current liabilities	$3,432,033$ (		3,319,592)
Non-current liabilities	1,725,406)		1,974,139)
Total net assets	3,753,868	\$	4,099,234
Share in associate's net assets	1,126,160	\$	1,229,770
Statements of comprehensive income
	Uni President Development Corp.
	2017		2016

Revenue	949,102	981,167
Profit for the year from continuing operations	111.834	143,048
Total comprehensive income	111.834	143,048

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, 2017 and 2016, the carrying amount of the Company's individually immaterial associates amounted to \$329,060 and \$395,896, respectively.

		Years ended December 31,
		2017		2016
Profit for the period from continuing
operations	S	4.293	- S	242,267
Other comprehensive income- net of tax		1,363)		1,396
Total comprehensive income		2,930		243,663

D. The Company's share of profit of subsidiaries, associates and joint ventures accounted for using equity method for the years ended December 31, 2017 and 2016 was \$788,953 and \$559,388, respectively.
E. The investment income of certain investees for the years ended December 31, 2017 and 2016 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, 2017 and 2016 was \$911

and 84,550, respectively. As of December 31, 2017 and 2016, investment balance accounted for under the equity method in these investees were \$147,765 and \$897,432, respectively.

The investees whose financial statements were audited by other independent accountants for the years ended December 31, 2017 were as follows:

Geng-Ding Co., Ltd. and Dong-Feng Enterprises Co., Ltd

The investees whose financial statements were audited by other independent accountants for the years ended December 31, 2016 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, 2017		December 31, 2016
Land	\$ 191,884	- \$	191,884
Buildings	294,216		302,374
Computer and communication equipment	6,572		9,748
Transportation equipment	4,445		3,303
Office equipment	32,410		40,143
Leasehold improvements	22,996		24,323
Other equipment	257		314
	\$ 552,780		572,089

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

		Opening net							Closing net
Cost		book amount		Additions		Disposals	Reclassifications		book amount
Land	\$	191,884 \$			$-$ \$	$\omega_{\rm c}$	\$ $\blacksquare$	\$	191,884
Buildings		438,331					۰		438,331
Computer and communication equipment		59,989		$1,117$ (		1,063)			60,043
Transportation equipment		9,767		$3,411$ (		1,611)	$\overline{\phantom{a}}$		11,567
Office equipment		178,475		4.231(		526)			182,180
Leasehold improvements		73,532		$\blacksquare$			$\blacksquare$		73,532
Other equipment		1,912				6)			1,907
		953,890	S	8,760	(5)	3,206)		S	959,444

		Year ended December 31, 2016
Cost	Opening net book amount			Additions Disposals Reclassifications						Closing net book amount
Land	\$	191,884 \$			$-$ \$	$\blacksquare$	\$		- \$	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						178,475
Leasehold improvements		73,532				٠				73,532
Other equipment		1,914				2)				1,912
	\$	951.791	\$	$3.101$ $($		$1.002$ \$		۰	£.	953.890

					Year ended December 31, 2017
Accumulated depreciation	Opening net book amount		Additions	Reclassifications	Closing net book amount
Land	\$ 135,957	-S	8,158 \$		$\blacksquare$	- \$	$\sim$	\$ 144,115
Computer and communication equipment	50,241		$4,268$ (		1,038)			53,471
Transportation equipment	6,464		$1,047$ (		389)			7,122
Office equipment	138,332		$11,963$ (		525)			149,770
Leasehold improvemnets	49,209		1.327					50,536
Other equipment	1,598		52					1,650
	381,801		26,815	(\$	(952.ا	S		406,664

	Year ended December 31, 2016
Accumulated depreciation	Opening net book amount		Additions		Disposals		Reclassifications		Closing net book amount
Buildings	\$ 127,798 \$		8.159 \$		$\overline{a}$	-\$	$\overline{\phantom{a}}$	\$	135,957
Computer and communication equipment	45.164		5,077		×.				50,241
Transportation equipment	6,370		900(		806)				6,464
Office equipment	126,366		11.966				$\overline{a}$		138,332
Leasehold improvements	47,884		1,325				۰		49,209
Other equipment	1,452		146						1,598
	\$ 355,034	\$	27,573	(\$	806)	S	$\blacksquare$	S	381,801

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, 2017	December 31, 2016
Land	265,550	265,550
Leased assets-land	2,567,358	2,567,429
Leased assets-buildings	3,047,652	3,137,449
	5,880,560	5,970,428

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

						Year ended December 31, 2017
		Opening net							Closing net
Cost		book amount		Additions		Disposals	Reclassifications		book amount
Land	\$	265,550	$\mathsf S$	ä,	\$		\$	\$	265,550
Leased assets-land		2,567,429				71)			2,567,358
Leased assets-buildings		3,963,186				5,440)			3,957,746
	S	6,796,165	S		$($ \$	5,511)	S	\$	6,790,654
						Year ended December 31, 2016
		Opening net							Closing net
Cost		book amount		Additions		Disposals	Reclassifications		book amount
Land	\$	265,550	s	÷	\$		\$	\$	265,550
Leased assets-land		2,567,486				57)			2,567,429
Leased assets-buildings		3,967,538				4,352)			3,963,186
		6,800,574			(3)	4,409)	-\$	S	6,796,165
						Year ended December 31, 2017
		Opening net							Closing net
Accumulated depreciation		book amount		Additions		Disposals	Reclassifications		book amount
Leased assets-buildings	S	825,737	S	85,454	$\left( \mathbf{\$} \right)$	1,097)	\$		910,094
						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

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,
	2017	2016
Rental revenue from the lease of the investment property	312,716	294,260
Direct operating expenses arising from the investment property that generated rental
income in the period Direct operating expenses arising from the investment property that did not generate	161,387	156,000
rental income in the period

D. As of December 31, 2017 and 2016, the fair value of the investment property held by the Company was \$12,720,361 and \$12,886,955, 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, 2017 December 31, 2016
Service concession	2,177,934 \$	2,239,187

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

			Year ended December 31, 2017
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, 2016
	Opening net				Closing net
Cost	book amount	Additions	Disposals	Reclassifications	book amount
Service concession	2,868,372	S			2,868,372
			Year ended December 31, 2017
	Opening net				Closing net
Accumulated Amortisation	book amount	Additions	Disposals	Reclassifications	book amount
Service concession	629,185	61,253 Ъ			690,438

	Year ended December 31, 2016
	Opening net						Closing net
Accumulated Amortisation	book amount	Additions		Disposals		Reclassifications	book amount
Service concession	567,933	-S	61,252	\$	\$		\$ 629,185
C. Details of amortisation on intangible assets are as follows:
						For the years ended December 31,
				2017			2016
Operating costs-amortization expenses			\$		61,253	\$	61,252
(13) Short-term borrowings
				December 31, 2017			December 31, 2016
Secured borrowings			$\mathbb{S}$		690,000	\$	2,135,659
Unsecured borrowings							80,000
			$\mathbf S$		690,000	\$	2,215,659
Interest rate range				1.53%~1.85%			1.53%~2.06%
For details of pledged assets, please refer to Note 8.
(14) Short-term notes payable
				December 31, 2017			December 31, 2016
Commercial papers			\$		855,900	\$	340,000
Less: Unamortised discount					342)		306)
			\$		855,558	\$	339,694
Interest rate range				$0.48\%$ ~1.67%			$0.58\%$ ~1.02%
.

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

Item	December 31, 2017		December 31, 2016
Advance real estate receipts	S	823,934	880,026
Advance rent		117,359	132,381
Other advance receipts		1,072	959
		942,365	1,013,366

$(16)$ Bonds payable

		December 31, 2017		December 31, 2016
2012 1st secured ordinary bonds payable	\$	$\sim$	-S	2,000,000
2013 1st secured ordinary bonds payable		2,500,000		2,500,000
2017 1st secured ordinary bonds payable		2,000,000
		4,500,000		4,500,000
Less: Current portion		2,500,000)		2,000,000
	S	2,000,000	S	2,500,000

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.
C. The Company issued secured ordinary bonds payable in June 2017. The significant terms of the bonds are as follows:

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

(b) Issue price: At par value of \$1,000 per bond

(c)Coupon rate: $1.05\%$

(d) Terms of interest repayment: The bonds interest is calculated on simple rate every year starting June 2017 based on the coupon rate.

(e)Repayment term: The bonds are repaid upon the maturity of the bonds.

(f)Period: 5 years, from June 19, 2017 to June 19, 2022

(g) The way of security: The bonds are secured by Bank of Taiwan.

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

(17) Long-term borrowings

	December 31, 2017	December 31, 2016
Secured bank borrowings	\$ 6,864,979	\$ 5,550,034
Unsecured bank borrowings	1,975,000	100,000
	8,839,979	5,650,034
Less: Current portion	$3,202,613$ (	1,176,015)
	5,637,366	4,474,019
Commercial paper	960,000	2,339,600
Less: Unamortised discount	1,213)	2,260
	958,787	2,337,340
	6,596,153	S 6,811,359
Range of maturity dates	2018.07.27~2027.11.02	2017.02.08~2027.11.02
Range of interest rates	$0.58\% - 2.47\%$	$0.55\% \sim 2.70\%$

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 $9(8)$ and $9(10)$ .

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

(18) Provisions-replacement cost

		Years ended December 31,
		2017	2016
At January 1	\$	75,207 -8	84,517
Additions		63,468	33,470
Used		39,136)	42,780)
At December 31	S	99,539 S	75,207

$(19)$ 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, 2017 December 31, 2016
Present value of defined benefit obligations	1\$	$122,439$ (\$)	118,729)
Fair value of plan assets		45,566	49,876
Net defined benefit liability	(\$	76,873) (\$	68,853)

		Present value of
		defined benefit		Fair value		Net defined
		obligations		of plan assets		benefit liability
Year ended December 31, 2017
Balance at January 1	$\circ$	118,729) \$		49,876 (\$		68,853)
Current service cost		546)				546)
Interest (expense) income		1,662)		698		964)
		120,937)		50,574		70,363)
Remeasurements:
Change in financial assumptions		4,679)				4,679)
Experience adjustments		$1,998)$ (		$524)$ (		2,522)
		$6,677$ ) (		524) (		7,201)
Pension fund contribution				691		691
Paid pension		5,175		5,175)
Balance at December 31	(\$	122,439)	\$	45,566	(3)	76,873)
		Present value of
		defined benefit		Fair value		Net defined
		obligations		of plan assets		benefit liability
Year ended December 31, 2016
Balance at January 1	$($ \$	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)	$\overline{\mathbf{z}}$	49,876	$($ \$	68,853)

$\hat{\mathcal{A}}$

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

	Years ended December 31,
	2017	2016
Discount rate	1.00%	1.40%
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
						Decrease 0.25%
2,955)		3,059		2.728	í\$	2,653)

						Decrease 0.25%
						2,655)
	Increase 0.25% Increase 0.25% 2,937)	Discount rate	Decrease 0.25% Decrease 0.25% 3,044		Increase 0.25% Increase 0.25% 2,734	Future salary increases Future salary increases ſS

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, 2018 amounts to \$691
(f) As of December 31, 2017, the weighted average duration of that retirement plan is 10 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, 2017 and 2016 were \$7,649 and \$7,624, 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
	2017	2016
Shares at January 1 and December 31	1,622,671	1,622,671

B. As of December 31, 2017, 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.
C. As of December 31, 2017 and 2016, 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\$1.53 per share, and the fair value was NT\$12.05 and NT\$10.50 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
2017	Share premium	Treasury share transaction	Others	Total
Balances as of January 1 and December 31	1,375,442	877.839	7,232	2,260,513
		Capital surplus
	Share	Treasury share
2016	premium	transaction	Others	Total
Balances as of January 1 and December 31	1,375,442	877,839	S 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 not lower than 20% 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 \$1,623,326 (\$1.0 (in dollars) per share) and \$1,785,659 (\$1.1 (in dollars) per share) for the years ended December 31. 2017 and 2016, respectively. On March 20, 2018, the Board of Directors proposed that total dividends for the distribution of earnings for 2017 was \$1,055,162 at \$0.65 (in dollars) per share.
(23) Other equity items

		Available-for-sale investment		Currency translation		Total
At January 1, 2017	$\boldsymbol{\hat{\mathsf{s}}}$	1,058,318 (\$		48) \$		1,058,270
Available-for-sale investment:
-Loss at fair value		83,893)				83,893)
At December 31, 2017		974,425	$\binom{3}{5}$	48)	S	974,377
		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	ς	1,058,318	$\left( \mathbb{S}\right)$	48)		1,058,270

(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, 2017
Assets
Notes receivable, net	\$ 11,438	\$ 55,851	\$ 67,289
Accounts receivable, net	78,384	3,689	82,073
Inventories	10,158,891	11,084,117	21,243,008
	\$ 10,248,713	\$ 11,143,657	\$ 21,392,370
Liabilities
Notes payable	\$ 5,793	\$	\$ 5,793
Accounts payable
(including related parties)	670,171	409,517	1,079,688
	\$ 675,964	\$ 409,517	\$ 1,085,481
	Within 12 months	Over 12 months	Total
December 31, 2016
Assets
Notes receivable, net	\$ 26,027	\$ 16,930	\$ 42,957
Accounts receivable, net	79,952	3,722	83,674
Inventories	9,290,432	12,086,768	21,377,200
	\$ 9,396,411	\$ 12,107,420	\$ 21,503,831
Liabilities
Notes payable Accounts payable	\$ 15,052	\$	\$ 15,052
(including related parties)	745,572	678,229	1,423,801
	\$ 760,624	\$ 678,229	\$ 1,438,853
(25) Operating revenue
		Years ended December 31,
		2017	2016
Construction revenues		\$ 4,994,154	\$ 5,274,930
Rental revenues		369,518	353,578
Service concession revenue
-Operating service revenue		367,083	372,719

Other operating revenues

$\boldsymbol{\mathsf{S}}$

3,301

${\mathbb S}$

5,734,056

3,143

6,004,370

$(26)$ Other income

	Years ended December 31,
	2017		2016
Interest income	\$ 6,787	\$	7,287
Dividend income	90,329		93,755
Others	91,596		131,935
	188,712		232,977

(27) Other gains and losses

	Years ended December 31,
		2017	2016
Net currency exchange losses	(\$	$36,866$ (\$)	7,185
Net gain on financial assets at fair value through
profit or loss		2,242	384
Loss on disposal of property, plant and equipment
(including investment property)		$1,640)$ (	1,473)
Others		176,794	255,010
		140,530	246,736

(28) Finance costs

	Years ended December 31,
		2017		2016
Interest expense:
Bank borrowings	\$	70,994	-S	102,270
Commercial paper		11,515		14,824
Ordinary bond		28,242		59,596
Endorsement and guarantee		20,157		24,208
Others		1,410		1,476
		132,318	S	202,374

$\bar{z}$

(29) Expenses by nature

	Year ended December 31, 2017
		Operating costs		Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	7,655	S.	349,433	\$	357,088
Labor and health insurance fees				20,148		20,148
Pension costs				9,159		9,159
Other employee benefit expense				20,854		20,854
	\$	7,655	\$	399,594	\$	407,249
Depreciation	\$	85,454	\$	26,815	\$	112,269
Amortisation	Ŝ	61,253	\$		\$	61,253
				Year ended December 31, 2016
		Operating costs		Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	1,136	$\mathbf{s}$	417,054	\$	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

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 channelled 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, 2017 and 2016, employees' compensation was accrued at \$128,682 and \$185,821, respectively; while directors' remuneration was accrued at \$43,779 and \$63,218, respectively. The aforementioned amounts were recognized in salary expenses.

The employees' compensation 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, 2017. 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' remuneration for 2016 as resolved by the shareholders during their meeting were in agreement with those amounts recognised in profit or loss for 2016. Information about employees' compensation and directors' remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

$(30)$ Income tax

A. Income tax expense

(a) Components of income tax expense:

	Years ended December 31,
		2017		2016
Current tax:
Current tax on profits for the year	\$		- \$	147,978
Additional 10% tax on undistributed earnings				21,397
Piror year income tax overestimation		$4,970$ ) (		2,535
Land value increment tax recognized in income tax for the year		32,208		82,183
Total current tax		27,238		249,023
Deferred tax:
Origination and reversal of temporary differences		21,515)
Income tax expense		5,723		249,023

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

	Years ended December 31,
		2017	2016
Tax calculated based on profit before tax and statutory tax rate	\$	218,760 -S	315,896
Effect recognized from adjustments under tax regulations		$240,276$ ) (	143,805)
Additional 10% tax on undistributed earnings			21,397
Effect from investment tax credits		- (	24,113)
Prior year income tax overestimation		$4,970$ (	2,535)
Land value increment tax		32,209	82,183
Income tax expense		5,723 \$	249,023

B. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows: The Company did not have any unrecognized deferred tax assets for the year ended December 31, 2016.

		2017
	January J	Recognised in profit or loss December 31,
Temporary differences:
-Deferred tax assets:
Unrealised compensation losses	$\overline{\phantom{0}}$	$21,515$ \$	21,515

C. As of December 31, 2017, the Company's income tax returns through 2015 have been assessed and approved by the Tax Authority

D. With the abolishment of the imputation tax system under the amendments to the Income Tax Act promulgated by the President of the Republic of China in February, 2018, the information on unappropriated retained earnings and the balance of the imputation credit account as of December 31, 2017, as well as the estimated creditable tax rate for the year ended December 31, 2017 is no longer disclosed.

Unappropriated retained earnings on December 31, 2016:

	December 31, 2016
Earnings generated in and after 1998	3,101,014

E. As of December 31, 2016, the balance of the imputation tax credit account was \$83,807. The creditable tax rate was 8.80% for 2016.

(31) Earnings per share

	Year ended December 31, 2017
			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	\$	1,281,101	1,622,671	\$ 0.79
Diluted earnings per share
Profit attributable to ordinary shareholders	S	1,281,101	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation			11,645
Profit attributable to ordinary shareholders
plus assumed conversion of all dilutive
potential ordinary shares	S	1,281,101	1,634,316	0.78

Earnings
per share
(in dollars)

0.99







0.98

7. RELATED PARTY TRANSACTIONS

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

Names of related parties	Relationship with the Company
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
The Splendor Hotel Taichung (The Splendor)	The Company's subsidiary
Ta-Chen Construction & Engineering Corp.
(Ta-Chen Construction & Engineering)	The subsidiary of CSIHC
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

$\mathcal{L}^{\text{max}}_{\text{max}}$

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:


	2017	2016
- Other related parties	47,443	47,775
- Subsidiaries	2,231	3.045
	49,674	50,820

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 are as follows:

	Years ended December 31,
	2017	2016
Construction subcontracting:
$-$ Cheng-Shi Construction	\$ 865,798	-\$	605,366
$-$ Prince Utility	483,750		300,288
$-Ta$ - Chen Construction \$ Engintering	55,109		69,971
Purchases of services:
$-Subsidiaries$	40,474		15,846
Purchases of goods:
$-$ Subsidiaries	2,301		12,074
	1,447,432		1,003,545

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, 2017 and 2016, unsettled construction contracts that were signed by the Company and Chen-Shi Construction Company totaled \$2,515,959 and \$2,232,449, respectively; payments already made for those contracts amounted to \$1,047,250 and \$493,139, respectively; and future payments required under those contracts amounted to \$1,468,709 and $$1,739,310$ , respectively.

(c)As of December 31, 2017 and 2016, unsettled construction contracts that were signed by the Company and Ta-Chen Construction Company totaled to \$120,994 and \$259,621, respectively; payments already made for those contracts amounted to \$101,000 and \$180,123, respectively; and future payments required under those contracts amounted to \$19,994 and \$79,498, respectively.
(d)As of December 31, 2017 and 2016, unsettled construction contracts that were signed by the Company and Prince Utility Company totaled \$970,198 and \$1,240,645, respectively; payments already made for those contracts amounted to \$361,800 and \$233,970, respectively; and future payments required under those contracts amounted to \$608,398 and \$1,006,675, 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, 2017 and 2016, the Company's creditor's rights receivable from A party both amounted to \$575,000.

2006	\$	225,000
2008		105,000
2009		615,000
2010		30,000
	\$	975,000
D. Accounts payable
	December 31, 2017	December 31, 2016
Subsidiaries	16,391	\$ 5,948
E. Rent expense
	Years ended December 31,
	2017	2016
Uni-President Developmment Corp.	\$ 32,488	\$ 32,138

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,
		2017		2016
Salaries and other short-term employee benefits	S	130,545	- S	100,723
Termination benefits
Post-employment benefits
Other long-term benefits
Share-based payments
		130,545		100,723

8. PLEDGED ASSETS

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

Pledged asset	December 31, 2017	December 31, 2016	Purpose
Demand deposits, certificate of deposit and checking deposit (shown as "other financial assets - current" and "other financial assets - non-current")	1,145,392 \$ S	1,033,201	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	78,552		78,253 Long-term borrowings
Land held for construction	5,997,376	7,808,509	Short-term borrowings, notes and bills payable and long-term borrowings
Construction in progress	3,504,289	2,803,892	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	708,513		757,036 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	1,325,878	1.443.473	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	209,629	215,511	Short-term borrowings, notes and bills payable and long-term borrowings
Investment property	3,783,563	3.816,598	Short-term borrowings, notes and bills payable and long-term borrowings
	17,420,400	20,894,536 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, 2017				December 31, 2016
		Total				Total
		endorsement		Amount		endorsement	Amount
Name of company		amount		drawn		amount	drawn
The Splendor Hotel Taichung	S	2,000,000	S	1,683,308	S	2,000,000	1,682,206
Prince Real Estate Co., Ltd.		2,500,000		258,000		2,500,000	780,000
Ta-Chen Construction & Engineering Corp.						1,900,000
		4.500,000		1,941,308		6,400,000	2,462,206

		December 31, 2017				December 31, 2016
		Total				Total
		endorsement		Amount		endorsement	Amount
Name of company		amount		drawn		amount	drawn
Prince Real Estate Co., Ltd.	S.	2,500,000	S	1,513,309	S	2,500,000	\$2,035,309
Ta-Chen Construction & Engineering Corp.		927,889				927,889
Prince Utility Co., Ltd.	900,000 638,763							900,000	638,763
	S	4,327,889	S	2,152,072	S	4,327,889	\$2,674,072

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, 2017 and 2016, 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, 2017 and 2016, 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 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.
(9) 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. In May, 2017, the syndicated loan has been settled at maturity.
(10) 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.

(11) 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 instalments according to the contractual terms. The Company had provided such performance guarantee with guarantee letter of the bank as follows:

	December 31, 2017	December 31, 2016
Taichung City Koan An Section No.591-1	63,880	63,880
Nanzi Dist., Kaohsiung City Nanzi 1st section
No. 158, etc.	125,540	125,540

(12) 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, 2017 and 2016, balance of the performance bonds were as follows:

	350,000
	19,570
	December 31, 2017 December 31, 2016 350,000 \$ 19,570

In 2017, the Company asked the owners of land to return the 50 % performance bond after completion of the construction of roof-slab. However, the owners of land refused to return the 50% performance bond in the form of cash claiming that the joint construction agreement states that the owners of land can use allocated buildings and lands to offset the performance bond. The Company disagreed with the aforementioned claim. In addition, the Company expects to obtain a use permit by December 31,

2017, but the use permit is still pending approval from the Taipei City Government as of audit report date. Currently, the Company is continuously communicating with the Taipei City Government in order to obtain the use permit in accordance with regulations, and has sent the legal demand letter to the owners of land for the collection of the performance bond. As of December 31, 2017, the Company's construction cost in this joint construction agreement amounted to \$591,174.

SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE None.

1. 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, 2017 and 2016 would have been \$9,530 and \$7,866 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, 2017 and 2016 would have increased/decreased by \$17,662 and \$37,600, 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 \$13,276 and \$13,327 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, 2017 and 2016, the management does not expect any significant losses from non-performance by these counterparties.
(c) Liquidity risk
i. Cash flow forecasting is performed 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, 2017
	Within 1 year		Between 1 to 3 years Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 694,848	S	- \$
Short-term notes and bills payable	855,900
Notes payable	5,793
Accounts payable (including related party)	690,663		409,517
Other payables	525,715
Guarantee deposits received	72,003		35,302	22,391
Bonds payable	2,559,750		42,000	2,042,000
Long-term borrowings (including current portion)	3,355,193		3,134,553	2,533,305

		December 31, 2016
	Within 1 year	Between 1 to 3 years Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 2,239,654 \$		- \$
Short-term notes and bills payable	340,000
Notes payable	15,052
Accounts payable	817,127	678,229
Other payables	672,161		×
Guarantee deposits received	67,150	31,651	29,018
Bonds payable	2,065,350	2,538,750
Long-term borrowings (including current portion)	1,194,401	4,402,930	2,989,561

iii. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.
(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, $2017$ and $2016$ , is as follows:

December 31, 2017		Level 1	Level 2		Level 3	Total
Assets:
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities	\$	179,172	\$	\$		\$ 179,172
Available-for-sale financial assets
Equity securities		1,018,855			76,253	1,095,108
		\$1,198,027	\$	\$	76,253	\$ 1,274,280
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	S	378,253	\$	\$		\$ 378,253
Available-for-sale financial assets
Equity securities		1,039,027			142,996	1,182,023

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, 2017 and 2016, 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, 2017 and 2016:

Non-derivative equity instruments		2017	2016
At January 1		142,996 \$	192,557
Losses recognised in other comprehensive income
(Note)	$66,743$ ) ( -		47,984)
Proceeds from capital reduction			1,577
At December 31		76,253	142,996

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

G. For the years ended December 31, 2017 and 2016, 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, 2017	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Non-derivative equity
Unlisted shares	\$ 76,253	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value
	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	\$ 142.996	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:


						Recognised in other
				Recognised in profit or loss		comprehensive income
			Favourable	Unfavourable	Favourable	Unfavourable
	lmput	Change	change	change	change	change
Financial assets
Equity instruments	\$ 29,234	±1%			292	- 65	292)

						December 31, 2016
					Recognised in profit or loss		Recognised in other comprehensive income
				Favourable	Unfavourable	Favourable	Unfavourable
Financial assets		Imput	Change	change	change	change	change
Equity instruments	S	29,234	士1%			292(5)	292)

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.

Table 1														Expressed in thousands of NTD (Except as otherwise indicated)
$(Note 1)$ Creditor E ż	Consulting Co., Ltd Borrower Prince Security Co., Prince Property Management	General ledger Is a related Other receivables - account related parties	outstanding balance during the year Maximum ended ç,	party December 31, 2017 December 31, 2017 drawn down rate loan borrower Balance at $15,000$ \$	Actual amount Interest Nature of with the S,	27	Short- financing term	transactions Amount of ø	Additional operating Reason for short-term financing capital	$\frac{1}{\text{term}}$ Value Allowance for doubtful	Collateral None ^-	Limit on loans ø	s, 30,000	granted to a Ceiling on total single party loans granted	85.370 Note 3 Note
(1) The Company is '0'.	Note 2: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in the Connany's "Procedures for Provision of Loans" are as follows: Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows: (2) The subsidiaries are numbered in order starting from '1'.

Prince Housing & Development Corp. and Subsidiaries

Year ended December 31, 2017 Loans to others

lures for Provision of Loans" are as follows: Ĕ ś

. Linux on toans granten to a single patry and cening on total toans grat
A. Ceiling on total loans to others: 40% of the Company's net worth.
B. Linit on loans to a single party:

(a) Nature of the loan is related to business transactions: Limit to a single party is NT\$1.5 billion or the amount of business transactions between the creditor and borrower in the current year.
(b) Nature of Ioan is for

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

i
ŗ

Provision of endorsements and guarantees to others

Year ended December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

		Party being endorsed/guaranteed			Maximum				Ratio of
					빋 outstandi				accumulated			Provision of Provision of Provision of
				Limit on	endorsement	Outstanding		Amount of	endorsement/	Ceiling on total		endorsements endorsements endorsements/
			Relationship with	endorsements	guarantee	endorsement		endorsements	guarantee amount to	amount of	/ guarantees	guarantees	guarantees to
			the endorser/	guarantees	ัธ amount as	guarantee amount		guarantees	net asset value of the	endorsements/	by parent	by subsidiary	the party in
Number	Endorser/		guaranto:	provided for a	$\overline{31}$ December	at December 31,	Actual amount	secured with	endorser/ guarantor	guarantees	company to	to parent	Mainland
(Note 1)	guarantor	Company name	(Note 2)	single party	2017	2017	drawn down	collateral	company	provided	subsidiary	company	China	Footnote
0	Development Corp. Prince Housing &	Ta-Chen Construction & Engineering Corp.	S	4,772,454 ÷,	1,900,000 S,	ç,	S			11,931,135 S,		z	z	Note ³
٥	Development Corp. Prince Housing &	Prince Real Estate Co. 궠	٢Ń	4.772.454	ğ 2,500	2,500,000	258,000		io%	11,931,135	≻	z	z	Note ³
۰	Development Corp. Prince Housing &	The Splendor Hotel Taichung	۰	4.772,454	g 2,000	2,000,000	1,633,308		$\frac{3}{2}$	11,931,135	>	z	z	Note 3
	Prince Utility Co., Ltd.	Development Corp. Prince Housing &		1,000,000	$\frac{8}{2}$ Ş,	900,000	638,763		1230%	2,000,000	z		z	Note 4
N	Prince Real Estate Co., Ltd.	Development Corp. Prince Housing &		2,500,000	g 2,500	2,500,000	1,513,309		163%	5,000,000	z		z	Note 5
	Ta-Chen Construction & Engineering Corp.	Development Corp. Prince Housing &		1,500,000	88 527	927,889			114%	3,000,000	z		z	Note 6
	Management Maintain Prince Apartment Co., Ltd.	Prince Security Co., Ltd.		20,000	ğ ς	20,000	20,000		27%	50,000	z	z	z	Note 7
n	Management Consulting Prince Property Co., Ltd.	Prince Security Co., Ltd.	2	56,000	g s,	56,000			19%	120,000	z	z	z	Note 8
	(1) Having business relationship. $(1)$ The Company is '0'.	(3) The endorset/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company, (4) The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary Note 2: Relationship between the endorsenguarantor and the party being endorsed guaranteed is classified into the following six categories: (2) The endorsenguarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary. 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, (5) Mutual guarantee of the trade as required by the construction contract.

Note 3. In accordance with the Group's related regulations, the limit on endorsements and guarantees for angle entity is 20% of the Company's net worth based on the latest financial statements and the limit on accumulated (6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 4: In accordance with Prince Utility Co., Ltd.'s related regulations, the limit of endorsements and guarantees for any single entity is \$1,000,000; the total accumulated amount is \$2,000,000. of endorsements and guarantees is 50% of the Company's net worth based on the latest financial statements.

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

Note 6: In accordance with Ta-Chen Construction & Engineering Corp.'s related regulations, the limit of endoperaters and guarantees for any single entity is \$1,500,000; the total accumulated amount is \$3,000,000, Note 7. In accordance with Prince Apartment Management Maintain Co., Ltd.'s related regulations, the limit of endorsements and guarantees for any single entity is \$20,000; the total accumulated amount is \$50,000. Note 8: In accordance with Prince Property Management Consulting Co., Ltd.'s related regulated regulation, the limit of endorsements and guarantees for any single entity is \$56,000; the total accumulated amount is \$120,000

Table 2

Prince Housing & Development Corp. and Subsidiaries Holding of marketable securities at the end of the year December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

						As of December 31, 2017
	Marketable		Relationship with the securities
Securities held by	scurities	Name of investoe companies	LSSUC	General ledger account	Number of shares	Book value	Ownership (%)	Fair value	Foolnota
Prince Housing & Development Corp.	tiesi Sies	Nantex Industry Co., Ltd.	ر مح	Available-for sale financial assets - non-current	7,204,751	169,312	Note 1	n
	Šlock	ScinoPharm Taiwan, Ltd.	ا چ	Available-for sale financial assets - non-current	13, 00, 92	56,830	- Pois		23.50 Listed company, Note 2
	Slock	simple Technology Co., Ltd.	None	Available-for sale financial assets - non-current	46.349	$\frac{17}{2}$	Note 1	66,50	35.45 Listed company, Note 3
	5100.	Jaiversal Venture Capital Investment Corp.	Space	Available-for sale financial assets - non-current	,400,000	13,537	Note 1	2.67	OTC company
	Sioci.	Grand Bills Finance Corp.	Sec	Available-for sale financial assets - non-current	48, 672		Note 1	17.10
	Slock	Chipwell Toch, Corp.	$rac{2}{2}$	Available-for sale financial assets - non-current	344,488	53	Note 1	4.42
	Stock	Manmat Technology Co., Ltd.	None	Available-for sale futancial assets - non-current	,618.563		$\frac{1}{2}$	3.9
	Slock	Southern Science Joint Development,	None	Available-for sale futancial assets - non-current	10,000	23.513 35.513	10.00	3,551.32
	Stock	Changing Information Technology Co., Ltd.	None	Available-for sale futancial asses - non-current	119,075	1.752	Note 1	14.72
	Stock Stock	Formosoft International Co., Ltd.	None	Available-for sale financial assets - non-current	35,589		Note 1	63
	ğ	President Energy Development Corp.	$\frac{1}{2}$	Financial assets carried at cost - non-current	(30,000	13.510	ŝ,	$\frac{3}{4}$
	Stock	President International Development Corp.	$N$ onc	Financial assets carried at cost - non-current	87 745 770	841,520	663	10.87	t 2
	녆	Mega Diamond Money Market Fund	None	Financial assets at fair value through profit or loss - non-current	6,10,406	78,552		12.47	Note 5
	Ĕ	fuanta Wan Tai Money Market	hei Z	Financial assets at fair value through profit or loss-current	6,690,130	100,626		15.06
Ta-Chen Construction & Engineering Corp.	Stock	Nantes Industry Co., Ltd.	None	Financial assets at fair value through profit or loss - current	2,692,84	28,282	Note 1	55	Note 6
	Ě	Cuanta De-Bao Money Market Fund	None	Financial assets at fair value through profit or loss - current	5,022,602	60,020		$\frac{1}{2}$
	Stock	Chipwell Toch, Corp.	None	Available-for sale financial assets - non-current	349.990	1.547	Note 1	4.42
	Slock	Naumai Technology Co., Ltd.	Space	Available-for sale financial assets - non-current	.48.85	25,866	S, 8	ŝ
	Repurchase	China Bills Finance Corp.	Let	Cash equivalents-repurchase bonds		45,000
		Reparchase International Bills Finance Corp.	None	Cash equivalents-repurchase bonds		5.000
		Repurchase MEGA BILLS FINANCE CO., LTD.	Space	Cash equivalents-repurchase bonds		6000
Prince Housing Investment Co., Ltd.	Slock	Tou lisu Investments Inc.	None	Available-for sale financial assets - non-current	ŝ		15,00	USD 1.00
Prince Apartment Management	Slock ¹	Prince Housing & Development Corp.	Parent company	Available-for sale financial assets - non-eurrent	655,424	7,898	Tote 1
Maintain Co. Ltd.								12.05
	Slock	Tainan Spinning Co., Ltd.	Space	Available-for sale futancial assets - non-current	12,201	562	Net 1	13.60
Dong-Feng Enterprises Co., Ltd.	Slock	Nantex Industry Co., Ltd.	. See	Available-for sale futureial assets - non-current	185,031	$rac{348}{4}$	Note 1	23.50
	Stock	Sung Gang Asset Management Co., Ltd.	$rac{8}{2}$	Available-for sale futureial assets - non-current	47,968	n T	Note 1	24.20
Prince Security Co., Ltd.	Stock	Nanmat Technology Co., Ltd.	Nono	Available-for sale financial assets - non-current	246,513	3449	Note 1	13.99
Cheng-shi Construction Co., Ltd.	Ĕ	UPAMC James Bond Money Market Fund	Jone	Financial assets at lair value through profit or loss - current	1,013,263	50,100		16.62
	Repurchase	International Bills Finance Corp.	None	Cash equivalents-repurchase bonds
		Repurchase China Bills Finance Corp.	None	Cash equivalents-repurchase bonds		30,000 24.000		ı $\ddot{\phantom{0}}$
	Repurchase	Mega Bills Finance Co., LTD,	Nonc	Cash equivalents-repurchase bonds		10,000		ł
Time Square International Co., Ltd.	Fund	FSITC Taiwan Money Market	None	Financial assets at fair value through profit or loss - current	1,893,426	20,036		15.21
	Fund	FSITC Money Market	None	Financial assets at fair value through profit or loss - current	507,484	90,014		ŢΠ,
	Fund	JPAMC Janes Bond Money Market Fund	Sec	Financial assets at fair value through profit or loss - current	1,612,652	60,026		16.62
	Fund	Eastspring Investments Well Pool Money Market F	S	Financial assets at fair value through profit or loss - current	137,050	60,009		$\frac{5}{2}$

Note 1: Presentage of Company's omersibip is less than 3%,
Note 2: 4,088 thousand shares of outstanding common stock were used as conlateral for hom.
Note 3: 17,276 thousand shares of outstanding common stock were used as

					Acquisition or sale of the same security with the accumulated cost exceeding \$300 million or 20% of the Company's paid-in capital	Year ended December 31, 2017	Prince Housing & Development Corp. and Subsidiaries
Table 4													Expressed in thousands of NTD (Except as otherwise indicated)
					January 1, 2017 Balance as at		Addition (Note 3)			Disposal (Note 3)			Balance as at December 31 2017
	Marketable			Relationship ţ
	securities	General	Counterparty	the investor	Number of		Number of		Number of			Gain (loss) on	Number of
Investor	(Note 1)	ledger account	(Note 2)	(Note 2)	shares	Amount	shares	Amount	shares	Selling price Book value		disposal	shares	Amount
Prince housing & Development ĝ	UPAMC James Bond Money Market Fund	value through profit or Financial assets at fair loss-non-current			6,040,325	100,000	s, 30,152,896	500,000 (	36,193,221) \$	600,723 (\$	600,000) \$	ŗ
Prince housing & Development	Yuanta Wan Tai Money Market	value through profit or Financial assets at fair			6,663,158	100,000	59,880,350		900,083 ( 59,853,378)	900,548	899,463)	1,085	6,690,130	100,620
Development Ċ. Čerp.	Prince housing & Jih Sun Money Market Fund	value through profit or Financial assets at fair loss-non-current loss-non-current			6,817,980	100,000	20,439,776		300,000 ( 27,257,756)	400,572 (	400,000)	572
	Note 4: Paid-in capital to herein is the paid-in copital of parent company. In the case that shares were issued with no par value or a par value other than NTS10 per share, the 20 % of paid-in explain shall be replaced by Note 3. Aggregate purchases and sales amounts stoudd be calculated separately at their market values to verify whether they individually reach NT\$300 million or 20% of paid-in capital or more. Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank. Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. سنادا والمساحد والمساودة فستستحدث

parent in the calculation.

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, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

					Other	commitments	None				None
Reason for	acquisition of	real estate	and	status of the	real	estate	For operating	y			For operating	use
				Basis or reference	used in setting the	price	Note 2				Market value
						Amount
				Date of the	original	transaction
If the counterparty is a related party, information as to the last	transaction of the real estate is disclosed below:					acquirer
			Original owner Relationship	Relationship who sold the real between the original	estate to the owner and the
					with the	counterparty counterparty	Third party				Third party
						Counterparty	5 1,169,785 Redevelopment	zone of Xia Hai Term, Renwu	District,	Kaolisiung City	.799 Taiwan Sugar Corporation
					Status of						303.
					Transaction		Note 2
							(Note 1)				2014/11/07 \$ 1,255,309 (Note 3)
							Hai Lot No. 978.	ដូ			No. 158,etc.
						Real estate acquired by Real estate acquired Date of the event amount payment	Prince Housing & Development Corp. Ren Wu Dist. Xia 2013/06/14				Prince Housing & Development Corp. Nanzi subsection

Note 1; The transfer of fide took place on settlement date. The Company paid \$0 for the teurent period. As of December 31, 2017, the Company has alteady paid \$1.169,785.
Note 2: In order to purchase 67.13% of areas fon the

Table 5, Page 1

Table 5

Prince Housing & Development Corp. and Subsidiaries
Disposal of real estate reaching NT\$300 million or 20% of paid-in capital or more
Year ended December 31, 2017

Table 6

Expressed in thousands of NTD
(Except as otherwise indicated)

	her commitment
asis or reference u.	in setting the price	ppraisal repo
Reason for	disposal	it operating us
elationship	rith the seller	None
	Counterparty	Third party
Gain (loss		on disposal $\frac{3}{2}$ $\frac{285,812}{2}$
latus of collection	of proceeds	2,556,667 \$
lisposal	amount	2,556,667
	Book value	2270,855 \$
	Pate of acquisition	[14/12/31 (Note 2) Î
pasaction date.	date of the event $\overline{\phantom{a}}$	017/02/21 (Note 1
	eal estate	ei Hu Tannei Section No.4
		ne Compan

Note 1: Contract date
Note 2: Completion date

$\hat{\boldsymbol{\beta}}$

					Footnote
Expressed in thousands of NTD	(Except as otherwise indicated	Notes/accounts receivable (payable)	Percentage of notes/accounts total	receivable	(payable)	$(0\%)$	$(0\%)$
					Balance
					Credit term		It is reasonable
	Differences in transaction	terms compared to third party transactions			$\frac{Unit \, price}{\sqrt{1 - (1)}}$
					$C$ redit term $\qquad$	Payments were paid It is reasonable It is reasonable	in accordance with compared to the compared to the in accordance with compared to the compared to the the contract terms normal tradings normal tradings the contract terms normal tradings normal tradings Payments were paid It is reasonable
		Transaction		Percentage of total	purchases (sales)	15%	š,
					Amount	865,798	483,750
				Purchases	(sales)	Purchases	Purchases
				Relationship with the	counterparty	Subsidiary	Subsidiary
					Counterparty		É
lable				Purchaser/seller		Prince Housing & Development Cheng-Shi Construction Co.,	Prince Housing & Development Prince Utility Co., Ltd. Cop. e corp

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 Endot Deember 31, 2017

Table 7

$\ddot{\cdot}$

$\frac{1}{2}$

				575,000 - obligation receivable Other assets	Subsidiary	The Splender Hotel Taichung	Prince Housing & Development Corp.
doubtful accounts	subsequent to the balance Allowance for Amount collected sheet date	Action		December 31, 2017 Turnover rate Amount taken Balance as at	Relationship with the counterparty	Counterparty	Creditor C
			Overdue
Expressed in thousands of NTD (Except as otherwise indicated)							able 8

Prince Housing & Development Corp. and Subsidiaries
Receivables from related parties reaching \$100 million or 20% of paid-in capital or more
December 31, 2017

Table 8

$\frac{1}{2}$

Prince Housing & Development Corp. and Subsidiaries

Significant inter-company transactions during the reporting periods
Year ended December 31, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

							consolidated total Percentage of
Number	Company name	Counterparty	Relationship	General ledger account	Amount	Transaction terms	operating revenues or total
	Prince Housing & Development Corp.	Ta-Chen Construction & Engineering Corp.	The Company to the consolidated subsidiaries	Construction in progress	120,994		0.24% assets
	Prince Housing & Development Corp.	Prince Uitility Co., Ltd.	The Company to the consolidated subsidiaries	Purchases	483,750	Based on mutual agreements	4.40%
	Prince Housing & Development Corp.	Prince Utility Co., Ltd.	The Company to the consolidated subsidiaries	Construction in progress	361,800		$0.92\%$
	Prince Housing & Development Corp.	Theng-Shi Construction Co., Ltd.	The Company to the consolidated subsidiaries	Purchases	865,798	Based on mutual agreements	7.88%
	Prince Housing & Development Corp.	Theng-Shi Construction Co., Ltd.	The Company to the consolidated subsidiaries	Construction in progress	,047,250		2.08%
	Prince Housing & Development Corp.	The Splender Hotel Taichung	The Company to the consolidated subsidiaries	Endorsement and guarantee	,683,308	In accordance with	3,35%
						endorsement and guarantee
						procedures
	Prince Housing & Development Corp.	The Spiender Hotel Taichung	The Company to the consolidated subsidiaries	Other assets - obligation	575,000	Creditor's rights purchase	1.14%
				receivables		contract
	Prince Housing & Development Corp.	Prince Real Estate Co., Ltd.	The Company to the consolidated subsidiaries	Endorsement and guarantee	258,000	In accordance with	0.51%
						endorsement and guarantee
						procedures
	Prince Utility Co., Ltd.	Prince Housing & Development Corp.	consolidated subsidiaries to the Company Ĕ	Endorsement and guarantee	638,763	In accordance with	1.27%
						endorsement and guarantee
						procedures
$\sim$	Prince Real Estate Co., Ltd.	Prince Housing & Development Corp.	consolidated subsidiaries to the Company È	Endorsement and guarantee	1,513,309	In accordance with	3.01%
						endorsement and guarantee

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

procedures

(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 c

$(2)$ Subsidiary to parent company.
$(3)$ Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operation sects, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on
accum

Note 4: The table only discloses transaction amounts of NTS100 million or more.

Prince Housing & Development Corp. and Subsidiaries Information on investees

Year ended December 31, 2017

(Except as otherwise indicated) Expressed in thousands of NTD

December 31, 2017 December 31, 2016 Number of shares Ownership (%) Book value Main business activities Location
ĠĤ, investment General Taiwan Prince Housing & Development Corp. Cheng-Shi Investment Holdings Co.,
Management and Taiwan
consulting Hotels and catering Taiwan
investment Overseas British Virgin Islands
Housebuilders and sales Taiwan
Leasing of buildings Tarwan
Hotels and catering Taiwan
Hotels and catering Taiwan
Manufacture of plywoods Taiwan
Real estate trading Tarwan
Development of public housing and building Taiwan
Real estate trading Taiwan
and leasing Construction Taiwan Ta-Chen Construction & Engineering
Electricity water pipe Taiwan
Construction Taiwan

Table 10, Page 1

Table 10

					Initial investment amount		Shares held as at December 31, 2017			income (loss) Investment
									Net profit (loss) of recognised by the the investee for the Company for the
									year ended	year ended
			Main business	Balance as at	Balance as at				December 31,	December 31,
Investor	Investee	Location	activities		December 31, 2017 December 31, 2016 Number of shares Ownership (%) Book value				2017	2017	Footnote
Prince Housing Investment Co., Ltd. PPG Investment Inc.			investment U.S.A Overseas	56,945	56945	2 ₁	27.30%	5,451 (\$	24543)		Note ₃
	Queen Holdings Ltd.	British Virgin Overseas Islands	investment	122,034	122,034	2,730	2730%	369,575	68,291		Note ₃
Prince Property Management Consulting Co., Ltd.	Prince Apartment Management Maintain Co., Ltd.	Taiwan	Management of ipartments	67,853	67853	3,000,000	100%	73,391	$\frac{1}{9}$		Notes 2 and 3
Dong-Feng Enterprises Co., Ltd.	Amida Trustlink Assets Management Prince Security Co., Ltd.	Taiwan Taiwan	Development of Security	305,480 159,611	305,480 159.611	13 172,636 21 644,062	45.21% 100%	138,830 212,662	651) 13338		Notes 2 and 3 Note ₃
	Co., Ltd.		public housing and building

Note 1: The difference between the income (loss) of the investee and the investion income inversion income (loss) of the investee recognised by the Company in proportion to the share ownership and unrealised gain (loss) fr

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 s

AI assistant

PHD — Audit Report / Information 2017

52134_rns_2017-12-15_203d2377-7d45-462b-8a8c-b0fcd5908d92.pdf

PRINCE HOUSING & DEVELOPMENT CORP. PARENT COMPANY ONLY FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2017 AND 2016

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR17000341

Opinion

Basis for opinion

Key audit matters

The accuracy of building and land sales revenue recognition timing

Description

How our audit addressed the matter

Description

How our audit addressed the matter

Other matter - Scope of the Audit

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

Auditor's responsibilities for the audit of the financial statements

PRINCE HOUSING & DEVELOPMENT CORP.PARENT COMPANY ONLY BALANCE SHEETSDECEMBER 31, 2017 AND 2016(Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP.PARENT COMPANY ONLY BALANCE SHEETSDECEMBER 31, 2017 AND 2016(Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP.PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOMEFOR YEARS ENDED DECEMBER 31, 2017 AND 2016(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

PRINCE HOUSING & DEVELOPMENT CORP.PARENT COMPANY ONLY STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP.PARENT COMPANY ONLY STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2017 AND 2016(Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

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

INDICATED)

1. HISTORY AND ORGANIZATION

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

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

IFRS 16, 'Leases'

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Foreign currency translation

(7) Available-for-sale financial assets

(9) Impairment of financial assets

(11) Inventories

(15) Operating leases (lessor/ lessee)

(16) Investment property

(17) Intangible assets

(19) Borrowings

(22) Offsetting financial instruments

(24) Provisions

(25) Employee benefits

B. Pensions

$(26)$ Income tax

(27) Share capital

A. Sales of goods

(30) Service concession arrangements

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(4) Accounts receivable, net

(5) Inventories

D. Details of significant inventories:

B. Subsidiaries

C. Associates

Balance sheet

(10) Property, plant and equipment

$(11)$ Investment property

(12) Intangible assets

(15) Receipts in advance

$(16)$ Bonds payable

(17) Long-term borrowings

$(19)$ Pension

(21) Capital surplus

(22) Retained earnings

(24) Maturity analysis of assets and liabilities

$(26)$ Other income

(27) Other gains and losses

(28) Finance costs

(29) Expenses by nature

$(30)$ Income tax

7. RELATED PARTY TRANSACTIONS

C. Other assets

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE None.

Foreign exchange risk

Interest rate risk

Price risk

13. SUPPLEMENTARY DISCLOSURES

Provision of endorsements and guarantees to others

PHD Audit Report / Information 2017

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME
FOR YEARS ENDED DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP.
PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2017 AND 2016
(Expressed in thousands of New Taiwan dollars)

Significant inter-company transactions during the reporting periods
Year ended December 31, 2017