PHD — Audit Report / Information 2019

Dec 12, 2019

PRINCE HOUSING & DEVELOPMENT

CORP.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND REPORT OF INDEPENDENT

ACCOUNTANTS

DECEMBER 31, 2019 AND 2018

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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.

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REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

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, 2019 and 2018, 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, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with the “Regulations Governing the Preparation 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.

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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(31) for accounting policies on sales revenue, and Note 6(26) for details. For the year ended December 31, 2019, building and land sales revenue amounted to NT$ 4,917,111 thousand, representing 86.57 % of operating revenue.

The Company recognises building and land sales revenue and profit or loss upon the transfer of ownership and handing over the property. Since the Company has diverse customers, the information delivery and recording process between segments in the Company usually involve 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

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• 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 that the timing of the building and land sales revenue recognition was appropriate.

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(14) for accounting policies on investments accounted for under equity method, and Note 6(8) 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.

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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 TaChen 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$ 307,140 thousand and NT$ 285,763 thousand as at December 31, 2019 and 2018, constituted 0.73% and 0.66% of total assets; comprehensive income (loss) of aforementioned company of NT$21,377 thousand and NT($12,014) thousand for the years then ended, constituted 2.06% and (1.15%) 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 reports of the other independent accountants.

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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 Preparation 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:

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• 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.

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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.

Tien, Chung-Yu Wu, Chien-Chih

For and on behalf of PricewaterhouseCoopers, Taiwan March 19, 2020

------------------------------------------------------------------------------------------------------------------------------------------------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.

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PRINCE HOUSING & DEVELOPMENT CORP. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) and 8 6(5) 6(5) 6(6), 7 and 8 6(7) 6(2) and 8 6(3) and 8 6(4) and 8 6(8) and 8 6(9) and 8 6(10) and 7 6(12) and 8 6(13) 6(31) 9 7	December31,2019 AMOUNT % $ 4,113,430 10 904,894 2 - - 56,998 - 88,426 - 1,963 - 7,128 - 19,335,331 46 91,063 - 40 - 24,599,273 58 79,342 - 1,795,634 4 910,538 2 5,600,351 13 484,710 1 182,672 1 5,740,842 14 2,055,428 5 471 - 13,067 - 636,640 2 17,499,695 42 $ 42,098,968 100	December31,2018	December31,2018
		AMOUNT $ 4,113,430 904,894 - 56,998 88,426 1,963 7,128 19,335,331 91,063 40 24,599,273 79,342 1,795,634 910,538 5,600,351 484,710 182,672 5,740,842 2,055,428 471 13,067 636,640 17,499,695 $ 42,098,968	AMOUNT $ 2,103,964 533,083 240,251 70,659 1,071,244 88,134 - 21,310,383 240,890 41,096 25,699,704 78,906 1,708,278 877,248 5,560,664 530,320 - 5,789,684 2,116,681 26,332 113,156 636,640 17,437,909 $ 43,137,613	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 1479 Other current assets 11XX Total current Assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1550 Investments accounted for under equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets, net 1840 Deferred income tax assets 1920 Refundable deposits 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				5 1 1 - 3 - - 49 1 -
				60
				- 4 2 13 1 - 13 5 - - 2
				40
				100

(Continued)

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PRINCE HOUSING & DEVELOPMENT CORP. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December31,2019 December31,2018 Notes AMOUNT % AMOUNT % 6(14) and 8 $ 1,949,000 5 $ 730,000 2 6(15) and 8 49,925 - 201,734 1 6(26) 551,520 1 487,975 1 1,940 - 4,528 - 941,127 2 1,345,204 3 7 31,006 - 120,236 - 375,656 1 540,685 1 - - 41,994 - 7 29,698 - - - 6(16) 66,565 - 64,060 - 6(18) and 8 4,629,401 11 3,643,297 9 31,513 - 79,131 - 8,657,351 20 7,258,844 17 6(17) 4,500,000 11 4,500,000 11 6(18) and 8 4,326,523 10 6,910,357 16 6(19) 102,554 - 87,196 - 7 155,362 1 - - 6(20) 61,556 - 61,115 - 141,469 - 129,655 - 6(8) 297,509 1 315,830 1 9,584,973 23 12,004,153 28 18,242,324 43 19,262,997 45 6(21) 16,233,261 39 16,233,261 38 6(22) 2,260,513 5 2,260,513 5 6(23) 2,058,870 5 1,933,605 4 2,428,513 6 2,660,209 6 6(24) 876,490 2 788,031 2 6(21) ( 1,003) - ( 1,003) - 23,856,644 57 23,874,616 55 9 $ 42,098,968 100 $ 43,137,613 100	December31,2018	December31,2018
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2310 Receipts in advance 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current Liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term borrowings 2550 Provisions for liabilities - non-current 2580 Non-current lease liabilities 2640 Net defined benefit liabilities - non- current 2645 Guarantee deposits received 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total Liabilities Equity Share capital 3110 common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments 3X2X Total liabilities and equity			2 1 1 - 3 - 1 - - - 9 -
			17
			11 16 - - - - 1
			28
			45
			38 5 4 6 2 -
			55
			100

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

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PRINCE HOUSING & DEVELOPMENT CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except earnings per share)

					Years endedDecember31	Years endedDecember31	Years endedDecember31	Years endedDecember31	Years endedDecember31
					2019				2018
	Items	Notes			AMOUNT	%			AMOUNT	%
4000	Operating revenue	6(26) and 7		$	5,680,054	100		$	6,485,290	100
5000	Operating costs	6(6)(13)(30) and	7(		4,299,848 )	(	76) (		4,877,308 ) (	76 )
5900	Gross profit from operations				1,380,206		24		1,607,982	24
	Operating expenses	6(30) and 7
6100	Selling expenses		(		325,022 )	(	6) (		334,206 ) (	5 )
6200	Administrative expenses		(		750,591 )	(	13) (		780,567 ) (	12 )
6450	Impairment loss (impairment gain	12(2)
	and reversal of impairment loss)
	determined in accordance with IFRS
	9		(		29 )		-		-	-
6000	Operating expenses		(		1,075,642 )	(	19) (		1,114,773) (	17 )
6900	Net operating income				304,564		5		493,209	7
	Non-operating income and expenses
7010	Other income	6(27)			140,963		3		199,505	3
7020	Other gains and losses	6(2)(28)			130,789		2		146,831	2
7050	Finance costs	6(6)(29) and 7	(		185,984 )	(	3) (		173,469 ) (	2 )
7070	Share of profit of associates and	6(8)
	joint ventures accounted for using
	equity method				628,202		11		665,802	10
7000	Non-operating income and
	expenses				713,970		13		838,669	13
7900	Profit before income tax				1,018,534		18		1,331,878	20
7950	Income tax expense	6(31)	(		65,767 )	(	1) (		79,223 ) (	1 )
8000	Profit from continuing operations				952,767		17		1,252,655	19
8200	Profit			$	952,767		17	$	1,252,655	19
	Other comprehensive income
	Components of other comprehensive
	income that will not be reclassified to
	profit or loss
8311	Gains (losses) on remeasurements of	6(20)
	defined benefit plans		(	$	295 )		- ($		129 )	-
8316	Unrealised gains (losses) from	6(3)(24)
	investments in equity instruments
	measured at fair value through other
	comprehensive income				87,356		1 (		255,628 ) (	4 )
8330	Share of other comprehensive
	income of associates and joint
	ventures accounted for using equity
	method, components of other
	comprehensive income that will not
	be reclassified to profit or loss		(		2,638 )		-		44,999	1
8310	Components of other
	comprehensive income that will
	not be reclassified to profit or
	loss				84,423		1 (		210,758) (	3 )
8300	Other comprehensive income(loss)			$	84,423		1 ($		210,758 ) (	3 )
8500	Total comprehensive income			$	1,037,190		18	$	1,041,897	16
	Earnings per share (in dollars)	6(32)
9750	Basic earnings per share			$		0.59		$		0.77
9850	Diluted earnings per share			$		0.58		$		0.76
	Assuming the Company treated the stocks held by a subsidiary				as long-term investments		rather		than treasury stock, the
	proforma information is as follows:'
	Comprehensive income			$		952,767		$	1,252,655
	Earnings per share (in dollars)
	Basic earnings per share			$		0.59		$		0.77

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

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PRINCE HOUSING & DEVELOPMENT CORP. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2018 Balance at January 1, 2018 Effects of retrospective adjustments Balance at 1 January 2018 after adjustments Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Appropriations and distribution of 2017 earnings Legal reserve Cash dividends Disposal of financial assets at fair value through other comprehensive income Balance at December 31, 2018 Year ended December 31, 2019 Balance at January 1, 2019 Profit for the year Other comprehensive (loss) income for the year Total comprehensive income for the year Appropriations and distribution of 2018 earnings Legal reserve Cash dividends Balance at December 31, 2019	Notes		Share capital - commonstock		Capitalsurplus		Retained	earnings	earnings		O	therequityinterest		Treasury stocks		Totalequity
							Legal reserve		Unappropriated retained earnings	Financial statements translation differences of foreignoperations		Unrealised gains or losses from financial assets measured at fair value through other comprehensive income	Unrealized gain or loss on available- for-sale financial assets
	6(24) 6(32) 6(3)(20)(24) 6(23) 6(3)(24) 6(32) 6(3)(20)(24) 6(23)		$ 16,233,261 - 16,233,261 - - - - - - $ 16,233,261 $ 16,233,261 - - - - - $ 16,233,261		$ 2,260,513 - 2,260,513 - - - - - - $ 2,260,513 $ 2,260,513 - - - - - $ 2,260,513		$ 1,805,495 - 1,805,495 - - - 128,110 - - $ 1,933,605 $ 1,933,605 - - - 125,265 - $ 2,058,870	$ 2,589,627 - 2,589,627 1,252,655 232 1,252,887 ( 128,110 ) ( 1,055,162 ) 967 $ 2,660,209 $ 2,660,209 952,767 ( 4,036 ) 948,731 ( 125,265 ) ( 1,055,162 ) $ 2,428,513		($ 48 ) - ( 48 ) - - - - - - ($ 48 ) ($ 48 ) - - - - - ($ 48 )	$ - 1,000,036 1,000,036 - ( 210,990 ) ( 210,990 ) - - ( 967 ) $ 788,079 $ 788,079 - 88,459 88,459 - - $ 876,538		$ 974,425 ( 974,425 ) - - - - - - - $ - $ - - - - - - $ -	($ 1,003 ) - ( 1,003 ) - - - - - - ($ 1,003 ) ($ 1,003 ) - - - - - ($ 1,003 )	$ 23,862,270 25,611 23,887,881 1,252,655 ( 210,758 ) 1,041,897 - ( 1,055,162 ) - $ 23,874,616 $ 23,874,616 952,767 84,423 1,037,190 - ( 1,055,162 ) $ 23,856,644

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

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PRINCE HOUSING & DEVELOPMENT CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Gain on financial assets at fair value through profit or loss Expected credit loss Share of profit of subsidiaries, associates and joint ventures accounted for under equity method Loss on disposal of property, plant and equipment Gain on disposal of investment property Property, plant and equipment transferred to expenses Depreciation Amortization Interest expense Interest income Dividend income Gain on unrealized foreign exchange Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss - current Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Current contract liabilities Notes payable Accounts payable Accounts payable - related parties Other payables Receipts in advance Other current liabilities Provisions for liabilities - non-current Net defined benefit liabilities - non-current Cash inflow (outflow) generated from operations Interest received Cash dividend received Interest paid Income tax paid Net cash flows from operating activities

Notes Years ended December 31 2019 2018 $ 1,018,534 $ 1,331,878 6(2)(28) ( 4,059 ) ( 1,817 ) 12(2) 29 - 6(8) ( 628,202 ) ( 665,802 ) 6(28) 80 19 6(28) ( 182 ) ( 602 ) 278 - 6(9)(10)(12)(30) 141,763 110,893 6(13)(30) 61,253 61,253 6(29) 185,984 173,469 6(27) ( 4,099 ) ( 4,169 ) 6(3)(27) ( 74,866 ) ( 112,484 ) 6(28) - ( 15,467 ) ( 368,188 ) ( 431,000 ) 13,661 15,103 982,789 ( 986,368 ) 86,171 43,228 1,975,052 ( 64,035 ) 139,235 ( 23,125 ) 41,056 172,462 63,545 ( 337,303 ) ( 2,588 ) ( 1,265 ) ( 404,077 ) 261,415 ( 89,230 ) 103,845 ( 164,345 ) 6,799 2,505 ( 53,027 ) ( 47,618 ) 47,447 15,358 ( 12,343 ) 146 ( 15,887 ) 2,939,985 ( 396,883 ) 4,099 4,169 642,422 1,060,297 ( 186,668 ) ( 165,298 ) ( 89,028 ) ( 42,046 ) 3,310,810 460,239

(Continued)

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PRINCE HOUSING & DEVELOPMENT CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Decrease in financial assets at amortised cost - current Increase in investments accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment property Decrease in refundable deposits Proceeds from disposal of financial assets at fair value through other comprehensive income-non-current Return of share capital from financial assets at fair value through other comprehensive income-non-current Increase in financial assets at amortised cost non-current Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term notes and bills payable Repayment of bonds Proceeds from issuance of bonds Repayment of long-term borrowings Proceeds from long-term borrowings Increase (decrease) in guarantee deposits received Payment of lease liabilities Cash dividends paid Net cash flows used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes Years ended December 31 2019 2018 $ 240,251 $ 234,595 - ( 221,000 ) 6(9) ( 6,870 ) - 20 - 1,855 4,345 100,089 307,892 6(3) - 1,786 - 10,057 ( 33,290 ) ( 206,702 ) 302,055 130,973 6(35) 1,219,000 40,000 6(35) ( 151,809 ) ( 653,824 ) 6(35) - ( 2,500,000 ) 6(35) - 2,500,000 6(35) ( 31,212,652 ) ( 15,682,269 ) 6(35) 29,614,922 16,437,157 6(35) 11,814 ( 41 ) 6(35) ( 29,512 ) - 6(23) ( 1,055,162 ) ( 1,055,162 ) ( 1,603,399 ) ( 914,139 ) 2,009,466 ( 322,927 ) 2,103,964 2,426,891 $ 4,113,430 $ 2,103,964

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

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PRINCE HOUSING & DEVELOPMENT CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2019 AND 2018

(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 19, 2019.

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 2019 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ IFRS 16, ‘Leases’ Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ IFRIC 23, ‘Uncertainty over income tax treatments’ Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 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. IFRS 16, ‘Leases’

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• A. 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.

• B. The Company has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by the FSC. Accordingly, the Company increased ‘right-of-use asset’ by $213,649, increased ‘lease liability’ by $213,649, respectively, with respect to the lease contracts of lessees on January 1, 2019.

• C. The Company has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16.

• (a) Reassessment as to whether a contract is, or contains, a lease is not required, instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.

• (b) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

• (c) The accounting for operating leases whose period will end before December 31, 2019 as shortterm leases and accordingly, rent expense of $665 was recognised for the year ended December 31, 2019.

• (d) The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.

• D. The Company calculated the present value of lease liabilities by using weighted average incremental borrowing interest rate of 2.21%.

• E. The Company recognised lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate and lease liabilities recognised as of January 1, 2019 is as follows:

follows:
Operating lease commitments disclosed by applying IAS 17 as at December 31, 2018 Total lease contracts amount recognised as lease liabilities by applying IFRS 16 on January 1, 2019 Incremental borrowing interest rate at the date of initial application Lease liabilities recognised as at January 1, 2019 by applying IFRS 16	240,319 $
	240,319 $
	2.21% 213,649 $

• (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 2020 are as follows:

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New Standards,Interpretations and Amendments Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’	Effective date by International Accounting Standards Board
	January 1, 2020 January 1, 2020 January 1, 2020

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

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

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

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’	To be determined by International Accounting Standards Board January 1, 2021 January 1, 2022

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

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 Reports by Securities Issuers”.

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(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)Financial assets at fair value through other comprehensive income.

• (c)Defined benefit liabilities recognised based on the net amount of pension fund assets less unrecognised actuarial gains and present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its 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, nonmonetary 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.

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  - (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;

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  - (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 that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

• D. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

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• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Company’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• (9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (10) Impairment of financial assets

• For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(11) 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.

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• －

• (12) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

• (13) 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.

• (14) 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.

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• 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

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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.

• (15) 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:

are as follows:
Buildings and structures	50 ~ 60 years
Computer and communication equipment	5 years
Transportation equipment	5 years
Office equipment	5 ~ 10 years
Leasehold improvements	5 ~ 20 years
Other equipment	5 ~ 10 years

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(16) Leasing arrangements (lessee)-right-of-use assets/ lease liabilities

Effective 2019

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable; and

• (b) Variable lease payments that depend on an index or a rate.

• The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the initial measurement of lease liability.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(17) Operating leases (lessee)

Effective 2018

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

(18) 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 ~ 60 years.

(19) 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.

(20) 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. When the circumstances or reasons for recognising

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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.

• (21) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised 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 recognised 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 drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

• (22) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (23) Bonds payable

• Ordinary corporate bonds issued by the Company are initially recognised at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(24) 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.

(25) 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.

• (26) 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

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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.

• (27) 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.

• 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.

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(28) 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 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.

(29) 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.

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(30) 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.

• (31) Revenue recognition

• A. Land development and resale

  • (a) The Company develops and sells residential properties. Revenue is recognised when control over the property has been transferred to the customer. The properties have generally no alternative use for the Company due to contractual restrictions. However, an enforceable right to payment does not arise until legal title has passed to the customer. Therefore, revenue is recognised at a point in time when the legal title has passed to the customer.

  • (b) The revenue is measured at an agreed upon amount under the contract. The consideration is due when legal title has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is therefore not adjusted because the contract does not include a significant financing component.

• B. Hospitality service revenue

  • The Company provides related service, such as room and accommodation service. Sales revenue will be recognised when services are provided or goods are sold. Consideration is collected when customers purchase goods or services.

• C. Service concession revenue

  • Information on service concession revenue is provide in Note 4(32).

• D. Rental revenue

The Company leases offices and dormitories. Rental revenue is recognised in profit or loss on a straight-line basis over the lease term.

• E. Incremental costs of obtaining a contract

  • The Company recognises an asset (shown as ‘other current assets’) the incremental costs (mainly comprised of sales commissions) of obtaining a contract with a customer if the Company expects to recover those costs. The recognised asset is amortised on a systematic basis that is consistent with the transfers to the customer of the goods or services to which the asset relates. The Company recognises an impairment loss to the extent that the carrying amount of the asset exceeds the remaining amount of consideration that the Company expects to receive less the costs that have not been recognised as expenses.

• (32) 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 Changxing St. Campus for 44 years and 6 months, and for Shuiyuan Campus for 44 years and 4

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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 IFRS 15, ‘Revenue from contracts with customers’.

• B. Costs incurred on provision of construction services or upgrading services under a service concession arrangement are accounted for in accordance with IFRS 15, ‘Revenue from contracts with customers’.

• C. The consideration received or receivable from the grantor in respect of the service concession arrangement is recognised at its fair value. Such considerations are recognised 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. The Company recognises a financial asset to the extent that it has an unconditional contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction services, and recognises an intangible asset to the extent that it receives a right (a licence) to charge users of the public service.

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

• 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 own-use portion accounts for less 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.

~30~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Repurchase bonds Checking accounts and demand deposits	December 31,2019 $ 2,888 3,609,051 501,491 $4,113,430		December 31,2018 $ 3,509 2,100,455 -
			$2,103,964

• 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.

• C. Details of trust fund of pre-sale construction and borrowings compensation account pledged to others as collateral which were classified as financial assets at amortised cost, are provided in Note 6(4).

• D. Details of the interest income from the aforementioned pledged bank deposits which was recognised under interest income, are provided in Note 6(27).

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

Financial assets at fair value through profit or loss
Items Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Valuation adjustments Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Valuation adjustments	December 31,2019 900,633 $ 4,261 904,894 $ 76,000 $ 3,342 79,342 $	December 31,2018
		531,620 $ 1,463
		533,083 $
		76,000 $ 2,906
		78,906 $

• A. The Company recognised net gain of $4,059 and $1,817 on financial assets at fair value through profit or loss for the years ended December 31, 2019 and 2018, respectively.

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

~31~

(3) Financial assets at fair value through other comprehensive income

Items Non-current items: Designation of equity instrument Listed stocks Unlisted stocks Valuation adjustment	December 31,2019 103,523 $ 872,802 976,325 819,309 1,795,634 $	December 31,2018 103,523 $ 872,802 976,325 731,953 1,708,278 $

• A. The Company has elected to classify stocks that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $1,795,634 and $1,708,278 as at December 31, 2019 and 2018, respectively.

• B. In response to the modified investment strategy, the Company sold $1,786 of unlisted stocks at fair value and resulted in cumulative gains on disposal of $967 for the year ended December 31, 2018.

• C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative gains reclassified to retained earnings due to derecognition Dividend income recognised in profit or loss held at end of period	2019 2018 87,356 $ 255,628) ($ - $ 967 $ 74,866 $ 112,484 $

• D. Details of the Company’s financial assets at fair value through other comprehensive income pledged to others as collateral are provided in Note 8.

(4) Financial assets at amortised cost

Items Current items: Trust account Time deposits Non-current items: Compensation account	December 31,2019 $ - - - $ 910,538 $	December 31,2018 239,891 $ 360 240,251 $ 877,248 $

~32~

• A. As at December 31, 2019 and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Company was $910,538 and $1,117,499, respectively.

• B. Details of the Company’s financial assets at amortised cost pledged to others as collateral are provided in Note 8,

• C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

• (5) Notes and accounts receivable

Notes and accounts receivable
	December	31,2019	December 31,2018
Notes receivable	$	56,998	$	70,659
Accounts receivable	$	92,169	$	1,074,987
Less: Allowance for doubtful accounts	(	3,743)	(	3,743)
	$	88,426	$	1,071,244

• A.The ageing analysis of notes receivable and accounts receivable that were past due but not impaired is as follows:

is as follows:
Without past due Up to 30 days 31 to 60 days 61 to 90 days Over 90 days	Notes Accounts receivable receivable 56,998 $ 87,530 $ - - - - - - - 4,639 56,998 $ 92,169 $ December 31,2019	December 31,2018
	Notes receivable 56,998 $ - - - - 56,998 $	Notes receivable 70,659 $ - - - - 70,659 $	Accounts receivable
			1,070,226 $ - - - 4,761
			1,074,987 $

The above ageing analysis was based on past due date.

• B. As of December 31, 2019, December 31, 2018, and January 1, 2018, the balances of receivables (including notes receivable) from contracts with customers amounted to $94,000, $1,091,483 and $118,364, respectively.

• C. As at December 31, 2019 and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes receivable were $56,998 and $70,659, respectively; the maximum exposure to credit risk in respect of the amount that best represents the Company’s accounts receivable were $88,426 and $1,071,244, respectively.

• D. Information relating to credit risk of notes receivable and accounts receivable is provided in Note 12(2).

• E. The Company does not hold any collateral pledged for notes and accounts receivable.

~33~

(6) Inventories

Inventories
Land held for construction site Construction in progress Buildings and land held for sale Prepayment for land Prepayment for buildings and land Merchandise Land held for construction site Construction in progress Buildings and land held for sale Prepayment for land Prepayment for buildings and land Merchandise		December 31,2019	Book value $ 6,926,185 4,385,175 7,247,363 223,135 552,085 1,388
	Allowance for Cost valuation loss $ 6,990,434 ($ 64,249) 4,385,175 - 7,259,621 ( 12,258) 223,135 - 552,085 - 1,388 - $19,411,838 ($76,507) December 31,2018
			$19,335,331
			Book value $ 7,889,977 4,214,810 8,080,514 282,111 841,421 1,550
	Allowance for Cost valuation loss $ 7,954,226 ($ 64,249) 4,214,810 - 8,093,176 ( 12,662) 282,111 - 841,421 - 1,550 - $21,387,294 ($76,911)
			$21,310,383

• A. The cost of inventories recognised as expense for the years ended December 31, 2019 and 2018 was $4,152,592 and $4,730,348, respectively, including the amounts of $404 and $26,667, 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:

Interest capitalized Interest paid before capitalization Annual interest rate used for capitalization	Years ended December 31,	Years ended December 31,
	2019 344,946 $ 158,962 $ 1.53%-2.50%	2018
		391,512 $
		218,043 $
		1.99%-2.58%

• D. Details of significant inventories:

• (a)Buildings and land in progress

~34~

(b)Land held for construction site Taipei branch Ling Ko Dist. Li Shing Section No. 1209, etc. Bali Dist Chung Chang Section No.222 and 211-1, etc. W Prince (New Taipei City Shing Jheng Section No.883, etc.) Prince Pine Garden (Jhong Li City Shuang Ling Section No. 1449, etc.) Taichung branch Prince Xin World (Ping Hsin Section No. 694, etc.) Jin Shuei Dist. Wu Show Section No. 1037, No. 1038, No. 1040, etc. Tainan branch Prince Feng Yun (Hsin Ying Section No. 841-9) Jin Hua Section No. 1361 Shan Chia Section No. 939, etc. Others Kaohsiung branch Prince Castle (Building) (Nanzi subsection No. 158, etc.) Prince Cloud E (Ren Wu New Hougang West Section No .90, etc. ) Prince Cloud B (Ren Wu New Hougang West Section No .42, etc.) Ren Wu New Hougang West Section No. 88 experimental house Total buildings and land in process Taipei branch Zhong Li Pu Ren Lot No. 720, etc. Others Taichung branch Wu Feng Lot No. 365~855 etc. Song Quan Lot No. 164 etc. Tu Ku Section No. 9-7, etc. Song Chang Lot No. 577 etc. Hou Long Zi Section No. 133-004 Xi Zhou Lot No. 112-54 etc. Others	December 31,2019 1,975,394 $ 689,409 - - 2,664,803 $ December31,2019 1,627,356 $ 212,248 1,839,604 $ December31,2019 1,258,574 $ 688,265 155,943 3,738 2,106,520 $ December31,2019 1,572,455 $ 448,871 364,370 72,933 2,458,629 $ $ 9,069,556 December31,2019 140,156 $ 5,978 146,134 $ December31,2019 175,661 $ 137,697 55,167 19,912 19,513 2,766 11,713 422,429 $	December 31,2018
		1,852,235 $ 689,088 1,185,483 686,574
		4,413,380 $
		December31,2018
		1,260,063 $ 207,536
		1,467,599 $
		December31,2018
		1,093,329 $ 688,265 154,651 3,738
		1,939,983 $
		December31,2018
		1,509,936 $ 153,757 379,154 72,933
		2,115,780 $
		$ 9,936,742
		December31,2018
		140,156 $ 5,978
		146,134 $
		December31,2018
		175,661 $ 137,697 55,167 19,912 19,513 2,766 11,713
		422,429 $

~35~

(c)Buildings and land held for sale Tainan branch Shan Zhong Lot No. 1468, 1475 & 1476 etc. Xue Zhong Lot No. 679, etc. Yong Kang Ding An Lot No. 879, etc. Bei An Section No. 54-3, etc. Chin An Section No. 373~377 Bao An Lot No. 882, etc. Others Kaohsiung branch Ren Wu New Hougang West Section No. 53, etc. Ren Wu New Hougang West Section No. 30 & 52-74 Ren Wu Xiahai Section No. 642, 669 & 940, etc. Da Hua Lot No. 434 & 436 Total land held for construction site Taipei branch Taipei Shin Yi (Xin Zhuang Fuduxin) Prince Hua Wei W Prince Prince pine garden Prince Fu III Prince Da Din Prince Guo Boa Prince Fu II Others Taichung branch Prince Xian Heng W Epoch Chin Fon Gin Prince Jyun Prince Shin Fu Others Tainan branch Flower Bo Five Prince WIN2 Jun Chan LV Prince Jum Fon Huei Prince Golden Age Others	December31,2019 234,699 $ 50,798 28,610 15,344 15,139 10,325 14,550 $ 369,465 December31,2019 905,077 $ 407,357 41,668 13,923 $1,368,025 $2,306,053 December31,2019 $ 1,203,294 936,352 908,965 512,426 89,346 12,025 5,738 - 546 $ 3,668,692 December31,2019 1,223,688 $ 339,089 20,759 9,058 - 6,118 $1,598,712 December31,2019 $ 578,935 80,640 19,725 15,208 5,302 2,292 $702,102	December31,2018
		234,699 $ 50,798 28,610 15,344 15,139 10,325 14,550
		$ 369,465
		December31,2018
		872,986 $ 407,357 - 13,923
		$1,294,266
		$2,232,294
		December31,2018
		$ 1,516,042 936,352 - - 830,889 12,235 5,738 25,395 546
		$ 3,327,197
		December31,2018
		1,416,409 $ 992,044 40,718 20,542 343,573 6,118
		$2,819,404
		December31,2018
		$ 719,686 229,619 19,725 170,269 5,302 2,292
		$1,146,893

~36~

Prepayment for land Prepayment for buildings and land Kaohsiung branch Prince Castle (Townhouse) Prince Cloud C apartment Prince Hua Yang Prince Cloud D Prince Dai Din Prince Cloud C townhouse Total buildings and land held for sale Tainan branch Ren Wu New Hougang West Section No. 20, etc. Taisugar Nanzi Section	December31,2019 $ 1,204,509 28,347 27,883 22,206 7,170 -	December31,2018
		$ - 637,544 54,641 91,355 8,473 7,669
	$1,290,115 $7,259,621 December31,2019 $223,135 December31,2019 $ 552,085	$799,682
		$ 8,093,176
		December31,2018
		$282,111
		December31,2018
		$ 841,421

(d)Prepayment for land

(e)Prepayment for buildings and land

(7) Other current assets

Other current assets
Items Deferred sales commission	December31,2019 40 $	December31,2018
		41,096 $

Note: Deferred sales commissions (incremental costs of obtaining contracts) were reclassified to selling expenses with amounts of $41,056 and $172,462 for the years ended December 31, 2019 and 2018, respectively.

(8) Investments accounted for under equity method

A. Details of investments accounted for under the equity method are set forth below:

Name of subsidiaries and associates Uni-President Development Corp. Cheng-shi Investment Holdings Co., Ltd. Time Square International Investment Holdings Co., Ltd. (Note 3) Prince Real Estate Co., Ltd.(Note 2) Prince Housing Investment Co., Ltd. Geng-Ding Co., Ltd. The Splendor Hotel Taichung Prince Property Management Consulting Co., Ltd.	Percentage of Carryingamount ownership $ 1,146,288 30.00% 1,133,975 100.00% 992,375 100.00% 912,198 99.68% 525,031 100.00% 307,140 30.00% 284,831 50.00% 262,006 100.00% December 31,2019	December 31,2018	December 31,2018
	Carryingamount $ 1,146,288 1,133,975 992,375 912,198 525,031 307,140 284,831 262,006	Carryingamount $ 1,130,857 1,077,950 870,306 1,104,574 492,715 285,763 299,344 258,914	Percentage of ownership
			30.00% 100.00% 100.00% 99.68% 100.00% 30.00% 50.00% 100.00%

~37~

Name of subsidiaries and associates Ming-Da Enterprise Co., Ltd Jin Yi Xing Plywood Co., Ltd.(Note 1) Prince Industrial Co., Ltd.	Percentage of Carryingamount ownership 27,152 20.00% - 99.65% 9,355 100.00% $5,600,351 December 31,2019	December 31,2018	December 31,2018
	Carryingamount 27,152 - 9,355 $5,600,351	Carryingamount 30,826 - 9,415 $5,560,664	Percentage of ownership
			20.00% 99.65% 100.00%

• Note 1: As of December 31, 2019 and 2018, the book value of the Company’s investment in Jin Yi Xing Plywood Co., Ltd. ,which was below zero. Thus, the investments were transferred to other non-current liabilities at $297,509 and $315,830, respectively.

• Note 2: On December 31, 2018, Dong-Feng Enterprises Co., Ltd. was merged into Prince Real Estate Co., Ltd. After the merger, Dong-Feng Enterprises Co., Ltd. will be the dissolved company while Prince Real Estate Co., Ltd. will be the surviving company.

• Note 3: Time Square International Stays Corp. was established in July 2018, and originally was a wholly-owned subsidiary of the Company. The Company converted its equity interests in Time Square International Stays Corp. and Time Square International Hotel into shares of Time Square International Investment Holdings Co., Ltd due to a Company reorganisation, and the date of conversion of stock into shares was December 24, 2018.

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 associate that is material to the Company is as follows:

Balance sheet

follows: Balance sheet
		Uni President Development Corp.
	December 31,2019		December 31,2018
Current assets	$	221,434	$	206,849
Non-current assets		7,843,948		8,271,368
Current liabilities	(	3,318,190)	(	3,205,874)
Non-current liabilities	(	926,233)	(	1,502,821)
Total net assets	$	3,820,959	$	3,769,522
Share in associate's net assets	$	1,146,288	$	1,130,857

~38~

Statements of comprehensive income

Statements of comprehensive income
		Uni President Development Corp.
		Years ended	December 31,
		2019		2018
Revenue	$	973,047	$	959,140
Profit for the period from continuing operations	$	156,197	$	116,093
Total comprehensive income	$	156,197	$	116,093
Dividends received from associates	$	31,428	$	30,132

• (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, 2019 and 2018, the carrying amount of the Company’s individually immaterial associates amounted to $334,292 and $316,589, respectively.

		Years ended	December 31,
		2019	2018
Income (loss) for the year from	$	82,899	($	32,550)
continuing operations
Other comprehensive loss, net of tax	(	3,200)	(	783)
Total comprehensive income (loss)	$	79,699	($	33,333)

• D. The Company’s investments had no quoted market price.

• E. The Company’s share of profit of subsidiaries, associates and joint ventures accounted for using equity method for the years ended December 31, 2019 and 2018 was $628,202 and $665,802, respectively.

• F. The investment income of certain investees for the years ended December 31, 2019 and 2018 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 income (loss) recognized for these investees for the years ended December 31, 2019 and 2018 was $22,337 and ($11,779), respectively. As of December 31, 2019 and 2018, investment balance accounted for under the equity method in these investees were $307,140 and $285,763, respectively.

The investees whose financial statements were audited by other independent accountants for the years ended December 31, 2019 and 2018 were as follows:

Geng-Ding Co., Ltd.

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

~39~

(9) Property, plant and equipment

A. Details of book values are as follows:

operty, plant and equipment Details of book values are as follows:
Land Buildings Computer and communication equipment Transportation equipment Office equipment Leasehold improvements Other equipment Construction in progress and equipment under acceptance	December 31,2019 $ 182,890 248,818 2,184 3,136 21,452 20,342 218 5,670 $484,710	December 31,2018
		$ 191,884 286,058 3,740 3,244 23,484 21,669 241 -
		$530,320

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

Cost Land Buildings and structures Computer and communication equipment Transportation equipment Office equipment Leasehold improvements Other equipment Construction in progress and equipment under acceptance Cost Land Buildings and structures Computer and communication equipment Transportation equipment Office equipment Leasehold improvements Other equipment		Year ended December 31,2019	Year ended December 31,2019
	Opening net book amount 191,884 $ 438,331 60,113 11,567 185,229 73,532 1,891 - $962,547	Additions Disposals Reclassifications - $ - $ 8,994) ($ - - 49,438) ( - 57) ( 205 1,200 2,200) ( - - 3,270) ( 10,387 - - - - 23) ( - 5,670 - - $6,870 ($5,550) 47,840) ($ Year ended December 31,2018		Closing net book amount
				182,890 $ 388,893 60,261 10,567 192,346 73,532 1,868 5,670
				$916,027
	Opening net book amount 191,884 $ 438,331 60,043 11,567 182,180 73,532 1,907 $959,444	Additions Disposals - $ - $ - - - 21) ( - - - - - - - 16) ( $- ($37)	Reclassifications - $ - 91 - 3,049 - - 3,140 $	Closing net book amount
				191,884 $ 438,331 60,113 11,567 185,229 73,532 1,891
				$962,547

~40~

Year ended December 31, 2019

		Year ended December 31,2019
Accumulated depreciation Buildings and structures Computer and communication equipment Transportation equipment Office equipment Leasehold improvements Other equipment	Opening net book amount $ 152,273 56,373 8,323 161,745 51,863 1,650 $432,227	Additions Disposals Reclassifications $ 8,078 $ - ($ 20,276) 1,761 ( 57) - 1,208 ( 2,100) - 12,164 ( 3,015) - 1,327 - - - - - $24,538 5,172) ($ 20,276) ($	Closing net book amount
			$ 140,075 58,077 7,431 170,894 53,190 1,650
			$431,317

Accumulated depreciation Buildings and structures Computer and communication equipment Transportation equipment Office equipment Leasehold improvements Other equipment		Year ended December 31,2018	Year ended December 31,2018
	Opening net book amount $ 144,115 53,471 7,122 149,770 50,536 1,650 $406,664	Additions Disposals $ 8,158 $ - 2,920 ( 18) 1,201 - 11,975 - 1,327 - - - $25,581 18) ($	Reclassifications $ - - - - - - - $	Closing net book amount
				$ 152,273 56,373 8,323 161,745 51,863 1,650
				$432,227

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

(10) Leasing arrangements - lessee

Effective 2019

• A. The Company leases various assets including offices, cafeterias and vehicles. Rental contracts are typically made for periods of 3 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes, and all or certain assets leased from associations and other related parties can be subleased to associations under the lessors’ agreement. Remaining lease assets cannot be lent, subleased, sold or granted in any different form to the third parties.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

~41~

Buildings and structures Transportation equipment (business vehicles)	December 31,2019 Book value 181,626 $ 1,046 182,672 $	Year ended December 31,2019 Depreciation expense 31,458 $ 442 31,900 $

• C. For the year ended December 31, 2019, the additions to right-of-use assets was $923.

• D. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on lease of low-value assets	Year ended December 31,2019
	4,432 $ 665 157

• E. For the year ended December 31, 2019, the Company’s total cash outflow for leases amounted to $34,766.

• F. Extension and termination options

  • (a) Extension options are included in approximately 50% of the Company’s lease contracts pertaining to offices and cafeterias. These terms and conditions aim to maximise optional flexibility in terms of managing contracts.

  • (b) In determining the lease term, the Company takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option or not to exercise a termination option. The assessment of lease period is reviewed if a significant event occurs which affects the assessment.

• (11) Leasing arrangements – lessor

• A. The Company leases various assets including offices, dormitories and long-term rental suites. Rental contracts are typically made for periods of 0.5 and 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. To secure lease assets, the lessee may be asked that leased assets may not be used as security for borrowing purposes or cannot be lent, subleased, sold or granted in any different form to the third parties by the lessors.

• B. Gain arising from operating lease agreements for the year ended December 31, 2019 is as follows:

~42~

Rent income Rent income arising from variable lease payments	Year ended December 31,2019
	394,538 $
	49,503 $

C. The maturity analysis of the lease payments under the operating leases is as follows:

The maturity analysis of the lease payments under the operating leases is as	follows:
January 1, 2020 to December 31, 2020 January 1, 2021 to December 31, 2025 After January 1, 2026	December 31,2019
	345,637 $ 512,790 148,330
	1,006,757 $

(12) Investment property

A. Details of book values are as follows:

estment property Details of book values are as follows:
Land Leased assets-land Leased assets-buildings	December 31,2019 265,550 $ 2,575,020 2,900,272 5,740,842 $	December 31,2018
		265,550 $ 2,566,054 2,958,080
		5,789,684 $

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

Year ended December 31, 2019

Changes in investment	property for the	period are as follows: Year ended December 31,2019	period are as follows: Year ended December 31,2019
Cost Land Leased assets-land Leased assets-buildings Cost Land Leased assets-land Leased assets-buildings Accumulated depreciation Leased assets-buildings	Opening net book amount $ 265,550 2,566,054 3,952,087 $6,783,691	Additions Disposals Reclassifications $ - $ - $ - - ( 28) 8,994 - 2,176) ( 49,438 - $ 2,204) ($ 58,432 $ Year ended December 31,2018		Closing net book amount
				$ 265,550 2,575,020 3,999,349
				$6,839,919
	Opening net book amount $ 265,550 2,567,358 3,957,746 $6,790,654	Additions Disposals Reclassifications $ - $ - $ - - ( 113) ( 1,191) - 4,637) ( ( 1,022) - $ 4,750) ($ 2,213) ($ Year ended December 31,2019		Closing net book amount
				$ 265,550 2,566,054 3,952,087
				$6,783,691
	Opening net book amount $ 994,007	Additions Disposals $85,325 531) ($	Reclassifications 20,276 $	Closing net book amount
				$1,099,077

~43~

Accumulated depreciation Leased assets-buildings		Year ended December 31,2018
	Opening net book amount $ 910,094	Additions Disposals Reclassifications $85,312 1,007) ($ 392) ($	Closing net book amount
			$ 994,007

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

from the investment property are shown below:
Rental revenue from the lease of the investment property 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 rental income in the period	Years ended December 31,
	2019 444,041 $ 163,279 $ - $	2018
		390,717 $
		160,538 $
		- $

• D. As of December 31, 2019 and 2018, the fair value of the investment property held by the Company was $12,714,352 and $12,773,194, respectively. The Company management estimated the fair value based on market evidence on transaction price of similar property and assessed value. Valuations were made using the income approach which is categorised within Level 3 in the fair value hierarchy.

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

(13) Intangible assets

• A. Details of book values are as follows:

Service concession	December31,2019 2,055,428 $	December31,2018
		2,116,681 $

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

Cost Service concession Cost Service concession		Year ended December 31,	Year ended December 31,	2019
	Opening net book amount 2,868,372 $	Additions Disposals - $ - $ Year ended December 31,		Reclassifications - $ 2018	Closing net book amount
					2,868,372 $
	Opening net book amount 2,868,372 $	Additions - $	Disposals - $	Reclassifications - $	Closing net book amount
					2,868,372 $

~44~

Year ended December 31, 2019

		Year ended December 31,	Year ended December 31,	2019
Accumulated Amortization Service concession Accumulated Amortization Service concession	Opening net book amount 751,691 $	Additions Disposals 61,253 $ - $ Year ended December 31,		Reclassifications - $ 2018	Closing net book amount
					812,944 $
	Opening net book amount 690,438 $	Additions 61,253 $	Disposals - $	Reclassifications - $	Closing net book amount
					751,691 $

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

Short-term borrowings Operating costs-amortization expenses Unsecured bank borrowings Secured bank borrowings Interest rate range	2019 61,253 $ Years ended December 31,2019 1,819,000 $ 130,000 1,949,000 $ 1.48%~1.98%	Years ended	December 31,	December 31,
		2019	2018 61,253 $ December 31,2018 680,000 $ 50,000 730,000 $ 1.53%~1.79%	2018
		61,253 $		61,253 $

(14) Short-term borrowings

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

(15) Short-term notes and bills payable

	December	31,2019	December 31,2018	December 31,2018
Commercial papers	$	50,000	$	201,900
Less: Unamortized discount	(	75)	(	166)
	$	49,925	$	201,734
Interest rate range		1.19%		1.19%~1.43%

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

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

(16) Receipts in advance

B. For details of pledged assets, please refer to Note 8. Receipts in advance
Items Advance rent Other advance receipts	December 31,2019 65,634 $ 931 66,565 $	December 31,2018
		62,616 $ 1,444
		64,060 $

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(17) Bonds payable

2017 1st secured ordinary bonds payable 2018 1st secured ordinary bonds payable	December31,2019 2,000,000 $ 2,500,000 4,500,000 $	December31,2018
		2,000,000 $ 2,500,000
		4,500,000 $

• A.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 September 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: Secured by Bank of Taiwan.

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

• B.The Company issued secured ordinary bonds payable in June 2018. The significant terms of the bonds are as follows:

• (a)Total issue amount: $2,500,000

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

• (c)Coupon rate: 0.84%

• (d)Terms of interest repayment: The bonds interest is calculated on simple rate every year starting September 2018 based on the coupon rate.

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

(f)Period: 5 years, from June 15, 2018 to June 15, 2023.

(g)The way of security: Secured by Bank of Taiwan.

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

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- (18) Long term borrowings

Long-term borrowings
	December 31,2019		December 31,2018
Secured bank borrowings	$	7,156,383	$	7,069,821
Unsecured bank borrowings		728,400		2,314,400
		7,884,783		9,384,221
Less: Current portion	(	4,477,788)	(	3,643,297)
		3,406,995		5,740,924
Commerical papers		1,071,900		1,170,000
Less: Unamortized discount	(	759)	(	567)
		1,071,141		1,169,433
Less: Current protion	(	151,613)		-
		919,528		1,169,433
Total	$	4,326,523	$	6,910,357
Range of maturity dates	2020.04.02~2027.11.02		2019.06.27~2027.11.02
Range of maturity rates		0.64%~2.41%		0.60%~2.41%

• 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 the revolving credit line to issue abovementioned commercial paper during the credit term. For the related information, please refer to Notes 9(9) to 9(12).

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

(19) Provisions-replacement cost

Provisions-replacement cost
		2019			2018
At January 1	$		87,196	$		99,539
Additions			49,427			41,181
Used	(		34,069)	(		53,524)
At December 31	$		102,554	$		87,196

(20) 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

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assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions to cover the deficit by next March.

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

	December	31,2019	December	31,2018
Present value of defined benefit obligations	($	121,777)	($	122,774)
Fair value of plan assets		60,221		61,659
Net defined benefit liability	($	61,556)	($	61,115)

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

2019 Balance at January 1 Current service cost Interest (expense) income Remeasurements: Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Balance at December 31	Present value of defined benefit obligations 122,774) ($ 290) ( 1,105) ( 124,169) ( 2,079) ( 265) ( 2,344) ( - 4,736 121,777) ($	Fair value ofplan assets 61,659 $ - 555 62,214 - 2,049 2,049 694 4,736) ( 60,221 $	Net defined benefit liability
			61,115) ($ 290) ( 550) ( 61,955) ( 2,079) ( 1,784 295) ( 694 - 61,556) ($

~48~

The principal actuarial assumptions used were as follows: Present value of defined benefit Fair value Net defined obligations ofplan assets benefit liability 2018 Balance at January 1 122,439) ($ 45,566 $ 76,873) ($ Current service cost 495) ( - 495) ( Interest (expense) income 1,224) ( 455 769) ( 124,158) ( 46,021 78,137) ( Remeasurements: Change in financial assumptions 1,129) ( - 1,129) ( Experience adjustments 398) ( 1,398 1,000 1,527) ( 1,398 129) ( Pension fund contribution - 17,151 17,151 Paid pension 2,911 2,911) ( - Balance at December 31 122,774) ($ 61,659 $ 61,115) ($ 2019 2018 Discount rate 0.70% 0.90% Future salary increases 1.50% 1.50% Years ended December31,	The principal actuarial assumptions used were as follows: Present value of defined benefit Fair value Net defined obligations ofplan assets benefit liability 2018 Balance at January 1 122,439) ($ 45,566 $ 76,873) ($ Current service cost 495) ( - 495) ( Interest (expense) income 1,224) ( 455 769) ( 124,158) ( 46,021 78,137) ( Remeasurements: Change in financial assumptions 1,129) ( - 1,129) ( Experience adjustments 398) ( 1,398 1,000 1,527) ( 1,398 129) ( Pension fund contribution - 17,151 17,151 Paid pension 2,911 2,911) ( - Balance at December 31 122,774) ($ 61,659 $ 61,115) ($ 2019 2018 Discount rate 0.70% 0.90% Future salary increases 1.50% 1.50% Years ended December31,	The principal actuarial assumptions used were as follows: Present value of defined benefit Fair value Net defined obligations ofplan assets benefit liability 2018 Balance at January 1 122,439) ($ 45,566 $ 76,873) ($ Current service cost 495) ( - 495) ( Interest (expense) income 1,224) ( 455 769) ( 124,158) ( 46,021 78,137) ( Remeasurements: Change in financial assumptions 1,129) ( - 1,129) ( Experience adjustments 398) ( 1,398 1,000 1,527) ( 1,398 129) ( Pension fund contribution - 17,151 17,151 Paid pension 2,911 2,911) ( - Balance at December 31 122,774) ($ 61,659 $ 61,115) ($ 2019 2018 Discount rate 0.70% 0.90% Future salary increases 1.50% 1.50% Years ended December31,	Net defined benefit liability
	2019 0.70% 1.50%	2018
		0.90%
		1.50%

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

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:

Increase 0.25% Decrease 0.25% December 31, 2019 Effect on present value of defined benefit obligation 2,590) ($ 2,674 $ Increase 0.25% Decrease 0.25% December 31, 2018 Effect on present value of defined benefit obligation 2,797) ($ 2,891 $ Discount rate Discount rate	Increase 0.25% Decrease 0.25% 2,341 $ 2,282) ($ Increase 0.25% Decrease 0.25% 2,558 $ 2,491) ($ Future salaryincreases Future salaryincreases

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, 2020 amounts to $693.

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  - (f) As of December 31, 2019, the weighted average duration of that retirement plan is 9 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 plans of the Company for the years ended December 31, 2019 and 2018 were $7,273 and $7,586, respectively.

• (21) Share capital

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

Shares at January 1 and December 31	2019 1,622,671	2018
		1,622,671

• B. As of December 31, 2019 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, 2019 and 2018, the Company’s subsidiary, Prince Apartment Management Maintain Co., Ltd., held the Company’s stocks to maintain equity interest in the Company. The amount of shares held by the subsidiary was all 655 thousand shares, the average par value was all NT$1.53 per share, and the fair value was NT$ 11.25 and NT$10.20 per share, respectively.

• (22) Capital surplus

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

Capital surplus

legal reserve is insufficient.		Capital surplus	Capital surplus
2019 At January 1, 2019 (At December 31, 2019) 2018 At January 1, 2018 (At December 31, 2018)	Share premium 1,375,442 $	Treasury share transaction Others 877,839 $ 7,232 $ Capital surplus		Total
				2,260,513 $
	Share premium 1,375,442 $	Treasury share transaction 877,839 $	Others 7,232 $	Total
				2,260,513 $

~50~

(23) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, the Company will take into consideration its future business plans and capital expenditures in determining the amount of earnings to be retained and to be distributed. In accordance with the Company Law, 10% of the current year’s earnings, after payment of all taxes and after offsetting accumulated deficit, shall be set aside as legal reserve until the balance of legal reserve is equal to that of issued share capital. Afterwards, an amount shall be appropriated or reversed as special reserve in accordance with applicable legal or regulatory requirements, along with prior years’ accumulated unappropriated retained earnings, and then distribution should be in the following order: stock dividend and bonus to shareholders are no less than 20% of the accumulated distributable earnings, in current period 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 recognised dividends distributed to owners both amounting to $1,055,162 ($0.65 (in dollars) per share) for the years ended December 31, 2019 and 2018. On March 19, 2020, the Board of Directors proposed that total dividends for the distribution of earnings for 2019 was $811,663 at $0.5 (in dollars) per share.

(24) Other equity items

Other equity items
		Unrealised gains			Currency
	(losses)on valuation				translation				Total
At January 1, 2019		$	788,079	($		48)		$	788,031
Revaluation - gross			88,459			-			88,459
At December 31, 2019		$	876,538	($		48)		$	876,490
		Unrealised gains			Currency
	(losses)on valuation				translation				Total
At January 1, 2018	$		974,425	($		48)	$		974,377
Effect of retrospective application			25,611			-			25,611
Revaluation - gross	(		210,990)			-	(		210,990)
Revaluation transferred to retained
earnings - gross	(		967)			-	(		967)
At December 31, 2018	$		788,079	($		48)	$		788,031

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(25) Maturity analysis of assets and liabilities

The construction related assets and liabilities are classified as current and non-current based on the operating cycle. Related recognised 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

	Within 12 months Over 12 months Total	Within 12 months Over 12 months Total	Total
Operating revenue December 31, 2019 Assets Notes receivable, net Accounts receivable, net Inventories Liabilities Contract liabitities Notes payable Accounts payable (including related parties) December 31, 2018 Assets Notes receivable, net Accounts receivable, net Inventories Liabilities Contract liabilities Notes payable Accounts payable (including related parties) Revenue from contracts with customers Other - rental revenue	35,854 $ 1,944 $ 37,798 $ 82,186 3,589 85,775 10,358,230 8,975,713 19,333,943 10,476,270 $ 8,981,246 $ 19,457,516 $ 496,296 $ - $ 496,296 $ 1,940 - 1,940 528,000 418,839 946,839 1,026,236 $ 418,839 $ 1,445,075 $ Within 12 months Over 12 months Total 48,489 $ 3,174 $ 51,663 $ 1,064,289 3,589 1,067,878 9,342,717 11,966,116 21,308,833 10,455,495 $ 11,972,879 $ 22,428,374 $ 436,595 $ - $ 436,595 $ 4,528 - 4,528 680,012 763,378 1,443,390 1,121,135 $ 763,378 $ 1,884,513 $ 2019 2018 5,236,013 $ 6,094,573 $ 444,041 390,717 5,680,054 $ 6,485,290 $ Years ended December 31,		37,798 $ 85,775 19,333,943
			19,457,516 $
			496,296 $ 1,940 946,839
			1,445,075 $
			Total
			51,663 $ 1,067,878 21,308,833
			22,428,374 $
			436,595 $ 4,528 1,443,390
			1,884,513 $
		2018
		6,094,573 $ 390,717
		6,485,290 $

(26) Operating revenue

A. The revenue from contracts with customers arises from the transfer of goods and services over time and at a point in time in the following business lines:

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Year ended December 31, 2019 Revenue from external customer contracts Timing of revenue recognition At a point in time Over time Year ended December 31, 2018 Revenue from external customer contracts Timing of revenue recognition At a point in time Over time	Buildingand land sales 4,917,111 $ 4,917,111 $ - 4,917,111 $ Buildingand land sales 5,742,428 $ 5,742,428 $ - 5,742,428 $	Hotel operation 61,385 $ - $ 61,385 61,385 $ Hotel operation 55,047 $ - $ 55,047 55,047 $	BOT business 257,517 $ - $ 257,517 257,517 $ BOT business 297,098 $ - $ 297,098 297,098 $	Total
				5,236,013 $
				4,917,111 $ 318,902
				5,236,013 $
				Total
				6,094,573 $
				5,742,428 $ 352,145
				6,094,573 $

B. Contract liabilities

The Company has recognised the following revenue-related contract liabilities:

Contract liabilites: Contract liabilities - buildings and land sales contracts Contract liabilities - hotel management contracts Contract liabilities - BOT business contracts	December 31,2019 496,296 $ 53,969 1,255 551,520 $	December 31,2018 436,595 $ 50,105 1,275 487,975 $	January1,2018
			823,934 $ 45,829 1,344
			871,107 $

Revenue recognised that was included in the contract liability balance at the beginning of the year:

year:
Revenue recognised that was included in the contract liability balance at the beginning of the year Building and land sales contracts BOT business contracts Hotel management contracts	Years ended December 31,
	2019 348,046 $ 50,105 94 398,245 $	2018
		666,336 $ 45,829 69
		712,234 $

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(27) Other income

Other income
			Years ended December 31,
			2019			2018
Interest income		$	4,099		$	4,169
Dividend income			74,866			112,484
Income from confiscated guarantee due to a default			38,551			5,386
Other income			23,447			77,466
	$		140,963	$		199,505
Other gains and losses
			Years ended	December 31,
			2019			2018
Net gain on financial assets at fair value through
profit or loss		$	4,059		$	1,817
Payables transferred to other income			128,076			134,083
Gain on disposal of property, plant and
equipment (including investment property)			102			583
Net currency exchange gain			-			15,467
Others	(		1,448)	(		5,119)
	$		130,789	$		146,831
Finance costs
			Years ended	December 31,
			2019			2018
Interest expense:
Bank borrowings		$	109,125		$	92,124
Lease liability			4,432			-
Commercial paper			13,733			11,116
Ordinary bonds			41,001			52,920
Endorsements and guarantee			15,463			15,976
Others			2,230			1,333
	$		185,984	$		173,469

(28) Other gains and losses

(29) Finance costs

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(30) Expenses by nature

Expenses by nature
Employee benefit expense Wages and salaries Labor and health insurance fees Pension costs Directors' remuneration Other employee benefit expense Depreciation charges Amortization charges Employee benefit expense Wages and salaries Labor and health insurance fees Pension costs Directors' remuneration Other employee benefit expense Depreciation charges Amortization charges	Year	ended December 31,2019
	Operatingcosts - $ - - - - - $ 85,325 $ 61,253 $ Year	Operatingexpenses Total 225,852 $ 225,852 $ 17,574 17,574 8,113 8,113 42,140 42,140 18,342 18,342 312,021 $ 312,021 $ 56,438 $ 141,763 $ - $ 61,253 $ ended December 31,2018	Total
			225,852 $ 17,574 8,113 42,140 18,342
			312,021 $
			141,763 $
			61,253 $
	Operatingcosts - $ - - - - - $ 85,312 $ 61,253 $	Operatingexpenses 231,520 $ 17,293 8,850 52,343 19,562 329,568 $ 25,581 $ - $	Total
			231,520 $ 17,293 8,850 52,343 19,562
			329,568 $
			110,893 $
			61,253 $

• A. As of December 31, 2019 and 2018, the Company had approximately 241 and 246 employees, respectively. There were 14 non-employee directors for both years.

• B. Average employee benefit expense in 2019 and 2018 were $1,189 and $1,195, respectively. Average employee salaries in 2019 and 2018 were $995 and $998, respectively; and adjustments of average employee salaries was 0%.

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

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

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

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• D. For the years ended December 31, 2019 and 2018, employees’ compensation was accrued at $101,854 and $133,188, respectively; while directors’ remuneration was accrued at $34,651 and $45,311, respectively. The aforementioned amounts were recognised in salary expenses.

• The employees’ compensation and directors’ remuneration were accrued based on the percentage as prescribed in the Company’s Articles of Incorporation and distributable profit of current period for the year ended December 31, 2019. 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 of 2018 as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2018 financial statements. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(31) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Under provision of prior year’s income tax Land value increment tax recognised in income tax for the year Total current tax Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Total deferred tax Income tax expense	2019 2018 8,445 $ 34,138 $ 3,671 8,959 3,537 1 24,253 40,942 39,906 84,040 25,861 1,020) ( - 3,797) ( 25,861 4,817) ( 65,767 $ 79,223 $ Years ended December 31,

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

		Years ended	December 31,	December 31,
		2019		2018
Tax calculated based on profit before tax and	$	203,707	$	266,376
statutory tax rate
Effect recognized from adjustments under tax	(	169,417)	(	237,067)
regulations
Tax on undistributed surplus earnings		3,671		8,959
Effect from investment tax credits		16		12
Under provision of prior year’s income tax		3,537		1
Land value increment tax		24,253		40,942
Income tax expense	$	65,767	$	79,223

• B. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

Temporary differences： -Deferred tax assets: Unrealised compensation losses Effects of lease liabilities Temporary differences： -Deferred tax assets: Unrealised compensation losses		2019	December 31
	January1 26,332 $ - 26,332 $	Recognised in profit or loss 26,332) ($ 471 25,861) ($ 2018
			- $ 471 471 $ December 31
	January1 21,515 $	Recognised in profit or loss 4,817 $
			26,332 $

• C. The Company’s income tax returns through 2017 have been assessed and approved by the Tax Authority.

• D. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate.

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(32) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December 31,2019
	Weighted average number of ordinary Earnings shares outstanding per share Amount after tax (shares in thousands) (in dollars) 952,767 $ 1,622,671 0.59 $ 952,767 $ 1,622,671 - 11,641 952,767 $ 1,634,312 0.58 $ Year ended December 31,2018	Earnings per share (in dollars)
		0.59 $
		0.58 $
	Weighted average number of ordinary shares outstanding Amount after tax (shares in thousands) 1,252,655 $ 1,622,671 1,252,655 $ 1,622,671 - 15,349 1,252,655 $ 1,638,020	Earnings per share (in dollars)
		0.77 $
		0.76 $

(33) Operating leases

Prior to 2019

The Company lease offices, cafeterias and vehicles under non-cancellable operating lease agreements. The lease terms are within 2015 to 2035 years, and all these lease agreements are renewable at the end of the lease period. The Company recognised rental expenses of $33,666 for the year ended December 31, 2018. The future aggregate minimum lease payments under noncancellable operating leases are as follows:

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Not later than one year Later than five years Later than one year but not later than five years	December 31,2018
	33,838 $ 121,696 84,785
	240,319 $

(34) Supplemental cash flow information

Investing and financing activities with no cash flow effects:

Supplemental cash flow information Investing and financing activities with no cash flow effects:	Supplemental cash flow information Investing and financing activities with no cash flow effects:
Changes in liabilities from financing activities 2019 2018 Prepayment for equipment transferred to property, plant and equipment 10,592 $ 3,140 $ Investment properties transferred to real estate held for sale - $ 1,821 $ Property, plant and equipment transferred to investment properties 38,156 $ - $ Years ended December 31, Changes in cash flow from financing Changes in other non- January1,2019 activities cash items(Note) December 31,2019 Short-term borrowings 730,000 $ 1,219,000 $ - $ 1,949,000 $ Short-term notes and bills payable 201,734 151,809) ( - 49,925 Bonds payable 4,500,000 - - 4,500,000 Long-term borrowings 10,553,654 1,597,730) ( - 8,955,924 Guarantee deposits received 129,655 11,814 - 141,469 Lease liability 213,649 29,512) ( 923 185,060 Liabilities from financing activities-gross 16,328,692 $ 548,237) ($ 923 $ 15,781,378 $ Changes in cash flow from financing Changes in other non- January1,2018 activities cash items(Note) December 31,2018 Short-term borrowings 690,000 $ 40,000 $ - $ 730,000 $ Short-term notes and bills payable 855,558 653,824) ( - 201,734 Bonds payable 4,500,000 - - 4,500,000 Long-term borrowings 9,798,766 754,888 - 10,553,654 Guarantee deposits received 129,696 41) ( - 129,655 Liabilities from financing activities-gross 15,974,020 $ 141,023 $ - $ 16,115,043 $
Short-term borrowings Short-term notes and bills payable Bonds payable Long-term borrowings Guarantee deposits received Lease liability Liabilities from financing activities-gross Short-term borrowings Short-term notes and bills payable Bonds payable Long-term borrowings Guarantee deposits received Liabilities from financing activities-gross
	1,949,000 $ 49,925 4,500,000 8,955,924 141,469 185,060
	15,781,378 $
	December 31,2018
	730,000 $ 201,734 4,500,000 10,553,654 129,655
	16,115,043 $

(35) Changes in liabilities from financing activities

Note: Changes in other non-cash items arose from the additions to lease liabilities.

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7. RELATED PARTY TRANSACTIONS

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

Names of relatedparties	Relationshipwith the Company
Dong-Feng Enterprises Co., Ltd. (Note 1)	The Company’s subsidiary
Times Square International Investment Holdings Co., Ltd.	The Company’s subsidiary
(Times Square International Investment Holdings) (Note 1)
Time Square International Co., Ltd. (Note 1)	The subsidiary of TSIIHC
Times Square International Stays Corp. (Note 1)	The subsidiary of TSIIHC
Prince Industrial Co., Ltd.	The Company’s subsidiary
Prince Real Estate Co., Ltd.	The Company’s subsidiary
The Splendor Hotel Taichung (The Splendor)	The Company’s subsidiary
Cheng-Shi Investment Holdings Co., Ltd	The Company’s subsidiary
(Cheng-Shi Investment Holdings)
Prince Property Management Consulting Co., Ltd.	The Company’s subsidiary
(Prince Property Management Consulting)
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. (Cheng-Shi Construction)	The subsidiary of CSIHC
Prince Security Co., Ltd. (Prince Security)	The subsidiary of PPMCC
Prince Apartment Management Maintain Co., Ltd. (Prince Apartment)	The subsidiary of PPMCC
President International Development Corp.	The Company’s other related parties
(President International Development)
Tainan Spinning Co., Ltd. (Tainan Spinning) (Note2)	The Company’s other related parties
President Chain Store Corp. (President Chain Store)	The Company’s other related parties

(Note 1) Please refer to Note 6(8) for details.

(Note 2) It is no longer a related party after the re-election of directors of the Company on June 21, 2019. 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.

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(2) Significant related party transactions and balances

A. Sales of goods:

nificant related party transactions and balances Sales of goods:
Rental income: －President Chain Store －Subsidiaries	Years ended December 31,
	2019 51,578 $ 2,013 53,591 $	2018
		49,837 $ 2,173
		52,010 $

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:

t is determined by mutual agreements and is collected chases Details of the Company’s subcontracting to related parties are as follows:	monthly. parties and its purchases from related	monthly. parties and its purchases from related
－Prince Utility －Subsidiaries Purchases of services: －Subsidiaries Purchases of goods: －Subsidiaries Construction subcontracting: －Cheng-Shi Construction	Years ended December 31,
	2019 267,834 $ 108,487 - 56,758 55 433,134 $	2018
		684,234 $ 403,941 29,593 54,725 14,960
		1,187,453 $

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 Chen-shi, 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, 2019 and 2018, unsettled construction contracts that were signed by the Company and Chen-Shi Construction Company totaled $1,778,514 and $1,997,514, respectively; payments already made for those contracts amounted to $942,800 and $938,740, respectively; and future payments required under those contracts amounted to $835,714 and $1,058,774, respectively.

• (c) As of December 31, 2019 and 2018, unsettled construction contracts that were signed by the Company and Prince Utility Company totaled $491,418 and $625,174, respectively; payments already made for those contracts amounted to $307,600 and $318,400, respectively; and future payments required under those contracts amounted to $183,818 and $306,774, respectively.

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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. Total acquisition price of the creditor’s rights amounted to $5,200,000, which the Company and A party bear 50% of the price each. The Company had paid its share. 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, 2019 and 2018, the Company’s creditor’s rights receivable from A party both amounted to $575,000(shown as ‘other non-current assets – others’).

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

follows:
2006 2008 2009 2010	225,000 $ 105,000 615,000 30,000
	975,000 $

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D. Accounts payable

Subsidiaries

December	31,2019	December	31,2018
$	31,006	$	120,236

E. Lease transactions - lessee

(a)

• i. The Company leases office from the other related parties, President International Development Corp. These leases have terms expiring between 2018 and 2023, and all these lease agreements are renewable at the end of the lease period.

• ii. The Company leases office from the other related parties. These leases have terms expiring between 2015 and 2035, and all these lease agreements are not renewable at the end of the lease period.

• (b) Acquisition of right-of-use assets:

For the year ended December 31, 2019, there was no ‘right-of-use asset’ obtained from related parties. Due to the Company has elected to apply IFRS 16, ‘right-of-use asset’ was increased on January 1, 2019 as follows:

Tainan Spinning Co., Ltd. President International Development Corp.	106,933 $ 105,352
	212,285 $

(c) Depreciation expense - right-of-use assets and rent expense

Depreciation expense - right-of-use assets: President International Development Corp. Tainan Spinning Co., Ltd. Rent expense : President International Development Corp. Tainan Spinning Co., Ltd.	Years ended December 31,	Years ended December 31,
	2019 24,312 $ 3,092 27,404 $ - $ - - $	2018
		- $ -
		- $
		23,585 $ 6,915
		30,500 $

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(d) Lease liabilities

i. Outstanding balance:

Lease liabilities i. Outstanding balance:
ii. Interest expense: Lease liabilities - current: President International Development Corp. Lease liabilities - non - current: President International Development Corp. Interest expense: President International Development Corp. Other related parties	December 31,2019
	24,192 $
	57,496 $
	Year ended December 31,2019
	2,090 $ 1,080
	3,170 $

F. The information on endorsement and guarantees among related parties are described in Note 9(1). (3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Termination benefit Post-employment benefits Other long-term benefits Share-based payment	Years ended December 31,
	2019 59,918 $ - - - - 59,918 $	2018
		80,977 $ - - - -
		80,977 $

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8. PLEDGED ASSETS

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

Pledged asset Time deposits, demand deposits and checking deposits (shown as "financial assets at amortised cost") Financial assets at fair value through profit or loss Land held for construction site Construction in progress Financial assets at fair value through other comprehensive income Investments accounted for under equity method Land Buildings Investment property	December 31,2019 910,538 $ 79,342 3,493,345 3,834,017 1,152,004 1,146,288 82,788 168,785 3,919,326 14,786,433 $	December 31,2018	Purpose
		1,117,499 $ 78,906 4,578,217 3,960,061 1,096,674 1,321,365 91,782 203,748 3,912,955	Performance guarantee,short-term and long-term borrowings. Long-term borrowings Short-term borrowings, notes and bills payable and long-term borrwings Short-term borrowings, notes and bills payable and long-term borrwings Issued long-term notes and bills Short-term borrowings, notes and bills payable Short-term borrowings, notes and bills payable and long-term borrwings Short-term borrowings, notes and bills payable and long-term borrwings Short-term borrowings, notes and bills payable and long-term borrwings
		16,361,207 $

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

• (1) Summary of endorsements and guarantees is as follows:

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

Name of company The Splendor Hotel Taichung(Note)	Total endorsement amount Amount drawn 2,150,000 $ 1,900,000 $ December 31,2019	December 31,2018	December 31,2018
	Total endorsement amount 2,150,000 $	Total endorsement amount 1,900,000 $	Amount drawn
			1,900,000 $

Note: The Company and China Metal Products Co., Ltd. provided endorsements and guarantees in equal proportions of 50% ownership each for the Splendor Hotel Taichung’s short-term borrowings, short-term notes and bills payable, long-term notes payable and syndication loan of long-term borrowings.

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

Name of company Prince Real Estate Co., Ltd.	Total endorsement amount Amount drawn 1,352,085 $ 1,352,085 $ December 31,2019	December 31,2018	December 31,2018
	Total endorsement amount 1,352,085 $	Total endorsement amount 1,255,309 $	Amount drawn
			1,255,309 $

• C. The accumulated operating losses of the subsidiary, the Splendor Hotel Taichung, had exceeded 50% of its paid-in capital and its current liabilities were greater than its current assets. The Company was committed to provide the endorsement and guarantees for all Splendor Hotel’s borrowings in its ownership proportion of 50%.

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

December 31, 2019 December 31, 2018 Property, plant and equipment $ 3,382 $ 5,802

• (3) 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.

• (4) Information on the commitments of the Company relating to financial support to related parties is described in Note 7(2).

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

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

• B. A party should give B party a performance guarantee of $60,000 for the construction on the signing date and $30,000 for operations before the start of operation. As of December 31, 2019 and 2018, A party had provided performance guarantee with a guarantee letter issued by the bank, all amounting to $30,000.

• C. A party should pay B party land rentals from the registration of the superficies, according to the terms of the contract, and pay B party operating royalties from the third year of the operation, based on the specified proportion of dormitory rentals and use fees of other facilities collected from students.

• D. Terms of restrictions for A party:

  • (a) The ratio of A party’s own capital utilized in this project to total construction cost of this project should be at least 30%;

  • (b) During the operation period, the ratio of shareholders’ equity to total assets should be at least 25%; and current ratio (current assets/current liabilities) should be at least 100%;

  • (c) All rights acquired by A party under the contract, except for other conditions specified in the contract and approved by B party, should not be transferred, leased, registered as a liability/obligation or become an executed object of civil litigation.

• (6) On May 10, 2005, the Company (“A party”) signed a contract with National Cheng Kung University (“B party”) relating to the construction and operation of student dormitories and alumni hall. The major terms of the contract are as follows:

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• A. Under the contract, B party should be responsible for acquiring the ownership or land-use right for this project, and let A party use the land by way of registration of the superficies; A party must obtain the user license within 3 years after the signing date, and may operate the dormitories and motorcycle parking lots for 35 years from the start of operation and collect dormitory rentals and use fees of other facilities from students for 50 years from the start of construction, and should return the related assets to B party on the expiry of the contract.

• B. A party should give B party performance guarantee of $50,000 for this project on the signing date, which will be returned in installment according to the contractual terms. As of December 31, 2019 and 2018, 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 the specified proportion of annual operating revenue of the dormitories and auxiliary facilities operating royalties based on the specified proportion of annual operating revenue of the auxiliary facilities. A party should pay such operating royalties for prior year before the end of June every year. Further, according to the superficies contract signed by the two parties, A party should pay B party land rentals from the registration of superficies.

• D. All rights acquired by A party under the contract, except for other conditions specified in the contract and approved by B party, should not be transferred, leased, registered as a liability/obligation or become an executed object of civil litigation.

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

• (8) The Company signed a loan contract with Mega International Commercial Bank for a credit line of $785 million. The loans include long-term (secured) loans and guarantee payments receivable (secured), which are used to fund the construction of student dormitories and alumnus hall of National Cheng Kung University. During the loan period, the Company should maintain financial commitments such as current ratio, liability ratio and interest coverage; those financial

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ratios/restrictions shall be reviewed at least once every year. Current ratio and liability ratio shall be reviewed based on the Company’s audited annual non-consolidated financial statements, and interest coverage based on the Company’s revenue and expenditure table for the related project. If the Company violates the above financial commitments, it shall improve its financial position by capital increase or other ways before the end of October of the following year from the year of violation; it would not be regarded as a default if the bank confirms that its financial position has improved completely. In case of violation, interest on the loans would be charged at the loan rate specified in the contract plus additional 0.25％ per annum from the notification date of the bank to the completion date of financial improvement or to the date the Company obtains a waiver from the bank for its violation.

• (9) The Company signed a syndicated loan contract with 3 financial institutions - Mega International Commercial Bank as the lead bank for a credit line of $1.06 billion. The syndicated loans include medium-term (secured) loans and commercial paper guarantees, which are used for purchases of 4 tracts of PingHsin Sections No. 694, 706, 708 and 709 in Taiping Dist., Taichung City and construction payment of residential buildings. Furthermore, the Company shall repay in full for the balance of unpaid principal on maturity date.

• (10) The Company signed a syndicated loan contract with 3 financial institutions – Bank of Taiwan Co., Ltd. as the lead bank for a credit line of $3.045 billion. The syndicated loans include medium-term guarantee payments receivable (secured) and medium-term commercial paper guarantees (secured). Bank of Taiwan and Agricultural Bank of Taiwan provided medium-term guarantee payments receivable (secured) with a credit line of $2.545 billion which are used by the Company to apply for the guarantee of corporate bond issued by the bank. International Bills Finance Corp provides medium-term commercial paper guarantees (secured) with a credit line of $500 million which are used by the Company to repay the borrowing to the financial institutions and improve financial structure. These three financial institutions shall renew the contract with the Company for another 1 year based on their individual commitments and establish the facility documentation, which is similar to the commercial paper guarantees, letter of purchase contract and others. In addition, no matter whether the bondholders receive the payment or not, the banks’ guarantee responsibility will be released after the debtor returns the payables to the agency. This syndicated loan contract expired on November 21, 2018.

• (11) The Company signed a syndicated loan contract with 4 financial institutions – Bank of Taiwan Co., Ltd. as the lead bank for a credit line of $3.221 billion. The syndicated loans include medium-term guarantee payments receivable (secured) and medium-term commercial paper guarantees. Bank of Taiwan and Agricultural Bank of Taiwan provided medium-term guarantee payments receivable (secured) with a credit line of $2.021 billion which are used by the Company to apply for the guarantee of corporate bond issued by the bank and pay off 2012 1[st] secured ordinary bonds payable. China Bills Finance Corp, Mega Bills Finance Corp and Taiwan Cooperative Finance Cop. provides medium-term commercial paper guarantees with a credit line of $1.2 billion which are used by the

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Company to apply for the guarantee of commercial paper guarantees and enrich operational working capital. These three financial institutions shall renew the contract with the Company for another 1 year based on their individual commitments and establish the facility documentation, which is similar to the commercial paper guarantees, letter of purchase contract and others. In addition, no matter whether the bondholders receive the payment or not, the banks’ guarantee responsibility will be released after the debtor returns the payables to the agency.

• (12) The Company signed a syndicated loan contract with 2 financial institutions – Bank of Taiwan Co., Ltd. as the lead bank for a credit line of $3.121 billion. The syndicated loans include medium-term guarantee payments receivable (secured) and medium-term commercial paper guarantees. Bank of Taiwan and Agricultural Bank of Taiwan provided medium-term guarantee payments receivable (secured) with a credit line of $2.521 billion which are used by the Company to apply for the guarantee of corporate bond issued by the bank and pay off 2013 1[st] secured ordinary bonds payable. International Bills Finance Corp provides medium-term commercial paper guarantees with a credit line of $600 million which are used by the Company to apply for the guarantee of commercial paper guarantees and enrich operational working capital. These three financial institutions shall renew the contract with the Company for another 1 year based on their individual commitments and establish the facility documentation, which is similar to the commercial paper guarantees, letter of purchase contract and others. In addition, no matter whether the bondholders receive the payment or not, the banks’ guarantee responsibility will be released after the debtor returns the payables to the agency.

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

December 31, 2019 December 31, 2018

Nanzi Dist., Kaohsiung City Nanzi 1st Section No. 158 etc $ 55,210 $ 125,540

• (14) The Company signed an agreement with Mr. Fang Tsai-Yuan and World Vision United Co., Ltd. on March 5, 2012 and July 17, 2012, respectively, for joint construction of houses. Under those agreements, Mr. Fang Tsai-Yuan and World Vision United Co., Ltd., the owners of land, shall provide the land located at Nos. 572 and 602, Sec. Zhi-Shan 1, Shilin District, Taipei City,

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respectively, and the Company is responsible for the construction; the houses built would be allocated to both sides based on the specified proportion. In addition, the Company shall give performance bond in the amount of $350,000 and $19,570 to Mr. Fang Tsai-Yuan and World Vision United Co., Ltd., respectively, which would be returned to the Company in installments. As of December 31, 2019 and 2018, balance of the performance bonds were as follows:

No. 602, Sec. Zhi-Shan 1, Shilin District, Taipei City No. 572, Sec. Zhi-Shan 1, Shilin District, Taipei City	December 31,2019 - $ - $	December 31,2018
		87,500 $
		4,893 $

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

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

(2) Financial instruments

A. Financial instruments by category

ogress and capital needed for operations. nancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost (Note) Notes receivable Accounts receivable Other receivables Refundable deposits	December 31,2019 984,236 $ 1,795,634 4,113,430 910,538 56,998 88,426 1,963 13,067 7,964,292 $	December 31,2018
		611,989 $ 1,708,278 2,103,964 1,117,499 70,659 1,071,244 88,134 113,156
		6,884,923 $

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December 31, 2019 December 31, 2018

	December 31,2019	December 31,2018
Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables Corporate bonds payable (including current portion) Long-term borrowings (including current portion) Guarantee deposits received Lease liabitity	1,949,000 $ 49,925 1,940 972,133 375,656 4,500,000 8,955,924 141,469 16,946,047 $ 185,060 $	730,000 $ 201,734 4,528 1,465,440 540,685 4,500,000 10,553,654 129,655
		18,125,696 $
		- $

Lease liabitity

• Note: The Company reclassified cash and cash equivalents pledged to others as collateral from its initial classification of “other financial assets” to “financial assets at amortised cost” in accordance with the category of financial instruments. This reclassification has no effect on either assets, liabilities or earnings per share as of December 31, 2019 and 2018.

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk.

• (b) Risk management is carried out by a central treasury department (Company's finance & accounting division) under policies approved by the Board of Directors. 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 interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

The Company’s businesses do not involve non-functional currency operations, thus would not be materially affected by the exchange rate fluctuations.

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

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• ii. Shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2019 and 2018 would have increased/decreased by $97,663 and $60,762, 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 both by $97,633 as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

• Cash flow and fair value interest rate risk

• The Company's interest rate risk mainly arose from short-term and long-term (excluding commercial papers) borrowings issued at variable rates and exposed 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 floating rate were calculated by NTD, if interest rates on borrowings had been 0.1% basis point higher/lower with all other variables held constant, profit before tax for the years ended December 31, 2019 and 2018 would have been $9,834 and $10,114 lower/higher, respectively.

• (b) Credit risk

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. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted, so it expects that the probability of counterparty default is remote. Credit risk arises from outstanding receivables (including contract assets).

Accounts receivable

• i. The Company’s accounts receivable mainly arose from mortgage and credit card payment loaned to financial institutions, so it expects that the credit risk is remote.

• ii. The Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

• iii. The Company adjusted the provision matrix with the historical loss of accounts receivable and forecastability, which considered the economic condition of the next months. The provision matrix in accordance with above estimation are as follows:

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December 31, 2019 Expected loss rate Total book value Loss allowance December 31, 2019 Expected loss rate Total book value Loss allowance	Without Up to 30 days past due past due 0.01% 10% 87,530 $ - $ - $ - $ 0.01% 10% 1,070,226 $ - $ - $ - $	Over 31-60 days 25% - $ - $ 25% - $ - $	Over 61-90 days Over 90 days 5% 100% - $ 4,639 $ - $ 3,743 $ 50% 100% - $ 4,761 $ - $ 3,743 $	Total
				92,169 $ 3,743 $ 1,074,987 $ 3,743 $

• iv. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

allowance for accounts receivable are as follows:
2019 Accounts receivable At January 1 3,743 $ Provision for impairment loss 29 Derecognised 29) ( At December 31 3,743 $	2018
	Accounts receivable
	3,743 $ - -
	3,743 $

• v. The estimation of expected credit loss on financial assets at amortised cost, excluding accounts receivable, is as follows:

  • For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts.

• (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 Companyings 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.

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Non-derivative financial liabilities : Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Lease liability Other payables Guarantee deposits received Bonds payable Long-term borrowings (including current portion)		December 31,2019
	Within 1year 1,969,280 $ 50,000 1,940 553,294 33,486 375,656 75,429 42,000 4,680,842	Between 1 to 3years - $ - - 418,839 66,573 - 13,750 2,084,000 3,688,736	Over 3years
			- $ - - - 107,269 - 52,290 2,521,000 1,267,432

Non-derivative financial liabilities : Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables Guarantee deposits received Bonds payable Long-term borrowings (including current portion)		December 31,2018
	Within 1year 735,687 $ 201,900 4,528 702,062 540,685 92,960 42,000 3,691,740	Between 1 to 3years - $ - - 763,378 - 4,296 84,000 4,896,833	Over 3years
			- $ - - - - 32,399 4,542,000 1,274,501

     - 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 information

• A. 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 without active market is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(12).

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• C. Financial instruments not measured at fair value

The carrying amounts of the Company’s cash and cash equivalents, financial instruments at amortised cost (including financial assets at amortised cost, notes receivable, accounts receivable, other payables, refundable deposits, short-term borrowings, short-term notes payable, notes payable, accounts payable (including related parties), other payables, lease liability, corporate bonds payables, long-term-borrowings, and guarantee deposits received) are approximate to their fair values.

• D. 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, 2019 and 2018 are as follows:

• (a)The related information of natures of the assets and liabilities is as follows:

December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities December 31, 2018 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities	Level 1 984,236 $ 878,757 1,862,993 $ Level 1 611,989 $ 796,270 1,408,259 $	Level 2 - $ - - $ Level 2 - $ - - $	Level 3 - $ 916,877 916,877 $ Level 3 - $ 912,008 912,008 $	Total
				984,236 $ 1,795,634
				2,779,870 $
				Total
				611,989 $ 1,708,278
				2,320,267 $

• (b)The methods and assumptions the Company used to measure fair value are as follows:

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

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

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can

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be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the balance sheet date.

• E. For the years ended December 31, 2019 and 2018, 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, 2019 and 2018:

At January 1 Adjustment due to transfer of standard Gain (loss) recognised in other comprehensive income (Note) Sold in the year At December 31	2019 2018 Non-derivative equity Non-derivative equity instruments instruments 912,008 $ 76,253 $ - 880,641 4,869 43,919) ( - 967) ( 916,877 $ 912,008 $

• Note: Shown as unrealised gain or loss on financial assets at fair value through other comprehensive income.

• G. For the years ended December 31, 2019 and 2018, there was no transfer into or out from Level 3.

• H. Finance and Accounting segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently assessing valuation results and making any other necessary adjustments to the fair value.

• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity Unlisted shares	Fair value at December31,2019	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	916,877 $	Discounted cash flow	Weighted average cost of capital Discount for 30% lack of marketability	0.64%- 2.41% 30%	The higher the weighted average cost of capital, the lower the fair value The higher the net asset value, the higher the fair value

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Non-derivative equity Unlisted shares	Fair value at December31,2018	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	912,008 $	Discounted cash flow	Weighted average cost of capital Discount for 30% lack of marketability	0.60%- 2.41% 30%	The higher the weighted average cost of capital, the lower the fair value 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. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

December 31, 2019

Financial assets Equity instruments Financial assets Equity instruments	Input	Change		Recognised inprofit or loss	Recognised inprofit or loss	Recognised inprofit or loss	Recognised in other comprehensive income	Recognised in other comprehensive income
				Favourable change		Unfavourable change	Favourable change	Unfavourable change
	872,802 Input	±1% Change		- $		- $ 8,728 $ December 31,2018
				Recognised inprofit or loss
				Favourable change		Unfavourable change	Favourable change	Unfavourable change
	872,802	±1%		- $		- $	8,728 $	8,728) ($

13. SUPPLEMENTARY DISCLOSURES

• (1) Significant transactions information

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

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

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 5.

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

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

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 7.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

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• J.Significant inter-company transactions during the reporting periods: Please refer to table 8.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland

China): Please refer to table 9.

• (3) Information on investments in Mainland China

None.

14. SEGMENT INFORMATION

None.

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PRINCE HOUSING & DEVELOPMENT CORP.

CASH AND CASH EQUIVALENTS

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Item Cash on hand and revolving funds Checking accounts Demand deposits - NTD deposits - USD deposits Repurchase bonds	Description (USD 105.09 thousand, exchange rate 29.93)	Amount
		2,888 $ 2,366,255 1,242,793 3 501,491
		4,113,430 $

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PRINCE HOUSING & DEVELOPMENT CORP.

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS-CURRENT

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Name of financial instruments	Description Jih Sun Money Market Fund Yuanta Wan Tai Market Prudential Financial Money Market Fund Yuanta De-Li Money Market Fund UPAMC James Bond Monet Market Fund	Number of shares 13,497,677 13,316,728 12,593,359 12,269,203 6,006,728	Price (in dollar) Total amount Interest rate 10 $ 134,977 $ - 10 133,167 - 10 125,934 - 10 122,692 - 10 60,067 - Add: Valuation adjustment for financial assets	Acquisition cost 200,000 $ 200,620 200,000 200,013 100,000 900,633 $ 4,261 904,894 $	Price (in dollar) 14.88 $ 15.20 15.88 16.37 16.78	Totalprice 200,813 $ 202,449 200,004 200,846 100,782 904,894 $	Notes
Beneficiary certificates

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PRINCE HOUSING & DEVELOPMENT CORP.

INVENTORIES

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Land held for construction site Construction in progress Buildings and land held for sale Prepayment for land Prepayment for building and land Merchandise Less: Allowance for inventory valuation losses	Description Cost Net realisable value 6,990,434 $ 7,270,939 $ 4,385,175 5,152,425 7,259,621 8,626,848 223,135 223,135 552,085 552,085 1,388 1,388 19,411,838 21,826,820 $ 76,507) ( 19,335,331 $ Amount	Notes
		Note Note Note Note Note Note

Note: Use the replacement cost to be the market price.

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PRINCE HOUSING & DEVELOPMENT CORP.

CONSTRUCTION IN PROGRESS

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Name of construction Prince pine garden (Jhong Li City Shuang Ling Section No. 1449, etc.) Ling Ko Dist. Li Shing Section No. 1209, etc. W Prince (New Taipei City Shing Jheng Section No. 883, etc.) Bali Dist Chung Chang Section No. 222 and 211-1, etc. Prince Xin World(Ping Hsin Section No. 694, etc.) Jin Hua Section No.1361 Prince Feng Yun (Hsin Ying Section No. 841-9) Prince Cloud E (Ren Wu New Hougang West Section No. 90 etc.) Prince Castle (Building) (Nanzi subsection No. 158, etc.) Prince Castle (Townhouse) (Nanzi subsection No. 158, etc.) Others	Openingbalance 395,161 $ 540,647 454,130 15,172 406,588 77,100 642,928 153,757 1,168,856 341,080 19,391 4,214,810 $	Cost incurred 34,263 $ 82,743 145,354 321 337,732 - 140,913 289,373 375,024 148,992 6,004 1,560,719 $	Capitalised interest Transfer of payment completed construction 4,956 $ 434,380) ($ 40,416 - 17,947 617,431) ( - - 29,562 - - - 24,332 - 5,741 - - 28,575 - 7,433 497,505) ( - - 158,962 $ 1,549,316) ($	Balance at December 31,2019
				- $ 663,806 - 15,493 773,882 77,100 808,173 448,871 1,572,455 - 25,395
				4,385,175 $

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PRINCE HOUSING & DEVELOPMENT CORP.

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Name	Opening bal	Aomunt 210,307 $ 15,881 570,083 13,185 841 1,684 57,996 1,512 10 9,336 827,443 1,708,278 $ ance	Addition	Aomunt 17,399 $ 7,253 57,835 - 36 - 1,682 551 - - 5,264 90,020 $ s	Reduction
	Number of shares (perthousand share) 7,565 76 23,606 1,400 49 344 1,649 10 7 300 87,746		Number of shares (perthousand share) - - - - - - - - - - -
Nantex Industry Co., Ltd. Simplo Technology Co., Ltd. ScinoPharm Taiwan Ltd. Universal Venture Capital Investment Corp. Grandn Bills Finance Corp. Chipwell Tech. Corp. Nantmat Technology Co., Ltd. Sothern Scirnce Joint Development Formosoft International Co., Ltd. President Energy Development Corp. President International Development Corp.

Note 1: 4,088 thousand shares of outstanding common stock were used collateral for loan.

Note 2: 17,276 thousand shares of outstanding common stock were used collateral for loan.

Note 3: 60,000 thousand shares of outstanding common stock were used collateral for loan.

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PRINCE HOUSING & DEVELOPMENT CORP.

FINANCIAL ASSETS AT AMORTISED COST - NON-CURRENT

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The information on ‘Financial assets at amortised cost - non-current’ is provided in Note 6(4).

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PRINCE HOUSING & DEVELOPMENT CORP.

CHANGES ON INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

																	Market price or net	Market price or net	Market price or net
	Openingbalance			Additions			Reductions				Endingbalance						valueper share
	Number of shares			Number of shares			Number of shares				Number of shares	%					Price			Collateral
Name	(per thousand share)		Aomunt	(per thousand share)		Aomunt	(per thousand share)			Aomunt	(per thousand share)	Ownership			Aomunt		(in dollar)		Totalprice	orpledged	Notes
Cheng-Shi Investment Holdings Co., Ltd.	97,505	$	1,077,950	-	$	56,025	-		$	-	97,505	100.00%		$	1,133,975	$	13.11	$	1,277,886	No
Prince Property Management Consulting Co., Ltd.	17,147		258,914	-		3,092	-			-	17,147	100.00%			262,006		15.93		273,206	No
Geng-Ding Co., Ltd.	18,000		285,763	-		21,377	-			-	18,000	30.00%			307,140		17.06		307,140	No
Prince Housing investment Co., Ltd.	0.4		492,715	-		32,316	-			-	0.4	100.00%			525,031	1,280,758.54			548,164	No
Uni-President Development Corp.	108,000		1,130,857	-		15,431	-			-	108,000	30.00%			1,146,288		10.61		1,146,288	Note 1
The Splender Hotel Taichung	97,500		299,344	-		-	-	(		14,513)	97,500	50.00%			284,831		2.92		284,831	No
Jin Yi Xing Plywood Co., Ltd.	3,938	(	315,830)	-		18,321	-			-	3,938	99.65%	(		297,509)		1.46		5,743	No	Note 2
Ming-Da Enterprise Co., Ltd.	200		30,826	-		-	-	(		3,674)	200	20.00%			27,152		47.97		9,594	No
Prince Industrial Co., Ltd.	1,000		9,415	-		-	-	(		60)	1,000	100.00%			9,355		9.36		9,355	No
Prince Real Estate Co., Ltd.	12,292		1,104,574	-		-	-	(		192,376)	12,292	99.68%			912,198		84.04		1,033,063	No
Time Square International Investment	68,400		870,306	-		122,069	-			-	68,400	100.00%			992,375		14.51		992,375	No
Holding Co., Ltd.			5,244,834		$	268,631		($		210,623)					5,302,842
Add: Shown as increase in other non-current liabilities			315,830												297,509
		$	5,560,664											$	5,600,351

Note 1: 108,000 thousand shares of outstanding common stock were used as collateral for loan.

Note 2: As of December 31, 2019 and 2018, the book value of investment in Jin Yi Xing Plywood Co., Ltd. were transferred to other non-current liabilities at $297,509 and $315,830, respectively, as the balances were below zero.

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PRINCE HOUSING & DEVELOPMENT CORP. PROPERTY, PLANT AND EQUIPMENT

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The information on ‘Property, plant and equipment’ is provided in Note 6(9).

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PRINCE HOUSING & DEVELOPMENT CORP.

ACCUMULATED DEPRECIATION ON PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The information on ‘Property, plant and equipment’ is provided in Note 6(9). Please refer to Note 4(15), for the information of depreciation methods and useful lives.

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PRINCE HOUSING & DEVELOPMENT CORP.

RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Buildings and structures Transportation equipment	Opening net book amount 213,084 $ 565 213,649 $	Additions - $ 923 923 $	Disposals - $ - - $	Closing net book amount 213,084 $ 1,488 214,572 $	Notes

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PRINCE HOUSING & DEVELOPMENT CORP.

ACCUMULATED DEPRECIATION ON RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Buildings and structures Transportation equipment	Opening net book amount - $ - - $	Additions 31,458 $ 442 31,900 $	Disposals - $ - - $	Closing net book amount 31,458 $ 442 31,900 $	Notes

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PRINCE HOUSING & DEVELOPMENT CORP.

INVESTMENT PROPERTY

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The information on ‘Investment property’ is provided in Note 6(12).

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PRINCE HOUSING & DEVELOPMENT CORP.

ACCUMULATED DEPRECIATION ON INVESTMENT PROPERTY FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The information on ‘Investment property’ is provided in Note 6(12). Please refer to Note 4(18), for the information of depreciation methods and useful lives.

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PRINCE HOUSING & DEVELOPMENT CORP.

INTANGIBLE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The information on ‘Intangible’ is provided in Note 6(13). Please refer to Note 4(19), for the information on amortisation methods.

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PRINCE HOUSING & DEVELOPMENT CORP.

OTHER NON-CURRENT ASSETS, OTHERS

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Description Other assets - others The Splender Hotel Taichung's creditor right Paintings	Amounts 575,000 $ 61,640 636,640 $	Notes

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PRINCE HOUSING & DEVELOPMENT CORP.

SHORT-TERM BORROWINGS

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Creditor UBOT Bank Mega Bank TBB Bank Hua Nan Bank O-Bank Taishin Bank	Explanation Collateral loan Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings	Amounts 130,000 $ 130,000 1,219,000 400,000 100,000 50,000 50,000 1,819,000 1,949,000 $	Contractperiod 108.06.20~109.06.20 108.08.16~109.08.14 108.07.26~109.07.26 108.10.28~109.10.28 108.09.10~109.09.09 108.04.30~109.04.30	Interest rate 1.98% 1.77% 1.55% 1.50% 1.48% 1.75%	Financing limit (Note 2) 130,000 $ 1,233,000 700,000 100,000 100,000 301,000	Pledge or guarantee Note 1	Note

Note 1: Please refer to Note 8 for details. Note 2: Certain short-term borrowings share the facilities with short-term notes and bills payable and long-term borrowings.

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PRINCE HOUSING & DEVELOPMENT CORP.

SHORT-TERM BORROWINGS

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Guarantor Contractperiod Interest rate Amounts Commercial papers Ta ching Bills Finance Corp. 2019.12.17~2020.12.17 1.19% 50,000 $ Less: Unamortized discount 75) ( 49,925 $ Note: Please refer to Note 8 for details. (Remainder of page intentionally left blank)	Pledge orguarantee Note	Note

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PRINCE HOUSING & DEVELOPMENT CORP.

CONTRACT LIABILITES-CURRENT

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Advance real estate receipts Others	Description W Prince Prince Xian Heng W Epoch Prince Xin World Others (minor amount less than 5%)	Amount 294,566 $ 37,037 52,340 31,550 80,803 496,296 55,224 551,520 $	Notes
			Buildings and land held for sale Buildings and land held for sale Buildings and land held for sale Buildings and land in progress

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PRINCE HOUSING & DEVELOPMENT CORP.

OTHER PAYABLES

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Employees’ compensation and directors’ remuneration payable Advertisement expense payable House tax payable Dividends payable Land value tax payable Others (minor amount less than 5%)	Description	Amount 136,742 $ 79,044 34,137 30,835 19,384 75,514 375,656 $	Notes

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PRINCE HOUSING & DEVELOPMENT CORP.

LEASE LIABILITIES

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Buildings and structures Transportation equipment Less：Current portion	Description	Lease term 2015.5.1~2035.4.30 2017.8.17~2022.9.2	Discount rate Endingbalance 2.21% 184,017 $ 2.09%~2.21% 1,043 185,060 29,698) ( 155,362 $	Notes

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PRINCE HOUSING & DEVELOPMENT CORP.

BONDS PAYABLE

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Name of Bond	Guarantor Trustee Taiwan Bank Taipei Fubon Commercial Bank Taiwan Bank Taipei Fubon Commercial Bank	Period 2017.06.19 2018.06.15	Date of interest payment Note Note	Interest rate Note Note	Total issued amount 2,000,000 $ 2,500,000 4,500,000 $	Repayment - $ - - $	Balance at December 31,2019 2,000,000 $ 2,500,000 4,500,000 $	Repayment method Note Note	Collateral orpledged
2017 1st secured ordinary bonds payable 2018 1st secured ordinary bonds payable									Note Note

Note: Please refer to Note 6(17) for the information of corporate bonds payable. 。

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PRINCE HOUSING & DEVELOPMENT CORP.

LONG-TERM BORROWINGS

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Creditor SCSB Bank Land Bank Land Bank Jih Sun Bank Taiwan Bank Mega Bank and syndicated borrowings banks Mega Bank Mega Bank Mega Bank Mega Bank Mega Bank EBA Bank EBA Bank Hua Nan Bank Hua Nan Bank Hwa Tai Bank Hwa Tai Bank Chang Hwa Bank Commerical papers (Note 2) Less：Current portion Less：Current portion	Type ofborrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Unsecured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings Secured borrowings	Amount 378,000 $ 840,000 228,200 200,000 1,300,000 900,000 1,001,528 728,400 445,520 422,074 184,061 300,000 120,000 324,000 150,000 70,000 28,000 265,000 7,884,783 4,477,788) ( 3,406,995 1,071,141 151,613) ( 919,528 4,326,523 $	Contract period 2016.06.27~2022.06.27 2015.04.02~2020.04.02 2015.05.27~2020.04.02 2019.05.31~2022.05.30 2018.07.30~2020.07.30 2007.01.09~2027.01.09 2017.02.15~2021.02.15 2018.08.10~2020.08.10 2007.11.02~2027.11.02 2019.06.20~2020.10.30 2019.06.20~2020.10.30 2019.09.19~2022.09.19 2017.07.12~2020.07.12 2019.06.20~2021.07.01 2019.03.11~2022.03.11 2018.10.15~2020.10.15 2018.10.15~2020.10.15 2014.08.22~2020.09.22	Interestrate 2.41% 2.34% 2.40% 1.60% 1.70% 1.98% 2.25% 1.79% 1.98% 2.25% 2.25% 1.76% 1.76% 1.98% 1.90% 2.35% 2.35% 2.22%	Pledge orguarantee Notes Note 1 Repayable in full at maturity Note 1 Repayable in full at maturity Note 1 Repayable in full at maturity Note 1 Repayable in full at maturity Note 1 The credit can be redrawn within the facility line during the contract period and repayable in full at maturity Note 1 Repayable in installments based on contract terms Note 1 Repayable in full at maturity None Repayable in full at maturity Note 1 Repayable in installments based on contract terms Note 1 The credit can be redrawn within the facility line during the contract period and repayable in full at maturity Note 1 Repayable in full at maturity Note 1 Repayable in installments based on contract terms Note 1 Repayable in installments based on contract terms Note 3 Repayable in full at maturity Note 3 Repayable in installments based on contract terms Note 1 Repayable in full at maturity Note 1 Repayable in installments based on contract terms Note 1 Repayable in full at maturity

Note 1: Note: Please refer to Note 8 for details.

Note 2: Please refer to long-term notes and bills payable. Note 3: It refers to the financing of land and buildings construction in Prince Cloud E joint construction project of the subsidiary, Prince Real Estate Co., Ltd., who is the joint guarantor and pledges with its land in first priority to Hua Nan Bank amounting to $960,000.

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~100~

PRINCE HOUSING & DEVELOPMENT CORP.

LONG-TERM NOTES AND BILLS PAYABLE

DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Commerical papers	Guarantor Mega Bills Finance Co., Ltd. Mega Bills Finance Co., Ltd. China Bills Finance Corp. Taiwan Coperative Bills Finance Corp. International Bills Finance Corp. Less: Unamortized discount Less: Current portion	Contractperiod 2017.06.19~2022.06.19 2019.06.20~2020.10.30 2017.06.19~2022.06.19 2017.06.19~2022.06.19 2018.11.21~2023.06.19	Interest rate 1.23% 0.83% 0.64% 1.26% 0.73%	Amount 300,000 $ 151,900 300,000 120,000 200,000 1,071,900 759) ( 1,071,141 151,613) ( 919,528 $	Pledge or guarantee Note 1 Note 1 Note 1 Note 1 Note 1	Notes
						Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: Please refer to Note 8 for details.

Note 2: This commercial paper is the contract of a syndicated borrowing facility signed by the Company with financial institutes. The credit can be

redrawn within the facility line during the contract period to reissue the commercial papers, please refer to Notes 9 to 12 for the details.

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~101~

PRINCE HOUSING & DEVELOPMENT CORP.

OPERATING REVENUES

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Description Construction revenue Sales revenue from buildings and land W Epoch Prince Cloud C Department Prince Fu III W Prince Prince Shin Fu Taipei ShinYi Prince Xian Heng Prince pine garden Prince Jum Fon Huei Flower Bo Five Prince Win 2 Prince Cloud D Prince Fu II Prince Hua Yang Chin Fon Gin Prince Cloud C townhouse Prince Jyun Others Sales returns and discounts Hotel operating revenue BOT business revenue Other rental revenue Construction revenue total		Amount
	Land 409,230 $ - 534,820 314,455 201,970 245,120 115,750 106,434 64,160 113,440 65,830 47,630 25,245 16,290 13,400 - 7,110 790 2,281,674 $

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~102~

PRINCE HOUSING & DEVELOPMENT CORP.

OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

					Amount
Items	Description		Land		Buildings		Total
Cost of construction sales
Sales cost from
buildings and land
	W Epoch	$	287,960	$	379,948	$	667,908
	Prince Cloud C Department		-		611,604		611,604
	Prince Fu III		405,358		336,029		741,387
	W Prince		257,177		183,010		440,187
	Prince Shin Fu		114,189		229,703		343,892
	Taipei ShinYi		176,906		135,623		312,529
	Prince Xian Heng		89,458		111,927		201,385
	Prince pine garden		93,459		122,905		216,364
	Prince Jum Fon Huei		38,046		122,219		160,265
	Flower Bo Five		72,508		68,715		141,223
	Prince Win 2		44,281		106,910		151,191
	Prince Cloud D		30,558		31,866		62,424
	Prince Fu II		9,399		15,894		25,293
	Prince Hua Yang		16,450		10,919		27,369
	Chin Fon Gin		6,801		13,158		19,959
	Prince Cloud C townhouse		-		14,435		14,435
	Prince Jyun		4,548		6,936		11,484
	Others		511		1,003		1,514
		$	1,647,609	$	2,502,804		4,150,413
	Less: Gain on reversal of inventory		valuation	losses		(	404)
Cost of construction sales	total						4,150,009
Other operating costs							149,839
						$	4,299,848

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~103~

PRINCE HOUSING & DEVELOPMENT CORP.

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items Selling expenses General & administrative expenses Expected credit losses	Description Advertisement expense Wages and salaries Taxes Repairs and maintenance expense Depreciation Security expenses Utilities expenses Other expenses (minor amount less than 5%)	Amount 325,022 $ 276,105 134,719 56,637 56,437 47,654 41,180 137,859 750,591 29 1,075,642 $	Notes

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~104~

PRINCE HOUSING & DEVELOPMENT CORP.

FINANCE COSTS

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the details of employee benefits, depreciation and amortisation expenses summarised by function for the year, please refer to Note 6(29).

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~105~

PRINCE HOUSING & DEVELOPMENT CORP.

CURRENT EMPLOYEE BENEFITS, DEPRECIATION AND AMORTISATION EXPENSES SUMMARIZED BY FUNCTION

FOR THE YEAR ENDED DECEMBER 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the details of employee benefits, depreciation and amortisation expenses summarised by function for the year, please refer to Note 6(30).

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~106~

Prince Housing & Development Corp. Loans to others Year ended December 31, 2019

No. (Note 1) Table 1	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31,2019	Balance at December 31, 2019	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for accounts	Collateral	Limit on loans granted to Ceiling on total a singleparty loansgranted Expressed in thousan (Except as otherwise	Limit on loans granted to Ceiling on total a singleparty loansgranted Expressed in thousan (Except as otherwise	Footnote ds of NTD indicated)
													Item Value
1 2 3 4	Ta-Chen Construction& Engineering Corp. Time Square International Co., Ltd. Cheng-Shi Construction Co., Ltd. Prince Utility Co., Ltd.	Cheng-Shi Investment Holdings Co., Ltd. Times Square International Investment Holdings Co., Ltd. Cheng-Shi Investment Holdings Co., Ltd. Cheng-Shi Investment Holdings Co., Ltd.	Other receivables - related parties Other receivables - related parties Other receivables - related parties Other receivables - related parties	Y Y Y Y	200,000 $ 1,000 90,000 20,000	100,000 $ - 90,000 -	100,000 $ - 90,000 -	2.7 2.7 2.7 2.7	Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - -	Additional operating capital Additional operating capital Additional operating capital Additional operating capital	$ - - - -	None - None - None - None -	$ 453,949 (Note 3) 189,193 104,158 22,671	453,949 $ 189,193 104,158 22,671	Note 2 Note 4 Note 5 Note 6

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

• (1) The Company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in Ta-chen Construction & Engineering Corp. "Procedures for Provision of Loans" are as follows:

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

• B. Limit on loans to a single party:

• (a) Nature of the loan is related to business transactions: Limit to a single party is NT$1.0 billion or the amount of business transactions between the creditor and borrower in the current year.

• (b) Nature of loan is for short-term financing: Limit on loans to a single party is NT$500 million.

• Note 3: Limit on loans granted to a single party as prescribed in Ta-Chen Construction & Engineering Corp. 's "Procedures for Provision of Loans" are not allowed more than NT$500 million. However, limit on loans granted to a single party shall not excess the ceiling on total loans, therefore, Ta-Chen Construction & Engineering Corp. 's limit on loans granted to a single party is based on its ceiling on total loans.

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

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

• B. Limit on loans to a single party:

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

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

• Note 5: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in Cheng-Shi Construction Co., Ltd. “Procedures for Provision of Loans” are as follows:

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

• B. Limit on loans to a single party:

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

• (b)Nature of loan is for short-term financing: Limit on loans to a single party is 40% of the Company’s net worth.

• Note 6: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in Prince Utility Co., Ltd. “Procedures for Provision of Loans” are as follows:

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

• B. Limit on loans to a single party:

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

• (b)Nature of loan is for short-term financing: Limit on loans to a single party is 40% of the Company’s net worth.

Table 1,Page 1

Prince Housing & Development Corp.

Table 2

Expressed in thousands of NTD

(Except as otherwise indicated)

Provision of endorsements and guarantees to others

Year ended December 31, 2019

Party being endorsed/guaranteed

Number (Note 1)	Endorser/ guarantor	Companyname	Relationship with the endorser/ guarantor (Note 2)	Limit on endorsements/ guarantees provided for a singleparty	Maximum outstanding endorsement/ guarantee amount as of December 31, 2019	Outstanding endorsement/ guarantee amount at December 31, 2019	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
0 1 2 3	Prince Housing & Development Corp. Prince Real Estate Co., Ltd. Prince Apartment Management Maintain Co., Ltd. Prince Property Management Consulting Co., Ltd.	The Splendor Hotel Taichung Prince Housing & Development Corp. Prince Security Co., Ltd. Prince Security Co., Ltd.	6 3 4 4	4,771,329 $ 2,500,000 20,000 56,000	2,150,000 $ 2,055,309 20,000 56,000	$ 2,150,000 1,352,085 20,000 -	1,900,000 $ 1,352,085 20,000 -	$ - - - -	9% 130% 27% 0%	11,928,322 $ 5,000,000 50,000 120,000	Y N N N	N Y N N	N N N N	Note 3 Note 4 Note 5 Note 6

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

• (1) The Company is ‘0’.

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

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

• (1)Having business relationship.

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

• (3)The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

• (4)The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

• (5)Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

• (6)Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7)Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

• Note 3:In accordance with the Company’s related regulations, the limit on endorsements and guarantees for any single entity is 20% of the Company’s net worth based on the latest financial statements and the limit on accumulated amount of transactions of endorsements and guarantees is 50% of the Company’s net worth based on the latest financial statements.

Note 4: In accordance with 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 5: 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 6: In accordance with Prince Property Management Consulting Co., Ltd.'s related regulation, the limit of endorsements and guarantees for any single entity is $56,000; the total accumulated amount is $120,000.

Table 2,Page 1

Prince Housing & Development Corp.

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

December 31, 2019

		December 31, 2019
Securities held by Marketable securities Name of investee companies Table 3	Relationship with the securitiesissuer	General ledgeraccount		As of Decemb	er 31, 2019	Fairvalue Footnote Expressed in thousands of NTD (Except as otherwise indicated)
			Numberofshares	Bookvalue	Ownership (%)
Prince Housing & Development Corp. Stock Nantex Industry Co., Ltd. Stock ScinoPharm Taiwan, Ltd. Stock Simplo Technology Co., Ltd. Stock Universal Venture Capital Investment Corp. Stock Grand Bills Finance Corp. Stock Chipwell Tech. Corp. Stock Nanmat Technology Co., Ltd. Stock Southern Science Joint Development . Stock Formosoft International Co., Ltd. Stock President Energy Development Corp. Stock President International Development Corp. Fund Mega Diamond Money Market Fund Fund UPAMC James Bond Money Market Fund Fund Yuanta Wan Tai Money Market Fund Jih Sun Money Market Fund Fund Yuanta De-Li Money Market Fund Fund Prudential Financial Money Market Fund Ta-Chen Construction & Engineering Corp. Stock Nantex Industry Co., Ltd. Stock Chipwell Tech. Corp. Stock Nanmat Technology Co., Ltd. Prince Apartment Management Maintain Co., Ltd. Stock Prince Housing & Development Corp. Stock Tainan Spinning Co., Ltd. Fund UPAMC James Bond Money Market Fund Prince Security Co., Ltd. Stock Nanmat Technology Co., Ltd. Prince Property Management Consulting Co., Ltd. Fund CTBC Hwa-win Money Market Fund Cheng-shi Construction Co., Ltd. Fund UPAMC James Bond Money Market Fund Time Square International Co., Ltd. Fund FSITC Money Market Fund Eastspring Investments Well Pool Money Market Fund Fund Taishin 1699 Money Market Fund Allianz Global Investor Taiwan Money Market Fund Prince Real Estate Co., Ltd. Stock Nantex Industry Co., Ltd. Stock Sung Gang Asset Management Co., Ltd. Fund Jih Sun Money Market Fund Prince Utility Co., Ltd Fund UPAMC James Bond Money Market Fund	None None None None None None None None None None None None None None None None None None None None Parent company None None None None None None None None None None None None None	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss -current Financial assets at fair value through profit or loss -current Financial assets at fair value through profit or loss -current Financial assets at fair value through profit or loss -current Financial assets at fair value through profit or loss -current Financial assets at fair value through profit or loss - non - current Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss - current Non-current financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss -current	7,564,988 23,605,921 76,349 1,400,000 48,672 344,488 1,648,563 10,000 7,117 300,000 87,745,770 6,301,406 6,006,728 13,316,728 13,497,677 12,269,203 12,593,359 13,327,483 349,990 1,848,857 655,424 122,201 896,298 246,513 2,172,949 10,217,642 168,148 2,205,234 2,214,905 2,384,757 194,282 47,968 13,571,283 2,997,207	227,706 $ 627,918 23,134 11,396 877 1,209 59,678 2,063 - 8,946 832,707 79,342 100,782 202,449 200,813 200,846 200,004 401,157 1,228 66,929 7,374 1,283 15,000 8,924 24,000 171,434 60,042 30,021 30,000 30,000 5,848 775 201,907 50,288	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 10.00% Note 1 6.00% 6.63% - - - - - - Note 1 Note 1 5.40% Note 1 Note 1 - Note 1 - - - - - - Note 1 6.90% - -	30.10 $ Listed company, Note 2 26.60 Listed company, Note 3 303.00 OTC company 8.14 18.02 3.51 36.20 206.29 - 29.82 9.49 Note 4 12.59 Note 5 16.78 15.20 14.88 16.37 15.88 30.10 Note 6 3.51 36.20 11.25 Listed company 10.50 Listed company 16.78 36.20 11.06 16.78 179.10 13.66 13.58 12.58 30.10 Listed company 16.15 OTC company 14.88 16.78

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

Note 2: 4,088 thousand shares of outstanding common stock were used as collateral for loan.

Note 3: 17,276 thousand shares of outstanding common stock were used as collateral for loan.

Note 4: 60,000 thousand shares of outstanding common stock were used as collateral for loan.

• Note 5: 6,301 thousand units of outstanding common stock were used as collateral for loan.

• Note 6: 10,000 thousand shares of outstanding common stock were used as collateral for loan.

Table 3,Page 1

Prince Housing & Development Corp.

Table 4

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

Year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

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

Note 1: The transfer of title took place on settlement date. The Company paid $0 for the current period. As of December 31, 2019, the Company has already paid $1,169,785.

Note 2: In order to purchase 67.13% of areas from the north side of the offset-expenditure land in the redevelopment zone, the transaction amount was the expected price including compensation for demolition to all land owners of north side of the offset-expenditure land, compensation for demolition to owners of parkland to be (67.13%), construction expenses in all regions (67.13%) and interests arising from re-planning committee's borrowing from the Company to pay aforementioned expenses. Note 3: November 7, 2014 was the signing date of the contract. The Company paid $414,063 for the current period. As of December 31, 2019, the Company has already paid $1,255,309.

Table 4,Page 1

Table 5

Prince Housing & Development Corp.

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2019

Table 5 Purchaser/seller	Counterparty	Relationship with the counterparty		Tra	nsaction		Differences in transaction terms compared to third party transactions		(Except as otherwise Expressed in thousan Notes/accounts receivable(payable)		indicated) ds of NTD Footnote
			Purchases (sales)	Amount	Percentage of total purchases(sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Prince Housing & Development Corp. Prince Housing & Development Corp.	Cheng-Shi Construction Co., Ltd. Prince Utility Co., Ltd.	Subsidiary Subsidiary	Purchases Purchases	267,889 $ 108,487	13% 5%	Payments were paid in accordance with the contract terms Payments were paid in accordance with the contract terms	It is reasonable compared to the normal tradings It is reasonable compared to the normal tradings	It is reasonable compared to the normal tradings It is reasonable compared to the normal tradings	21,930) ($ ( 4,326)	(1%) 0%

Table 5,Page 1

Table 6

Prince Housing & Development Corp.

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2019	Turnover rate	Overdue	Overdue	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Prince Housing & Development Corp. Ta-Chen Construction & Engineering Corp.	The Splender Hotel Taichung Cheng-Shi Investment Holdings Co., Ltd.	Subsidiary Affiliate	Other assets - obligation receivable 575,000 $ Other receivables - loans to others 100,000 $	- -	- $ - $	- -	- $ - $	- $ - $

Table 6,Page 1

Table 7

Prince Housing & Development Corp.

Significant inter-company transactions during the reporting periods Year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number	Companyname	Counterparty	Relationship	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 0 0 0 0 0 1 2	Prince Housing & Development Corp. Prince Housing & Development Corp. Prince Housing & Development Corp. Prince Housing & Development Corp. Prince Housing & Development Corp. Prince Housing & Development Corp. Prince Real Estate Co., Ltd. Ta-Chen Constmctron& Engineering Corp.	Cheng-Shi Construction Co., Ltd. Cheng-Shi Construction Co., Ltd. Prince Utility Co., Ltd. Prince Utility Co., Ltd. The Splender Hotel Taichung The Splender Hotel Taichung Prince Housing & Development Corp. Cheng-Shi Investment Holdings Co., Ltd.	The Company to the consolidated subsidiaries The Company to the consolidated subsidiaries The Company to the consolidated subsidiaries The Company to the consolidated subsidiaries The Company to the consolidated subsidiaries The Company to the consolidated subsidiaries The consolidated subsidiaries to the Company The consolidated subsidiaries to the consolidated subsidiaries	Purchases Construction in progress Purchases Construction in progress Endorsement and guarantee Other assets - obligation receivables Endorsement and guarantee Loans to others	267,889 $ 942,800 108,487 307,600 2,150,000 575,000 1,352,085 100,000	Based on mutual agreements - Based on mutual agreements - In accordance with endorsement and guarantee procedures Creditor's rights purchase contract In accordance with endorsement and guarantee procedures Based on Procedures for provision of loans	2.20% 1.72% 0.89% 0.56% 3.93% 1.05% 2.47% 0.18%

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

(1) Parent company is ‘0’.

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

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

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

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

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

Table 7,Page 1

Prince Housing & Development Corp.

Information on investees Year ended December 31, 2019

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares held	as at December 31,2019	as at December 31,2019	Net profit (loss) of the investee for the year ended December 31, 2019	Investment income (loss) recognised by the Company for the year ended December 31,2019	Footnote
				Balance as at December 31,2019	Balance as at December 31,2018	Number of shares	Ownership (%)	Book value
Prince Housing & Development Corp. Cheng-Shi Investment Holdings Co., Ltd	Cheng-Shi Investment Holdings Co., Ltd. Prince Property Management Consulting Co., Ltd. Geng-Ding Co., Ltd. Prince Housing Investment Co., Ltd. Uni-President Development Corp. The Splender Hotel Taichung Jin Yi Xing Plywood Co., Ltd. Ming-Da Enterprise Co., Ltd. Prince Industrial Co., Ltd. Prince Real Estate Co., Ltd. Times Square International Investment Holdings Co., Ltd. Ta-Chen Construction & Engineering Corp. Prince Utility Co., Ltd. Cheng-Shi Construction Co., Ltd.	Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	General investment Management and consulting Hotels and catering Overseas investment Leasing of buildings Hotels and catering Manufacture of plywoods Real estate trading Development of public housing and building Real estate trading and leasing General investment Construction Electricity water pipe Construction	1,146,925 $ 181,000 120,000 140,413 1,080,000 975,000 165,410 37,378 10,000 470,784 607,270 856,566 56,025 208,027	1,146,925 $ 181,000 120,000 140,413 1,080,000 975,000 165,410 37,378 10,000 470,784 607,270 856,566 56,025 208,027	97,504,758 17,146,580 18,000,000 428 108,000,000 97,500,000 3,938,168 200,000 1,000,000 12,292,315 68,400,000 90,497,528 3,070,000 20,100,000	100% 100% 30% 100% 30% 50% 99.65% 20% 100% 99.68% 100% 100% 100% 100%	1,133,975 $ 262,006 307,140 525,031 1,146,288 284,831 297,509) ( 27,152 9,355 912,198 992,375 1,134,872 56,677 260,395	214,844 $ 20,306 74,456 32,316 156,197 29,025) ( 148) ( 8,443 60) ( 155,265 126,769 169,098 5,313 43,917	229,871 $ 20,401 22,337 32,316 46,859 14,513) ( 18,321 1,688 60) ( 144,213 126,769 - - -	Notes 1 and 2 Notes 1 and 2 Note 2 Note 4 Note 2 Notes 1 and 2 Note 2 Notes 1 and 2 Notes 2 Notes 2 and 3 Notes 2 and 3 Notes 2 and 3

Table 8,Page 1

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares held	as at December 31,2019	as at December 31,2019	Net profit (loss) of the investee for the year ended December 31, 2019	Investment income (loss) recognised by the Company for the year ended December 31,2019	Footnote
				Balance as at December 31,2019	Balance as at December 31,2018	Number of shares	Ownership (%)	Book value
Prince Housing Investment Co., Ltd. Prince Property Management Consulting Co., Ltd. Princre Real Estate Co., Ltd. Time Square International Investment Holdings Co., Ltd	PPG Investment Inc. Queen Holdings Ltd. Prince Apartment Management Maintain Co., Ltd. Prince Security Co., Ltd. Amida Trustlink Assets Management Co., Ltd. Time Square International Co., Ltd. Times Square International Stays Corp. (Note 5)	U.S.A British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan	Overseas investment Overseas investment Management of apartments Security Development of public housing and building Hotels and catering Hotels and catering	56,945 $ 122,034 67,853 159,611 305,480 376,270 331,000	56,945 $ 122,034 67,853 159,611 305,480 376,270 231,000	273 2,730 3,000,000 13,172,636 21,644,062 46,300,000 22,100,000	27.30% 27.30% 100% 100% 45.21% 100% 100%	3,071 $ 400,869 61,480 172,664 139,411) ( 630,643 312,864	27,943 $ 74,258 4,933 15,622 659) ( 134,109 6,909) (	- $ - - - - - -	Note 3 Note 3 Notes 2 and 3 Notes 2 and 3 Note 3 Notes 2 and 3 Notes 2 and 3

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

Note 2: Subsidiary.

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

Note 4: Provided 108,000 thousand shares as collateral.

Note 5: Times Square International Investment Holdings Co., Ltd. invested $100 thousand in Times Square International Stays Corp. for the year and the registration was completed on January 16, 2020.

Table 8,Page 2