PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2016 AND 2015

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

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2016, pursuant to "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises," the Company that is required to be included in the consolidated financial statements of affiliates, is the same as the Company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standards 10. And if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

PRINCE HOUSING & DEVELOPMENT CORP. $Bv$ ZHENG GAO HUI Chairman March 22, 2017.

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR 16000394

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

Opinion

We have audited the accompanying consolidated balance sheets of Prince Housing & Development Corp. and its subsidiaries (the "Group") as at December 31, 2016 and 2015, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated 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 consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2016 and 2015, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the "Regulations Governing the Preparations of Financial Reports by Securities Issuers" and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

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 Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the "Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained and the report of other independent accountants are sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

The accuracy of building and land sales revenue recognition timing

Description

Please refer to Note 4(30) for accounting policies on sales revenue, and Note 6(26) for details. For the year ended December 31, 2016, building and land sales revenue amounted to NT\$ 5,274,930 thousand, representing 43.74% of consolidated operating revenue.

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

How our audit addressed the matter

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

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

Recognition of construction revenue- the stage of completion estimate Description

Please refer to Note 4(13) and (30) for accounting policies on construction contracts and revenue recognition, and Note 6(26) for details. For the year ended December 31, 2016, construction revenue amounted to NT\$ 2,781,948 thousand, representing 23.07% of consolidated operating revenue.

The Group 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 scaled caused by additional or less work, and the price fluctuations in the recent market to estimate the contract work, overhead and relevant costs.

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

How our audit addressed the matter

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

A. We obtained an understanding of the nature of business and industry of the Group and assessed the reasonableness of internal process of estimating total construction cost, including the unit of calculation of owner's design drawing, the procedure of estimating each construction cost and overhead, and the consistency of applying the estimation method;
$B_r$ We assessed and tested the internal controls which would affect the changes of estimated total cost, 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 at the end of the reporting period to assess the reasonableness of the stage of completion method result.

D. We obtained 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 a wholly-owned consolidated subsidiary and investments recognized under the equity method that are included in the financial statements. Total assets (including investments accounted for under equity method) of NT\$ 1,497,276 thousand and NT\$ 1,843,945 thousand as at December 31, 2016 and 2015, constituted 2.92% and 3.38% of consolidated total assets. Operating income of NT\$ 599,445 thousand and NT\$ 534,463 thousand, for the years ended December 31, 2016 and 2015, constituted 4.97% and 3.32% of consolidated total operating income; comprehensive income accounted for under equity method of NT\$ 44,904 thousand and NT\$ (71,792) thousand for the years ended December 31, 2016 and 2015, constituted 3.62% and (3.28%) of consolidated total comprehensive income, respectively. Those financial statements were audited by other independent accountants whose report thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Prince Housing & Development Corp. as at and for the years ended December 31, 2016 and 2015.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group'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 Group 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 Group's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated financial statements.

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

Identify and assess the risks of material misstatement of the consolidated financial statements, $A_{\cdot}$ 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 Group's internal control.
$C_{\cdot}$ 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 Group'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 consolidated 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 Group to cease to continue as a going concern.
$E_{\cdot}$ Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated 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 Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Wu, Chien-Chih Lin, Yi-Chang

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

The accompanying consolidated 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 consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

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

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

			December 31, 2016			December 31, 2015
	Assets	Notes	AMOUNT	$\overline{\%}$		AMOUNT	$\frac{9}{6}$
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 4,648,915	9	$\sqrt{3}$	3,800,751	7
1110	Financial assets at fair value	$6(2)$ and $8$
	through profit or loss - current		664,151	1		479,761	1
1150	Notes receivable, net	6(3)	102,339			135,230
1170	Accounts receivable, net	6(4)	822,457	2		1,861,620	3
1180	Accounts receivable - related	7
	parties		22,660			428,646	1
1190	Receivables from customers on	6(5)
	construction contracts		1,058,750	2		1,347,958	2
1200	Other receivables		21,466	$\blacksquare$		69,310
130X	Inventories, net	$6(6)$ and $8$	22, 270, 854	44		22, 209, 890	41
1410	Prepayments		222,435			310,651
1476	Other financial assets - current	8	925,921	2		1,973,705	4
1479	Other current assets	6(7)	299,327	1		341,872	1
11XX	Total Current Assets		31,059,275	61		32,959,394	60
	Non-current assets
1510	Financial assets at fair value	$6(2)$ and 8
	through profit or loss - non-
	current		78,253			77,992
1523	Available-for-sale financial assets 6(8) and 8
	- non-current		1,212,673	2		1,564,942	3
1543	Financial assets carried at cost -	$6(9)$ and $8$
	non-current		877,800	2		887,529	2
1550	Investments accounted for under	$6(10)$ and 8
	equity method		2,029,496	$\overline{4}$		2,244,485	4
1600	Property, plant and equipment,	$6(11)$ and 8
	nct		6,513,554	13		6,742,932	13
1760	Investment property, net	$6(12)$ and 8	5,957,293	12		6,043,827	11
1780	Intangible assets, net	6(13)	2,240,916	4		2,302,523	4
1840	Deferred income tax assets	6(31)	104,535			106,459
1920	Refundable deposits	7 and 9	567,979	1		627,584	1
1980	Other financial assets - non-	8
	current		564,213			838,030	2
1990	Other non-current assets		78,857			80,214
15XX	Total Non-current assets		20, 225, 569	39		21, 516, 517	40
1XXX	Total assets		\$ 51,284,844	100	\$	54, 475, 911	100

(Continued)

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

$\hat{\mathcal{A}}$

			December 31, 2016			December 31, 2015
	Liabilities and Equity	Notes	AMOUNT	$\overline{\mathscr{C}}$		AMOUNT	%
	Current liabilities
2100	Short-term borrowings	$6(14)$ and 8	\$ 2,275,659	5	S	2,626,373	5
2110	Short-term notes and bills payable 6(15) and 8		489,694	1		1,059,811	$\sqrt{2}$
2150	Notes payable		57,872	$\tilde{\phantom{a}}$		26,699
2170	Accounts payable		2,961,923	6		4,198,917	8
2190	Payables to customers on	6(5)
	construction contracts		223,082	$\blacksquare$		505,437	1
2200	Other payables		1,155,972	$\overline{c}$		1,357,629	3
2220	Other payables - related parties	7	701,520	$\mathbf{1}$		169,005
2230	Current income tax liabilities		185,206			96,030
2310	Receipts in advance	6(16)	1,387,455	3		1,875,462	3
2320	Long-term liabilities, current	$6(17)(18)$ and 8
	portion		3,322,904	7		474,592	1
2399	Other current liabilities		50,716			20,647
21XX	Total Current Liabilities		12,812,003	25		12,410,602	23
	Non-current liabilities
2530	Bonds payable	6(17)	2,500,000	5		4,500,000	8
2540	Long-term borrowings	$6(18)$ and $8$	9,797,068	19		10,019,911	19
2550	Provisions for liabilities - non-	6(19)
	current		75,207			84,517
2570	Deferred income tax liabilities	6(31)	345,839	$\bf{l}$		416,005	1
2610	Long-term notes and accounts	7
	payable		711,106	2		1,385,984	3
2640	Net defined benefit liability -	6(20)
	non-current		91,109			141,075
2645	Guarantee deposits received		135,350			135,719
2670	Other non-current liabilities	6(10)	189,869			207,527
25XX	Total Non-current liabilities		13,845,548	27		16,890,738	31
2XXX	Total Liabilities		26,657,551	52		29, 301, 340	54
	Equity attributable to owners of
	parent
	Share capital
3110	Common stock	6(21)	16,233,261	31		16,233,261	30
	Capital surplus	6(22)
3200	Capital surplus		2,260,513	5		2,260,513	4
	Retained earnings	6(23)(31)
3310	Legal reserve		1,644,576	3		1,420,796	3
3350	Unappropriated retained earnings		3,101,014	6		3,508,400	6
	Other equity interest	6(24)
3400	Other equity interest		1,058,270	$\overline{\mathbf{c}}$		1,409,109	2
3500	Treasury stocks	6(21)	$1,003$ )			$1,003$ )
31XX	Equity attributable to owners
	of the parent		24,296,631	47		24,831,076	45
36XX	Non-controlling interest		330,662			343,495	$\mathbf{I}$
3XXX	Total equity		24, 627, 293	48		25, 174, 571	46
	Significant contingent liabilities	9
	and unrecognised contract
	commitments
3X2X	Total liabilities and equity
			\$ 51, 284, 844	100	\$	54,475,911	100

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

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

					Years ended December 31
				2016		2015
	Items	Notes		AMOUNT	$\%$	AMOUNT	$\%$
4000	Operating revenue	$6(26)$ and 7	\$	12,060,302	100 \$	16,108,506	100
5000	Operating costs	6(6)(30)		8, 124, 458) (	$67)$ (	10,933,346)(	68)
5900	Gross profit			3,935,844	33	5,175,160	32
	Operating expenses	$6(30)$ and 7
6100	Selling expenses		(	466,748)(	$4)$ (	669,420) (	4)
6200	General & administrative
	expenses			1,955,363)(	$16)$ (	$2,054,341$ ) (	13)
6000	Total operating expenses			2,422,111) (	$20)$ (	2,723,761)(	17)
6900	Operating profit			1,513,733	13	2,451,399	15
	Non-operating income and
	expenses
7010	Other income	6(27)		301,136	2	336,933	$\overline{2}$
7020	Other gains and losses	6(2)(28)		214,776	$\overline{c}$	56,884	1
7050	Finance costs	6(6)(29)	(	243,079) (	$2)$ (	335,166)(	2)
7060	Share of profit/(loss) of	6(10)
	associates and joint ventures
	accounted for under equity
	method			119,118	1	11,610
7000	Total non-operating income
	and expenses			391,951	3	70,261	$\mathbf{1}$
7900	Profit before income tax			1,905,684	16	2,521,660	16
7950	Income tax expense	6(31)		306,469)(	$3)$ (	288,092)(	2)
8200	Profit for the period		\$	1,599,215	13 \$	2,233,568	14

$\bar{\gamma}$

(Continued)

$\lambda_{\rm{max}}$

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

					Years ended December 31
				2016		2015
	Items	Notes		AMOUNT	$\overline{\frac{9}{6}}$	AMOUNT	$\%$
	Other comprehensive income
	Components of other
	comprehensive loss that will not
8311	be reclassified to profit or loss
	Actuarial loss on defined benefit 6(20) plan
8320	Share of other comprehensive		(5)	8,112)	$-$ (\$	12,909)
	(loss) 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			416	- (	1,484)
8349	Income tax related to components of other	6(31)
	comprehensive income that will
	not be reclassified to profit or
	loss			560
8310	Components of other
	comprehensive loss that will
	not be reclassified to profit
	or loss			7,136)		14,393)
	Components of other comprehensive income that will
	be reclassified to profit or loss
8361	Exchange differences arising on
	translation of foreign operations		(	1,754)		16
8362	Other comprehensive (loss)	6(8)
	income, before tax, available-
	for-sale financial assets			349,085)(	$3)$ (	27,126)
8360	Components of other
	comprehensive loss that will
	be reclassified to profit or loss
8300	Total other comprehensive loss			350,839)(	$3)$ (	27,110)
	for the year		$($ \$	$357,975$ ) (	$3)$ (\$	$41,503$ )
8500	Total comprehensive income for
	the year		$\overline{\mathcal{E}}$	1,241,240	10 \$	2,192,065	$\frac{14}{}$
	Profit (loss), attributable to:
8610	Owners of the parent		\$	1,609,189	13 \$	2,237,800	$\overline{14}$
8620	Non-controlling interest			9,974)	$\blacksquare$	4,232)
			\$	1,599,215	13 \$	2,233,568	$\frac{14}{}$
	Comprehensive income (loss)
	attributable to:
8710	Owners of the parent		\$	1,251,214	10 \$	2,196,297	14
8720	Non-controlling interest			9,974)		4,232)
			\$	1,241,240	10 \$	2,192,065	14

9750	Earnings per share (in dollars) Basic earnings per share	6(32)
9850	Diluted earnings per share		$\frac{3}{3}$		0.99		1.38
					0.98 \$		1.36

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

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

					(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
			Equity attributable to owners of the parent
					Retained Earnings		Other equity interest
	Notes	Share capital- common stock	Capital surplus. additional paid- in capital	Legal reserve	Unappropriated retained earnings	differences of statements translation operations Financial foreign	Unrealized gain available-for- sale financial or loss on assets	Treasury stocks		Total	controlling interest . Z	Total equity
2015
Balance at January 1, 2015		\$16,623,418	\$1,929,793	1,180,924 ↔	\$2,854,738	1,690 ⊷	\$1,434,529	٣	60,440)	\$23,964,652	346,292 ↔	\$24,310,944
Appropriations and distribution of 2014 earnings
Legal reserve				239,872	239,872)
Cash dividends	6(23)				1,329,873)					$1,329,873$ )		1,329,873)
Profit (loss) for the year	6(32)				2, 23, 300					2,237,800	4,232	2,233,568
Other comprehensive income (loss) for the year	6(8)(20)(24)				$14,393$ )		27,126) $\tilde{=}$			41,503		41,503
Treasury stock transactions	6(21)(22)	390, 157)	330,720						59,437
Changes in non-controlling interest				J							1,435	1.435
Balance at December 31, 2015		\$16, 233, 261	2.260,513	1,420,796 ∥⊶	3,508,400 ↮	SQL'	1,407,403 ارب	ی	ျေ	\$24,831,076	343, 495 ÷.	\$25,174.57
2016
Balance at January 1, 2016		\$16,233,261	\$ 2,260,513	1,420,796 ÷	\$3,508,400	1,706 ۰Ą	\$1,407,403	ی	$1,003$ )	\$24,831,076	343,495 ↔	\$25,174,571
Appropriations and distribution of 2015 earnings
Legal reserve				223,780	223,780)
Cash dividends	6(23)				1,785,659					1,785,659)		1,785,659)
Profit (loss) for the year	5(32)				1,609,189					1,609,189	9,974)	1,599,215
Other comprehensive loss for the year	6(8)(20)(24)				7,136)	$1,754$ )	349,085			357,975)		357,975)
Changes in non-controlling interest											2,859	2.859

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

$$24.627.293$

$$330,662$

$\underline{\textbf{3}}$ 1,003 ) $\underline{\textbf{3}}$ 24,296,631

$\frac{48}{2}$ ) $\frac{1.058.318}{2}$

$\mathbf{e}$

$\frac{1}{2}$ 3, 101, 014

$1,644.576$

$5 - 2.260.513$

$516, 233, 261$

Balance at December 31, 2016

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

			Years ended December 31
	Notes		2016		2015

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax
Adjustments		\$	1,905,684	\$	2,521,660

Income and expenses having no effect on cash flows Net loss (gain) on financial assets at fair value through profit or loss
Reversal of provision for bad debts	6(2)(28)		15,349	€	79,305)
Provision for bad debts	6(3) 6(4)		194	€	$196$ ) 230
Write-off of uncollectible accounts	6(3)(4)		344) (
Share of profit of associates and joint ventures accounted for under	6(10)	€			3,171)
equity method		€	$119,118$ ) (		$11,610$ )
Loss on disposal of property, plant and equipment			2,438		2,833
(Gain) loss on disposal of investment property			909)		4,278
Property, plant and equipment transferred to expenses			323
Depreciation	6(30)		373,196		357,071
Amortization	6(13)(30)		62,123		61,844
Interest expense	6(29)		241,879		333,965
Interest income	6(27)	€	$10,033$ ) (		8,896)
Dividend income	6(27)		$118,461$ )	-6	$169,518$ )
Loss (gain) on unrealized foreign exchange			7,185	1	14,676)
Changes in assets/liabilities relating to operating activities
Changes in operating assets
Financial assets at fair value through profit or loss - current		€	$200,000$ ) (		162,335)
Notes receivable			33,235		13,378
Accounts receivable			1,038,969		3,496,680
Accounts receivable - related parties			405,986		11,783
Receivables from customers on construction contracts			289,208	¢	392,068)
Other receivables			47,844		214,741
Inventories		€	$60,964$ ) (		1,346,494)
Prepayments			88,216		119,206
Other current assets			42,545		179,932
Other non-current liabilities			1,357		3,263
Net changes in liabilities relating to operating activities
Notes payable			31,173		4,672
Accounts payable			$1,236,994$ ) (		63,401)
Payable to customers on construction contracts Other payables			282,355)		154,478
Other payables - related parties			194, 117)		260,236
Receipts in advance			86,365)	$\sqrt{ }$	24,996)
Other current liabilities			488,007) (		1,161,673)
Provisions for liabilities - non-current			30,069	X	92,660)
Long-term notes and accounts payable			9,310) $10,907$ ) (		2,797 9,928)
Net defined benefit liability - non-current			$57.518$ ) (
Other non-current liabilities			$17,986$ )		$2,709$ ) 95)
Cash inflow generated from operations			1,723,585		4,199,316
Interest received			10,033		9,989
Cash dividend received			356,881		210,558
Interest paid			249,419)		331,385)
Income tax paid			285,535)		395,077)
Net cash flows from operating activities			1.555,545		3,693,401

(Continued)

$\bar{\alpha}$

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

			Years ended December 31
	Notes		2016		2015
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in other financial assets - current		\$	1,047,784	\$	799,254
Return of share capital from available-for-sale financial assets - non-
current			1.577
Decrease in available-for-sale financial assets - non-current			1,607		31,473
Return of share capital from financial assets carried at cost			9,729
Return of share capital from investments accounted for under equity
method			90,022		56,808
Acquisition of property, plant and equipment	6(11)	€	$61,479$ ) (		58,695)
Proceeds from disposal of property, plant and equipment			789		64
Acquisition of investment property	6(12)			t	1,084)
Proceeds from disposal of investment property			1,554		4,518
Increase in intangible assets	6(13)	0	$516$ ) $($		1,372)
Decrease (increase) in refundable deposits			59,605	ſ	90,207)
Decrease in other financial assets - non-current			273,817		73,958
Net cash flows from investing activities			1,424,489		814,717
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings		t	$350,714$ ) (		679,211)
Decrease in short-term notes and bills payable		t	570,117) (		1,043,456)
Repayment of long-term borrowings		€	10,875,088) (		4,959,670)
Proceeds from long-term borrowings			11,500,557		5, 194, 003
Decrease in long-term notes and accounts payable		C	45,091) (		61,339)
Decrease in guarantee deposits received		(	369 ) (		828)
Cash dividends paid	6(23)		$1,785,659$ ) (		1,329,873)
Changes in non-controlling interest			2,859)		1,435
Net cash flows used in financing activities			2,129,340)		2,878,939)
Effect of exchange rate changes on cash and cash equivalents			2,530)		5,766
Net increase in cash and cash equivalents			848,164		1,634,945
Cash and cash equivalents at beginning of year			3,800,751		2,165,806
Cash and cash equivalents at end of year		\$	4,648,915	\$	3,800,751

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

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2016 AND 2015

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

1. HISTORY AND ORGANIZATION

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

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

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

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

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

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

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

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

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

New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Classification and measurement of share-based payment transactions (amendments to IFRS 2)	January 1, 2018
Applying IFRS 9 'Financial instruments' with IFRS 4'Insurance contracts' (amendments to IFRS 4)	January 1, 2018
IFRS 9, 'Financial instruments'	January 1, 2018
Sale of contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28)	To be determined by International Accounting Standards Board
IFRS 15, 'Revenue from contracts with customers'	January 1, 2018
Clarifications to IFRS 15, 'Revenue fromcontracts with customers' (amendments to IFRS 15)	January 1, 2018
IFRS 16, 'Leases'	January 1, 2019
Disclosure initiative (amendments to IAS 7)	January 1, 2017
Recognition of deferred tax assets for unrealised losses (amendments to IAS 12)	January 1, 2017
Transfers of investment property (amendments to IAS 40)	January 1, 2018
IFRIC 22, 'Foreign currency transactions and advance consideration'	January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 1, 'First-time adoption of International Financial Reporting Standards'	January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 12, 'Disclosure of interests in other entities'	January 1, 2017
Annual improvements to IFRSs 2014-2016 cycle- Amendments to IAS 28, 'Investments in associates and joint ventures'	January 1, 2018

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

A. IFRS 9, 'Financial instruments'
(a) Classification of debt instruments is driven by the entity's business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
(b) The impairment losses of debt instruments are assessed using an 'expected credit loss' approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses ('ECL') or lifetime ECL (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.
B. IFRS 15 'Revenue from contracts with customers'

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

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

Step 1: Identify contracts with customer.

Step 2: Identify separate performance obligations in the contract(s).
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price.

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

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

C. IFRS 16, 'Leases'

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

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the "Rules" Governing the Preparation of Financial Statements by Securities Issuers", International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the "IFRSs").

(2) Basis of preparation
A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (b) Available-for-sale financial assets measured at fair value.
(c)Defined benefit liabilities recognized based on the net amount of pension fund assets less unrecognized actuarial gains and present value of defined benefit obligation.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group 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. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its 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. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

		Main business		Ownership (%)
Name of investor	Name of subsidiary	activities	December 31, 2016	December 31, 2015	Description
Prince Housing & Development Corp.	Prince Property Management Consulting Co., Ltd.	Real estate managers	100	100
	Cheng-Shi Investment Holdings Co., Ltd.	General investments	100	100
	Prince Housing Investment Overseas investment Co., Ltd.		100	100
	BioSun Technology Co., Ltd.	Anti-mildew's import and export		100	Note 5
	Dong-Feng Enterprises Co., Ltd.	Housebuilders and sales	100	100
	The Splendor Hotel Taichung	Hotels and catering	50	50	Note 1
	Time Square International Co., Ltd.	Hotels and catering	100	100
	Jin-Yi-Xing Plywood Co., Ltd.	Manufacture of plywood	99.65	99.65	Note 2
	Prince Industrial Co., Ltd.	Development of public housing and building	100	100
	Prince Real Estate Co., Ltd. Real estate trading	and leasing	99.65	99.65	Note 2
Prince Property Management Consulting Co., Ltd.	Prince Apartment Management Maintain Co., Ltd.	Management of apartment	100	100
	Prince Security Co., Ltd.	Security	100	100
Cheng-Shi Investment Holdings Co., Ltd.	Ta-Chen Construction & Engineering Corp.	Construction	100	100
	Prince Utility Co., Ltd.	Electricity and water pipe maintenance	100	100
	Cheng-Shi Construction Co., Ltd.	Construction	100	100
Ta-Chen Construction & Engineering Corp.	Ta-Chen International (Brunei) Corp.	Overseas investment		100	Note 4
Ta-Chen International (Brunei) Corp.	Ta Chen Construction & Engineering (Vietnam) Corp.	Construction		100	Note 3

B. Subsidiaries included in the consolidated financial statements:

Note 1: The Group does not directly or indirectly own above 50% of voting shares of The Splendor Hotel Taichung. However, as the Group has control over the finance and operations of the company, it is included in the consolidated financial statements.
Note 2: The subsidiary was newly established from the land division of Jm-Yi-Xing Plywood Co., Ltd. on September 1, 2015.
Note 3: Ta Chen Construction & Engineering (Vietnam) Corp. has completed liquidation process in May 2016.
Note 4: Ta-Chen International (Brunei) Corp. has completed liquidation process in August 2016.
Note 5: BioSun Technology Co., Ltd. has completed liquidation process in September 2016.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group:

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

(4) Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in New Taiwan dollars, which is the Company's functional and the Group's 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 recognised 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 recognised 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 recognised 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 recognised 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.
(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 group entities, associates and joint arrangements 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 recognised in other comprehensive income.
(b) When the foreign operation partially disposed of or sold is an associate or joint arrangements. 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 the Group still retains partial interest in the former foreign associate or joint arrangements after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangements, 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, even the Group still 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.
(5) 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 cycles; if they are not related to the construction business, they are classified by annual basis.
B. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
- (b) Assets held mainly for trading purposes;
- (c) Assets that are expected to be realised within twelve months from the balance sheet date;
- (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
C. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (a) Liabilities that are expected to be settled within the normal operating cycle;
- (b) Liabilities arising mainly from trading activities;
- (c) Liabilities that are to be settled within twelve months from the balance sheet date;
- (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

$(6)$ 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.

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

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

(8) Available-for-sale financial assets

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

(9) Receivables

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

(10) Impairment of financial assets

A. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

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

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

(b) Financial assets measured at cost

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

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

(11) Derecognition of financial assets

The Group 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 Group 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 Group has not retained control of the financial asset.
(12) Inventories

Except for gains or losses occurring from construction contracts that are recognised using the percentage of completion method, "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.

(13) Construction contracts

A. IAS 11, 'Construction Contracts', defines a construction contract as a contract specifically negotiated for the construction of an asset. If the outcome of a construction contract can be estimated reliably and it is probable that this contract would make a profit, contract revenue should be recognised by reference to the stage of completion of the contract activity, using the percentage-of-completion method of accounting, over the contract term. Contract costs are expensed as incurred. The stage of completion of a contract is measured by the proportion of contract costs incurred for work performed to date to the estimated total costs for the contract. An expected loss where total contract costs will exceed total contract revenue on a construction contract should be recognised as an expense as soon as such loss is probable. If the outcome of a construction contract cannot be estimated reliably, contract revenue should be recognised only

to the extent of contract costs incurred that it is probable will be recoverable.

B. Contract revenue should include the revenue arising from variations from the original contract work, claims and incentive payments that are agreed by the customer and can be measured reliably.
C. The excess of the cumulative costs incurred plus recognised profits (less recognised losses) over the progress billings on each construction contract is presented as an asset within 'receivables from customers on construction contracts'. While, the excess of the progress billings over the cumulative costs incurred plus recognised profits (less recognised losses) on each construction contract is presented as a liability within 'payables to customers on construction contracts'.
D. In accordance with IFRIC 15, 'Agreements for the Construction of Real Estate', if the buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress, the construction contract meets the definition of construction contract and criteria in IAS 11, 'Construction Contracts'. In accordance with the recognition criteria on the sale of goods as provided in IAS 18, 'Revenue', the Group recognises sales revenue for contracts of pre-selling of buildings that do not meet the definition of construction contracts. For transactions that meet the definition of construction contracts, the Group recognises contract revenue in accordance with IAS 11.
(14) Investments accounted for using equity method / associates
A. Associates are all entities over which the Group 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 recognised at cost.
B. The Group's share of its associates' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate's equity are not recognised in profit or loss or other comprehensive income of the associate and such changes do not affect the Group's ownership percentage of the associate, the Group recognises change in ownership interests in the associate in 'capital surplus' in proportion to its ownership.
D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group'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 Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new

shares proportionately, which results in a change in the Group'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 Group's ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised 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.

F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.
G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised 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, then the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, then the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.
(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 recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a

change in estimate under IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	$50 \sim 60$ years
Machinery and equipment	$2 \sim 10$ years
Computer and communication equipment	5 years
Transportation equipment	$3 \sim 5$ years
Office equipment	$5 \sim 15$ years
Leasehold improvements	5 years
Other equipment	$5 \sim 15$ years

(16) Operating leases (lessor/ lessee)

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

(17) Investment property

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

(18) Intangible assets

Goodwill, patent rights, computer software cost and service concession are stated at acquisition cost and amortised on a straight line basis. The useful life of major intangible assets is $3\neg 5$ years, while service concession is 44 years.

(19) Impairment of non-financial assets

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

(20) Borrowings
A. 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 recognised 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.

(21) Notes and accounts payable

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

(22) 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.

(23) 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 recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(24) Financial liabilities

Bonds payable

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

(25) Provisions

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

(26) 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 recognised as expenses in that period when the employees render service.

B. Pensions

(a) Defined contribution plans

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

(b) Defined benefit plans
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 Group in current period. The liability recognised in the balance sheet in respect of defined benefit pension plans 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 government bonds (at the balance sheet) of a currency and term consistent with the currency and term of the employment benefit obligations.
ii. Remeasurement arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognised immediately in profit or loss.
C. Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognised 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 Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

$(27)$ Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the 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 Group 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 recognised 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 recognised 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 recognised 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 recognised 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.
G. Consolidated income tax return for tax filings of certain domestic subsidiaries in the Group accounted for in accordance with individual reporting situations. And subsidiaries have selected the consolidated income tax return for tax filings and pay additional 10% tax on their undistributed retained earnings. If there is any tax effect due to the adoption of the consolidated tax system, the subsidiaries can proportionately allocate the effects on tax expense (benefit), deferred income tax and tax payable (tax refund receivable).
(28) 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.

(29) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are resolved 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 shares on the effective date of new shares issuance.

(30) Revenue recognition
A. Sales of goods

The Group handles entrusted construction, sale and lease of public housings and business buildings. Revenue arising from the sales of goods is recognised when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied. For pre-selling of housing that the Group has entrusted to construction companies to build, as stated in Note 4(13), sales revenue is recognised in accordance with IAS 18, 'Revenue'. Thus, the Group has carried over costs and recognised profit or loss when it completes transfer of title and settlement of housing. Only when housing was actually settled (or only when ownership was transferred) before balance sheet date, and related risk return was transferred would sales revenue be recognised.

B. Sales of services

The Group serves as real estate agency, manages apartment buildings and provides security. Revenue is recognised when transactions of service rendered can be reliably measured and future economic benefit may become inflows to the Group.

C. Construction contract revenue Please refer to Note 4(13) for construction contract services provided by the Group.
D. Service concession revenue

Please refer to Note 4(31) for service concession contracts provided by the Group.

(31) Service concession arrangements
A. The Group 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 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 Group allocates the fair value of the consideration received or receivable in respect of the service concession arrangement between construction services and operating services provided based on their relative fair values, and recognises such allocated amounts as revenues in accordance with IAS 11, 'Construction Contracts', and IAS 18, 'Revenue', respectively.
B. Costs incurred on provision of construction services or upgrading services under a service concession arrangement are accounted for in accordance with IAS 11, 'Construction Contracts'.
C. The consideration received or receivable from the grantor in respect of the service concession

arrangement is recognised at its fair value. Such considerations are recognised as an intangible asset based on how the considerations from the grantor to the operator are made as specified in the arrangement.

(32) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

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

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

A. Financial assets—impairment of equity investments

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

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

B. Investment property

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

(2) Critical accounting estimates and assumptions

Revenue recognition

Construction revenue should be recognised by reference to the stage of completion in the contract period using the percentage of completion method. Construction costs are recognised in the incurred period. The stage of completion of a contract is measured by the proportion of contract costs incurred for work performed to date bear to the estimated total contract costs.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	December 31, 2016	December 31, 2015
Cash on hand and revolving funds	\$ 172,942 \$	8,989
Checking accounts and demand
deposits	3,318,600	2,861,201
Time deposits	217,293	590,561
Repurchase bonds	940,080	340,000
	\$ 4,648,915	3,800,751

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

B. The repurchase bonds held by the Group has high liquidity, so they were classified as cash equivalents.

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

Items	December 31, 2016		December 31, 2015
Current items:
Financial assets held for trading
Listed (TSE and OTC) stocks	\$ 264,520	\$	264,520
Beneficiary certificates	400,000		200,000
	664,520		464,520
Financial assets held for trading
valuation adjustments	369)		15,241
	664,151	S	479,761
Non-current items:
Financial assets held for trading
Beneficiary certificates	\$ 76,000	S	76,000
Financial assets held for trading
valuation adjustments	2,253		1,992
	\$ 78,253	\$	77,992

A. The Group recognized net (loss) gain of (\$15,349) and \$79,305 for the years ended December 31, 2016 and 2015, respectively.
B. Details of the Group's financial assets at fair value through profit or loss pledged to others as collateral are provided in Note 8.
(3) Notes receivable, net

	December 31, 2016	December 31, 2015
Notes receivable	$102,339$ \$	135,574
Less: Allowance for doubtful accounts		344)
	102,339	135,230

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

	Years ended December 31,
	2016	2015
At January 1	\$ 344 - S	540
Reversal of impairment	$\overline{\phantom{a}}$	196)
Write-offs during the period	344)
At December 31	$\overline{\phantom{a}}$	344

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

C. The Group does not hold any collateral as security.
(4) Accounts receivable, net

	December 31, 2016	December 31, 2015
Accounts receivable	826,755 \$	1,865,724
Less: Allowance for doubtful accounts	4,298)	4,104)
	822,457	1,861,620

A. The Group's accounts receivable that were neither past due nor impaired were fully performing in line with the credit standards prescribed based on counterparties' industrial characteristics, scale of business and profitability. Accounts receivable are classified into 3 categories:
(a) Sale of real estate: collection of customers' loans from banks.
(b) Construction contracts and sales of service: from customers with optimal collection record.

B. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

	December 31, 2016
Up to 60 days	\$ 3,943	^\$	620
$61$ to $120$ days	536		414
121 to 180 days	35		108
Over 181 days	1,809		1,895
	6,323		3,037

The above ageing analysis was based on past due date.

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


	2016	2015
At January 1	\$ 4,104	7,045
Provsion for impairment loss	194	230
Write-offs during the period	$\blacksquare$	3,171)
At December 31	4.298	4.104

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

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

(5) Construction contracts receivable (payable)

	December 31, 2016		December 31, 2015
Aggregate cost incurred plus
recognised profits (less recognised losses)	\$ 18,283,104	-S	19,550,455
Less: progress billings	17,447,436) (		18,707,934)
Net balance sheet position for
construction in progress	835,668	S	842,521
Presented as:
Due from customers for contract work	\$ 1,058,750	-S	1,347,958
Due to customers for contract work	$223,082$ )		505,437)
	\$ 835,668		842,521

As of December 31, 2016 and 2015, the retainage relating to construction contracts amounted to \$618,729 and \$1,384,110, respectively; the advances received before the related construction contracts are performed amounted to \$719,619.

(6) Inventories

Cost				Book value
\$ 12,602,184	(\$			12,536,812
3,691,313				3,691,313
4,964,820		49,229)		4,915,591
132,652				132,652
954,027				954,027
40,459				40,459
22,385,455	$($ \$	114,601)	S	22,270,854
			December 31, 2016 Allowance for valuation loss	65,372) \$

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

A. The cost of inventories recognized as expense for the years ended December 31, 2016 and 2015 was \$8,124,458 and \$10,933,346, respectively, including the amount of \$203 and \$2,014, respectively, that the Group wrote down from cost to net realizable value accounted for as cost of goods sold.

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

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

		Years ended December 31,
		2016		2015
Interest paid before capitalization	S	425,984	\$	478,106
Interest capitalized	\$	184,105	\$	144,141
Annual interest rate used for capitalization		$0.36\% \sim 3.93\%$		1.61%~3.20%
D. Details of significant inventories:
(a) Buildings and land in progress
Taipei branch		December 31, 2016		December 31, 2015
Prince Shin Yi (XinZhuang Fuduxin)		\$ 2,022,377		\$ 1,736,845
Ling Ko Dist. Li Shing Section No. 1209, etc.		1,515,855		1,376,328
Prince Fu III (Taoyuan Qing Sun Section No. 446)		1,438,248		1,131,432
W Prince (New Taipei City Shing Jheng Section No. 883, etc.)		950,762		962,064
Bali Dist Chung Chang Section No. 2222 and 211-1, etc.		686,428		685,665
Jhong Li City Shuang Ling Section No. 1449, etc.		447,678		328,796
Prince Hua Wei (Shilin Dist. Zhishan Section No. 602, etc.)		269,237		106,680
		\$ 7,330,585		\$ 6,327,810
Taichung branch		December 31, 2016		December 31, 2015
Ping Hsin Section No. 694, etc.		\$ 897,690		$\boldsymbol{\mathsf{S}}$ 862,840
Prince Yu Ding (Hui Li Section No. 195)		855,004		707,080
Prince County (Chaotun Section No. 755, etc.)		320,984		250,571
Jin Shuei Dist. Wu Show Section No. 1037, No. 1038, No. 1040, etc.		206,249		195,947
Hsinfuliao Section No. 1096, No. 1098, NO.1097, No. 1108, etc.		184,609		159,160
W Epoch (Kao An Section No. 591-1)		139,576		21,893
The Cloud Century Special A (Kao An Section No. 12-16)				698,401
Others			7	7
		\$ 2,604,119		\$ 2,895,899
Tainan branch		December 31, 2016		December 31, 2015
Jin Hua Section No. 1361		\$ 688,200		\$ 688,190
Prince Feng Yun (Hsin Ying Section No. 841-9)		665,265		564,433
Prince Jum Fon Huei (Yu Ming Section No. 681-8)		375,447		266,825
Chin An Section No. 296, No. 297, etc.		156,124		95,703
Shan Chia Section No. 939, etc.		152,384		148,499
Others			3,524	3,524
		2,040,944 \$		1,767,174 S

Kaohsiung branch	December 31, 2016		December 31, 2015
Prince Cloud B (Ren Wu New Hougang West Section No.42, etc.)	\$ 379,133	$\mathbf S$	378,865
Prince Cloud C townhouse (Ren Wu New Hougang West Section No.69, etc.)	265,807
Prince Cloud C apartment (Ren Wu New Hougang West Section No. 69-148 etc.)	161,013
Prince Yun (Nanzi subsection No. 158)	125,629		28,177
Ren Wu New Hougang West Section No. 88 experimental house	72,929		73,050
Prince Cloud E (Ren Wu New Hougang West Section No. 90 etc.)	4
Prince Cloud D (Ren Wu New Hougang West Section No. 52, etc.)			416,940
	1,004,515		897,032
Total buildings and land in progress	\$ 12,980,163	\$	11,887,915
(b) Land held for construction site
Taipei branch	December 31, 2016		December 31, 2015
Zhong Li Pu Ren Lot No. 720, etc.	\$ 140,156	\$	140,156
Others	5,978		5,978
	\$ 146,134	$\mathbf{\underline{\$}}$	146,134
Taichung branch	December 31, 2016		December 31, 2015
Song Quan Lot No. 164 etc.	\$ 176,296	\$	176,296
Wu Feng Lot No. 365~855 etc.	175,661		175,661
Tu Ku Section No. 9-7, etc.	55,167		55,167
Song Chang Lot No. 557 etc.	19,912		19,912
Hou Long Zi Section No. 133-004	19,513		19,513
Xi Zhou Lot No. 112-54 etc.	11,941		11,941
Others	18,780		20,446
	\$ 477,270	\$	478,936

Tainan branch	December 31, 2016	December 31, 2015
Shan Zhong Lot No. 1468, 1475 & 1476 etc.	\$ 234,699	\$ 234,699
Xue Zhong Lot No. 679, etc.	50,798	50,798
Yong Kang Ding An Lot No. 879, etc.	28,610	28,610
Bei An Section No. 54-3, etc.	15,344	15,344
Chin An Section No. 373-377, etc	15,139	15,139
Bao An Lot No. 882, etc.	10,325	10,325
Others	14,550	14,550
	\$ 369,465	369,465 \$
Kaohsiung branch	December 31, 2016	December 31, 2015
Ren Wu New Hougang West Section No. 53, etc.	\$ 987,079 \$	986,221
Ren Wu New Hougang West Section No. 30 & 52-74	407,357	408,037
Da Hua Lot No. 434 & 436	13,923	13,923
	\$ 1,408,359	1,408,181 \$
Total land held for construction site	\$ 2,401,228	\$ 2,402,716
(c) Buildings and land held for sale
Taipei branch	December 31, 2016	December 31, 2015
Prince Tanmei	\$ 2,270,855 \$	2,270,855
Prince Fu II	287,735	641,311
Prince Dragon House III	42,432	42,432
Prince Da Din	12,446	12,446
Prince Guo Boa	5,738	5,738
Taipei Shinyi		106,741
Others	546	546
	\$ 2,619,752	\$ 3,080,069

Taichung branch	December 31, 2016			December 31, 2015
Chin Fon Gin	\$	403,492	\$	516,970
The Cloud Century A		292,529
Prince Fu		$-27,417$		39,528
Jing Yun Sian		13,418		13,418
The Cloud Century A				452,895
Hai Yan				64,657
Others		10,889		10,889
	\$	747,745	\$	1,098,357

Tainan branch	December 31, 2016			December 31, 2015
Flower Bo Five	\$	1,273,009	\$	1,625,272
Tun Sha Building III Jun Chan LV		28,376 19,725		28,376
Prince Golden Age		19,572		19,725 19,572
Others		2,188		2,188
	\$	1,342,870	\$	1,695,133
Kaohsiung branch	December 31, 2016		December 31, 2015
Prince Cloud D	\$	222,345 \$
Prince Hua Yang		81,242		79,875
Prince Dai Din		9,777		10,431
	\$	313,364	\$	90,306
Total buildings and land held for sale	\$	5,023,731	\$	5,963,865
(d) Prepayment for land
	December 31, 2016		December 31, 2015
Tainan branch
Ren Wu New Hougang West Section No. 20, etc.	\$	132,652	\$	223,700
(e) Prepayment for buildings and land
	December 31, 2016		December 31, 2015
Taisugar Nanzi Section	\$	786,213 \$		258,794
Taisugar Kao An Section		95,814		651,397
Prince Shin Yi (Xin Zhuang Fuduxin)		72,000		37,800
	\$	954.027 \$		947.991

				Estimated	Percentage	Accumulated
Name of construction contract		Contract amount		construction cost	of completion	construction profit/(loss)
Tainan Spinning Dream Mall	မာ	4,799,021	⊷	4,707,073	100.00%	91,948 ↔
New Construction of Chaojhou Railway Station		4,368,825		4,197,138	99.44%	170,726
West Coast Expressway 130K FangLi to Dia An Construction		2,056,675		1,969,427	64.47%	56,249
Taoyuan MRT Airport Line - CU03		1,609,366		564,057	99.66%	45,155
San Bau Bei Tou DaYe - New Construction		,627,610		,551,397	85.42%	65,101
Improvement plan for High Speed Railway ground access road in Changhua		1,255,059		1,198,581	99.86%	56,399
(b) As of December 31, 2015, significant constructions are set forth below:
				Estimated	Percentage	Accumulated
Name of construction contract		Contract amount		construction cost	of completion	construction profit/(loss)
Tainan Spinning Dream Mall	မာ	4,842,473	မာ	4,742,532	97.51%	97,452 ⊷
New Construction of Chaojhou Railway Station		4,274,219		4,104,868	97.55%	165,202
Tseng-Wen Reservoir		3,178,480		2,862,176	99.37%	314,311
West Coast Expressway 130K FangLi to Dia An Construction		2,058,381		1,969,484	34.69%	30,838
Taoyuan MRT Airport Line - CU03		1,631,685		1,570,640	99.36%	60,654
San Bau Bei Tou DaYe - New Construction		1,599,813		, 515, 723	46.70%	39,270
Improvement plan for High Speed Railway ground access road		,210,476		,156,005	70.82%	38,576

(a) As of December 31, 2016, significant constructions are set forth below: E. Disclosure of significant constructions:

$-43-$

$\ddot{\phantom{0}}$

Improvement plan for High Speed Railway ground access road in Changhua

(7) Other current assets

Items	December 31, 2016		December 31, 2015
Deferred sales commission	\$ 292,538	S	324,072
Others	6,789		17,800
	299,327	S	341,872
(8) Available-for-sale financial assets
Items	December 31, 2016		December 31, 2015
Non-current items:
Listed (TSE and OTC) stocks	\$ 116,704	-S	120,252
Unlisted stocks	44,584		46,161
	161,288		166,413
Valuation adjustment of available-
for-sale financial assets	1,051,385		1,398,529
	1,212,673		1,564,942

A. The Group recognised \$349,085 and \$27,126 in other comprehensive loss for fair value change and reclassified \$1,941 and \$0 from equity to profit or loss for the years ended December 31, 2016 and 2015, respectively.

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

(9) Financial assets carried at cost

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

A. Based on the Group's intention, its investment in President Energy Development Ltd. and President International Development Corp. should be classified as 'available-for-sale financial assets'. However, as President Energy Development Ltd. and President International Development Corp. stocks are not traded in an active market, and no sufficient industry information of companies similar to President Energy Development Ltd. and President International Development Corp. can be obtained, the fair value of the investment in President Energy Development Ltd. and President International Development Corp. stocks cannot be measured reliably. Accordingly, the Group classified those stocks as 'financial assets measured at cost'.
B. Details of the Group's financial assets measured at cost pledged to others as collateral are provided in Note 8.

(10) Investments accounted for under equity method

		December 31, 2016		December 31, 2015
Name of associates		Carrying amount	Percentage of ownership	Carrying amount	Percentage of ownership
Geng-Ding Co., Ltd.	\$	320,555	30.00%	\$ 326,189	30.00%
Uni-President Development Corp.		1,229,770	30.00%	1,365,037	30.00%
PPG Investment Inc.		12,974	27.27%	13.621	27.27%
Queen Holdings Ltd.		390,856	27.27%	372,751	27.27%
Ming-Da Enterprise Co., Ltd.		75.341	20.00%	166,887	20.00%
Amida Truslink Assets Management Co., Ltd. (Note)			45.21%		45.21%
		2,029,496		2,244,485

Note: As of December 31, 2016 and 2015, the book value of the Group's investment in Amida Truslink Assets Management Co., Ltd. was a credit balance thus, the investment was transferred to other non-current liabilities which amounted to \$137,346 and \$137,018, respectively.

Associates

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

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

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

	Uni President Development Corp.
	December 31, 2016		December 31, 2015
Current assets	\$ 265,427	\$	373,344
Non-current assets	9,127,538		9,564,478
Current liabilities	3,319,592) (		3,627,239)
Non-current liabilities	1,974,139		1,760,396)
Total net assets	4,099,234	S	4,550,187
Share in associate's net assets	\$ 1,229,770	8	1,365,037

Statement of comprehensive income

	Uni President Development Corp.
	Years ended December 31,
		2016	2015
Revenue		981,167	1,066,653
Profit for the period from continuing operations		143,048	221,365
Total comprehensive income	S	143,048	221,365

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

As of December 31, 2016 and 2015, the carrying amount of the Group's individually immaterial associates amounted to \$662,380 and \$742,430, respectively. $\mathbf{r}$


	2016	2015
Profit for the period from continuing operations	310,213		56,593
Other comprehensive income, net of tax	1.396
Total comprehensive income	311,609		56,593

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

E. Share of profit of associates and joint ventures accounted for using equity method was \$119,118 and \$11,610 for the years ended December 31, 2016 and 2015, respectively.

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

(11) Property, plant and equipment

A. Details of book values are as follows:

		December 31, 2016		December 31, 2015
Land	\$	2,865,610	-S	2,858,947
Buildings and structures		3,212,229		3,391,429
Machinery and equipment		6,937		8,373
Computer and communication equipment		10,474		15,605
Transportation equipment		3,766		4,788
Office equipment		320,805		366,507
Leasehold improvements		24,323		25,648
Other equipment		61,353		66,339
Construction in progress and
equipment under acceptance		8,057		5,296
	\$	6,513,554	\$	6,742,932

B. Changes in property, plant and equipment for the period are as follows:
Year ended December 31, 2016

				rear ended December 31, 2016
Cost	Opening net book amount	Additions		Disposals	Reclassifications		Closing net book amount
Land	\$ 2,858,947	\$ 6,663	\$		\$		\$ 2,865,610
Buildings and structures	4,445,929	10,453 (		821)		1,114	4,456,675
Machinery and equipment	14,476						14,476
Computer and communication equipment	61,662	485					62,147
Transportation equipment	12,657	146(		1,000)			11,803
Office equipment	800,944	32,312	- (	23,721)		4,644	814,179
Leasehold improvements	73,533						73,533
Other equipment	91,935	$2,613$ (		$2,570$ (		35)	91,943
Construction in progress and
equipment under acceptance	5,296	8,807				6,046)	8,057
	\$ 8,365,379	\$ 61,479	$($ \$	28,112)	(	323)	\$ 8,398,423
				Year ended December 31, 2015
	Opening net						Closing net
Cost	book amount	Additions		Disposals	Reclassifications		book amount
Land	\$ 2,858,947	\$	\$		\$		\$ 2,858,947
Buildings and structures	4,465,549	3,809	-6	23,429)			4,445,929
Machinery and equipment	14,476						14,476
Computer and communication equipment	59,714	1,948					61,662
Transportation equipment	11,729	1,200	-6	272)			12,657
Office equipment	788,300	18,529 (		6,273)		388	800,944
Leasehold improvements	47,000					26,533	73,533
Other equipment	90,999	3,586 (		2,817)		167	91,935
Construction in progress and
prepayments for equipment	2,594	29,623				26,921)	5,296
	8,339,308	\$ 58,695	(1)	32,791)	\$	167	\$ 8,365,379
				Year ended December 31, 2016
	Opening net						Closing net
Accumulated depreciation	book amount	Additions		Disposals	Reclassifications		book amount
Buildings and structures	\$ 1,054,500	\$ 190,668 (\$		722)	- \$		\$ 1,244,446
Machinery and equipment	6,103	1,436					7,539
Computer and communication equipment	46,057	5,616					51,673
Transportation equipment	7,869	974 (		806)			8,037
Office equipment	434,437	82,204 (		23,267)			493,374
Leasehold improvements	47,885	1,325					49,210
Other equipment	25,596	5,084		90)			30,590
	1,622,447	\$ $287,307$ (\$		24,885)	\$		1,884,869

	Year ended December 31, 2015
Accumulated depreciation	Opening net book amount		Additions		Disposals	Reclassifications		Closing net book amount
Buildings and structures	\$ 907.885	S	$170,044$ (\$)		23,429) \$	$\blacksquare$	\$	1,054,500
Machinery and equipment	4,667		1,436					6,103
Computer and communication equipment	39,987		6,070					46,057
Transportation equipment	7.396		691 (		218)			7,869
Office equipment	353,979		86,705		6,247			434,437
Leasehold improvements	47.000		885					47,885
Other equipment	20,428		5.168					25,596
	\$ 1,381,342	S	270,999	(\$	29,894)	S		1,622,447

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

$\mathcal{A}$

(12) Investment property
A. Details of book values are as follows:

$\cdots$
A. Details of book values are as follows:
	December 31, 2016	December 31, 2015
Land	265,550 \$	265,550
Leased assets-land	2,592,149	2,592,206
Leased assets-buildings	3,099,594	3,186,071
	5,957,293	6,043,827

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

	Year ended December 31, 2016
Cost		Opening net book amount		Additions		Disposals	Reclassifications			Closing net book amount
Land	\$	265,550	-S	$\blacksquare$	\$		\$		\$	265,550
Leased assets-land		2,592,206				57)				2,592,149
Leased assets-buildings		3,932,498				4,398)				3,928,100
		6,790,254	S		$($ \$	4,455)				6,785,799
			Year ended December 31, 2015
		Opening net								Closing net
Cost		book amount		Additions		Disposals	Reclassifications			book amount
Land	\$	203,494	\$	$\overline{\phantom{0}}$	\$		\$	62,056	S	265,550
Leased assets-land		2,592,341		-		135)				2,592,206
Leased assets-buildings		3,941,751		1,084		10,337				3,932,498
		6,737,586		1,084	(S	10,472)	S	62,056	S.	6,790,254
						Year ended December 31, 2016
		Opening net								Closing net
Accumulated depreciation		book amount)		Additions		Disposals	Reclassifications			book amount
Leased assets-buildings		746,427		85,889	$($ \$	3,810)	S			828,506

$\sim$

	Year ended December 31, 2015
	Opening net					Closing net
Accumulated depreciation	book amount	Additions	Disposals		Reclassifications	book amount
Leased assets-buildings	662.031	86.072		. (676.،		746,427

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

295,085


	2016	2015
Rental revenue from the lease of the investment property	294,709	295,085
Direct operating expenses arising from the investment property that generated rental income in the period	156,000	157,872
$\mathbf{D}^{\mathsf{H}}$ and the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the set of the

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

D. As of December 31, 2016 and 2015, the fair value of the investment property held by the Group was \$12,870,800 and \$12,932,299, respectively. The Group management estimated the fair value based on market evidence on transaction price of similar property and assessed value.

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

(13) Intangible assets

A. Details of book values are as follows:

	December 31, 2016
Service concession	2,239,187	2,300,439
Software	1.729	1,870
Trademarks and licences	$\overline{\phantom{0}}$	214
	2,240,916	2,302,523

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

						Year ended December 31, 2016
Cost		Opening net book amount		Additions		Disposals	Reclassifications		Closing net book amount
Service concession	\$	2,868,372	- \$	$\sim$	\$	$\blacksquare$	\$ $\blacksquare$	\$	2,868,372
Software		3,762		516					4,278
Trademarks and licences		3,139							3,139
		2,875,273	S	516	S				2,875,789
	Year ended December 31, 2015
		Opening net							Closing net
Cost		book amount		Additions		Disposals	Reclassifications		book amount
Service concession	\$	2,868,372	-S	$\overline{\phantom{a}}$	\$	٠	\$ ۰.	\$	2,868,372
Software		19,559		1,372	- (	17,169)			3,762
Trademarks and licences		3,139							3,139
	\$	2,891,070	S	1,372	(\$	17,169	\$ -	S	2,875.273

	Year ended December 31, 2016
Accumulated Amortization		Opening net book amount		Additions		Disposals		Reclassifications		Closing net book amount
Service concession	\$	567,933	\$	61,252	- \$		- \$	$\overline{\phantom{0}}$	S	629,185
Software		1,892		657						2,549
Trademarks and licences		2,925		214						3,139
		572,750	z	62,123	S					634,873
	Year ended December 31, 2015
		Opening net								Closing net
Accumulated Amortization		book amount		Additions		Disposals		Reclassifications		book amount
Service concession	\$	506,680	\$	61,253	- \$	$\blacksquare$	\$	$\overline{\phantom{a}}$	\$	567,933
Software		18,756		305	-6	17,169)				1,892
Trademarks and licences		2,639		286						2,925
		528,075	S	61,844	(S)	17,169)	S			572,750

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

		Yeaers ended December 31,
	2016		2015
Operating costs	\$ 61,252	- \$	61,253
Administrative expenses	871		591
	62,123	\$	61,844
(14) Short-term borrowings
	December 31, 2016		December 31, 2015
Unsecured bank borrowings	\$ 2,135,659	\$	1,991,373
Secured bank borrowings	140,000		635,000
	2,275,659	S	2,626,373
Interest rate range	1.53%~2.70%		1.92%~2.51%
For details of pledged assets, please refer to Note 8. (15) Short-term notes and bills payable
	December 31, 2016		December 31, 2015
Commercial naners	400.000	¢	1 ሰሬስ ሰሰሰ

Commercial papers	\$ 490,000	1,060,000
Less: Unamortized discount	306)	189)
	489,694	1,059,811
Interest rate range	$0.58\%$ ~1.59%	$0.55\% - 2.25\%$

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

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

(16) Advance receipts

Items	December 31, 2016		December 31, 2015
Advance real estate receipts	\$ 1.123,109	S.	1,592,844
Advance rent	132,495		158,283
Other advance receipts	131,851		124,335
	\$ 1,387,455	S	1,875,462
$(17)$ Bonds payable	December 31, 2016
			December 31, 2015
2012 1st secured ordinary bonds payable	\$ 2,000,000	S	2,000,000
2013 1st secured ordinary bonds
payable	2,500,000		2,500,000
	4,500,000		4,500,000
Less: Expiring within one year	2,000,000)
	2,500,000	S	4,500,000

A. The Group issued secured ordinary bonds payable in July 2012. The significant terms of the bonds are as follows:

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

(f)Period: 5 years, from November 21, 2013 to November 21, 2018

(g) The way of security: \$1.5 billion and \$1 billion secured by Bank of Taiwan and Agricultural Bank of Taiwan, respectively.

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

(18) Long-term borrowings

	December 31, 2016		December 31, 2015
Secured bank borrowings	\$ 8,682,632	- \$	9,635,346
Unsecured bank borrowings	100,000		270,000
	8,782,632		9,905,346
Less: Current portion	1,322,904)		474,592)
	7,459,728		9,430,754
Commerical papers	2,339,600		589,600
Less: Unamortized discount	2,260		443)
	2,337,340		589,157
Total	9,797,068		10,019,911
Range of maturity dates	2017.02.08~2027.11.02		2016.06.24~2027.11.02
Range of maturity rates	$0.55\% \sim 2.70\%$	1.74%~3.16%

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

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

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

(19) Provisions-replacement cost

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

$(20)$ Pension

A.(a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees' service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the

number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions to cover the deficit by next March.

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

		December 31, 2016
Present value of defined benefit obligation (\$		$202,924)$ (\$	199,398)
Fair value of plan assets		111,815	58,323
Net defined benefit liability	ſS	91,109)	141,075)

		Present value of
		defined benefit		Fair value of		Net defined
		obligation		plan assets		benefit liability
Year ended December 31, 2016
At January 1	(\$	199,398) \$		58,323 (\$		141,075)
Current service cost		964)		Ξ.		964)
Interest (expense) income		3,376)		558		2,818)
		203,738)		58,881		144,857)
Remeasurement:
Change in financial assumptions (		5,908)			- (	5,908)
Experience adjustments		1,747		457)		2,204)
		$7,655$ ) (		457) (		8.112)
Pension fund contribution				57,072		57,072
Paid pension		8,469		3,681)		4,788
At December 31	\$	202,924)	S	111,815	(	91,109)

		Present value of
		defined benefit		Fair value of		Net defined
		obligation		plan assets		benefit liability
Year ended December 31, 2015
At January 1	(\$	180,831) \$		51,440 (\$		129,391)
Current service cost		1,667)				1,667)
Interest (expense) income		3,552)		1,424		2,128)
		186,050)		52,864		133,186)
Remeasurement:
Change in financial assumptions (		5,280)				5,280)
Experience adjustments		8,068)		439		7,629
		13,348)		439		12,909)
Pension fund contribution				5,020		5,020
At December 31	\$	199,398)	S	58,323	(S	141,075)

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

	Years ended December 31,
	2016	2015
Discount rate	$1.20\% \sim 1.40\%$	1.70%
Future salary increases	$1.50\% \sim 2.00\%$	$1.50\% \sim 2.00\%$

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

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

	Discount rate			Future salary increases
	Increase 0.25%	Decrease 0.25%		Decrease 0.25%
December 31, 2016
Effect on present value of
defined benefit obligation	(\$ 4,604)	4,687 S	4,238 S	(\$ 4,120
December 31, 2015
Effect on present value of
defined benefit obligation	ſS 4,542	5,238	S 4,657	(\$ 4,142)
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.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(e) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2017 amounts to \$4,843.
(f) As of December 31, 2016, the weighted average duration of that retirement plan is $9\neg 12$ years.
B.(a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The pension costs under the defined contribution pension plans of the Group for the years ended Dcember 31, 2016 and 2015, were \$62,768 and \$60,853, respectively.

(21) Share capital

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

(Units: in thousand shares)

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

B. The Company's subsidiary, Ta-Chen Construction & Engineering Corp. (Ta-Chen) has acquired the Company's shares in an open market to maintain the equity interest of the Company's shareholders. In order to strengthen management through eliminating interlocking shareholding, the Board of Directors of Ta-Chen has resolved to reduce capital of \$435,025 (elimination of 43,502 thousand shares) by returning the Company's shares (of 39,016 thousand shares) to Cheng-Shi Investment Holdings Co., Ltd. (Cheng-Shi Investment), and set the effective capital reduction date as August 5, 2015. Cheng-Shi Investment's Board of Directors has resolved the capital reduction and set the reduction effective on September 21, 2015, and returned shares to the Company. The registration of changes in capital and capital reduction as approved by the competent authority has been completed on November 18, 2015.
C. As of December 31, 2016, the Company's authorized capital was \$20,000,000, and the paid-in capital was \$16,233,261 with a par value of NT\$10 per share, consisting of 1,623,326 thousand shares of ordinary stock.
D. As of December 31, 2016 and 2015, the Company's subsidiary Prince Apartment Management Maintain Co., Ltd. held the Company's stocks to maintain equity interest in the Company. The amount of shares held by the subsidiary was all 655 thousand shares, the average par value was all NT\$1.52 per share, and the fair value was NT\$10.50 and NT\$9.40 per share, respectively.

(22) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the

Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

		Capital surplus
2016	Share premium	Treasury share transaction	Others	Total
At January 1, 2016 (At December 31, 2016)	1,375,442	877,839	S 7,232	S 2,260,513
		Capital surplus
	Share	Treasury share
2015	premium	transaction	Others	Total
At January 1, 2015	\$ 1,408,500	S 514,061	\$ 7,232	S 1,929,793
Treasury stock transactions	33,058)	363,778		330,720
At December 31, 2015	1,375,442	877,839	7,232	2,260,513 \$

(23) Retained earnings

A. In accordance with the Company's Articles of Incorporation, the Company will take into consideration its future business plans and capital expenditures in determining the amount of earnings to be retained and to be distributed. In accordance with the Company Law, 10% of the current year's earnings, after payment of all taxes and after offsetting accumulated deficit, shall be set aside as legal reserve until the balance of legal reserve is equal to that of issued share capital. Afterwards, an amount shall be appropriated or reversed as special reserve in accordance with applicable legal or regulatory requirements, along with prior years' accumulated unappropriated retained earnings, and then distribution should be in the following order; stock dividend and bonus to shareholders are 50%~100% of the accumulated distributable earnings, and cash dividend is at least 30% of the total stock dividend and bonus; the appropriation of earnings is proposed by the Board of Directors and resolved by the shareholders.
B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.
C. The Company recognized dividends distributed to owners amounting to \$1,785,659 (\$1.1 (in dollars) per share) and \$1,329,873 (\$0.8 (in dollars) per share) for the years ended December 31, 2016 and 2015, respectively. On March 22, 2017, the Board of Directors proposed that total dividends for the distribution of earnings for 2016 was \$1,623,326 at \$1.0 (in dollars) per share.

(24) Other equity items

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

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

		Within 12 months	Over 12 months		Total
December 31, 2016
Assets
Notes receivable, net	\$	$26,538$ \$		16,930	- \$	43,468
Accounts receivable, net (including related parties)		380,354		316,679		697,033
Inventories		8,681,727		13,548,668		22,230,395
Construction contract receivable		476,931		581,819		1,058,750
		9,565,550		14,464,096		24,029,646
Liabilities
Notes payable	\$	32,236	-S	11,456 \$		43,692
Accounts payable		1,325,909		1,471,736		2,797,645
Construction contract payable		81,924		141,158		223,082
		1,440,069		1,624,350		3,064,419

	Within 12 months		Over 12 months		Total
December 31, 2015
Assets
Notes receivable, net	\$ 44,980	\$		671	\$ 45,651
Accounts receivable, net(including related parties) Inventories	1,582,837 8,635,309		13,526,802	597,393	2,180,230 22,162,111
Construction contract receivable	931,727			416,231	1,347,958
	\$ 11,194,853	S		14,541,097	\$ 25,735,950
Liabilities
Notes payable	\$ 11,094	S			\$ 11,094
Accounts payable	2,510,158			1,529,999	4,040,157
Construction contract payable	\$ 406,921 2,928,173	\$		98,516 1,628,515	\$ 505,437 4,556,688
(26) Operating revenue
			Years ended December 31,
		2016			2015
Home sales revenue	\$		5,274,930	$\mathcal{S}$	8,382,243
Hospitality services revenue			2,856,156		3,073,924
Service revenue			547,080		502,615
Construction contract revenues			2,781,948		3,548,640
Service concession revenue
-Operating service revenue			372,719		373,279
Other operating revenue			227,469		227,805
	\$	12,060,302		\$	16,108,506
$(27)$ Other income
		2016	Years ended December 31,
					2015
Interest income	S		10,033	\$	8,896
Dividend income			118,461		169,518
Others			172,642		158,519
	\$		301,136	$\mathfrak{L}$	336,933
(28) Other gains and losses
			Years ended December 31,
		2016			2015
Net (loss) gain on financial assets at fair value
through profit or loss	(\$		$15,349$ \$		79,305
Net currency exchange (loss) gain			6,650		18,168
Arbitration expenses and compensation loss (Note)					56,278)
Others			236,775		15,689
	\$		214,776	\$	56,884

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

$\hat{\mathcal{L}}$

(29) Finance costs

$\frac{1}{2}$			Years ended December 31,
			2016		2015
Interest expense:
Bank borrowings		\$	88,143	\$	171,706
Commercial paper			31,309		36,603
Ordinary bond			120,946		123,953
Others			1,481		1,703
Other finance expenses			1,200		1,201
		\$	243,079	\$	335,166
(30) Expenses by nature			Year ended December 31, 2016
		Operating costs	Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	782,266	\$ 765,309	$\mathbb{S}$	1,547,575
Labor and health insurance fees		66,365	64,092		130,457
Pension costs		34,071	32,479		66,550
Other employee benefit expense		29,796	42,202		71,998
	$\frac{1}{2}$	912,498	\$ 904,082	\$	1,816,580
Depreciation charges	\$	85,889	\$ 287,307	\$	373,196
Amortization charges	\$	61,252	\$ 871	\$	62,123
			Year ended December 31, 2015
		Operating costs	Operating expenses		Total
Employee benefit expense
Wages and salaries	\$	790,765	\$ 813,870	\$	1,604,635
Labor and health insurance fees		64,300	61,452		125,752
Pension costs		30,200	34,448		64,648
Other employee benefit expense		15,572	51,552		67,124
	$\frac{1}{2}$	900,837	\$ 961,322	\$	1,862,159
Depreciation charges	\$	86,072	\$ 270,999	\$	357,071
Amortization charges	\$	61,253	\$ 591	\$	61,844

A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute compensation to the employees and pay remuneration to the directors that account for at least 2% and no higher than 3%, respectively, 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. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash.

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

B. For the years ended December 31, 2016 and 2015, employees' compensation was accrued at \$185,821, and \$244,705, respectively; while directors' remuneration was accrued at \$63,218 and \$83,250, 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, 2016. The distributed amounts resolved by the Board of Directors were in agreement with the accrued amounts. The employees' compensation will be distributed in the form of cash.

Employees' compensation and directors' remuneration of 2015 as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2015 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 (income)
(a) Components of income tax expense:

	Years ended December 31,
		2016		2015
Current tax:
Current tax on profits for the period	\$	256,531	S	110,958
Tax on undistributed surplus earnings		27,485		85,214
Under provision of prior year's income tax		7,952		31,079
Land value increment tax recognized in income tax for the period		82,183		138,254
Total current tax		374,151		365,505
Deferred tax:
Origination and reversal of temporary differences		67,682		77,413)
Income tax expense		306,469	\$	288,092

(b) The income tax (charge)/credit relating to components of other comprehensive income is as
follows:

		Years ended December 31,
		2016	2015
Remeasurement of defined benefit plans	(\$	\$ 560)
(c) Reconciliation between income tax expense and accounting profit:
		Years ended December 31,
		2016	2015
Tax calculated based on profit
before tax and statutory tax rate	\$	323,966 S	428,682
Effects recognised from
adjustments under tax regulations		98,349) (	301,656)
Additional 10% tax on
undistributed earnings		27,485	85,214
Effect from investment tax
credits		$24,113$ ) (	59,211)
Prior year's income tax under
estimation		7,952	31,079
Land value increment tax		82,183	138,254
Loss carryforward		12,655)	34,270)
Income tax expense		306,469 \$	288,092

$\bar{\beta}$

	Year ended December 31, 2016
			Recognised in	Recognised in other
	January 1		profit or loss	comprehensive income		December 31
Deferred tax assets
Temporary difference:
Rent adjusted using
the straight-line
method	104,991 (\$ \$		$2,045$ ) \$		\$	102,946
Pensions	$1,214$ (		1,636)	560		138
Employee benefits	254(		218)			36
Unused compensated
absences			548			548
Net operating loss
carryforward			867			867
	106,459 \$	$\left( \text{\$} \right)$	2,484)	560 \$	\$	104,535
Deferred tax liabilities
Temporary difference:
Provision for land
revaluation
increment tax	416,005 S	(	70,166)	\$	\$	345,839
				Year ended December 31, 2015
			Recognised in	Recognised in other
	January 1		profit or loss	comprehensive income		December 31
Deferred tax assets
Temporary difference:
Rent adjusted using
the straight-line
method	106,693 \$	(\$	$1,702$ \$		\$	104,991
Pensions	1,268	- (	54)			1,214
Employee benefits	408		154)			254
	108,369 \$	$\left( \mathcal{S}\right)$	1,910	\$	\$	106,459
Deferred tax liabilities
Temporary difference:
Provision for land
revaluation
increment tax	495,328 \$	$\left( \text{\$} \right)$	79,323)	\$	S	416,005

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

C. According to Act for Promotion of Private Participation in Infrastructure Projects, details of the Company's investment tax credit and unrecognised deferred tax assets are as follows:

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

	December 31, 2015
		Unrecognised		Tax credit of investment
Qualifying items	Unused tax credits		deferred tax assets	usable until
Investment	24,113		24.113	2016

D. Expiration dates of loss carryforward and amounts of unrecognised deferred tax assets are as follows:

December 31, 2016
Amount filed /		Unused			Usable
assessed		amount		tax assets	until
Amount assessed	\$	1,145,299	$\mathbf S$	1,145,299	2021
Amount assessed		11,475		11,475	2022
Amount assessed		34,849		34,849	2023
Amount filed/ assessed		31,519		31,519	2024
Amount filed		15,065		15,065	2025
Amount filed		20,721		19,854	2026
	\$	1,258,928	\$	1,258,061

Amount filed /		Unused			Usable
assessed		amount		tax assets	until
Amount assessed	\$	2,297,232	\$	2,297,232	2021
Amount filed		12,976		12,976	2022
Amount filed		220,453		220,453	2023
Amount filed		37,676		37,676	2024
Amount filed		16,571		16,571	2025
	\$	2,584,908	\$	2,584,908
				December 31, 2015	Unrecognised deferred Unrecognised deferred

E. As of December 31, 2016, the Company's income tax returns through 2014 have been assessed and approved by the Tax Authority.
F. Unappropriated retained earnings:

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

G. As of December 31, 2016 and 2015, the balance of the imputation tax credit account was \$83,807 and \$53,573, respectively. The creditable tax rate was 4.74% for 2015 and is estimated to be 8.15% for 2016. The tax credits to be allocated to the stockholders are calculated based on the balance of the imputation tax credit account on the day of distribution of dividends. Therefore, the creditable tax rate applicable to the stockholders for the appropriation of earnings generated in and after 1998 shall be adjusted to take into account the tax credits that might incur under the income tax laws up to the distribution date of dividends or earnings.

(32) Earnings per share

	Year ended December 31, 2016
			Weighted average
			number of ordinary	Earnings
			shares outstanding	per share
Basic earnings per share			Amount after tax (shares in thousands)	(in dollars)
Profit attributable to ordinary shareholders of the parent	\$	1,609,189	1,622,671	\$ 0.99
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	\$	1,609,189	1,622,671
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation			19,768
Profit attributable to ordinary shareholders of the parent plus assumed conversion
of all dilutive potential ordinary shares		1,609,189	1,642,439	0.98

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

(33) Operating leases

The Company's subsidiary leases office and business area under non-cancellable operating lease agreements. The lease terms are between 2011 and 2035, and all these lease agreements are renewable at the end of the lease period. Rental payment is calculated based on an agreed upon rate of revenue. The Company's subsidiary recognized rental expense of \$387,246 for the years ended December 31, 2016 and 2015. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

	December 31, 2016	December 31, 2015
Not later than one year	\$	403,952	400,563
Later than one year but not later than five years		2,041,364	2,034,162
Later than five years		5,566,321	5,977,475
	\$	8,011,637	8,412,200

(34) Non-cash transactions

Investing and financing activities with no cash flow effects:

	Years ended December 31,
	2016		2015
A. Merchandise inventory reclassified to property, plant and equipment		$\overline{\phantom{0}}$
B. Land held for construction site reclassified to investment property		$\overline{\phantom{0}}$	62,056

7. RELATED PARTY TRANSACTIONS

(1) Significant related party transactions and balances

A. Sales of goods:
$(a)$


	2016	2015
Construction subcontracting
$-$ Associates	113,781	152,071
$-$ Other related parties	183,885	388,903
	297,666	540,974

The contract prices of construction for related parties are based on expected construction cost plus reasonable management expenses and profit, and are determined based on mutual agreements. The construction payments are collected based on the contract terms. As of December 31, 2016 and 2015, the status of the construction of the related parties undertaken by the Group was as follows: L. $21.2015$ $\Delta \sim 10$ $\mathbf{A}$ $\sim$ $\sim$ $\sim$

		December 31, 2016		December 31, 2015
Associates:
Total amount of construction contracts that were signed but had not been settled yet	\$	318,329	-S	5,435,312
Construction payments received		271,887)		4,972,256)
Construction payments receivable Other related parties		46,442	\$	463,056
Total amount of construction contracts that were signed but had not been settled yet	\$	5,054.233	-S	5,427,516
Construction payments received		4,886,702)		5,030,549)
Construction payments receivable		167,531	S	396,967
(b)		Years ended December 31,

		2016		2015
Rental income:
$-$ Other related parties		47,775		47.334
79. .	$\blacksquare$	$\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\cdot$

Rent is determined by mutual agreements and is collected monthly.

B. Accounts receivable

	December 31, 2016		December 31, 2015
Accounts receivable - related parties:
$-$ Associates	\$ 2,660	\$	22,670
$-$ Other related parties	20,000		405,976
	\$ 22,660	\$	428,646
C. Rental payables	December 31, 2016		December 31, 2015
Other payable:
$-$ Associates	\$ 701,520	$\mathcal{S}$	169,005
Long-term notes and accounts payable
$-$ Associates	\$		618,880
D. Others
(a)		Years ended December 31,
	2016		2015
Rental expenses:
$-$ Associates	\$ 497,030	\$	558,115
$-$ Other related parties	6,594		4,456
	\$ 503,624		562,571
(b)	December 31, 2016		December 31, 2015
Refundable deposits:
-Associates	\$ 66,831	S	66,266

E. On June 20, 2006, the Company and China Metal Products Co., Ltd. ("A party") jointly signed a creditor's rights transfer contract with Amida Trustlink Assets Management Co., Ltd. ("B party"). Under the contract, the Company and A party should pay \$2,100,000 each (totaling \$4,200,000) to jointly acquire whole creditor's rights of mortgages, security interests and other dependent claims (collectively referred herein as the creditor's rights) on the Splendor Hotel Taichung Building, and each bears 50% rights and obligations of this acquisition; when all creditor's rights of this object turn into property rights, the Company and A party should pay B party totaling \$1,000,000 as the cost and reward of B party for it is entrusted with the task to help turn the creditor's rights as stated above into property rights, but any excess cost over \$1,000,000 if incurred on this task shall be borne by B party on its own; the Company should pay B party \$300,000 before June 30, 2006, and the Company and A party should jointly issue a promissory note of \$1,800,000 to B party on the signing date; payment should be done before July 15, 2006. The title to the creditor's rights as stated above had been transferred to the Company and A party

on August 2, 2006. Total acquisition price of the creditor's rights amounted to \$5,200,000, which the Company and A party bear 50% of the price each. The Company had paid its share.

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

(2) Key management compensation

	Years ended December 31,
		2016	2015
Salaries and other short-term employee benefits	\$	100,723	140,260
Post-employment benefits
Other long-term benefits
Termination benefit
Share-based payment
	Φ	100.723	.40.260

8. PLEDGED ASSETS

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

Pledged asset	December 31, 2016	December 31, 2015	Purpose
Time deposits, demand deposits and checking \$ deposits (shown as "other financial assets - current" and "other financial assets - non-current")	1,490,134	\$	2,811,735 To obtain a higher credit for client, performance guarantee, construction performance guarantee, short-term and long-term borrowings, short-term commercial papers issue, member reward points and gift coupons trust account
Financial assets at fair value through profit or loss	296,753		320,992 Construction performance guarantees, short-term and long-term borrowings
Land held for construction site	7,808,509	6,974,863	Short-term borrowings, notes and bills payable and long-term borrwings
Construction in progress	2,803,892	2,133,843	Short-term borrowings, notes and bills payable and long-term borrwings
Buildings and land held for sale	2,270,855		- Long-term notes and bills payable
Available-for-sale financial assets	757,036	1,028,798	Short-term borrowings, notes and bills payable
Financial assets carried at cost	575,426		575,426 Short-term borrowings, notes and bills payable
Investments accounted for under equity metho	1,443,473		1,582,560 Short-term borrowings, notes and bills payable
Land	2,729,051	2,729,051	Construction performance guarantees, short-term borrowings, notes and bills payable and long-term borrowings
Buildings	1,990,294	2,042,803	Short-term borrowings, notes and bills payable and long-term borrowings
Investment property	3,851,473	4,047,218	Construction performance guarantees, short-term borrowings, notes and bills payable and long-term borrowings
	26,016,896 S	\$ 24,247,289

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Summary of endorsements and guarantees and financial support commitments is as follows:

A. Summary of endorsements and guarantees provided by the Company to subsidiaries is as follows: December 31 2016 December 31-2015:

Total Total
endorsement endorsement Amount	Amount
Name of company drawn amount amount	drawn
The Splendor Hotel Taichung \$1,682,206 \$ 2,000,000 2,000,000	\$1,708,520
Prince Real Estate Co., Ltd. 2,500,000 780,000
Ta-Chen Construction &
1,900,000 1,900,000 Engineering Corp.
6,400,000 \$2,462,206 3,900,000	1,708,520

B. Summary of endorsements and guarantees provided by subsidiaries to the Company is as follows: $\frac{1}{2}$

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

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

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

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

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

	December 31, 2016	December 31, 2015
Property, plant and equipment		3.104 S		9,517
Jacontina Logga acquison qutar

⁽³⁾ Operating lease agreements:

Please refer to Note 6 (33) for details.

(4) According to the sale contracts, the Company should provide warranty on the house structure and major facilities for one year from the handover day for the houses it sold. However, any damage to the houses caused by disasters, additions to the houses made by the buyers, or events that are not attributed to the Company is not included in the scope of warranty.
(5) On March 17, 2005, the Company ("A party") signed a contract with National Taiwan University ("B party") relating to the construction and operation of dormitories on Chang-Hsing St. and Shui-Yuan Campus. The major terms of the contract are as follows:
A. Under the contract, B party should be responsible for acquiring the ownership or land-use right for this project, and let A party use the land; A party must complete the construction within 3 years from the registration of the superficies, and may operate the dormitories for 44 years, collect dormitory rentals and use fees of other facilities from students, and should return the related assets to B party on the expiry of the contract.
B. A party should give B party a performance guarantee of \$60,000 for the construction on the signing date and \$30,000 for operations before the start of operation. As of December 31, 2016 and 2015, A party had provided performance guarantee with a guarantee letter issued by the bank, all amounting to \$30,000.
C. A party should pay B party land rentals from the registration of the superficies, according to the terms of the contract, and pay B party operating royalties from the third year of the operation, based on 0.5% of dormitory rentals and use fees of other facilities collected from students.
D. Terms of restrictions for A party:
- (a) The ratio of A party's own capital utilized in this project to total construction cost of this project should be at least 30%;
- (b) During the operation period, the ratio of shareholders' equity to total assets should be at least 25%; and current ratio (current assets/current liabilities) should be at least 100%;
- (c) All rights acquired by A party under the contract, except for other conditions specified in the contract and approved by B party, should not be transferred, leased, registered as a liability/obligation or become an executed object of civil litigation.
(6) On May 10, 2005, the Company ("A party") signed a contract with National Cheng Kung University ("B party") relating to the construction and operation of student dormitories and alumni hall. The major terms of the contract are as follows:
A. Under the contract, B party should be responsible for acquiring the ownership or land-use right for this project, and let A party use the land by way of registration of the superficies; A party must obtain the user license within 3 years after the signing date, and may operate the dormitories and motorcycle parking lots for 35 years from the start of operation and collect dormitory rentals and use fees of other facilities from students for 50 years from the start of construction, and should return the related assets to B party on the expiry of the contract.
B. A party should give B party performance guarantee of \$50,000 for this project on the signing date, which will be returned in installment according to the contractual terms. As of December 31, 2016 and 2015, A party had provided performance guarantee with a guarantee letter issued by the bank, both amounting to \$20,000.
C. During the operation period, A party should pay B party dormitory operating royalties based on 2% of annual operating revenue of the dormitories and auxiliary facilities operating rovalties based on 4% of annual operating revenue of the auxiliary facilities. A party should pay such operating royalties for prior year before the end of June every year. Further, according to the superficies contract signed by the two parties. A party should pay B party land rentals from the registration of superficies.
D. All rights acquired by A party under the contract, except for other conditions specified in the contract and approved by B party, should not be transferred, leased, registered as a liability/obligation or become an executed object of civil litigation.
(7) The Company signed a syndicated loan contract with 7 banks Mega International Commercial Bank as the lead bank for a credit line of \$2.16 billion. The syndicated loans include long-term (secured) loans and guarantee payments receivable (secured), which are used to fund the construction of dormitories in Changxing St. Campus and Shuiyuan Campus of National Taiwan University. During the loan period, the Company should maintain financial commitments such as current ratio, liability ratio and interest coverage; those financial ratios/restrictions shall be reviewed at least once every year, based on the Company's audited annual non-consolidated financial statements. If the Company violates the above financial commitments, it shall improve its financial position by capital increase or other ways before the end of October of the following year from the year of violation; it would not be regarded as a default if the managing bank confirms that its financial position has improved completely. In case of violation, interest on the loans would be charged at the loan rate specified in the contract plus additional $0.25\%$ per annum from the notification date of the managing bank to the completion date of financial improvement or to the date the Company gains the relief from the consortium for its violation.
(8) The Company signed a loan contract with Mega International Commercial Bank for a credit line of \$785 million. The loans include long-term (secured) loans and guarantee payments receivable (secured), which are used to fund the construction of student dormitories and alumnus hall of National Cheng Kung University. During the loan period, the Company should maintain financial commitments such as current ratio, liability ratio and interest coverage; those financial ratios/restrictions shall be reviewed at least once every year. Current ratio and liability ratio shall be reviewed based on the Company's audited annual non-consolidated financial statements, and interest coverage based on the Company's revenue and expenditure table for the related project. If the Company violates the above financial commitments, it shall improve its financial position by capital increase or other ways before the end of October of the following year from the year of violation; it would not be regarded as a default if the bank confirms that its financial position has improved completely. In case of violation, interest on the loans would be charged at the loan rate specified in the contract plus additional 0.25% per annum from the notification date of the bank to the completion date of financial improvement or to the date the Company obtains a waiver from the bank for its violation.
(9) The Company signed a syndicated loan contract with 10 banks Bank of Taiwan Co., Ltd. as the lead bank for a credit line of \$2 billion. The syndicated loans are medium-term (secured) loans, and are used for residential building construction cooperated by the Company and Taiwan Sugar Corporation ("TSC") on Guo-An Sec., Xitun District, Taichung City. Furthermore, the Company shall repay in full for the balance of unpaid principal on maturity date. However, when the buildings in the case are completed and sold or when handling buyer's household debt, borrower should repay the balance of used and unpaid principal for the syndicated loans with 70% of selling consideration. The abovementioned construction has been substantially completed, thus, the Company has repaid in advance in January 2016.
(10) The Company signed a syndicated loan contract with 3 financial institutions Mega International Commercial Bank as the lead bank for a credit line of \$1.06 billion. The syndicated loans include medium-term (secured) loans and commercial paper guarantees, which are used for purchases of 4 tracts of PingHsin Sections No. 694, 706, 708 and 709 in Taiping Dist., Taichung City and construction payment of residential buildings. Furthermore, the Company shall repay in full for the balance of unpaid principal on maturity date.
(11) The Company signed a syndicated loan contract with 6 financial institutions CTBC Bank Co., Ltd. as the lead bank for a credit line of \$2.1 billion for medium-term commercial paper, financing the working capital of the Company which provides Tanmei office building as collateral. Commercial papers issued by the Company should be 90 days. However, commercial papers issued in the terms of other commercial papers issued before the due date should be the same. The syndicated loan can be redrawn in the credit term and pay off the loan immediately.
(12) The Company signed a syndicated loan contract with 3 financial institutions Bank of Taiwan Co., Ltd. as the lead bank for a credit line of \$3.045 billion. The syndicated loans include medium-term guarantee payments receivable (secured) and medium-term commercial paper guarantees (secured). Bank of Taiwan and Agricultural Bank of Taiwan provided medium-term guarantee payments receivable (secured) with a credit line of \$2.545 billion which are used by the Company to apply for the guarantee of corporate bond issued by the bank. International Bills Finance Corp provides medium-term commercial paper guarantees (secured) with a credit line of \$500 million which are used by the Company to repay the borrowing to the financial institutions and improve financial structure. These three financial institutions shall renew the contract with the Company for another 1 year based on their individual commitments and establish the facility documentation, which is similar to the commercial paper guarantees, letter of purchase contract and others. In addition, no matter whether the bondholders receive the payment or not, the banks' guarantee responsibility will be released after the debtor returns the payables to the agency.
(13) On May 18, 2007, the Company signed a contract with Taiwan Sugar Corporation ("TSC") in relation to cooperative construction of houses. According to the contract, TSC shall provide Lot No. 12-12, Guo-An Sec., Xitun District, Taichung City; the Company shall provide funding for those projects and repurchase houses and land allocated to TSC amounting to \$1,810,889 and shall bear all improvement fees of houses, public facilities and land, selling expenses, and other expenses or contributed expenses required under the decrees. The Company shall not ask for any compensation for price fluctuations or other reasons. Further, under the contract, the Company shall give TSC performance guarantee amounting to \$181,090, on the signing date, which will be returned in installments according to the contractual terms. The Company had provided performance guarantee with a guarantee letter of the bank as follows:

		December 31, 2015
Lot No.12-12, and No.601-1 Guo-An Sec.,
Xitun District, Taichung City(Note)	$-$ \$	181,090
$\mathbf{A}^{\star}$ , and the contract of the contract of $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and $\mathbf{A}$ and

Note: The usage license of the construction was granted in August 2016 and the performance guarantee was returned in the same month.

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

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

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

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

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

(16) As of December 31, 2016 and 2015, performance guarantee letters issued for construction undertaking, warranty and leases of subsidiary, Ta-Chen Construction & Engineering Corp., amounted to \$223,564 and \$572,960, respectively.
(17) The Subsidiary, Ta-Chen Construction & Engineering Corp. ("Ta-Chen"), Hung-Yi Construction Corp. and Evergreen International Engineering Corp. ("Evergreen") (collectively referred herein as the "joint contractors") jointly undertook the construction of the new office building of the American Institute in Taiwan. As the joint contractors and the owner of this project both claim the counterparty defaulted on the contract, they terminated the contract and referred the dispute to arbitration. A settlement was reached in August 2013, and the joint contractors would together pay a reconciliation payment amounting to US\$16.4 million, which Ta-Chen pays 68.24%. Ta-Chen has estimated and recognized related arbitration expenses, reconciliation payment and construction loss. Furthermore, the settlement agreement between Ta-Chen and the owner, including tax on settlement of \$30,178

paid to the Taxation Bureau on behalf of the owner, has been reached. As 2 years have passed from the application of tax refunds and the probability of tax refund is remote, the related other receivables were written off and loss of \$30,178 was recognised in 2015.

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

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

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

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

1. OTHERS
(1) Capital management

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

(2) Financial instruments

A. Fair value information of financial instruments

The carrying amount of cash and cash equivalents and financial instruments measured at amortized cost (including notes and accounts receivable, other receivables, other financial assets, refundable deposits, short-term borrowings, short-term notes and bills payable, notes and accounts payable, other payables, corporate bonds payable, long-term borrowings, long-term notes and accounts payable and guarantee deposits received) are approximate to their fair values. Furthermore, the Group's management believes the carrying amounts of financial assets and liabilities not measured at fair value are approximate to their fair value or their fair value cannot be reliably measured. Thus, the carrying amount is the estimated fair value. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

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

Foreign exchange risk

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

Interest rate risk

The Group's interest rate risk arises from short-term and long-term borrowings (not including commercial paper). Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's borrowings at variable rate were denominated in the NTD. If interest rates on borrowings had been 0.1% basis point higher/lower with all other variables held constant, pre-tax profit for the years ended December 31, 2016 and 2015 would have been \$11,058 and \$12,532 lower/higher, respectively.

Price risk

The Group has investments in equity instruments, and the prices would change due to the change of the future value of investee companies. However, the Group has set a stop-loss point and it was assessed that the Group was not exposed to significant price risk. If the prices of these equity securities had increased/decreased by 10% with all other variables held

constant, pre-tax profit for the years ended December 31, 2016 and 2015 would have increased/decreased by \$74,052 and \$54,052, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by \$16,129 and \$16,641, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. Credit risk arises from cash and deposits with banks and financial institutions, including outstanding receivables.
ii. The Group's receivables, which are the receivables from pre-selling of housing before completing construction and transferring the title, are installments received from customers of pre-construction real estate. Therefore, it was assessed that the Group was not exposed to significant credit risk from receivables.
iii. For the years ended December 31, 2016 and 2015, the management does not expect any significant losses from non-performance by these counterparties.
(c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group's finance $\&$ accounting division. Group's finance $\&$ accounting division monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times.
ii. The table below analyses the Group's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

		December 31, 2016
	Within 1 year	Between 1 to 3 years	Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 2,299,706	\$	\$
Short-term notes and bills payable	490,000
Notes payable	46,409		11,463
Accounts payable	1,489,691	1,414,964	57,268
Other payables (including related parties)	1,844,918	10,752	1,822
Guarantee deposits received	67,418	38,858	29,074
Bonds payable (including current portion)	2,065,350	2,538,750
Long-term borrowings (including current portion)	1,343,764	7,450,870	2,989,561
Long-term notes and accounts payable		711,106
		December 31, 2015
	Within 1 year	Between 1 to 3 years	Over 3 years
Non-derivative financial liabilities:
Short-term borrowings	\$ 2,659,883	\$	\$
Short-term notes and bills payable	1,060,000
Notes payable	26,692	7
Accounts payable	2,668,918	654,635	875,364
Other payables (including related parties)	1,520,467	5,461	706
Guarantee deposits received	72,591	27,678	35,450
Bonds payable	65,350	2,104,100	2,500,000
Long-term borrowings (including current portion)	487,551	3,489,212	7,448,165
Long-term notes and accounts payable		767,104	618,880

(3) Fair value information

A. Details of the fair value of the Group's financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group's investment property measured at cost are provided in Note 6(12).
B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and

volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks and beneficiary certificates is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investment in equity investment without active market is included in Level 3.
C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, $2016$ and $2015$ is as follows:

December 31, 2016	Level 1		Level 2		Level 3		Total
Assets:
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities	\$ 742,404	\$		- \$		S	742,404
Available-for-sale financial assets
Equity securities	1,045,898				166,775		1,212,673
	1,788,302			\$	166,775	\$	1,955,077
December 31, 2015	Level 1		Level 2		Level 3		Total
Assets:
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities	\$ 557,753	^\$		S.		S.	557,753
Available-for-sale financial assets
Equity securities	1,364,796				200,146		1,564,942
	\$ 1,922,549	S		\$	200,146		\$2,122,695

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

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

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

E. For the years ended December 31, 2016 and 2015, there was no transfer between Level 1 and Level 2.

F. The following chart is the movement of Level 3 for the years ended December 31, 2016 and $2015:$

		2016	2015
		Non-derivative equity instruments	Non-derivative equity instruments
At January 1	S	200,146 \$	276,597
Loss recognised in other
comprehensive income (Note)		$31,794$ ) (	76,451)
Proceeds from capital reduction		1,577)
December 31		166,775	200,146

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

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

	Fair value at December 31, 2016	Valuation technique	Significant unobservable input	Nange (weighted average)	Relationship of inputs to fair value
Non-derivative equity Unlisted shares	\$ 166,775	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value
				Range
	Fair value at	Valuation	Significant	(weighted	Relationship of inputs
	December 31, 2015	technique	unobservable input	average)	to fair value
Non-derivative equity Unlisted shares	\$ 200,146	Net asset value	Net asset value	N/A	The higher the net asset value, the higher the fair value

$n = 1$

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

					December 31, 2016
				Recognised in profit or		Recognised in other
				loss		comprehensive income
				Favourable Unfavourable		Favourable Unfavourable
	lnput	Change	change	change	change	change
Financial assets
Equity instruments	44,584	$\pm 1\%$			446 (\$	446)
					December 31, 2015
				Recognised in profit or		Recognised in other
				loss		comprehensive income
			Favourable	Unfavourable	Favourable	Unfavourable
	Input	Change	change	change	change	change
Financial assets
Equity instruments	46,161	$\pm 1\%$			462 (\$	462)
סם סדו איז האזרו אינו איז אם זמס

SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

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

B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding \$300 million or 20% of the Company's paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching \$300 million or 20% of paid-in capital or more: Please refer to table 5.
F. Disposal of real estate reaching \$300 million or 20% of paid-in capital or more: Please refer to table 6.
G. Purchases or sales of goods from or to related parties reaching \$100 million or 20% of paid-in capital or more: Please refer to table 7.
H. Receivables from related parties reaching \$100 million or 20% of paid-in capital or more: Please refer to table 8.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 9.
(2) Information on investees

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

(3) Information on investments in Mainland China None.

14. SEGMENT INFORMATION

(1) General information

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

(2) Measurement of segment information

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

(3) Information about segment profit or loss and assets

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

				Year ended December 31, 2016
					Write-off and
Item	Construction		Hotel	Others	Adjustment	Total
External operating revenue-net	\$	8,056,878 \$	3,228,875 S	774,549	$\mathbf s$	12,060,302
Internal operating revenue-net		1,122,241		51,948	1,174,189)
Total segment revenue		9,179,119	3,228,875	826,497		12,060,302
Costs and expenses		8,451,912)	2,790,489)	647,397)	1,343,229	10,546,569)
Segment income		727,207	438,386	179,100		1,513,733
Other income		665,887	5,930	45,129 (	415,810)	301,136
Other gains and losses	(	$169,324$ ) (	1,163)	1,392	383,871	214,776
Finance costs Share of profit of associates and joint ventures accounted for under equity method		208,489) ( 559,388	58,487) (	4,130) 23,539 (	28,027 ( 463,809)	243,079) 119,118
Profit from continuing operations before tax		1,574,669	384,666	245,030		1,905,684
Income tax expense		262,525)	37,033) (	6,911)		306,469)
Net income for the year		1,312,144 S	347,633 \$	238,119		1,599,215
Segment assets		46,542,938	7,302,370	2,372,255	4,932,719) $($ \$	51,284,844

			Year ended December 31, 2015
				Write-off and
Item	Construction	Hotel	Others	Adjustment Total
External operating revenue-net	11,578,873 S	3,447,203 \$	1,082,430 S.	-S \$ 16,108,506
Internal operating revenue-net	1,262,640		885,033	2,147,673)
Total segment revenue	12,841,513	3,447,203	1,967,463	16,108,506
Costs and expenses	11,394,730)	2,943,106)	1,049,533)	1,730,262 13,657,107)
Segment income	1,446,783	504,097	917,930	2,451,399
Other income	328,161	8,081	464,599 (	463,908) 336,933
Other gains and losses	$9,595$ ) (	$2,326$ ) (	20,955)	89,760 56,884
Finance costs Share of profit (loss) of associates and joint ventures accounted for under equity method	308,054) ( 842,977	$63,615$ (	373) 99,611) (	36,876 ( 335,166) 731,756) 11,610
Profit from continuing operations before tax	2,300,272	446,237	1,261,590	2,521,660
Income tax expense	210,276)	47,380)	$27,619$ (	$2,817$ ) 288,092)
Net income for the year	2,089,996	398,857 Ъ	1,233,971 S	2,233,568
Segment assets	49,716,149	7,461,278 S	2,670,001 (S	5,371,517) 54,475,911

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

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

(5) Information on products and services

The Chief Operating Decision-Maker considers the business from a product type perspective. Information about products is provided in Notes $6(26)$ and $14(3)$ .

(6) Geographical information

The Group operates mainly in Taiwan and it has no external customer revenue from other regions.

(7) Major customer information

For the years ended December 31, 2016 and 2015, there was no major customer.

i

Í r

I
۱ ı i

Loans to others

Year ended December 31, 2016

Maximum

Expressed in thousands of NTD (Except as otherwise indicated)

				$\frac{N_{\text{0}}}{N_{\text{0}}$			Note 4
		Ceiling on total		$\frac{\text{loans granted}}{\text{S}}$ 9,718,652 N		85,181 Note 3	138,891
	Limit on loans		granted to a single party $\frac{1}{2}$ s $\frac{1}{2}$ S $\frac{1}{2}$			30,000	138,891
		Collateral	ltem Value	None $S -$		None	None
Allowance		doubtful	accounts
	Reason for for	short-term			financing Additional operating capital	Additional operating capital	Additional operating capital
Amount of	ransactions		Nature of with the loan borrower
				- Short-term financing		Short-term financing	Short-term financing
			$rac{1}{\sqrt{2}}$	2.7		2.7	27
			drawn down			1,500
	lance at å		2016			15,000
outstanding balance	Is a during the year	General ledger related ended December 31, December 31, Actual amount Interest	2016	200,000 \$		15,000	200,000
			$\frac{1}{\sqrt{2}}$
			account	Other		receivables-	related parties
					Engineering Corp. related parties & Development Construction & receivables -	Consulting Co., Ltd related parties Prince Security Prince Property Other Management	International Co., Development Corp. receivables - Time Square Prince Housing & Other
			Note 1) Creditor Borrower	0 Prince Housing Ta-Chen	Corp.	Co., Ltd.	E.
		ź					$\overline{c}$

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

(1) The Company is '0'.

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

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

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

B. Limit on loans to a single party:

(a) Nature of the loan is related to business transactions: Limit to a single party is NTS1.5 billion or the amount of business transactions between the creditor and borrower in the current year. (b) Nature of loan is for short-term financing: Limit on loans to a single party is NTS500 million.

Note 3: Limit on loans granted to a single party and ceiling on total hoans granted as prescribed in Prince Security Co., Ltd.'s "Procedures for Provision of Loans" are as follows:
A. Limit on total loans to others: 40% of

B. Limit on loans to a single party:

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

Note 4: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in Time Square International Co., Ltd.'s "Procedures for Provision of Loans" are as follows: A. Limit on total loans to others: 30% of the Company's net worth.

B. Limit on loans to a single party:

(a) Nature of the loan is related to business transactions: Limit to a single party is the amount of business transactions between the creditor and borrower in the current year. (b) Nature of Ioan is for short-term financing: Limit on loans to a single party is 30% of the Company's net worth.

$\ddot{\phantom{0}}$

Table 1

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

Expressed in thousands of NTD (Except as otherwise indicated)

Party being endorsed/guaranteed

					Footnate	Note 3	Note 3	Note:	Note 4	Note 5	Note 6	Note 7	Note 8	Naie 9
	Provision of	endorsements	guarantees to the	party in Mainland	China C	z	z	z	z	z	z	z	z	z
	Provision of	endorsements	guarantees by	subsidiary to parent	company	z	z	z					z	z
		Provision of	endorsements/	guarantees by parent			>	>	z	z	z	z	z	z
		Ceiling on total	amount of	endorsements/	guarantees provided company to subsidiary	12,148,316	12,148,316	12.148.316	4,000,000	2,000,000	5,000,000	3,000,000	50,000	120,000
	Ratio of accumulated	endorsement/guarantee	amount to net asset value of	the endorser/guarantor	company	ž	Ě	ž		73%	230%	129%	27%	ļŷ.
		Amount of	endorsements/	Actual amount guarantees secured	with collateral
					drawn down	Ÿ,	180,000	1,682,206		638,763	2,015,109		10,000	10,000
Outstanding	endorsement	guarantee	amount at	December 31,	2016	\$ 000,000 \$ 000,000 \$	2,500,000	2,000,000		900,000	2,500,000	927,889	20,000	56,000
		Maximum outstanding	endorsement/guarantee		2016		2,300,000	2,000,000	1,810,889	900,000	2,500,000	727.889	20,000	36,000
			Limit on endorsements/	guarantees provided for a nonount as of December 31,	single party	4,859,326 \$	4,859226	4,859,126	2,000,000	1,000,000	2,500,000	1,500,000	20,000	56,000
		Relationship with	the endorser/	puarantor	(Note 2)	W
					Company name	Ta-Chan Construction & linginoring Corp.	Prince Real Estate Co., $\mathbb{E}$	The Spiencer Hotel Taichung	Development Corp. Prince Housing &	Development Corp. Prince Housing &	Development Corp. Prince Housing &	Development Corp. Prince Housing &	Prince Security Co., Ltd.	Prince Security Co., Ltd.
				Endorser	guarantor	Development Corp. I rince Housing &	Development Corp. Prince Housing &	Development Corp. Prince Housing &	Dong-Feng Enterprises Ca.14	Prince Uhility Co., Ltd.	Urinee Real Estate $_{\rm{Ca,14}}$	Ta-Chen Construction a. Engineering Corp.	Management Maintain Prince Apartment Ca, Id	Management Consulting Prince Property Co., Ltd
				Number	(Note I)	¢								ø

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

(1) The Company is $0^{\circ}$ .

(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 f

(1) Having business relationship.

(2) The endoscrigarizative partni company owns directly more than 50% voing shares of the endorset/garamteed subsidiary.
(3) The endorsef guarantor partni company and its subsidiaries jointly own more than 50% voing shares

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

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

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

$\ddot{\phantom{a}}$

Table 3

Prince Housing & Development Corp. and Subsidiaries
Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
December 31, 2016

Expressed in thousands of NTD
(Except as otherwise indicated)

							As of December 31, 2016
Securities held by	Marketable securities	Name of investee companies	Relationship with the securities issuer	General ledger account	Number of shares	Book value	Ownership (%)	Fair value	Footnote
Prince Housing & Development Corp.	Stock	Nantex Industry Co., Ltd.	None	Available-for sale financial assets - non-current	s, 6,861,668	149,927	SA Note 1	21.85	Listed company.
									Note ₃
	Stock	ScinoPharm Taiwan, Ltd.	None	Available-for sale financial assets - non-current	22,698,001	877,778	Note 1		38.65 Listed company, Note 4
	Stock	Simplo Technology Co., Ltd.	ne Z	Available-for sale financial assets - non-current	127,249	11,822	p Pote ¹	92.90	OTC company
	Stock	Universal Venture Capital Investment Corp.	None	Available-for sale financial assets - non-current	1,400,000	13,570	Note 1	9,69
	Siock	Grand Bills Finance Corp.	Rone	Available-for sale financial assets - non-current	48,672	786	Note 1	16.15
	Stock	Chipwell Tech. Corp.	None Z	Available-for sale financial assets - non-current	344,488	$\overline{3}$	Note:	4,88
	Stock Si	Nanmat Technology Co., Ltd.	None Z	Available-for sale financial assets - non-current	1,318,851	18,257	Note 1	13.84
	Stock	Southern Science Joint Development	None	Available-for sale financial assets - non-current	10,000	106,989	10.00	10,698.88
	Stack	Changing Information Technology Co., Ltd.	None	Available-for sale financial assets - non-current	119,075	1,608	Note I	13,51
	Stock	Formosoft International Co., Ltd.	N _Cm e	Available-for sale financial assets - non-current	35,589	ě	Note I	295
	Stock	President Energy Development Corp.	Nome Z	Financial assets measured at cost - non-current	.380,000	36,280	6.00	36.46
	Stock	President International Development Corp.	None	Financial assets measured at cost - non-current	87,745,770	841,520	6,63	10.95	Note 5
	Stock	Jia-Cheng Venture Capital Investment Co., Ltd.	None	Financial assets measured at cost - non-current	1,9,024		Note 1	Note ₂
	Stock	Jia-Hua Venture Capital Investment Co., Ltd.	None	Francial assets measured at cost - non-current	1,211,228		R.	Note 2
	Stock	Ever-Move Technology Co., Ltd.	Deal	Financial assets measured at cost - non-current	3,076		Note 1	Note ₂
	Stock	Chuang-Jing Technology Co., Ltd.	Rone	Financial assets measured at cost - non-current	12,645		Note 1	Note 2
	Stock	Bao-Mao Technology Co., Ltd.	None	Financial assets measured at cost - non-current	27,933		Note 1	Note 2
	Stock	Jie-Lun Technology Co., Ltd.	None	Financial assets measured at cost - non-current	17,280		Note 1	Note 2
	Stock	Quan-Mao Technology Co., Ltd.	None	Financial assets measured at cost - non-current	341,745		ŝ.	Note 2
	Stock	Wei-Jun Technology Co., Ltd.	$\frac{1}{2}$	Financial assets measured at cost - non-current	1,846		Note 1	Note 2
	Stock	Chieh-Cheng Technology Co., Ltd.	ne Ngj	Financial assets measured at cost - non-current	41,343		Note 1	Note 2
	Fund	Mega Diamond Money Market Fund	$rac{1}{2}$	Financial assets at fair value through profit or loss - non-current	6,301,406	78,253		1242	Note 6
	Fund Fund	UPAMC James Bond Money Market Yuanta Wan Tai Money Market	None K Nome R	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	6,040,325 6,663,158	100,000 100,000		16.56 15.01
	Eurd	Ith Sun Money Market Fund	None	Financial assets at fair value through profit or loss - current	6,817,980	100,000		14.67
	Repurchase	MEGA BILLS FINANCE CO., LTD.	y Se	Cash equivalents-repurchase bonds		150,039
	Repurchase	International Bills Finance Corp.	None	Cash equivalents-repurchase bonds	$\bar{\phantom{a}}$	150,041
	Repurchase	China Bills Finance Corp.	None	Cash equivalents-repurchase bonds		200,000
Prince Ta-Chan Investment Co., Ltd. (1	Stock	Jia-Cheng Venture Capital Investment Co., Ltd.	Nome Z	Financial assets at fair value through profit or loss - non-current	290,638
	Stock	Chich-Cheng Technology Co., Ltd.	N _c ne	Financial assets at fair value through profit or loss - non-current	41,434
	Stock Stock	AIRWAVETECHNOLOGIES.INC. Ever-Move Technology Co., Ltd.	ام تاریخ re K	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	300,000 79,178
	Stock	Bao-Mao Technology Co., Ltd.	nome Se	Financial assets at fair value through profit or loss - non-current	960,697		12.01
	Shock	Integrated Solutions Technology, Inc.	None	Financial assets at fair value through profit or loss - non-current	71,923
	Stock	Goyatek Technology, Inc.	None ²	Financial assets at fair value through profit or loss - non-current	18,524
	Siock	Quan-Mao Technology Co., Ltd.	n Ex	Financial assets at fair value through profit or loss - non-current	9,897
	Strek	ie-Lun Technology Co., Ltd.	Pene R	Financial assets at fair value through profit or loss - non-current	6,617
	Stock	Chuang-Jing Technology Co., Ltd.	kone K	Financial assets at fair value through profit or loss - non-current	4,842
	Stock	Wei-Jun Technology Co., Ltd.	Repre $\frac{1}{2}$	Financial assets at fair value through profit or loss - non-current	ξq
Ta-Chen Construction & Engineering	Stock Stock	Ia-Hua Venture Capital Investment Co., Ltd. Nantex Industry Co., Ltd.	Nome Z	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - current	12,088,420 479,893
	Stock	Chipwell Tech. Corp.	Rone	Available-for sale financial assets - non-current	349,990	1,708 264,132	Note I Note 1	21.85 4.88	Note 7
	Stock	Nanmat Technology Co., Ltd.	Nome Z	Available-for sale financial assets - non-current	1,479,086	20,471	\$.09	13.84
	Repurchase	China Bills Finance Corp.	None	Cash equivalents-repurchase bonds	$\mathbf{r}$	115,000
	Repurchase	International Bills Finance Corp.	ہ گ	Cash equivalents-repurchase bonds		110,000
	Repurchase	MEGA BILLS FINANCE CO., LTD.	None	Cash equivalents-repurchase bonds		75,000
Prince Utility Co., Ltd.	Repurchase	International Bills Finance Corp.	None	Cash equivalents-repurchase bonds		20,000
	Repurchase Repurchase	MEGA BILLS FINANCE CO., LTD. China Bills Finance Corp.	ا Seme	Cash equivalents-repurchase bonds Cash equivalents-repurchase bonds		20,000
Prince Housing Investment Co., Ltd.	Stock	Tou Itsu Investments Inc.	n Sa ğ	Available-for sale financial assets - non-current	ŝ	20,000	15,00	USD 1.00

Table 3, Page 1

Service Service

	Marketable
Securities held by	securities	Name of investee companies	Relationship with the securities issuer	General ledger account	umber of shares	Book value	Ownership (%)	Fair value
rince Apartment Management	stock	Prince Housing & Development Corp.	Parent company	Available-for sale financial assets - non-current			$rac{1}{2}$
		Laman Spinning Co., Ltd.		Available-for sale financial assets - non-current				12.20
Jong-Feng Enterprises Co., Ltd.	ដូច ។ និង ទី ទី នី ស៊ី នី នី គី	Nantex Industry Co., Ltd.		Available-for sale financial assets - non-current		3.850	Nae I Nae I Nae I	21.85
		Sung Gang Asset Management Co., Ltd. Nanmat Technology Co., Ltd.		Available-for sale financial assets - non-current
Trince Security Co., Ltd.				Available-for sale financial assets - non-current		$\frac{158}{180}$		$31.50$ 1384
Cheng-Shi Construction Co., Ltd.		JPAMC James Bond Money Market	November 2008 2008 2008 2008	inancial assets at fair value through profit or loss - curren	ង្គួរ ភូមិ មិន មិន ភូមិ មិន មិន			16.56
	Repurchase	International Bills Finance Corp.		Cash equivalents-repurchase bonds
		Repurchase MEGA BILLS FINANCE CO., LTD.		Cash equivalents-repurchase bonds		00.019 40.000 40.000

Note 1: Pectantage of Company's overtably is lass than 5%.
Note 2: Aps are not received the funeral factor materials from material channel.
Note 4: 17.276 investables funerally common stock were used as collateral for hear

Balance as at December 31,	2016	Anount shares	100,000 $6,040,325$ \$			100,000 6,663,158		100,000 6,817,980
			ຊ		$\mathbf{C}$			×		351
					730,152)			210,000)		317,910)
Disposal	(Note 3)	Selling price Book value disposal	24,183,754 \$ 400,000 (18,143,429) \$ 300,059 (\$ 100,000) \$		$730,285$ (			$210,036$ (		$318,261$ (
		shares			830,152 ( 97,706,932)			$310,000$ ( $14,324,457$ )		$117,910$ ( 21,731,247)
		Amount
Addition	(Note 3)	shares			04.370,090			21,142,437		8,052,760
		Amount								200,000
Balance as at	January 1, 2016	shares								13,678.487
Relationship with		(Note 2)
	Counterparty the investor	(Note 2)
	General	ledger account	value through profit or UPAMC James Bond Financial assets at fair	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
Marketable	securities	(Note 1)	Money Market		Yuanta Wan Tai Moncy Market			Jih Sun Money Market Fund		Jih Sun Money Market Fund
		Investor	Prince Real Estate Co, Ld.		Prince Real Estate	Co.1rd.		Prince Real Estate $Co$ , $Lid$ .		Prince Real Estate 20.11d

Note 1: Marketable securities in the tole refer to stocks, bonds, beneficincy cerificates and other related derivative securities.
Note 2: Fill in the columes the counterparty and relationship if securities are accounted f

Table 4, Page 1

$\frac{1}{2}$

Table 4

Expressed in thousands of NTD

Prince House & Development Corp. and Subsidiaries
Acquisition or sale of the same security with the accumulated cost exceeding \$300 million or 20% of the Company's paid-in capital
Year ended December 31, 2016

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

Year ended December 31, 2016

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Other	commitments	None None
acquisition of real estate and Reason for	estate	For operating For operating use š
used in setting the status of the real Basis or reference	price	Market value Note ₂


Relationship If the counterparty is a related party, information as to the with the last transaction of the real estate is disclosed below	counterparty owner who between the original Amount



		Third party Third party
	Counterparty	Term, Renvu District, zone of Xia Hai Note 2 \$ 1,115,071 Redevelopment Kaohsiung City ,651 Taiwan Sugar Corporation
Status of		794,t

Transaction		\$1,255,309
		2014/11/07 (Note 1) (Note 3)
		$\frac{\text{acquired by}}{\text{ince Housing}}$ Ren estate acquired Date of the event anount payment need to see 1,115,0 Prince Housing Nanzi subsection No. 158,etc. 978 etc.
Real estate		rince Housing & Development & Development Corp. Corp.

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

Note 2: In order to purchase 67.13% of areas from the nonth side of the offset-expenditure land in the redevelopment zone, the transaction amount was the expected price including compensation for demolition to all land own

Table 5, Page 1

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

Table 6

Expressed in thousands of NTD
(Except as otherwise indicated)

Jasis or referen	in setting the price
Reason for	lisposal	or operating in-
² Mationship will	he seller	ne Z
		Third party
Gain (loss)	on disposal	249,624
tus of collectiv		356,366
Disposa		35,366
	look value	106,742
	Date of acquisition	2012/11/30 (Note 2)
""saction date	date of the event	Xinyi Dist., Taipei 2016/01/25 (Note 1)
	Real estate
leal estate	isposed by	he Company

Note 1: Contract date
Note 2: Completion date

Relationship with the
Purchases $Am$ and Percentage of total Credit term counterparty
Purchases Subsidiary Prince Housing & Development Cheng-Shi Construction Co., Ltd.
Purchases Subsidiary
(Sales) Affiliated company

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, 2016

Prince Housing & Development Corp. and Subsidiaries

Table 7

Allowance for subsequent to the Amount collected	balance sheet date __ doubtful accounts
	$A$ ction taken
Overdue receivables	Amount

Balance as at	$\frac{\text{pary}}{\text{pary}}$ December 31, 2016 Turnover rate	575,000 - obligation receivable Other assets
with Relationship	the counterp	Subsidiary
	Counterparty
	Creditor	Prince Housing & Development Corp. The Splender Hotel Taichung

$\ddot{\phantom{0}}$

Prince Housing & Development Corp. and Subsidiaries
Receivables from related parties reaching \$100 million or 20% of paid-in capital or more
December 31, 2016

Table 8

Expressed in thousands of NTD
(Except as otherwise indicated)

Prince Housing & Development Corp. and Subsidiaries

Significant inter-company transactions during the reporting periods Year ended December 31, 2016 Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

							consolidated total Percentage of
							operating revenues or total
Number	Company name	Counterparty	Relationship	General ledger account	Amount	Transaction terms	assets
c	Prince Housing & Development Corp.	Ta-Chen Construction & Engineering Corp.	The Company to the
			consolidated subsidiaries	Ø Construction in progress	180,123		0.35%
0	Prince Housing & Development Corp.	Prince Utility Co., Ltd.	The Company to the
			consolidated subsidiaries	Purchases		300,288 Based on mutual agreements	249%
0	Prince Housing & Development Corp.	Prince Utility Co., Ltd.	The Company to the
			consolidated subsidiaries	Construction in progress	233,970		046%
0	Prince Housing & Development Corp.	Cheng-Shi Construction Co., Ltd.	The Company to the
			consolidated subsidiaries	Purchases		605,366 Based on mutual agreements	5.02%
0	Prince Housing & Development Corp.	Cheng-Shi Construction Co., Ltd.	The Company to the
			consolidated subsidiaries	Construction in progress	493,139	ı	0.96%
$\circ$	Prince Housing & Development Corp.	The Splender Hotel Taichung	The Company to the	Endorsement and guarantee		In accordance with
			consolidated subsidiaries			endorsement and guarantee
					1,682,206	procedures	328%
0	Prince Housing & Development Corp.	The Splender Hotel Taichung	The Company to the	Other assets - obligation		Creditor's rights purchase
			consolidated subsidiaries	receivables	575,000	contract	112%
$\bullet$	Prince Housing & Development Corp.	Prince Real Estate Co., Ltd.	The Company to the	Endorsement and guarantee		In accordance with
			consolidated subsidiaries			endorsement and guarantee
					780,000	procedures	1.52%
	Prince Utility Co., Ltd.	Prince Housing & Development Corp.	The consolidated	Endorsement and guarantee		In accordance with
			subsidiaries to the			endorsement and guarantee
			Company		638,763	procedures	1.25%
$\mathbf{\hat{c}}$	Prince Real Estate Co., Ltd.	Prince Housing & Development Corp.	The consolidated	Endorsement and guarantee		In accordance with
			subsidiaries to the			endorsement and guarantee
			Company		2.035.309	procedures	397%

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 tools 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.

Expressed in thousands of NTD

Prince Housing & Development Corp. and Subsidiaries

Year ended December 31, 2016 Information on investees

(Except as otherwise indicated)

		Footnote	Notes 1 and 2	Notes 1 and 2	Note 4	Note 2	Note 2 and 9	Notes 2 and 8	Note 5	Note 2	Note 2	Notes ₂	Note 10	Note 2	Notes 1 and 2	Notes 2 and 3
Investment income	the Company for the (loss) recognised by	December 31, 2016 Year ended	94,653	13,979	20,950	45,885	$\tilde{6}$	3,736	42,933	9,954)	180,136	142,279	31,696	$\epsilon$	6,842)	$\bullet$
Net profit (loss)	of the investee for the Year	ended December 31,2016	Ģ, 71,747	12,820	69,824	45,885	$16)$ (	3,736	143,048	19,908)	180,136	157)	172,444	$\frac{47}{4}$	5.504) (	35,262
		Book value	Ψ, 1,007,834	282,007	320,555	446,709	$\check{\cdot}$	151,839)	1,229,770	328,715	462,969	361,186) (	75,341	9,526	1,210,130	720,876
			Š,
Shares held as at December 31, 2016		Ownership	100%	100%	20%	100%		100%	30%	50%	100%	99.65%	20%	100%	99.65%	100%
		Number of shares	97,504,758	17,146,580	18,000,000	428	f,	4,300,000	108,000,000	97,500,000	73,830,000	3,938,168	200,000	1,000,000	11,208,632	90,497,528
	Balance as at	December 31, 2015	1146,925	181,000	120,000	140,413	1,000	876,431	1,080,000	975,000	600,000	165,410	127,400	10,000	470,784	856,566
Initial investment amount	Balance as at	December 31. 2016	S 1,146,925 ίĄ,	181,000	120,000	140,413	t	746,431	1,080,000	975,000	600,000	165,410	37,378	10,000	470,784	856,566
		Main business activities	investment General	Management and consulting	Hotels and catering	investment Overseas	mport and export Anti-mildew's	Housebuilders and sales	Leasing of buildings	Hotels and catering	Hotels and catering	Manufacture of plywoods	Real estate trading	Development of public housing and building	Real estate trading and leasing	Construction
		Location	Taiwan	Taiwan	Taiwan	British Virgin Islands	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan	Taiwan
		Investee	Cheng-Shi Investment Holdings Co., Ξ	Prince Property Management Consulting Co., Ltd.	Geng-Ding Co., Ltd.	Prince Housing Investment Co., Ltd.	BioSun Technology Co., Ltd.	Dong-Feng Enterprises Co., Ltd.	Uni-President Development Corp.	The Splender Hotel Taichung	Time Square International Co., Ltd.	Jin Yi Xing Plywood Co., Ltd.	Ming-Da Enterprise Co., Ltd.	Prince Industrial Co., Ltd.	Prince Real Estate Co., Ltd.	Ta-Chen Construction & Engineering Corp.
		Investor	Development Corp. Prince Housing &													Cheng-Shi Investment Holdings Co., Ltd

Table 10, Page 1

$-$ Notes 2 and 3

17,703

122,866

100%

3,070,000

56,025

Electricity water
pipe

Taiwan

Prince Utility Co., Ltd.

Table 10

					Initial investment amount			Shares held as at December 31, 2016			Net profit (loss) Investment income
											of the investee (loss) recognised by
					Balance as at	Balance as at				for the Year	the Company for the
			Main business		December 31,	December 31,				ended December	Year ended
Investor	Investee	Location	activities		2016	2015	Number of shares	Ownership	Book value	31,2016	December 31, 2016	Footnote
Cheng-Shi Investment Holdings Co., Ltd	Cheng-Shi Construction Co., Ltd.	Taiwan	Construction	G,	s 208,027	208,027	20,100,000	100%	294,767	16,211 s,		Notes 2 and 3
Ta-Chen Construction & Engineering Corp.	Ta-Chen International (Brunei) Corp.	Brunei	investment Overseas			9,464						Notes $2, 3$ and $7$
Prince Housing Investment Co.1id.	PPG Investment Inc.	USA	investment Overseas		56,945	56,945	273	27.27%	12,974	1,645)		Note 3
	Queen Holdings Ltd.	British Virgin Overseas Islands	investment		122,034	122,0.34	2,730	27.27%	390,856	70,315		Note 3
Consulting Co., Ltd.	Prince Property Management Prince Apartment Management Maintain	Taiwan	Management of apartments		67,853	67,853	3,000,000	100%	73,542	2,639		Notes 2 and 3
	Prince Security Co., Ltd.	Taiwan	Security		159,611	159,611	13,172,636	100%	212,952	12,317		Notes 2 and 3
	Dong-Feng Enterprises Co., Amida Trustlink Assets Management Co., Ltd.	Taiwan	Development of public housing		305,480	305,480	21,644,062	45.21%	$137,346$ ) (	725)		Note 3
Ta-Chen International (Brunei) Corp.	Ta Chen Construction (Vietnam) Corp. & Engineering	Vietnam	Construction			9,440						$-$ Notes 2, 3 and 6

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

Note 2: Subsidiary.
Note 3: The amount has been included in the profit (loss) of the Company's investee accounted using equity method and has been recognised as gain (loss) on investment.

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

Note 5: Provided 108,000 thousand shares as collateral.
Note 6: Ta Chen Construction & Engineering (Vietnam) Corp. has completed liquidation process in May 2016.

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

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

Note 9: BioSun Technology Co., Ltd. has completed liquidation process in September 2016.
Note 10: Ming-Da Enterprise Co., Ltd. has reducted capital \$459.112 in December 2016, has eliminated 45.911 thousand shares issued.

AI assistant

PHD — Audit Report / Information 2016

52134_rns_2016-12-19_93a6403b-2012-4f4d-b140-36041228578b.pdf

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2016 AND 2015

Declaration of Consolidated Financial Statements of Affiliated Enterprises

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR 16000394

Opinion

Basis for opinion

Key audit matters

The accuracy of building and land sales revenue recognition timing

Description

How our audit addressed the matter

Recognition of construction revenue- the stage of completion estimate Description

How our audit addressed the matter

Other matter $-Scope$ of the Audit

Other matter – Parent company only financial reports

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

Auditor's responsibilities for the audit of the consolidated financial statements

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER 31, 2016 AND 2015(Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER 31, 2016 AND 2015 (Expressed in thousands of New Taiwan dollars)

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYEARS ENDED DECEMBER 31, 2016 AND 2015(Expressed in thousands of New Taiwan dollars, except earnings per share)

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYEARS ENDED DECEMBER 31, 2016 AND 2015(Expressed in thousands of New Taiwan dollars, except earnings per share)

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

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

PRINCE HOUSING & DEVELOPMENT CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2016 AND 2015

1. HISTORY AND ORGANIZATION

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Basis of consolidation

B. Subsidiaries included in the consolidated financial statements:

(4) Foreign currency translation

$(6)$ Cash equivalents

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

(8) Available-for-sale financial assets

(9) Receivables

(10) Impairment of financial assets

(11) Derecognition of financial assets

(13) Construction contracts

(16) Operating leases (lessor/ lessee)

Bonds payable

(26) Employee benefits

A. Short-term employee benefits

B. Pensions

(32) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

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

(2) Critical accounting estimates and assumptions

Revenue recognition

6. DETAILS OF SIGNIFICANT ACCOUNTS

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

(6) Inventories

(9) Financial assets carried at cost

(10) Investments accounted for under equity method

Associates

Statement of comprehensive income

(11) Property, plant and equipment

B. Changes in property, plant and equipment for the period are as follows:Year ended December 31, 2016

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

(16) Advance receipts

(18) Long-term borrowings

$(20)$ Pension

(21) Share capital

(22) Capital surplus

(24) Other equity items

(29) Finance costs

(31) Income tax

(32) Earnings per share

(33) Operating leases

(34) Non-cash transactions

7. RELATED PARTY TRANSACTIONS

(1) Significant related party transactions and balances

8. PLEDGED ASSETS

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

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

(2) Financial instruments

Foreign exchange risk

PHD Audit Report / Information 2016

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

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

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

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

B. Changes in property, plant and equipment for the period are as follows:
Year ended December 31, 2016

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