Stock Code:1310

$\mathbf{1}$

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Review Report for the Three Months Ended March 31, 2019 and 2018

Address: 8F.-1, No.6, Sec.1, Roosevelt Rd., Taipei City Telephone: $(02)2396 - 6007$

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.

Contents	Page
1. Cover Page	$\mathbf{1}$
2. Table of Contents	2
3. Independent Auditors' Review Report	3
4. Consolidated Balance Sheets	4
5. Consolidated Statements of Comprehensive Income	5
6. Consolidated Statements of Changes in Equity	6
7. Consolidated Statements of Cash Flows	7
8. Notes to the Consolidated Financial Statements
(1) Company history	8
(2) Approval date and procedures of the consolidated financial statements	8
(3) New standards, amendments and interpretations adopted	$8 - 11$
(4) Summary of significant accounting policies	$11 - 15$
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	16
Explanation of significant accounts (6)	$16 - 42$
Related-party transactions (7)	$42 - 43$
Pledged assets (8)	43
(9) Commitments and contingencies	44
(10) Losses due to major disasters	44
(11) Subsequent events	44
$(12)$ Others	44
(13) Other disclosures items
(a) Information on significant transactions	$45 - 47$
(b) Information on investees	47
(c) Information on investment in mainland China	48
(14) Segment information	49

要保建業群合會計師事務府

KPMG 台北市11049信義路5段7號68樓(台北101大樓) 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City 11049, Taiwan (R.O.C.)

Telephone 電話 + 886 2 8101 6666 傳真 + 886 2 8101 6667 Fax Internet 網址 kpmg.com/tw

Independent Auditors' Review Report

To the Board of Directors of Taiwan Styrene Monomer Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheet of Taiwan Styrene Monomer Corporation and its subsidiaries as of March 31, 2019, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2019, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our review.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our review in accordance with Statement of Auditing Standard 65, "Review of Financial Information Performed by the Independent Auditor of the Entity". A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect total assets amounting to \$480,921 thousand, constituting 4.67% of consolidated total assets as of March 31, 2019, total liabilities amounting to \$22,717 thousand, constituting 0.96% of consolidated total liabilities as of March 31, 2019, and total comprehensive income (loss) amounting to \$(113) thousand, constituting, 0.04% of consolidated total comprehensive income (loss) for the three months ended March 31, 2019.

Furthermore, as stated in note 6(h), the equity accounted investments of Taiwan Styrene Monomer Corporation and its subsidiaries in its investee companies of \$1,485,760 thousand as of March 31, 2019, and its equity in net earnings on these investee companies of \$39,412 thousand for the three months ended March 31, 2019, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Taiwan Styrene Monomer Corporation and its subsidiaries as of March 31, 2019, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

The financial statements of Taiwan Styrene Monomer Corporation and its subsidiaries for the three months ended March 31, 2018, were reviewed by another auditor, who expressed a qualified conclusion on those statements on May 14, 2018, due to the financial statements of certain non-significant subsidiaries and the equity accounted investments of Taiwan Styrene Monomer Corporation and its subsidiaries were not reviewed by independent auditors.

The engagement partners on the reviews resulting in this independent auditors' review report are Lin Wu and Yuan-Sheng Yin.

KPMG

Taipei, Taiwan (Republic of China) May 7, 2019

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2019 and 2018

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2019, December 31 and March 31, 2018

(Expressed in Thousands of New Taiwan Dollars)

		March 31, 2019		December 31, 2018		March 31, 2018				March 31, 2019		December 31, 2018		March 31, 2018
	Assets	Amount	%	Amount	%	Amount	%		Liabilities and Equity	Amount	%	Amount	%	Amount	%
	Current assets:								Current liabilities:
1100	Cash and cash equivalents (note 6(a))	1.980.461 ŝ.	19	2,122,960	-20	1,201,261 11		2100	Short-term borrowings (notes 6(o) and 8)	342,500	$_{3}$	312,885	3	337,500
1110	Current financial assets at fair value through profit			141.830				2130	Current contract liabilities (note 6(w))	31,185		128,851		49,540
	or $loss$ (notes $6(b)$ and $8)$ )	181,127	3			303,924	-3	2150	Notes payable	5,924	- 27	9.678		17,232
1140	Current contract assets (note $6(w)$ )					3,796		2170	Accounts payable (note 7)	985,085	-10	1,229,326	- 12	996,709
1150	Notes receivable, net (note 6(c))	28	-9	21		198	- 12	2200	Other payables (note $6(p)$ )	287,336	$_{3}$	344,116	4	240,948
1170	Accounts receivable, net (notes 6(c) and 7)	974,202		947,584	-9	1,337,961		2230	Current tax liabilities	317,305	$\overline{\mathbf{3}}$	243,073	$\overline{\mathbf{2}}$	290,881
1200	Other receivables	7,869	$\sim$	35,647		19,560		2280	Current lease liabilities (note 6(r))	18,226			$\sim$	ж.
1220	Current tax assets	207	$\overline{\phantom{a}}$	181	G.	193		2320	Long-term liabilities, current portion (note 6(q))	26,284	$\sim$	115,164		284,559
130X	Inventories (note 6(d))	554,618	5	709,853	-7	627,541	-6	2399	Other current liabilities	14,263		10,270		14,948	$\sim$
1410	Prepayments (note 6(e))	206,122	3	154,522	-2	824 754	7		Total current liabilities	2,028,108	19	2,393,363	23	2,232,317 20
1470	Other current assets	427		308		1,937			Non-Current liabilities:
1476	Other current financial assets (notes 6(f) and 8)	13,671	$\sim$	16,937		50,129	222	2540	Long-term borrowings (note $6(q)$ )	23,231	$\sim$	140,902		657,507	6
	Total current assets	3.918,732	39	4,129,843	$-39$	4,371.254 39		2570	Deferred tax liabilities	173.509	$\overline{2}$	173,509	$\overline{2}$	173,509
	Non-current assets:							2581	Non-current lease liabilities (note 6(r))	43,867			Page
1510	Non-current financial assets at fair value through profit or loss (notes 6(b) and 8)	19.035	œ	17,144	$\sim$	27,607		2640	Net defined benefit liability, non-current	74,497		74,126		93,447
1517	Non-current financial assets at fair value through							2600	Other non-current liabilities	11,014		10,732	$-+$	10,803
	other comprehensive income (note $6(g)$ )	293,802	3	304,917	- 3	299,836	-3		Total non-current liabilities	326,118		399,269		935,266
1550	Investments accounted for using equity method								Total liabilities	2,354,226	- 23	2,792,632	27	3,167,583 29
	(note(6(h))	1,485,760	14	1,587,855	-15	1,757,229	-17		Equity attributable to owners of parent: (note 6(u))
1600	Property, plant and equipment (notes 6(i) and 8)	4,160,892	40	4,133,895	40	4,147,442	38	3100	Common stock	5,278,698	- 51	5,278,698 50		5,278,698 48
1755	Right-of-use assets, net (note 6(j))	65,475	$\mathbf{1}$					3200	Capital surplus	56.198		60,415		68,142
1760	Investment property, net (notes $6(k)$ and 8)	144,376	2	144.361	$\mathbf{2}$	231,180	$\overline{\mathbf{2}}$		Retained earnings:
1780	Intangible assets (note $6(f)$ )	15,566	$\overline{\phantom{a}}$	16,099	$\rightarrow$	17,750	12	3310	Legal reserve	409,609		409,609	4	307,466
1840	Deferred tax assets	36,111		33,172	$\overline{a}$	38,942	$\sim$	3320	Special reserve	8,811	÷	8,811	$\sim$	157,923
1915	Prepayments for equipment	7,585		20.439	$\sim$	19,675		3350	Unappropriated retained earnings	2,341,739	$-23$	2,127,643	- 20	2,055,111	19
1970	Other long-term investments, net (note $6(m)$ )	39,311	$-7.7$	38.436	$\blacksquare$	$42,152 - -$				2,760,159	27	2,546,063 24		2,520,500 23
1920	Refundable deposits	7,832	OK.	7,670	$\overline{a}$	$29,671 -$		3400	Other equity	(407.911)	(4)	$(421,857)$ (4)		$(244, 794)$ (2)
1990	Other non-current assets (note $6(n)$ )	97,093		76,215		85,014			Total equity attributable to owners of parent	7,687,144	- 75	7,463,319 71		7,622,546 69
	Total non-current assets	6,372,838	61	6,380,203	- 61	6,696,498 61		36XX	Non-controlling interests	250,200	$\mathbf{r}$	254,095	$_{-2}$	$277,623$ 2
									Total equity	7,937,344	- 77	7,717,414 73		7,900,169 71
	Total assets	10,291,570 100		10,510,046 100		11,067,752 100			Total liabilities and equity	10,291,570 100		10,510,046 100		11,067,752 100

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

		For the three months ended March 31
			2019		2018
			Amount	%	Amount	℅
4000	Operating revenue (notes $6(h)$ , $6(w)$ and $7)$	\$	2,937,390	100	4,004,442	100
5000	Operating costs (notes 6(d), 6(i), 6(l), 6(r), 6(s), 7 and 12)		2,489,262	85	3,458,303	86
	Gross profit from operations		448,128	15	546, 39	14
	Operating expenses (notes 6(c), 6(i), 6(l), 6(r), 6(s), 7, and 12):
6100	Selling expenses		10,757	٠	12.495
6200	Administrative expenses		84,050	3	94,079	3
6300	Research and development expenses		6.049	ä,	14,270
6450	Expected credit loss		711		15
			101.567	3	120,859	3
	Operating income		346,561	12	425,280	11
	Non-operating income and expenses:
7010	Other income (note $6(x)$ )		4,748		11,979
7020	Other gains and losses (notes $6(h)$ and $6(x)$ )		12,322		23,888
7050	Finance costs (notes $6(r)$ and $6(x)$ )		(2, 499)		(6, 461)
7060	Share of profit of associates and joint ventures accounted for using equity method (note 6(h))		39,073		30,016
			53,644	1	59,422
9900	Profit before tax		400,205	13	484,702	12
7950	Less. Income tax expenses (note 6(t))		71,707	$\overline{2}$	97,688	$\overline{2}$
	Net income		328,498	11	387,014	10
8300	Other comprehensive income (loss):
8310	Components of other comprehensive income (loss) that will not be reclassified to profit or loss
8316	Urrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income		(11, 405)	$\overline{\phantom{a}}$	2.880
8320	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss (note 6(u))		(20, 380)	(1)
	Components of other comprehensive income (loss) that will not be reclassified to profit or loss		(31,785)	(1)	2,880
8360	Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361	Exchange differences on translation		5,458		433
8370	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income (losses) that will be reclassified to profit or loss				(52, 284)	(1)
	Components of other comprehensive income (loss) that will be reclassified to profit or loss		5.459		(51, 851)	(1)
8300	Other comprehensive income, net		(26, 326)	(1)	(48, 971)	(1)
8500	Comprehensive income		302,172	10	338,043	$\overline{6}$
	Profit attributable to:
8610	Owners of parent		334,329	11	394,591	10
8620	Non-controlling interests		(5, 831)		(7, 577)
			328,498	11	387,014	10
	Comprehensive income attributable to:
8710	Owners of parent	\$	306,067	10	344,774	9
8720	Non-controlling interests		(3,895)		(6, 731)
			302,172	10	338,043
	Earnings per share (note $6(v)$ )
	Basic earnings per share			0.63		0.75
	Diluted earnings per share	S		0.63		0.75

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

						Equity attributable to owners of parent
								Other equity interest
				Retained earnings			Exchange differences on translation of	Unrealized gains (losses) on financial assets measured at fair value through	Unrealized gains (losses)		Total equity
	Common	Capital	Legal		Unappropriated retained		foreign financial	other comprehensive	on available- for-sale		attributable to owners of	Non- controlling
	atock	surplus	reserve	Special reserve	earnings	Total	statements	income	financial assets	Total	parent	interests	Total equity
Balance at January 1, 2018	5,278,698	68,142	307,466	157,923	1,378,191	1,843,580	(3,754)		101.265	97,511	7,287,931	284,331	7,572,262
Effects of retrospective application					281,392	281,392		(190, 286)	(101, 265)	(291, 551)	(10, 159)	-23	(10, 136)
Equity at beginning of period after adjustments	5,278,698	68,142	307,466	157,923	.659.583	2,124,972	(3,754)	(190, 286)		(194.040)	7.277,772	284,354	7,562,126
Net income					394,591	394,591					394,591	(7,577)	387,014
Other comprehensive income	on with a time throwing an time boother	a little bears will not even recovery to			937	937	(400)	(50, 354)		(50, 754)	(49, 817)	846	(48, 971)
Total comprehensive income					395,528	395,528	(400)	(50, 354)		(50, 754)	344,774	(6, 731)	338,043
Balance at March 31, 2018	5,278,698	68,142	307,466	157,923	2,055,111	2,520,500	(4, 154)	(240, 640)	------	(244, 794)	7,622,546	277,623	7,900,169
Balance at January 1, 2019	5,278,698	60,415	409,609	8.811	2,127,643	2,546,063	(2, 298)	(419, 559)		7421,857	7, 163, 319	254,095	7,717,414
Net income					334,329	334,329					334,329	(5, 831)	328,498
Other comprehensive income							3,509	(31,771)		(28.262)	(28, 262)	1,936	(26, 326)
Total comprehensive income					334.329	334,329	3,509	(31, 771)		(28.262)	306,067	(3,895)	302,172
Disposal of investment accounted for using equity method	$\sim$				(27, 278)	(27, 278)		27,278		27,278	$\mathbb{R}^n$		۰
Disposal of investments in equity instruments measured at fair value through other comprehensive
income					896	896		(896)		(896)
Changes in ownership interests in associates		(4.217)			(93, 851)	(93, 851)		15,826	$\overline{\phantom{a}}$	15,826	(82, 242)		(82, 242)
Balance at March 31, 2019	5,278,698	56,198	409,609	8.811	2,341,739	2,760,159	1,211	(409, 122)		(407.911)	7,687,144	250,200	7,937,344

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

	For the three months ended March 31
	2019	2018
Cash flows from operating activities:
Profit before tax	\$ 400.205	484,702
Adjustments:
Adjustments to reconcile profit (loss)
Depreciation expense	72,187	68,754
Amortization expense	533	24,016
Expected credit loss	711	15
Interest expense	2.499	6.461
Interest income	(1, 455)	(1,096)
Share of profit of associates accounted for using equity method	(39, 412)	(28, 635)
Loss (gain) on disposal of property, plant and equipment	(54)	18
Gain on disposal of investments accounted for using equity method	(2,682)
Total adjustments to reconcile profit (loss)	32,327	69,533
Changes in operating assets and liabilities:
Changes in operating assets:
Financial assets mandatorily measured at fair value through profit or loss	(41, 188)	(19, 228)
Contract assets	۳	(861)
Notes receivable	(7)	2,110
Accounts receivable	(27.329)	(8,739)
Other receivables	27,736	(15, 713)
Inventories	155,235	47,179
Prepayments	(76,048)	(64, 785)
Other current assets	(119)	(481)
Other financial assets	3,266	8,456
Total changes in operating assets	41,546	(52,062)
Changes in operating liabilities:
Current contract liabilities	(97,666)	3,960
Notes payable	(3, 754)	(4,945)
Accounts payable	(244, 241)	(149, 509)
Other payables	(56, 280)	(51,306)
Other current liabilities	3,993	1,360
Net defined benefit liability	371	525
Total changes in operating liabilities	(397,577)	(199, 915)
Total changes in operating assets and liabilities	(356, 031)
Cash inflow generated from operations	76,501	(251, 977)
Interest received	1,497	302,258
Interest paid		1,089
Dividends paid	(2,969)	(6, 481)
Income taxes (paid) received	(30)	(20)
Net cash flows from operating activities	(440)	24
Cash flows from investing activities:	74,559	296,870
Proceeds from disposal of investments accounted for using equity method
Acquisition of property, plant and equipment	41,568
Proceeds from disposal of property, plant and equipment	(93, 329)	(24,212)
Increase in refundable deposits	571
	(162)	(1,900)
Acquisition of intangible assets		(1,905)
Decrease (increase) in prepayments for equipment	12,854	(6, 743)
Increase in other investing activities Net cash flows used in investing activities		(3,910)
	(38, 498)	(38, 670)
Cash flows from financing activities:
Increase (decrease) in short-term borrowings	29,615	(20,000)
Repayments of long-term borrowings	(206, 551)	(68, 298)
Payment of lease liabilities	(4, 406)
Increase in other non-current liabilities	282	115
Net cash flows used in financing activities	(181,060)	(88, 183)
Effect of exchange rate changes on cash and cash equivalents	2,500	900
Net (decrease) increase in cash and cash equivalents	(142, 499)	170,917
Cash and cash equivalents at beginning of period	2,122,960	1,030,344
Cash and cash equivalents at end of period	1,980,461	1,201,261
See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Taiwan Styrene Monomer Corp. (the "Company") was incorporated on November 16, 1979, under the approval of Ministry of Economic Affairs, Republic of China (ROC). Registered address is 8F.-1, No.6, Sec.1, Roosevelt Rd., Taipei City. Please refer to note 4(b) for the major business activities of the Company and its subsidiaries (together referred to as the "Group").

(2) Approval date and procedures of the consolidated financial statements

The consolidated financial statements were authorized for issuance by the Board of Directors on May 7, 2019.

(3) New standards, amendments and interpretations adopted

The impact of the International Financial Reporting Standards ("IFRSs") endorsed by the Financial $(a)$ Supervisory Commission, R.O.C. ("FSC") which have already been adopted.

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2019.

New, Revised or Amended Standards and Interpretations	Lifecuve date per IASB
IFRS 16 "Leases"	January 1, 2019
IFRIC 23 "Uncertainty over Income Tax Treatments"	January 1, 2019
Amendments to IFRS 9 "Prepayment features with negative compensation"	January 1, 2019
Amendments to IAS 19 "Plan Amendment, Curtailment or Settlement"	January 1, 2019
Amendments to IAS 28 "Long-term interests in associates and joint ventures"	January 1, 2019
Annual Improvements to IFRS Standards 2015-2017 Cycle	January 1, 2019

Except for the following items, the Group believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements. The extent and impact of signification changes are as follows:

$(i)$ IFRS 16 "Leases"

IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases - Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

13.00 - - - - - - - - - - - - - - - - - -

The Group applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognized in retained earnings on January 1, 2019. The details of the changes in accounting policies are disclosed below,

$1)$ Definition of a lease

Previously, the Group determined at contract inception whether an arrangement is or contains a lease under IFRIC 4. Under IFRS 16, the Group assesses whether a contract is or contains a lease based on the definition of a lease, as explained in note 4(c).

On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Group applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after January 1, 2019.

$2)$ As a lessee

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Group. Under IFRS 16, the Group recognizes right-of-use assets and lease liabilities for most leases $-$ i.e. these leases are on-balance sheet.

The Group decided to apply recognition exemptions to short-term leases of transportation and office equipment as well as leases for which the underlying asset is of low value. At transition of the leases classified as operating leases under IAS 17, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group's incremental borrowing rate as of January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

In addition, the Group used the following practical expedients when applying IFRS 16 to leases.

Applied a single discount rate to a portfolio of leases with similar characteristics.
Adjusted the right-of-use assets by the amount of IAS 37 onerous contract provision immediately before the date of initial application, as an alternative to an impairment review.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term.
Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
$3)$ As a lessor

The Group is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor, except for a sub-lease. The Group accounted for its leases in accordance with IFRS 16 from the date of initial application.

Under IFRS 16, the Group is required to assess the classification of a sub-lease by reference to the right-of-use asset, not the underlying asset. On transition, the Group reassessed the classification of a sub-lease contract previously classified as an operating lease under IAS 17. The Group concluded that the sub-lease is a finance lease under IFRS 16.

4) Impacts on financial statements

On transition to IFRS 16, the Group recognized additional \$70,045 thousands of right-ofuse assets and \$66,475 thousands of lease liabilities, the difference amounted to \$3,570 thousands was a decrease in rental prepayments. When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted-average rate applied is 1.76%.

The explanation of differences between operating lease commitments disclosed at the end of the annual reporting period immediately preceding the date of initial application. and lease liabilities recognized in the statement of financial position at the date of initial application disclosed as follows:

	January 1, 2019
Operating lease commitment at December 31, 2018 as disclosed in the Group's consolidated financial statements	S 51,725
Immaterial lease payment not disclosed in financial statements	25,865
Recognition exemption for:
short-term leases	(7,229)
lease of low-value assets	(2, 456)
	67,905
Discounted using the incremental borrowing rate at January 1, 2019 (lease liabilities recognized at January 1, 2019)	66,475

(b) The impact of IFRS issued by IASB but not yet endorsed by the FSC

As of the date, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

New, Revised or Amended Standards and Interpretations	Effective date per IASB
Amendments to IFRS 3 "Definition of a Business"	January 1, 2020
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture"	Effective date to be determined by IASB
IFRS 17 "Insurance Contracts"	January 1, 2021
Amendments to IAS 1 and IAS 8 "Definition of Material"	January 1, 2020

The above IFRSs are not relevant to the Group.

(4) Summary of significant accounting policies

$(a)$ Statement of Compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the preparation of Financial Reports by Securities Issuers (the "Regulations") and IAS 34 "Interim Financial Reporting" which are endorsed and issued into effect by FSC, and do not include all of the information required by the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except for the following accounting policies, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statements for the year ended December 31, 2018. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2018.

Basis of consolidation $(b)$

List of subsidiaries in the consolidated financial statements:

			Shareholding (%)
Name of investor	Name of subsidiary	Principal activity	March 31, 2019	December 31, 2018	March 31. 2018	Note
The Company	Zung-Fu Co., Ltd.	Building cleaning and maintenance, sewage treatment, air conditioning equipment maintenance	89.16	89.16	89.16	Note 1
The Company	Lei-Ting Construction Corporation	Civil and construction engineering	75.27	75.27	75.27	Note 2
The Company	YSIC Ltd.	Residential building and industrial plant development rental business	99.99	99.99	99.99	÷.

$\sim$

				Shareholding (%)
Name of investor	Name of subsidiary	Principal activity	March 31, 2019	December 31, 2018	March 31, 2018	Note
The Company	Yuan-Shin Materials Technology Co. manufacturing Ltd.	Basic chemical materials and plastic raw material	100.00	100.00	100.00	Note 3
The Company	Yangmingshan Hotel Tien Lai Resort & SPA		65.07	65.07	65.07	Note 4
	The Company Gvision-USA, Inc.	Sales and distribution of LCD monitor	66.67	66.67	66.67	Note 3
	The Company Taiwan United Medical Inc.	Wholesale and retail of precision instruments and information software	64.79	64.79	64.79
The Company	Jing-Shou Engineering Co., Ltd.	Bridge and building engineering	100.00	100.00	100,00	Note 3
The Company	Technology Inc. manufacturing	Asia Carbons & Electronic component	34.76	34.76	34.76	Note 5
YSIC Ltd.	Grand Capital Co., Ltd.	Investment	97.22	97.22	97.22	Notes 3 and 6
YSIC Ltd.	Tien Lai Co., Ltd.	Piping engineering	50.00	50.00	50.00	Notes 3 and 7
YSIC Ltd.	Kun Shan International Ltd.	Investment	62.03	62.03	62.03	Note 3
Kun Shan International Ltd.	Kun Shan Yu- Fu Technology Education Consulting Co., consultation Ltd.	Educational consulting, information consulting, software and data storage	100.00	100.00	100.00	Note 3
Kun Shan International Ltd.	Technology Education Consulting Co., consultation Ltd.	Kun Shan Jia-an Educational consulting, information consulting, software and data storage	100.00	100.00	100.00	Note 3
Asia Carbons & Technology Co., Ltd. Inc.	Asia Graphene	Sales of electronic components	100.00	100.00	100.00	Note 3
n Tien Lai Resort & SPA Village	Yangmingsha Yangmingshan Tien Lai Art Development Co., Ltd.	Arts and leisure	100.00	100.00	100.00	Notes 3 and 8

Note 1: The Company and Lei-Ting Construction Corporation (holding 9.84% of common shares) totally hold 99.00% of common shares of Zung-Fu Co., Ltd.

Note 2: The Company and YSIC Ltd. (holding 24.73% of common shares) totally hold 100.00% of common shares of Lei-Ting Construction Corporation

Note 3: Non-significant subsidiary for which the financial statements have not been reviewed by independent auditors.
Note 4: The Company and YSIC Ltd. (holding 12.10% of common shares) totally hold 77.17% of common shares of Yangmingshan Tien Lai Resort & SPA.
Note 5: The Company, Zung-Fu Co., Ltd. (holding 16.19% of common shares), YSIC Ltd. (holding 10.57% of common shares), and Jing-Shou Engineering Co., Ltd. (holding 3.07% of common shares) hold 64.59% of common shares of Asia Carbons & Technology Inc.
Note 6: YSIC Ltd. and Zung-Fu Co., Ltd. (holding 2.78% of common shares) totally hold 100.00% of common shares of Grand Capital Co., Ltd.
Note 7: The Group does not directly or indirectly hold more than half of the total shares of Tien Lai Co., Ltd., but because the chairman of the company is designated by the Group and the Group has control over the company, it is incorporated into consolidation.
Note 8: On March 29, 2019, the Board of Directors determined to dissolve Yangmingshan Tien Lai Art Village Development Co., Ltd. on behalf of the shareholder.
$(c)$ Leases (applicable from January 1, 2019)
(i) Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease, A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

$1)$ the contract involves the use of an identified asset $-$ this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
$2)$ the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the Group has the right to direct the use of the asset when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of an asset if either:
the Group has the right to operate the asset; or
the Group designed the asset in a way that predetermines how and for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and nonlease components as a single lease component.

(ii) As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus anv initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee; or
there is a change of its assessment on whether it will exercise a purchase option; or
there is a change of its assessment on whether it will exercise an extension or termination option; or
there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of transportation and office equipment that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) As a leasor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(d) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

(e) Income tax

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period (and allocated to current and deferred taxes based on its proportionate size).

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

Significant accounting assumptions and judgments, and major sources of estimation uncertainty $(5)$

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 "Interim Financial Reporting" and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which is in conformity with the consolidated financial statements for the vear ended December 31, 2018. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2018.

(6) Explanation of significant accounts

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2018. Please refer to notes 6 to 35 of the 2018 annual consolidated financial statements.

(a) Cash and cash equivalents

		March 31, 2019	December 31, 2018	March 31, 2018
Cash on hand	\$	996	1,441	485
Petty cash		1,284	1,233	1,254
Deposits in bank		667,062	944,399	738,723
Cash equivalents
Bonds under resell agreements		1,100,000	850,000	928
Time deposits due within one year		211,119	325,887	460,799
	S	1,980.461	2,122,960	1.201.261

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

	March 31, 2019	December 31, 2018	March 31, 2018
Mandatorily measured at fair value through profit or loss:
Current:
Listed stocks	\$ 181,127	141,830	303.924
Non-current:
Listed stocks	19,035	17,144	27,607
Total	200,162	158,974	331,531

The above financial assets had been pledged as collateral for bank loans; please refer to note 8.

(c) Accounts receivable

		December 31,
	March 31, 2019	2018	March 31, 2018
Accounts receivable	977,000	949.671	1,339,834
Less: Loss allowance	(2.798)	(2,087)	(1, 873)
	974,202	947,584	1,337,961

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision was determined as follows:

		March 31, 2019
	Gross carrying amount	Weighted- average loss rate	Loss allowance provision
Current	\$ 968,423	0.005%	48
1 to 90 days past due	3,606	1%	36
91 to 180 days past due	2,022	2%	40
181 to 365 days past due	149	2%	3
More than 1 year past due	2,828	50%~100%	2,671
	977,028		2,798
		December 31, 2018
	Gross carrying amount	Weighted- average loss rate	Loss allowance provision
Current	\$ 938,601	0.005%	47
1 to 90 days past due	8,500	1%	41
91 to 180 days past due	251	2%	3
181 to 365 days past due	227	2%	$\overline{2}$
More than 1 year past due	2,113	50%~100%	1,994
	949,692		2,087
		March 31, 2018
	Gross carrying amount	Weighted- average loss rate	Loss allowance provision
Current	\$ 1,336,166	0.005%	67
1 to 90 days past due	1,310	1%	13
91 to 180 days past due	316	2%	6
181 to 365 days past due	197	2%	4
More than 1 year past due	2,043	50%~100%	1,783
	1,340,032		1,873

The movement in the allowance for notes and accounts receivable was as follows:

	For the three months ended March 31
	2019	2018
Beginning balance	2,087	1,858
Impairment losses recognized
Ending balance	2,798	1,873

(d) Inventories

		December 31,
	March 31, 2019	2018	March 31, 2018
Merchandise inventory	\$ 31,928	22,752	30,676
Finished goods	92,910	174,811	110,666
By-product	12,675	6,320	4,318
Semi-finished products	77,624	227,927	45,079
Work in progress	75,288	51,916	65,046
Raw materials	263,281	184,074	326,852
Supplies	912	42,053	44,904
	554,618	709,853	627,541

None of the inventories of the Group was pledged as collateral on March 31, 2019, December 31 and March 31, 2018.

Except for the transfer of inventory to operating costs from sales, other losses (gain) directly included in operating costs are as follows:

		For the three months ended March 31
		2019	2018
Gain from recovery of inventories	S	(441)	(71, 168)
Loss on inventory scrapping			70,616
Unallocated fixed manufacturing overhead expenses		21,072	12,288
		20,631	11,736

(e) Prepayments


	March 31, 2019	2018	March 31, 2018
Prepayment for purchases	22,569	23,360	661,183
Office supplies	98,027	93,992	97,088
Overpaid sales tax	19,793	19,173	44,735
Others	65,733	17,997	21,748
	206,122	154,522	824,754

$(1)$ Other current financial assets

		December 31,
	March 31, 2019	2018	March 31, 2018
Restricted deposits in bank	10,259	13,525	20,129
Refundable deposits	3,412	3.412	30,000
	13,671	16,937	50,129

The above assets of the Group had been pledged as collateral for long-term and short-term bank loans; please refer to note 8.

Non-current financial assets at fair value through other comprehensive income $(g)$

		December 31,
	March 31, 2019	2018	March 31, 2018
Equity investmensts:
Domestic non-listed stocks	171,753	174,915	198,585
Foreign non-listed equity
investments	122,049	130,002	101,251
	293,802	304,917	299,836

The Group designated the investments shown above at fair value through other comprehensive $(i)$ income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes not for trading purposes.

$(ii)$ There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of March 31, 2019 and 2018.
(iii) For market risk; please refer to note $6(z)$ .
(iv) None of the above-mentioned financial assets had been pledged as collateral as of March 31, 2019, December 31 and March 31, 2018.

$(h)$ Investments accounted for using equity method

$(i)$ Associates

Associates of the Group consisted of the following:

	March 31, 2019		December 31, 2018		March 31, 2018
	Amount	Share- holding (%)	Amount	Share- holding (%)	Amount	Share- holding (%)
Grand Cathay Venture Capital Co., Ltd. S.	334,980	25.00	318,400	25.00	320,339	25.00
Wonderland Enterprise Co., Ltd.	540,316	37.04	626,867	49.38	647.915	49.38
Yuan-Jie Investment Co., Ltd.	246,757	32.46	225,127	32.46	258,645	42.20
Yu-Jie Investment Co., Ltd.	283,565	32.96	301,166	32.96	380,476	41.60
Yuan-Yao Development Co., Ltd.	÷	÷.	36,336	33.22	64.499	33.22
Globaltop Technology Inc.	80,142	37.92	79,959	37.92	85,355	37.92
	\$1,485,760		1,587,855		1,757,229

On March 8, 2019, the Group had sold all of its shares of Yuan-Yao Development Co. Ltd., at the price of \$41,568 thousand, and the gain on disposal of investments amounted to \$2,682 thousand, which was accounted for under the other gains and losses of the consolidated comprehensive income statements; meanwhile, the unrealized losses of \$27,278 thousand from investments measured at fair value through other comprehensive income which shall not be reclassified to profit and loss, had been reclassified to retained earnings at the time of disposal.

Wonderland Enterprise Co., Ltd. conducted a capital increase by cash of \$200,000 thousand on January 15, 2019. The Group did not participate in the capital increase proportionally, and its shares of the Company dropped to 37.04%. The Group reduced the capital surplus of \$4,217 thousand and retained earnings of \$78,025 thousand, respectively, due to the decrease of its ownership. Meanwhile, the unrealized losses of \$15,826 thousand from investments measured at fair value through other comprehensive income which shall not be reclassified to profit and loss, had been reclassified to retain earnings proportionally.

The Group's financial information for investments accounted for using equity method that are individually insignificant was as follows:

	For the three months ended March 31
	2019	2018
Attributable to the Group:
Net income	\$ 39,412	28,635
Other comprehensive income	(20, 379)	(52, 284)
Total comprehensive income	19,033	(23, 649)

(ii) Pledge to secure

None of the investments using equity method of the Group was pledged as collateral.

(iii) The unreviewed financial statements of investments accounted for using the equity method

The investments accounted for using equity method and the share of the profit or loss and other comprehensive income were calculated based on the financial statements that had not been reviewed.

$(i)$ Property, plant and equipment

The movements of the property, plant and equipment of the Group were as follows:

$\frac{1}{2}$ $\frac{1}{2}$ $\frac{1}{2}$

$\mathbf{L}$ and $\mathbf{L}$

		Land	Land improvements	DUKBINGS and structures	масшвегу and equipment	Transportation equipment	Leased ussets	Other equipment	Construction in progress	Total
Cost:
Balance as of January 1, 2019	S	1,612,235	8,462	707,736	7,755,943	21,823	121,150	905,004	74,648	11,207,001
Additions					20,957		440	1,585	70,347	93,329
Disposals					(37, 775)	(3, 401)		(20)		(41, 196)
Effect of exchange rate changes				1,220	6	26	$\overline{\mathbf{2}}$	274		1,528
Balance as of March 31, 2019 S		1,612,235	8,462	708,956	7,739,131	18,448	121,592	906,843	144,995	11,260,662
Balance as of January 1, 2018 \$		1,612,235	8,462	780,112	7,835,691	21,071	96,523	882,076	9,408	11,245,578
Additions					3.749			2,108	20,044	25,901
Disposals								(1,692)		(1,692)
Effect of exchange rate changes				(6, 279)	(37, 892)	19	2,989	3,933	(4, 356)	(41, 586)
Balance as of March 31, 2018	s	1,612,235	8,462	773,833	7,801,548	21,090	99,512	886,425	25,096	11,228,201
Accumulated depreciation and impairment losses:
Balance as of January 1, 2019	s		8.341	232,845	6,113,795	17,805	80,068	620,252		7,073,106
Depreciation			5	4,431	45,556	362	2,384	13,824		66,562
Disposals			×		(37, 775)	(2, 885)		(19)		(40, 679)
Effect of exchange rate changes				503		24	4	245		781
Balance as of March 31, 2019	S		8,346	237,779	6,121,581	15,306	82,456	634,302		7,099,770
Balance as of January 1, 2018	s		8,318	285,098	6,098,890	16,522	73,739	577,160		7,059,727
Depreciation			7	6,773	46,311	324	1,118	12,809	×.	57,342
Disposals								(1,674)		(1,674)
Effect of exchange rate changes				(6, 837)	(37, 892)	17	(7)	83		(44, 636)
Balance as of March 31, 2018	s		8,325	285,034	6,107,309	16,863	74,850	588,378		7,080,759
Carrying value:
Balance as of January 1, 2019	s	1,612,235	121	474,891	1,642,148	4,018	41,082	284,752	74,648	4,133,895
Balance as of March 31, 2019	S	1,612,235	116	471,177	1,517,550	3,142	39,136	272,541	144,995	4,160,892
Balance as of January 1, 2018		1,612,235	144	495,014	1,736,801	4,549	22,784	304,916	9,408	4,185,851
Balance as of March 31, 2018		1,612,235	137	488,799	1,694,239	4,227	24,662	298,047	25,096	4,147,442

As of March 31, 2019, December 31 and March 31, 2018, the accumulated impairment losses of property, plant and equipment were amounted to \$332,973 thousand, \$332,973 thousand, and \$344,455 thousand respectively.

As of March 31, 2019, December 31 and March 31, 2018, the property, plant and equipment of the Group had been pledged as collateral for loans; please refer to note 8.

$(j)$ Right-of-use assets

The cost and accumulated depreciation of leased land, buildings and structures, and transportation equipment of the Group were as follows:

		Land	Buildings and structures	Transportation equipment	Total
Cost:
Balance as of January 1, 2019	S		×		÷
Effects of retrospective application (IFRS 16)		4,194	58,956	6.895	70,045
Balance as of January 1, 2019 after adjustments		4.194	58,956	6.895	70,045
Effects of exchange rate changes		82	23		105
Balance as of March 31, 2019		4,276	58,979	6,895	70,150
Accumulated depreciation:
Balance as of January 1, 2019	S
Depreciation		94	3,766	815	4,675
Balance as of March 31, 2019		94	3,766	815	4,675
Carrying amount;
Balance as of March 31, 2019		4,182	55,213	6,080	65,475

Some of the above-mentioned property, plant and equipment had been pledged as collateral for loans; please refer to note 8.

(k) Investment property

		Land	Buildings and structures	Total
Cost:
Balance as of January 1, 2019	S	90,030	92,634	182,664
Effects of exchange rate changes			1,707	1,707
Balance as of March 31, 2019		90,030	94,341	184,371
Balance as of January 1, 2018	\$	140,780	161,867	302,647
Effects of exchange rate changes			1,241	1,241
Balance as of March 31, 2018		140,780	163,108	303,888
Accumulated depreciation and impairment losses:
Balance as of January 1, 2019	S		38,303	38,303
Depreciation			950	950
Effects of exchange rate changes			742	742
Balance as of March 31, 2019			39,995	39,995
Balance as of January 1, 2018	\$	4,467	66,341	70,808
Depreciation			1,412	1.412
Effects of exchange rate changes			488	488
Balance as of March 31, 2018		4,467	68,241	72,708

	Land	Buildings and structures	Total
Carrying value:
Balance as of January 1, 2019	90,030	54,331	144,361
Balance as of March 31, 2019	90,030	54,346	144,376
Balance as of January 1, 2018	136,313	95,526	231,839
Balance as of March 31, 2018	136,313	94,867	231,180

The fair value of the investment property was not significantly different from those disclosed in note 18 of the annual consolidated financial statements for the year ended December 31, 2018. For other relevant information, please refer to note 18 of the consolidated financial statements of 2018.

The above-mentioned investment property had been pledged as collateral for loans; please refer to note 8.

Intangible assets $(1)$

The movements of intangible assets of the Group were as follows:

		Technical royalty	Computer software	Total
Cost:
Balance as of January 1, 2019	S	22,242	1,243	23,485
Balance as of March 31, 2019	\$	22,242	1,243	23,485
Balance as of January 1, 2018	$\mathbf S$	20,338	4,478	24,816
Acquisition		1,905		1,905
Balance as of March 31, 2018	\$.	22,243	4,478	26,721
Accumulated amortization:
Balance as of January 1, 2019	\$	6,408	978	7,386
Amortization		405	128	533
Balance as of March 31, 2019		6,813	1,106	7,919
Balance as of January 1, 2018	\$	4,787	3,511	8,298
Amortization		405	268	673
Balance as of March 31, 2018		5,192	3,779	8,971
Carrying value:
Balance as of January 1, 2019	\$	15,834	265	16,099
Balance as of March 31, 2019	ς	15,429	137	15,566
Balance as of January 1, 2018	S	15,551	967	16,518
Balance as of March 31, 2018	S	17,051	699	17,750

(m) Other long-term investment, net


	March 31, 2019	2018	March 31, 2018
Construction and operation of
student dormitory	39.311	38,436	42,152

The period of rights of investment in construction and operation of student dormitory is 30 years. The subsidy and management income will be recovered annually according to the agreement to July 31, 2035.

(n) Other non-current assets, net


	March 31, 2019	2018	March 31, 2018
Long-term prepaid rents	-	3,570	3,770
Long-term prepaid expenses	95,436	70,988	79,551
Others	1,657	1,657	1,693
	97,093	76,215	85,014

Long-term prepaid rents is paid for acquisition of the right of land use in China.

(o) Short-term borrowings

Short-term borrowings of the Group were as follows:

	March 31, 2019	December 31, 2018	March 31, 2018
Bank overdraft		5,505
Secured bank loans	167,500	172,380	147,500
Unsecured bank loans	175,000	135,000	190,000
Total	342,500	312,885	337,500
Range of interest rate	$1.45\%$ ~2.22%	$1.45\% - 3.73\%$	1.48%~3.50%
Unused short-term credit lines	125,000	179,495	160,000

For the collateral for short-term borrowings, please refer to note 8.

(p) Other payables

Other current liabilities of the Group were as follows:

	March 31, 2019	2018	March 31, 2018
Accrued payroll	\$ 58,318	135,831	36,420
Employee bonus payable	42,410	33,351	37,466
Compensation payable to directors and supervisor	50,198	41,073	46,414
Compensated absences	20,659	20,065	17,187
Other accrued expenses payable	46,493	47,531	62,198
Payables on equipment	16,525	14,863	1,183
Other payables—other	52,733	51,402	40,080
Total	287,336	344,116	240,948

(q) Long-term borrowings

Long-term borrowings of the Group were as follows:

		March 31, 2019	December 31, 2018	March 31, 2018 77,493
Unsecured bank loans	S
Secured bank loans		49,515	256,066	862,778
Other loans				1.795
Less: current portion		(26, 284)	(115, 164)	(284, 559)
Total		23,231	140,902	657,507
Due year		2023	2021-2023	2019-2028
Range of interest rate		1.72%-1.95%	1.30%-1.87%	1.72%-3.50%

On March 31, 2019, unused long-term credit lines of the Group was amounted to \$250,000 thousand.

$(r)$ Lease liabilities

Lease liabilities of the Group were as follows

		March 31, 2019
	Future minimum lease payments	Interest	Present value of minimum lease payments
Less than one year	19,163	937	18,226
Between one and five years	44,901	1,034	43,867
	64,064	1, 971	62,093
Current	19,163	937	18,226
Non-current	44,901	1,034	43,867

There were no significant issues, repurchases and repayments of lease liabilities for the three months ended March 31, 2019.

The amounts recognized in profit or loss were as follows:

	For the three months ended March 31, 2019
Interest on lease liabilities	285
Expenses relating to short-term leases	96
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets The amounts recognized in the statement of cash flows was as follows:
	For the three months ended March 31, 2019
Total cash outflow for leases	4,789

Employee benefits $(s)$

- Defined benefit plans $(i)$

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2018 and 2017.

The expenses recognized in profit or loss for the Group were as follows:

		For the three months ended March 31
		2019	2018
Operating cost	S	530	517
Operating expenses		158	192.
		688	709

(ii) Defined contribution plans

The Group's expenses under the pension plan cost to Bureau of Labor Insurance for the three months ended March 31, 2019 and 2018 were as follows:

	For the three months ended March 31
	2019	2018
Operating cost	\$ 2,957	3,769
Operating expenses	1,280	1,278
Total	4,237	5,047

The Group allocates 6% of each employee's monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Group allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

Income tax $(t)$

The components of income tax for the three months ended March 31, 2019 and 2018 were as follows:

	For the three months ended March 31
		2019	2018
Current income tax expense
Current period	S	74,305	102,807
Adjustment for prior periods		341
Current income tax expense		74,646	102,807
Deferred income tax expense (benefit)
Origination and reversal of temporary difference		(2,939)	(5,119)
Income tax expense		71,707	97,688

The Company's income tax return for the year 2017 had been examined by the tax authorities.

(u) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the three months ended March 31, 2019 and 2018. Please refer to note 27 of the consolidated financial statements for the year ended December 31, 2018.

Capital surplus $(i)$

The balances of capital surplus of the Company were as follows:

		December 31, 2018	March 31, 2018

3	24,015	24,015	30,669
	32,183	32,183	32,183
investments in associates using
		4,217	5,290
	56,198	60,415	68,142
		March 31, 2019

(ii) Retained earnings

The Company's Article of Incorporation stipulates that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders' meeting for approval.

In general, cash dividends shall not be less than 30% of total dividends. However, based on the need to respond to changes in the industry, major investment plans and improve the financial structure, or in the case of sudden major capital needs, the cash dividend payout rate could be adjusted to 10% to 30%. If the cash dividend is less than \$0.1 per share, it will not be issued, and the stock dividend will be paid instead.

On March 11, 2019, the Company's board of directors resolved to appropriate the 2018 earnings. On June 26, 2018, the shareholder's meetings resolved to distribute the 2017 earnings. These earnings were appropriated as follows and the related information is available on the Market Observation Post System website of the Taiwan Stock Exchange.

	2018 (proposed)		2017
	Ratio of allotment of shares (NTD)	Amount	Ratio of allotment of shares (NTD)	Amount
Dividends distributed to ordinary shareholders:
Cash	$2.00$ \$	1,055,740	1.60	844,592

(iii) Other equity

Changes of other equity of the Group were as follows:

			Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
Balance as of January 1, 2019		\$	(2, 298)	(419, 559)	(421, 857)
Exchange differences on foreign operations			3,508		3,508
Exchange differences on associates accounted for using equity method			1		1
Unrealized losses from financial assets measured at fair value through other comprehensive income				(11, 391)	(11, 391)
Disposal of investments accounted for using equity method				27,278	27,278
Changes in ownership interests in associates				15,826	15,826
Disposal of investments in equity instruments designated
at fair value through other comprehensive income Unrealized losses from financial assets measured at fair value through other comprehensive income, associates				(896)	(896)
accounted for using equity method				(20, 380)	(20, 380)
Balance as of March 31, 2019		S	1,211	(409, 122)	(407, 911)
		Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Unrealized gains (losses) on available- for-sale investments	Total
Balance as of January 1, 2018	S	(3,754)		101,265	97,511
Effects of retrospective application			(190, 286)	(101, 265)	(291, 551)
Balance as of January 1, 2018 after adjustments		(3,754)	(190, 286)		(194, 040)
Exchange differences on foreign operations		(395)			(395)
Unrealized gains from financial assets measured at fair value through other comprehensive income			1,925		1,925
Exchange differences on associates
accounted for using equity method Unrealized losses from financial assets measured at fair value through other comprehensive income, associates		(5)			(5)
accounted for using equity method			(52, 279)		(52, 279)
Balance as of March 31, 2018	S	(4, 154)	(240, 640)		(244, 794)

(v) Earning per share

The Group's basic earnings per share and diluted earnings per share were calculated as follows:

$(i)$ Basic earnings per share

	For the three months ended March 31
	2019	2018
Profit attributable to the Company	334,329	394,591
Weighted-average number of ordinary shares
outstanding	527,870	527,870
Earnings per share (NTD)	0.63	0.75

(ii) Diluted earnings per share


	2019	2018
Profit attributable to the Company (diluted)	334,329	394,591
Weighted-average number of ordinary shares outstanding	527,870	527,870
Effect of dilutive potential ordinary shares
Employee remuneration in stock	1,724	1,759
Weighted-average number of ordinary shares
outstanding (diluted)	529,594	529,629
Diluted earnings per share (NTD)	0.63	0.75

(w) Revenue from contracts with customers

Disaggregation of revenue $(i)$

		For the three months ended March 31
		2019	2018
Primary geographical markets:
Asia	\$	2,904,779	3,978,859
America		32,611	25,583
		2,937,390	4,004,442
Major products/services lines:
Commodity sales revenue	S	2,814,241	3,903,301
Travel service revenue		56,186	53,322
Construction project revenue		379	861
Service revenue		36,636	45,053
Other operating revenue		29,948	1,905
		2,937,390	4,004,442

(ii) Contract balances

Contract assets-construction		March 31, 2019	December 31, 2018	March 31, 2018
contract				3,796
Contract liabilities-unearned sales revenue	S	8,804	97,882	26,041
Contract liabilities-travel service contract		22,381	30,969	23,499
Total		31,185	128,851	49,540

For details on accounts receivable and allowance for impairment, please refer to note 6(c).

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

$(x)$ Non-operating income and expenses

$(i)$ Other income

Details of other income of the Group were as follows:

		For the three months ended March 31
		2019	2018
Interest income	S	1,455	1,096
Rent income		562	943
Write-off of overdue payables		÷.	625
Others		2,731	9,315
Total		4,748	11,979

(ii) Other gains and losses

	For the three months ended March 31
	2019	2018
Foreign exchange gains (losses)	\$ (1, 387)	20,833
Gains on disposals of investments	2,682
Gains on financial assets at fair value through profit or loss	10.986	3.083
Gains (losses) on disposals of property, plant and equipment	54	(18)
Miscellaneous disbursements	(13)	(10)
Other gains and losses (net)	12,322	23,888

(iii) Finance costs

	For the three months ended March 31
	2019	2018
Interest expense	2.499	6,461

(y) Employee compensation and directors and supervisors' remuneration

According to the Article of Incorporation, once the Company has annual profit, it should appropriate 1%~5% of the profit to its employees and 2.5% or less to its directors and supervisors as remuneration(since January 31, 2019, the Audit Committee has been set up to replace the supervisors' authority). However, if the Company still has accumulated deficit, the profit should be reserved to offset the deficit.

The amounts of the remunerations to employees, directors and supervisors for the three-months period ended March 31, 2019 and 2018 were calculated using the Company's net income before tax without the remunerations to employees, directors and supervisors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period.

If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholder' meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. Shares distributed to employees as employees' remuneration are calculated based on the closing price of the Company's shares one day before the approval by the Board of Directors.

Details of accrued remunerations to employees, directors and supervisors were as follows:

	For the three months ended March 31
	2019	2018
Employees compensation	9,186	10,310
Directors' and supervisors' remuneration	8,999	12,887
	18.185	23.197

For the years ended December 31, 2018 and 2017, the renumerations to employees amounted to \$33,086 thousand and \$27,440 thousand, respectively, and the remuneration to directors and supervisors amounted to \$41,073 thousand and \$34,300 thousand, respectively. The amounts as stated in the consolidated financial statements are identical to those of the actual distributions. Related information would be available at the Market Observation Post System website.

(z) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group's financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 44 of the consolidated financial statements for the year ended December 31, 2018.

Credit risk $(i)$
$1)$ Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

Concentration of credit risk $2)$

As of March 31, 2019, and December 31 and March 31, 2018, the Group reviewed the concentrations of credit risk arising from the major top ten customers, and it was 84%, 78% and 91%, respectively, of the total accounts receivable. The concentrations of credit risk of the remaining accounts receivable is relatively small.

Credit risk of receivables 3)

For credit risk exposure of note and trade receivables, please refer to note 6(c). Other financial assets at amortized cost include time deposits, other receivables, etc. The allowance for the receivables in the financial assets is measured by the amount of lifetime expected credit losses. The remaining financial assets are measured by the amount of 12-month expected credit losses.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments.

		Carrying amount	Contractual cash flows	Within 1 year	1-2 years	2-5 years	Over 5 years
March 31, 2019
Non-derivative financial liabilities
Short-term borrowings	S	342.500	346.543	346,543	Ξ	$\sim$	$\sim$
Accounts payable		1,088,347	1.088.347	1.078.293	実	10.054	m.
Long-term borrowings		49.515	50,322	26.936	23,386	29	승
Deposit received		7.428	7.428	6.468	960	÷.	$\sim$
Lease liabilities		62,093	64,064	19,163	17,506	27,395
		1,549,883	1,556,704	1,477,403	41,852	37,449

		Carrying amount	Contractual cash flows	Within 1 year	$1-2$ years	2-5 years	Over 5 years
December 31, 2018
Non-derivative financial liabilities
Short-term borrowings	\$	312,885	317,678	317,678	×.
Accounts payable		1,350.797	1,350,797	1,340,743	×	10.054
Long-term borrowings		256,066	265,075	118,451	۰	146,624	÷,
Deposit received		7,497	7,497	6,819		678
	s	1,927,245	1,941,047	1,783,691		157,356
March 31, 2018
Non-derivative financial liabilities
Short-term borrowings	\$	337,500	343,001	343,001	×
Accounts payable		1,117,790	1,117,790	1,108,238	÷.	9,552
Long-term borrowings		942,066	949,550	267,423	$\sim$	670,811	11.316
Deposit received		11.972	11.972	11,147	÷.	825	۰
Others		426	426		-		426
	s	2,409,754	2,422,739	1,729,809		681,188	11,742

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Market risk

$1)$ Currency risk

The Group's significant exposure to foreign currency risk was as follows:

		March 31, 2019		December 31, 2018				March 31, 2018
	Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate	NTD
Financial assets
Monetary items
USD	\$ 1.622	30.820	49.990	4,671	30 715	143.483	3.768	29.105	109,668
CNY	24.526	4.587	112,498	541	4.475	2,422	509	4.629	2,355
Financial liabilities
Monetary items
USD	13,261	30.820	408.704	20,127	30.715	618,203	29.210	29.105	850.157
CNY	1.719	4.586	7.885	٠	÷	V20	Œ.	$\overline{\phantom{a}}$	÷

The Group's exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable. other receivables, accounts payable and other payables that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD and CNY as at March 31, 2019 and 2018, would have increased (decreased) net profit after tax by \$2,033 thousand and \$5,905 thousand for the three month ended March 31, 2019 and 2018, respectively. The analysis is performed on the same basis.

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the three months ended March 31, 2019 and 2018, foreign exchange gain (loss) (including realized and unrealized portions) amounted to \$1,387 thousand and \$20,833 thousand, respectively.

$2)$ Interest rate risk

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding through the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 1%, the Group's net income would have increased / decreased by \$688 thousand and \$200 thousand for the three months ended March 31, 2019 and 2018 with all other variable factors remaining constant. This is mainly due to the Group's loan at variable rates.

$3)$ Other market price risk

If the securities price at the reporting date changes the analysis is performed on the same basis and all other variable factors remaining constant), the effect for the profit and loss is illustrated below:

		For the three months ended March 31
	2019		2018
	Prices of securities Other comprehensive		Other comprehensive
at the reporting date	income after tax	Net income	income after tax	Net income
Increasing 1%	2,938	2,002	2,999	3,315
Decreasing 1%	(2,938)	(2,002)	(2,999)	(3,315)

(iv) Fair value information
1) Types and fair value of financial instruments

Financial assets measured at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured at fair value on the basis of repeatability. The carrying amount and fair value of the financial assets and liabilities. including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required :

	March 31, 2019
			Fair value
	Book value	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Financial assets mandatorily at fair value through profit or loss	\$ 200,162	181,127	19,035		200,162
Financial assets at fair value through other comprehensive income:
Domestic and foreign non- listed stocks	293,802			293,802	293,802
Financial assets measured at amortized cost:
Cash and cash equivalents	1,980,461
Notes and accounts receivable	974,230
Other receivables	7,869
Other financial assets-current	13,671
Refundable deposits	7,832
Subtotal	2,984,063
Total	\$_3,478,027	181,127	19,035	293,802	493,964
Financial liabilities measured at amortized cost:
Short-term borrowings	\$ 342,500
Notes and accounts payable	991,009
Other payables	87,284
Other current liabilities	6,468
Long-term borrowings	49,515
Other non-current liabilities	11,014	÷
Lease liabilities	62,093
Total	1,549,883

	December 31, 2018
			Fair value
	Book value	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss: Financial assets mandatorily at fair value through profit or loss	S 158,974	141,830	17,144		158,974
Financial assets at fair value through other comprehensive income:
Domestic and foreign non- listed stocks	304,917			304,917	304,917
Financial assets measured at amortized cost:
Cash and cash equivalents	2,122,960
Notes and accounts receivable	947,605
Other receivables	35,647
Other financial assets-current	16,937
Other financial assets- noncurrent	7,670
Subtotal	3,130,819
Total	\$_3,594,710	141,830	17,144	304,917	463,891
Financial liabilities measured at amortized cost:
Short-term borrowings	\$ 312,885
Notes and accounts payable	1,239,004
Other payables	101,739
Other current liabilities	6,819
Long-term borrowings	256,066
Other non-current liabilities	10,732
Total	1,927,245

	March 31, 2018
			Fair value
Financial assets at fair value	Book value	Level 1	Level ₂	Level 3	Total
through profit or loss: Financial assets mandatorily at fair value through profit or loss	\$ 331,531	303,924	27,607		331,531
Financial assets at fair value through other comprehensive income:
Domestic and foreign non- listed stocks	299,836		÷.	299,836	299,836
Financial assets measured at amortized cost:
Cash and cash equivalents	1,201,261
Notes and accounts receivable	1,338,159
Other receivables	19,560
Other financial assets-current	50,129				51
Other financial assets- noncurrent	29,671
Subtotal	2,638,780
Total	\$ 3,270,147	303,924	27,607	299,836	631,367
Financial liabilities measured at amortized cost:
Short-term borrowings	\$ 337,500
Notes and accounts payable	1,013,941
Other payables	94,297
Other current liabilities	11,147
Long-term borrowings	942,066
Other non-current liabilities	10,803
Total	2,409,754 S

$2)$ Valuation techniques for financial instruments measured at fair value

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's-length basis. Whether transactions are taking place 'regularly' is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date. For example, yield curve of Taipei Exchange and average interest rate of commercial paper quoted by Reuters.

$\mathbf{r}$

Contract Contract Contract Contract

$3)$ Transfers between Level 1 and Level 2

There is no transfer for the three months ended March 31, 2019 and 2018.

$4)$ Reconciliation of Level 3 fair values

Unquoted equity instruments \$ Opening balance, January 1, 2019 Total gains and losses recognized Other comprehensive income Effect of exchange rate changes Ending Balance, March 31, 2019 S Opening balance, January 1, 2018 Total gains and losses recognized Other comprehensive income Adjustments due to IFRS9 Effect of exchange rate changes S		Fair value through other comprehensive income

		304,917

		(11, 405)
		290
		293,802
		304,956

		1,943
		(5.553)
		(1, 510)
	Ending Balance, March 31, 2018	299,836

Above-mentioned total gains and losses were included in unrealized gains and losses from financial assets at fair value through other comprehensive income. Among those related to the assets still held on March 31, 2019 were as follows:

	For the three months ended March 31
	2019	2018
Total gains and losses recognized:
In other comprehensive income, and presented in "unrealized gains and losses from financial assets at fair value through other comprehensive income"	(11, 405)	1,943

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group's financial instruments that use Level 3 inputs to measure fair value include financial assets measured at fair value through profit or loss-equity investments.

The Group's equity investments without an active market which are classified as Level 3 have numerous unobservable inputs. The significant unobservable inputs of equity instrument investments are not correlated to each other.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through other comprehensive income -	Market method company method)	· Price to book ratio (Comparable listed $\cdot$ Lack of market liquidity discount	$\cdot$ The fair would value increase if price to book ratio increase
equity investments without an active market			fair value would $\pm$ The decrease if lack of market liquidity discount increase

$6)$ Fair value measurements in Level $3$ – sensitivity analysis of reasonably possible alternative assumptions

The fair value measurement of financial instruments by the consolidated company is reasonable, but the use of different evaluation models or evaluation parameters may result in different evaluation results. For financial instruments classified as Level 3, if the price to book ratio or liquidity discount changes by 10%, the other comprehensive gains and losses for the period will increase or decrease by \$512 thousand and \$710 thousand respectively.

The favorable and unfavorable changes of the Group refer to the fluctuation of fair value, and the fair value is calculated by valuation techniques based on the unobservable input parameters of different degrees.

(aa) Financial risk management

There were no significant changes in the Group's financial risk management and policies as disclosed in note 44(3) of the consolidated financial statements for the year ended December 31, 2018.

(ab) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2018. Please refer to note 43 of the consolidated financial statements for the year ended December 31, 2018 for further details.

(ac) Investing and financing activities not affecting current cashflow

There is no non-cash investing activities in the three months ended March 31, 2019 and 2018.

Reconciliation of liabilities arising from financing activities were as follows:

		January 1, 2019	Cash flows	Non-cash changes Exchange rate changes	March 31, 2019
Long-term borrowings	S	256,066	(206, 551)	Ξ	49,515
Short-term borrowings		312,885	29,615		342,500
Lease liabilities		66,475	(4, 406)	24	62,093
Total liabilities from financial activities		635,426	(181, 342)	24	454,108

			Non-cash changes
	January 1,		Exchange rate	March 31.
	2018	Cash flows	changes	2018
Long-term borrowings	1,010,364	(68, 298)		942,066
Short-term borrowings	357,500	(20,000)		337,500
Total liabilities from financial activities	1,367,864	(88, 298)		1,279,566

(ad) Operating lease

$(i)$ Leases as lessee

Non-cancellable operating lease rentals payable were as follows:


	2018	March 31, 2018
Less than one year	12,000	12,000
Between one and five years	39,275	48.725
	51.275	60,725

$\blacksquare$

(7) Related-party transactions

(a) Names and relationship with related parties

Name of related party	Relationship with the Group
Wonderland Enterprise Co., Ltd.	An associate
Kunshan Globaltop Trading Co., Ltd.	Subsidiary of an associate
Thrutek Applied Materials Co., Ltd.	Subsidiary of an associate
Sun Trend Co., Ltd	Subsidiary of an associate

$(b)$ Significant transactions with related parties

Sales

The amounts of significant sales (returns) by the Group to related parties were as follows:

	For the three months
	ended March 31
	2019	2018
Other related parties	(3,156)	8,594

There were no comparable transactions with non-related parties.

$2.$ Receivable from related parties

Receivables from the related parties were as follows:

	Types of		December 31.
Accounts	related parties	March 31, 2019	2018	March 31, 2018
Accounts receivable Other related parties \$		5,887	3.351	8,949

The credit terms of sales ranged from 30 to 90 days which were not significantly different from those of non-related parties.

$3₁$ Payables to Related Parties

	Types of related		December 31,
Accounts	parties	March 31, 2019	2018	March 31, 2018
Accounts payable	Other related parties	1,819	2,789	334

The purchase credit terms is 60 days, which is the same as non-related parties transactions.

$4.$ Property transactions

The Group sold all its shares of Yuan-Yao Development Co., Ltd. to Wonderland Enterprise Co., Ltd. on March 8, 2019, with a selling price of \$41,568 thousand and a disposal gains of \$2,682 thousand.

Key management personnel compensation $(c)$

	For the three months ended March 31
	2019	2018
Short-term employee benefits	14,603	15,745
Post-employment benefits	130	241
Other long-term benefits	197	158
	14,930	16,144

Short-term employee benefits include the estimated employee compensation. Please refer to note 6(u) for the estimated method.

(8) Pledged assets

The carrying amounts of pledged assets were as follows:

			December 31,
Pledged assets	Object	March 31, 2019	2018	March 31, 2018
Cash in banks (other financial Performance guarantee \$ assets)		10,259	13,525	20,129
Property, plant and equipment Borrowings		684,424	2,471,173	3,048,816
Investment property	Borrowings	-	$\blacksquare$	82.490
Financial assets measured at fair value through profit or	Borrowings
loss			27,005
		694,683	2,511,703	3,151,435

(9) Commitments and contingencies:

(a) Letter of credit issued but not expired

		March 31, 2019	December 31, 2018	March 31, 2018
Letter of credit outstanding for the import of raw materials	S	990,760	1,067,148	977
		(including USD)		(including USD (including USD 34)
		$2,143$ thousand)	117 thousand and EUR 2 thousand)	thousand)

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

$(12)$ Others:

(a) A summary of employee benefits, depreciation, and amortization, by function, is as follows:

			For the three months ended March 31
By Function		2019			2018
By item	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits
Salary	94,491	50,395	144,886	74,180	58,960	133,140
Labor and health insurance	7,513	1,880	9,393	6,930	2,961	9,891
Pension	3,487	1,438	4,925	4,286	1,470	5,756
Remuneration of directors		9,049	9,049	۰	12,887	12,887
Others	2,451	3,788	6,239	2,655	5,048	7,703
Depreciation	62,753	9,434	72,187	64,391	4,363	68,754
Amortization	297	236	533	23,648	368	24,016

(13) Other disclosures items:

$(a)$ Information on significant transactions

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Group:

$(i)$ Lending to other parties:

												(In Thousands of New Taiwan Dollars)
Number (Nate I)	Name of lender	Name of borrower	Account латое	Related party	Highest balance during the period	Ending balance	Actual usage amount during the period	Range of interest rates Purposes of during the period	financing (Note2)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral Item	Value	Individual funding loan limit of fund limits (Note 3)	Maximum financing (Note 3)
$\mathbf{u}$		The Company Asia Carbons Other & Technologyreceivables linc.		Yes	24,140	24,140	23,649	3%	2	۰	Working capital	$\overline{\phantom{a}}$	Promissory	24,140	768,714	1,537,429
0		The Company Asia Carbons Other & Technologyreceivables IInс.		Yes	35,000	35,000	35,000	2%	$\mathbf{2}$	٠	Working capital	۰	Promissory	35,000	768,714	1,537,429
	Kun Shan Yu-Kun Shan Technology Education Consulting Co., Ltd.	Globa.top Trading Co., Ltd	Other receivables	Yes	13,731	13,731	٠	3.3%	$\mathbf{2}$	۰	Working capital	٠	Promissory	13,731	43,272	86,544
2	YSIC Ltd.	Asia Carbons Other & Technologyreceivables Пnс.		Yes	30,000	30,000	29,545	3%	2		Working capital	٠		۰	188,568	377,136

Note 1: The description of the number column is as follows:

Note 1: The description of the number column is as follows:

(2) Is user fills in 0.

(2) The invested company is numbered sequentially by the Arabic number 1,

(2) The invested company is numbered sequentially by the Ara the individual lending amount shall not exceed 20% of the andited or reviewed net worth of YSIC 1xd, and the aggregate lending amount shall not exceed 40% of the aforementioned net

---- --
worth

(ii) Guarantees and endorsements for other parties: None.
(iii) Information regarding securities held at the reporting day (excluding investment in subsidiaries, associates and joint ventures):

	Category and					Ending balance
Name of holder	name of security	Relationship with the security issuer	Account	Shares	Carrying value	Percentage of ownership (%)]	Fair value	Note
The Company	E Ink Holdings Inc.		Current financial assets at fair value through profit or loss	1,000,000	34,500	0.09%	34,500
The Company	China Steel Chemical Corporation		Current financial assets at fair walue through profit or loss	300,000	40,350	0.13%	40,350
The Company	Test Research, Inc.		Current financial assets at fair value through profit or loss	600,000	33,480	0.25%	33.480
The Company	Career Technology (Mfg.) Co., Ltd.		Current financial assets at fair value through profit or loss	200,000	6,370	0.05%	5,370
The Company	Euroc Venture Capital Corp.	÷.	Non-current financial assets at FVOCI	501,600	6,361	2.38 %	6,361
The Company	Global Investment Holding Co., Ltd	ä.	Non-current financial assets at FVOCI	10,901,520	83,397	5.75 %	83,397
The Company	Faith Alliance Corporation	$\blacksquare$	Non-current financial assets at FVOCI	25,720	155	0.06%	155
The Company	Multilayer P. C. B. & Assembly Manufacturer		Non-current financial assets at FVOCI	912	18	0.01%	18
The Company	Leadwell Cnc Machines Mfg.,Corp.		Non-current financial assets at FVOCI	37,352	754	0.06%	754
The Company	Crownpo Technology Inc.	-	Non-current financial assets at FVOCI	709	11	0.01%	11
The Company	Vxis Technology Corp.		Non-current financial assets at FVOCI	72.480	347	0.61%	347
The Company	Infomedia Inc.		Non-current financial assets at FVOCI	200,000	205	0.11%	205

	Category and					Ending balance
Name of holder	name of security	Relationship with the security issuer	Account	Shares	Carrying value	Percentage of ownership (%)	Fair value	Note
The Company	Taiwan Insulation Material Industrial Ccompany Ltd.		Non-current financial assets at FVOCI	293,333	1.779	18.33 %	1.779
The Company	Euroc III Venture Capical Corp.	÷.	Non-current financial assets at FVOCI	742,500	7,444	5.00%	7.444
The Company	Universal Venture Capital Investment Corporation		Non-current financial assets at FVOCI	8,400,000	52,113	6.98%	52.113
The Company	Asia Global Venture Capital II CO., Ltd		Non-current financial assets at FVTPL	1,000,000	24,573	10.00 %	24,573
Zung-Fu Co., Ltd.	Lidien Inc.	٠	Non-current financial assets at FVOCI	760,000	10.161	19.00 %	10.161
Zung-Fu Co., Ltd.	Deng Yun Co., Ltd	۰	Non-current financial assets at FVOCI	591,945	15,703	3.09%	15,703
Zung-Fu Co., Ltd.	YuChie Inc.	$\sim$	Non-current financial assets at FVOCI	589.000	7.307	19.00 %	7.307
YSIC Ltd.	E Ink Holdings Inc.	٠	Current financial assets at fair value through profit or loss	700,000	24,150	0.06%	24.150
YSIC Ltd.	Jetbest Corporation	$\overline{\phantom{a}}$	Current financial assets at fair value through profit or loss	490,000	20,457	1.49%	20,457
YSIC Ltd.	Foci Fiber Optic Communications, Inc.	÷.	Current financial assets at fair value through profit or loss	220,000	11,000	0.28 %	11,000
YSIC Ltd.	Ventec Electronics Corporation	$\overline{\phantom{a}}$	Current financial assets at fair value through profit or loss	60,000	5,340	0.09%	5,340
YSIC Ltd.	Episil Holding Inc.	÷.	Current financial assets at fair value through profit or loss	200,000	4,130	0.07%	4,130
YSIC LTD.	Taiwan Mask Corporation		Current financial assets at fair value through profit or loss	50,000	1,350	0.02%	1,350
lYSIC Ltd.	Ciw International Co., Ltd.	$\blacksquare$	Non-current financial assets at fair value through profit or loss	1,000,000	19,035	0.72%	19,035
NSIC Ltd.	Vxis Technology Corp.	$\sim$	Non-current financial assets at FVOCI	72,480	348	0.61%	348
YSIC Ltd.	Mcm Stamping lCo Ltd.		Non-current financial assets at FVOCI	200,000	684	0.63%	684
YSIC Ltd.	Infomedia Inc.	$\overline{\phantom{a}}$	Non-current financial assets at FVOCI	650,000	669	0.35 %	669
CO., Ltd	GRAND CAPITAL Deng Yun Co., Ltd	٠	Non-current financial assets at FVOCI	3,082,453	81,773	16.10 %	81,773

(iv) Information regarding purchase or sale of securities for the period exceeding NTD300 million or 20% of the Company's paid-in capital: None
(v) Information on acquisition of real estate with purchase amount exceeding NTD300 million or 20% of the Company's paid-in capital: None
(vi) Information regarding receivables from disposal of real estate exceeding NTD300 million or 20% of the Company's paid-in capital: None
(vii) Information regarding related-parties purchases and/or sales exceeding NTD100 million or 20% of the Company's paid-in capital: None
(viii) Information regarding receivables from related-parties exceeding NTD100 million or 20% of the Company's paid-in capital: None
(ix) Information regarding trading in derivative financial instruments: None
Significant transactions and business relationship between the parent company and its subsidiaries for the three months $(x)$ ended March 31, 2019: None

(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2019 (excluding information on investees in Mainland China):

										(In Thousands of New Taiwan Dollars)
Name of investor	Name of investee	Location	Main businesses and products	March 31,	Original investment amount December 31,		Balance as of March 31, 2019 Percentage of	Carrying	Net income	Share of
				2019	2018	Shares	ownership	value	(losses) of invested	profits/loases of investee	Note
The Company	Grand Carhay Venture Capital Co., Ltd.	Teiwar.	Investment business	400,000	400,000	40,000,000	25,00%	334,980	27,951	6,987
The Company	Wonderland Enterprise Co., لى: -	Taiwan	Ganaral investment business	325,230	325,230	29,629,597	37.04 %	540,316	(10, 554)	(4, 310)
The Company	Yuan-Jie Investment Co., 7.dd	Taiwan	General investment business	209,896	209,896	21,000,000	32.31 %	245,588	60,514	19,552
The Company	Yu-Jie Investment Co., Ltd.	Taiwan	General investment business	223,539	223,539	21,320,000	32,80%	282,202	52,966	17.373
The Company	Yuan-Yao Development Co., .1d	Taiwan	General investment business		55,305				(1,653)	(549)
The Company	Taiwan United Medical Inc.	Taiwan	Wholesale and Retail of Precision Instruments and Information Software	229,364	229,364	14,409,651	64.79%	65,159	(442)	(286)	Subsidiary
The Company	Zung-Fu Co., Ltd.	Taiwan	Building cleaning and mairtenance, Sewage treatment, Air conditioning equipment maintenance	522,032	522,032	22,289,256	89.16%	110,218	(8, 297)	(7, 398)	Subsidiary
The Company	YSIC Ltd.	Taiwan	Residential building and industrial plant development rental business	1,638,164	1,638,164	103,975,894	99.99%	938,281	8,532	8,596	Subsidiary
The Company	Yuan-Shin Materia is Technology Corp. Ltd.	Taiwan	Basic precision chemical materials and plastic raw msterial manufacturing	i45,900	145,900	5,000,000	100,00%	42,581	(71)	(71)	Subsidiary
The Company	Yangmingshan Tien Lai Resort & SPA	Taiwan	General hotel industry	630,555	630,555	25,865,618	65.07%	688,797	12,131	7,315	Subsidiary
The Company	Gvision-USA, Inc.	USA	Sale and distribution of liquid crystal displays	56,266	56,266	666,667	66,67%	44,737	198	132	Note
The Company	Jing-Shou Engineering Co., .td	Taiwan	Bridge and building engineering	187,000	187,000	4,500,000	100.00 %	28,947	(1,041)	(1,041)	Subsidiary
The Company	Lei-Ting Construction Corporation	Taiwan	Operating civil and construction engineering business	41,060	41,060	4,064,400	75.27%	12,069	(2,069)	(1, 558)	Subsidiary
The Company	Asia Carbon & Technology	Taiwan	Electronic component manufacturing	192,400	192,400	15,640,000	34.76%	(24, 571)	(26, 063)	(13, 442)	Subsidiary
Zung-Fu Co., Ltd.	Grand Captial Co., Ltd.	Seychelles	Transfer to invest in other bus:nessea	2,500	2,500	à.	2.78 %	2,340	35		Subsidiary
Zung-Fu Co., Ltd	YuChen Tech. Inc.	Taiwan	GPS	20,000	20,000	876,554	4.17%	8,822	483	20
Zung-Fu Co., Ltd.	Asia Carbon & Technology loc.	Taiwan	Electronic component manufacturing	115,850	115,850	7,285,000	16.19%		(26, 063)	(4, 145)	Subsidiary
YSIC Ltd	Kun Shan Internationi Ltd.	Seychelies	General investment business	122,572	122,572	3,702,718	62,03 9	139,713	1,426	885	Subsidiary
YSIC Ltd.	Grand Captial Co., Ltd.	Ssychelles	Transfer to invest in other businesses	88,090	88,090	2,622,904	97.22 %	81,743	35	34	Subsidiary
YSIC Ltd.	Yangningshan Tien Lai Resort & SPA	Taiwan	General hotel industry	110,836	110,836	4,807,774	12.10%	117,502	12,131	1,376	Subsidiary
YSIC Ltd.	Globaltop Technology Inc.	Taiwan	GPS Module, GPS Handheld System And GPS Antenna	155,449	155,449	7,086,249	33.74 %	71,320	483	163
YSIC Ltd.	Lei-Ting Construction Corporation	Taiwan	Operating civil and construction engineering business	99,380	99,380	1,335,600	24.73 %	3,966	(2,069)	(512)	Subridiary
YSIC Ltd	Tien Lai Co., Ltd.	Taiwar:	Piping engineering	5,000	5,000	500,000	50.00%	2,237	(603)	(302)	Subsidiary
YSIC Ltd.	Yuan-Jie Investment Co.,	Taiwan	Investment business	1,000	1,000	100,000	0.15%	1,169	60,514	92
YSIC Ltd.	Yu-Jie Investment Co., Ltd.	Taiwan	Investment business	1,000	1,000	103,000	0.16%	1,363	52,966	84
YSIC Ltd.	Asia Carbon & Technology	Tarwan	Eiectronic component manufacturing	77,917	77,917	4,756,110	10.57%	(5,097)	(26, 063)	(2,706)	Subsidiary
Lei-Ting Construction Corporation	Zung-Fu Co., Ltd.	Taiwan	Building cleaning and maintenance, Sewage reatment, Air conditioning equipment mainterance	59,670	59,670	2,461,351	9.85%	12,171	(8, 297)	(817)	Subsidiary
Jing-Shuo Engineering Co., Ltd	Asia Carbon & Technology nc	Taiwan	Electronic component manufacturing	13,855	13,855	1,385,527	3,08 %	(1, 485)	(26,063)	(788)	Subsidiary
Yangmingshan Tien Lai Resort & SPA	Yangmingshan Tien Lai Art Village Development Co., 1d.	Taiwan	Arts and cultural services and other leisure services	1,680	1,680	200,000	100.00 %	1,537	(56)	(56)	Subsidiary
Asia Carbon & Technology Inc.	ASIA GRAPHENE COMPANY	Taiwan	Graphene and MCMB	1,000	1,000	100,000	100.00%	292			Subsidiary

(c) Information on investment in mainland China:

$(i)$ The names of investees in Mainland China, the main businesses and products, and other information:

	Main	Total		Accumulated outflow of	Investment flows	Accumulated outflow of	Net income				Accumulated
Name of investee	businesses and products	amount of paid-in capital	Method оſ (Note 1)	investment from Taiwan as of investment January 1, 2018 Outflow	Inflow	investment from Taiwan as of March 31, 2019	of the investee l (Note 2)	of l ownershin l	(losses) Percentage Investment income (losses)	Book	remittance of earnings in value tcurrent neriod
Kun Shan Yu-Fu technology Education Consumng Co., Ltd.	Educational Consulting. Information operation consulting, Software and data storage consultation	706,897 (USD 3.468)	(2)	112.493 (USD 3.650)		112,493 (USD 3,650) (USD 64)	1.980	62.03%		1.222 93.643
Kun Shan Jia-An technology Education Consuring Co., Ltd.	Educational Consulting. Information operation consulting, Software and data storage consultation	74,941 (USD 2.432)	(2)	(Note 4)			(554) KUSD-181	62.03%		$(344)$ 44,511

Note1: The investment methods are divided into the following three types: (1) Direct investment in Mainland China. (2) Indirect investment in Mainland China through a holding company established in other countries. (3) Others.

Note2: The investment income (losses) recognized in the current period were calculated based on the financial statements that have not been reviewed.

Note3: The foreign currency transactions have been translated into New Taiwan Dollar at the exchange rate at the end of the financial reporting date and the average exchange rate (USD1-: NTD30.82, USD1-NTD30.7775).

Note4: Kun Shan Yu-Fu technology Education Consulting Co., Ltd. had been spinned-off as Kun Shan Yu-Fu technology Education Consulting Co., Ltd. and Kun Shan Jia-An technology Education Consulting Co., Ltd. and Kun Shan

(ii) Upper limit on investment in Mainland China:

Accumulated Investment in Mainland China as of March 31, 2019	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note)
112.493	112.493	4,612,286
(USD 3,650)	(USD 3, 650)

Note: The investment limit was calculated based on the official document 09704604680 announced by the MOEAIC on August 29, 2008.

(iii) Significant inter-company transactions with the subsidiary in Mainland China: None.

(14) Segment information:

(a)Plasticization segment: manufacturing and domestic/international sales of styrene monomer, manufacturing and sales of chemical materials and plastic materials.
(b)Investment segment: investment business.
(c)Other segments: the revenues of the segments that have not reached the quantitative threshold are hotel, general service business, medical equipment wholesale and electronic sales.
The Group's operating segment information and reconciliation are as follows:

			For the three months ended March 31, 2019
Revenue		Plasticization segment	Investment segment	Other segments	Reconciliati on and elimination	Total
Revenue from external customers Intersegments revenues	S	2,794,035	16,367 7,544	126,988 1,074	(8,618)	2,937,390
Total revenue		2,794,035	23,911	128,062	(8,618)	2,937,390
Reportable segment profit or loss		402,887	20,573	(23, 255)		400,205
			For the three months ended March 31, 2018
		Plasticization segment	Investment segment	Other segments	Reconciliati on and elimination	Total
Revenue
Revenue from external customers	S	3,866,440	4.619	133,383		4,004,442
Intersegments revenues			1,601	8.027	(9,628)
Total revenue		3,866,440	6,220	141,410	(9,628)	4,004,442
Reportable segment profit or loss		490,373	(8,551)	(44, 107)	46,987	484,702

AI assistant

T.S.M.C. — Interim / Quarterly Report 2019

51769_rns_2019-11-01_2ec1384e-87ed-42ae-b991-017ef16ea324.pdf

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Table of contents

Independent Auditors' Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Other Matter

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2019 and 2018

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Expressed in Thousands of New Taiwan Dollars)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

For the three months ended March 31, 2019 and 2018

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2019 and 2018

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

(2) Approval date and procedures of the consolidated financial statements

(3) New standards, amendments and interpretations adopted

(4) Summary of significant accounting policies

(ii) As a leasee

Significant accounting assumptions and judgments, and major sources of estimation uncertainty $(5)$

(6) Explanation of significant accounts

(c) Accounts receivable

(e) Prepayments

$(1)$ Other current financial assets

$(h)$ Investments accounted for using equity method

$(i)$ Associates

$(j)$ Right-of-use assets

(k) Investment property

(m) Other long-term investment, net

(n) Other non-current assets, net

(o) Short-term borrowings

(p) Other payables

(q) Long-term borrowings

$(r)$ Lease liabilities

(ii) Defined contribution plans

Income tax $(t)$

(u) Capital and other equity

(ii) Retained earnings

(iii) Other equity

(v) Earning per share

(ii) Diluted earnings per share

(w) Revenue from contracts with customers

(ii) Contract balances

$(x)$ Non-operating income and expenses

(z) Financial instruments

(iii) Market risk

$1)$ Currency risk

$2)$ Valuation techniques for financial instruments measured at fair value

(ad) Operating lease

(7) Related-party transactions

$(b)$ Significant transactions with related parties

$31$ Payables to Related Parties

(8) Pledged assets

(9) Commitments and contingencies:

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

$(12)$ Others:

(13) Other disclosures items:

$(a)$ Information on significant transactions

(b) Information on investees:

(c) Information on investment in mainland China:

(ii) Upper limit on investment in Mainland China:

(14) Segment information:

T.S.M.C. Interim / Quarterly Report 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2019 and 2018

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

$3₁$ Payables to Related Parties