URE - Annual Report 2018 | FinancialReports.eu

United Renewable Energy Co., Ltd. and Subsidiaries (Formerly Neo Solar Power Corp.)

Consolidated Financial Statements for the Years Ended December 31, 2018 and 2017 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2018 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10 “Consolidated Financial Statements.” Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we have not prepared a separate set of consolidated financial statements of affiliates.

Very truly yours,

United Renewable Energy Co., Ltd.

By:

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CHUM SAM HONG Chairman

March 22, 2019

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders United Renewable Energy Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of United Renewable Energy Co., Ltd. (“the Corporation”, formerly Neo Solar Power Corp.) and its subsidiaries (collectively referred to as the “Group”) which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to the Other Matter section of this report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters of the Group’s consolidated financial statements for the year ended December 31, 2018 are stated as follows:

Assessment of impairment losses on prepayments of long term purchase contracts

To stabilize the supply of raw materials in the manufacturing process, the Group signed several long-term materials supply agreements and made certain prepayments to be deducted from actual purchases. The

assessment of impairment losses on prepayments may be influenced by any worsening of the supplier’s financial position, negative variances in the solar energy industry, and declining prices of raw materials; any of these factors could result in a deceleration in the use of the prepayments. The assessment of impairment losses on prepayments by key management personnel is related to estimations of future cash flows and the identification of rates for recognizing impairment losses. Therefore, the assessment of impairment losses on prepayments was considered as a key audit matter. The accounting policies on impairment losses on prepayments can be found in Notes 4 and 5 to the accompanying consolidated financial statements. For the description of impairment losses on prepayments, refer to Notes 23 and 44 to the consolidated financial statements.

Our audit procedures performed in respect of the above key audit matter included the following:

We assessed the reasonableness of the method used by key management personnel for recognizing impairment losses as well as the reasonableness of assumptions.
We tested the accuracy of relevant calculations of prepayment deductions and confirmed that the impairment loss was properly recognized when prepayments would not be fully applied.

Business combination

With the anticipated growth in future demand for solar energy, the bright prospect of development of the solar industry, the expansion of the solar energy business and to enhance sustainability, in 2018, the Corporation merged two companies, Gintech Energy Corporation and Solartech Energy Corporation; the Corporation is the surviving entity and renamed United Renewable Energy Co., Ltd. Such acquisition created a bargain purchase gain of NT$2,261,090 thousand (Note 35). The related accounting policies, significant accounting estimates and basis of consideration are described in Notes 4 and 5 to the consolidated financial statements. Such transaction was a significant event and transaction in the current year. The fair value assessment of the acquisition-date assets and liabilities and the amount of the bargain purchase gain were based on the purchase price allocation report; the adopted method and assumptions involve the use of critical accounting judgements and estimations. Therefore, the aforementioned transaction was considered as a key audit matter.

Our audit procedures performed in respect of the above key audit matter included the following:

We reviewed minutes of meetings of the board of directors, inspected consolidated contracts and confirmed documents related to the acquisition price.
We inspected and tested whether the management’s accounting treatment and recording of the acquisition-date amounts of assets and liabilities at fair value were in accordance with IFRS 3 Business Combinations.
We assessed the qualifications of the external expert commissioned for the professional conduct of the business combination and we reviewed the purchase price allocation report issued by the external expert.
We tested the data and evidence supporting the method used and assumptions adopted in the determination of the fair value of Gintech Energy Corporation and Solartech Energy Corporation’s tangible assets and liabilities presented in the report . We recalculated the bargain purchase gain recognized in the acquisition.

Other Matter

Some subsidiaries included in the Group’s consolidated financial statements were audited by other auditors. The amounts within the consolidated financial statements for those subsidiaries were based solely on the reports of other auditors. As of December 31, 2018 and 2017, total assets of the aforementioned subsidiaries were 15.98% and 26.27% of the consolidated total assets, respectively. For the years ended December 31, 2018 and 2017, the operating revenues of these subsidiaries were 10.44% and 5.63% of the consolidated total operating revenue, respectively.

The financial statements of some investee companies accounted for using the equity method were audited by other auditors. The amounts within the consolidated financial statements for those investee companies were based solely on the reports of other auditors. As of December 31, 2018 and 2017, the aforementioned investments accounted for using the equity method were NT$114,284 thousand and NT$32,650 thousand, respectively. For the years ended December 31, 2018 and 2017, there was a gain of NT$7,541 thousand and a loss of NT$(5,944) thousand, respectively, from the aforesaid investments accounted for using the equity method.

Some subsidiaries included in the Group’s consolidated financial statements, which we have not audited but were audited by other auditors in accordance with different auditing standards, are based on a framework different from the accompanying consolidated financial statements. We have performed compulsory audit procedures and have made adjustments to the other financial statements for them to conform with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The consolidated financial statement amounts for the aforementioned subsidiaries were based on the reports of other auditors and the results of additional audit procedures performed in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. As of December 31, 2018 and 2017, total assets of the aforementioned subsidiaries were 4.00% and 5.60% of the consolidated total assets, respectively. For the years ended December 31, 2018 and 2017, the operating revenue of these subsidiaries was 3.35% and 0.38% of the consolidated total operating revenue, respectively.

The financial statements of some investee companies accounted for using the equity method, which we have not audited but were audited by other auditors in accordance with different auditing standards, are based on a framework different from the accompanying consolidated financial statements. We have performed compulsory audit procedures and have made adjustments to the other financial statements for them to conform with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The consolidated financial statement amounts for the aforementioned investee companies were based on the reports of other auditors and the results of additional audit procedures performed in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. As of December 31, 2017, the aforesaid investments accounted for using the equity method were NT$3,590 thousand. For the year ended December 31, 2017, the Groups share of the losses aforesaid investments accounted for using the equity method amounted to NT$(28,413) thousand.

The financial statements of some investee companies accounted for using the equity method as of and for the year ended December 31, 2017, which were based on a framework different from the accompanying consolidated financial statements and which we have not audited, were audited by other auditors. We have performed compulsory audit procedures and have made adjustments to the other financial statements for them to conform with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The consolidated financial statement amounts for the aforementioned investee companies were based on the reports of other auditors. As of December 31, 2017, the aforesaid investments accounted for using the equity method were NT$81,718 thousand. For the year ended December 31, 2017, the Group’s share of the losses of the aforesaid investments accounted for using the equity method were NT$(18,562) thousand.

We have also audited the parent company only financial statements of United Renewable Energy Co., Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have issued an unqualified opinion with other matters paragraphs.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial

Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Yi-Hsin Kao and Yu-Feng Huang.

Deloitte & Touche Taipei, Taiwan Republic of China March 22, 2019

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 ,6, 35, 36, 37 and 41) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 41) Financial assets at fair value through other comprehensive income - current (Notes 4, 8, 41 and 43) Contract assets - current (Notes 3, 4 and 41) Notes and accounts receivable, net (Notes 4, 5, 13 and 41) Accounts receivable from related parties (Notes 4, 5, 13, 41 and 42) Finance lease receivables (Notes 4, 5, 14, 41 and 43) Amount due from customers for construction contracts (Notes 4, 15, 41 and 42) Other receivables (Notes 4, 41 and 42) Other receivables from related parties (Notes 4, 41and 42) Current tax assets (Notes 4 and 32) Inventories (Notes 4, 5, 16 and 43) Prepayments (Notes 5, 22, 23, 42 and 44) Non-current assets held for sale (Notes 4, 17, 20 and 43) Other current assets (Notes 23, 41 and 43) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 4, 7 and 41) Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8, 41 and 43) Available-for-sale financial assets - non-current (Notes 4, 10 and 41) Financial assets at amortized cost - non-current (Notes 4, 9 and 41) Financial assets carried at cost - non-current (Notes 4, 11 and 41) Debt investments with no active market - non-current (Notes 4, 12, 41 and 42) Investments accounted for using the equity method (Notes 4, 19 and 43) Property, plant and equipment (Notes 4, 5, 17, 20, 42 and 43) Intangible assets (Notes 4, 5, 21 and 35) Deferred tax assets (Notes 4, 5 and 32) Finance lease receivables - non-current (Notes 4, 5, 14, 20, 41 and 43) Prepayments - non-current (Notes 5, 22, 23 and 44) Refundable deposits (Notes 4, 41 and 43) Other receivables from related parties - non-current (Notes 4, 13, 41 and 43) Prepayments for leases (Notes 4 and 22) Other non-current assets (Notes 23 and 43) Total non-current assets TOTAL		2018 Amount % $ 9,555,845 16 - - 133,333 - 96,617 - 2,506,228 4 532,466 1 273,941 1 - - 217,816 - 1,083,053 2 76,327 - 3,385,486 6 638,326 1 - - 4,981,243 9 23,480,681 40 243,130 1 1,595,898 3 - - 153,700 - - - - - 2,381,220 4 20,056,530 35 202,962 - 1,076,369 2 5,352,933 9 2,507,436 4 1,004,824 2 11,681 - 19,469 - 199,454 - 34,805,606 60 $ 58,286,287 100		2017 Amount % $ 4,430,627 13 106 - - - - - 1,300,076 4 170,506 - 195,295 1 64,295 - 99,626 - 1,765,926 5 8,557 - 2,972,591 9 205,275 1 280,778 1 1,079,956 3 12,573,614 37 141,514 - - - 109,065 - - - 54,546 - 149,240 - 1,887,773 6 11,162,899 33 261,350 1 90,529 - 3,798,494 11 1,010,072 3 852,023 2 194,664 1 19,700 - 1,940,462 6 21,672,331 63 $ 34,245,945 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bank loans (Notes 24, 41 and 43) Short-term bills payable (Notes 24 and 41) Financial liabilities at fair value through profit or loss - current (Notes 4, 7 and 41) Contract liabilities - current (Notes 3, 4 and 42) Notes and accounts payable (Note 40) Accounts payable to related parties (Notes 41 and 42) Amount due to customers for construction contracts (Notes 4, 15, 41 and 42) Bonuses payable to employees and directors (Note 31) Payables to contractors and equipment suppliers (Notes 40 and 42) Accrued expenses (Notes 4, 26, 41 and 42) Current tax liabilities (Notes 4 and 32) Provisions - current (Notes 4 and 27) Receipts in advance (Note 42) Current portion of long-term bank loans, preference share liabilities and bonds payable (Notes 24, 25, 41 and 43) Other current liabilities (Notes 4 and 26) Total current liabilities NON-CURRENT LIABILITIES Financial liabilities at fair value through profit or loss - non-current (Notes 4, 7 and 41) Bonds payable (Notes 25, 41 and 43) Long-term bank loans (Notes 24, 41 and 43) Provisions - non-current (Notes 4 and 27) Deferred tax liabilities (Notes 4 and 32) Guarantee deposits Preference share liabilities (Notes 4, 24 and 41) Other non-current liabilities (Note 26) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT (Notes 29, 35 and 37) Common shares Capital surplus Retained earnings Accumulated deficit Other equity Treasury shares Total equity attributable to shareholders of the parent NON-CONTROLLING INTERESTS (Notes 18 and 38) Total equity TOTAL		2018 Amount % $ 6,869,628 12 276,436 - - - 345,252 1 2,048,266 3 441 - - - 2,649 - 402,074 1 2,093,109 4 1,910 - - - 478 - 9,906,475 17 131,650 - 22,078,368 38 191,790 - - - 9,528,510 16 305,138 1 63,727 - 38,795 - 44,483 - 230,465 1 10,402,908 18 32,481,276 56 25,157,599 43 1,011,023 2 (369,468 ) (1 ) (873,443 ) (1 ) (18,699) - 24,907,012 43 897,999 1 25,805,011 44 $ 58,286,287 100		2017
				Amount % $ 8,229,315 24 606,396 2 5,742 - - - 1,104,640 3 12,820 - 71,963 - 8,242 - 507,879 2 2,536,941 8 19,462 - 1,609 - 374,623 1 3,101,105 9 98,835 - 16,679,572 49 94,014 - 3,425,011 10 2,158,036 6 246,033 1 53,125 - 36,595 - 26,419 - 189,330 1 6,228,563 18 22,908,135 67 10,192,564 30 6,028,165 18 (4,611,501 ) (14 ) (529,826 ) (2 ) - - 11,079,402 32 258,408 1 11,337,810 33 $ 34,245,945 100

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 22, 2019)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

NET SALES (Notes 4, 30, 41 and 43) COST OF SALES (Notes 4, 16, 31 and 41) GROSS LOSS REALIZED (UNREALIZED) GAINS FROM SALES REALIZED GROSS LOSS OPERATING EXPENSES (Notes 31 and 42) Selling General and administrative Research and development Expected credit loss on trade receivables Total operating expenses OTHER INCOME AND EXPENSES (Notes 17, 20 and 31) LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Gain from bargain purchase Gain on disposal of investments Reversal of contract compensation interest (Notes 44) Interest income (Notes 31 and 42) Other income (Notes 31 and 42) Gain (loss) on financial instruments at fair value through profit or loss (Notes 4 and 7) Gain on disposal of power facility business (Note 19) Gain on disposal of power facilities business held for sale (Note 17) Dividends income (Note 42) Share of profit of associates and joint ventures (Notes 4 and 19) Expect credit loss on trade receivables (Notes 4 and 13) Foreign exchange (loss) gain, net (Note 31) Finance costs (Notes 24 and 31) Other gains and losses Total non-operating income and expenses		2018 Amount % $ 12,983,920 100 13,722,481 106 (738,561) (6) 8,310 - (730,251) (6) 662,207 5 810,900 6 211,737 2 34,003 - 1,718,847 13 (260,378) (2) (2,709,476) (21) 2,261,090 17 254,886 2 239,274 2 104,773 1 97,386 1 62,391 - 18,305 - 6,387 - 3,680 - (7,642) - (8,400) - (61,243) (1) (653,408) (5) (48,306) - 2,269,173 17		2017
				Amount % $ 10,247,887 100 12,204,604 119 (1,956,717) (19) (26,678) - (1,983,395) (19) 761,073 7 723,884 7 266,224 3 - - 1,751,181 17 (158,372) (2) (3,892,948) (38) - - 344,039 3 - - 162,255 1 85,329 1 (179,008) (2) - - - - 4,415 - 1,488 - - - 73,979 1 (726,152) (7) (4,123) - (237,778) (3) (Continued)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

LOSS BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 32) NET LOSS FOR THE YEAR OTHER COMPREHENSIVE (LOSS) INCOME (Note 31) Items that will not be reclassified subsequently to profit or loss: Unrealized loss on investments in equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized losses on available-for-sale financial assets Total other comprehensive loss TOTAL COMPREHENSIVE LOSS FOR THE YEAR NET LOSS ATTRIBUTABLE TO: Shareholders of the parent Non-controlling interests TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO: Shareholders of the parent Non-controlling interests LOSS PER SHARE (Note 33) Basic loss per share Diluted loss per share		2018 Amount % $ (440,303) (4) (23,306) - (463,609) (4) (397,006) (3) 124,877 1 - - (272,129) (2) $ (735,738) (6) $ (468,294) (4) 4,685 - $ (463,609) (4) $ (756,354) (6) 20,616 - $ (735,738) (6) $ (0.34) $ (0.34)		2017
				Amount % $ (4,130,726) (41) (29,263) - (4,159,989) (41) - - (344,571) (3) (18,623) - (363,194) (3) $ (4,523,183) (44) $ (4,154,163) (41) (5,826) - $ (4,159,989) (41) $ (4,479,244) (44) (43,939) - $ (4,523,183) (44) $ (4.08) $ (4.08)

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 22, 2019)

(Concluded)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

				Equity Attributable to Sh	Equity Attributable to Sh	ar	eholders of the Pare
			Capital Surplus		Restricted Shares for Employees $ 118,649 - (117,440 ) (1,627 ) 8,255 - - - - - - - - - - 7,837 - 7,837 - - - - - (17,628 ) 15,807 - - - - - $ 6,016	R	etained Earnings Accumulated Deficits $ (6,309,786 ) 6,309,786 - - - - - - (445,947 ) (11,391 ) - - (4,154,163 ) - (4,154,163) (4,611,501 ) 98,826 (4,512,675) - 4,611,501 - - - - - - - (468,294 ) - (468,294) $ (369,468)		Other Equity	Unearned Employees Benefits Treasury Shares $ (4,666 ) $ - - - - - 3,765 - (26,805 ) - 7,668 - - - - - - - - - - - - - - - - - - - (20,038 ) - - - (20,038) - - - - - - - - - - (18,699 ) (15,316 ) - 2,276 - 16,492 - - - - - - - - - $ (16,586) $ (18,699)
Common S	hares Common Shares $ 10,176,152 - - (2,138 ) 18,550 - - - - - - - - - - 10,192,564 - 10,192,564 - - 3,342,917 11,578,990 - 61,211 (18,083 ) - - - - - $ 25,157,599	Share Premium $ 12,209,652 (6,309,786 ) 120,462 - - - - - - - - - - - - 6,020,328 - 6,020,328 - (4,611,501 ) (561,610 ) 115,790 - - - - - - - - $ 963,007	Changes in Capital Surplus from Investments in Associates and Joint Ventures Accounted for Using the Equity Method $ - - - - - - - - - - - - - - - - - - 42,000 - - - - - - - - - - - $ 42,000	Difference between Consideration and Carrying Amounts Adjusted Arising from Changes in Percentage of Ownership in Employee Share Subsidiaries Options $ 14,023 $ 3,022 - - - (3,022 ) - - - - - - - - - - (14,023 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ - $ -
								Foreign Currency Translation Reserve $ (90,836 ) - - - - - - - (40,612 ) - - - - (306,458) (306,458) (437,906 ) - (437,906) - - - - - - - - - - 108,946 108,946 $ (328,960)	Unrealized Loss on Financial Assets at Fair Value Unrealized Through Other (Losses) Gains on Comprehensive Available-for-sale Income Financial Assets $ - $ (53,259 ) - - - - - - - - - - - - - - - - - - - - - - - - - (18,623) - (18,623) - (71,882 ) (130,891) 71,882 (130,891) - - - - - - - - - - - - - - - - - - - - - (397,006) - (397,006) - $ (527,897) $ -
Shares (In Thousands) 1,017,615 - - (214 ) 1,855 - - - - - - - - - - 1,019,256 - 1,019,256 - - 334,292 1,157,899 - 6,121 (1,809 ) - - - - - 2,515,759

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 22, 2019).

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UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax Adjustments for: Depreciation Amortization Expected credit loss Impairment loss recognized on accounts receivable Net (gain) loss on financial assets and liabilities at fair value through profit or loss Share of loss (gain) of associates and joint ventures Loss on disposal of property, plant and equipment Reclassifications from property, plant and equipment to expenses Impairment loss on property, plant and equipment Loss (gain) on disposal of non-current assets held for sale Gain on disposal of power facilities business held for sale Gain on disposal of power facilities business Gain on disposal of investments Reversal of inventories (Reversal) impairment loss on prepayments Recognized loss on purchase contracts Net loss (gain) on foreign exchange Gain from bargain purchase Reversal of provisions Compensation costs of restricted shares for employees Compensation costs of employee share options Interest income Dividends income Finance costs Reversal of contracts compensation interest (Realized) unrealized gain from associates Changes in operating assets and liabilities Contract assets - current Notes and accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Amount due from customers for construction contracts Inventory Prepayments (including non-current) Other current assets Contract liabilities - current Notes and accounts payable Accounts payable to related parties Amount due to customers for construction contracts Bonuses payable to employees and directors Accrued expenses Receipts in advance Deferred revenue Other current liabilities Provisions Income taxes paid Net cash (used in) generated from operating activities	2018 $ (440,303) 2,031,556 16,678 42,403 - (9,476) 7,642 26 255,846 257,949 2,403 (6,387) (18,305) (254,886) (19,129) (78,924) 398,581 81,204 (2,261,090) - 16,492 - (491,666) (3,680) 653,408 (239,274) (8,310) 373,061 (32,322) 462,375 (354,018) 669,021 (761,361) - 423,517 89,088 (364,975) 36,737 (435,272) 149,673 - (5,593) (471,796) (390,645) 42,948 81,995 59,179 (112,593) (981,284)	2017 $ (4,130,726) 1,722,433 15,958 - 78,222 11,530 (1,488) 116,086 7,313 43,669 (1,383) - - (326,766) (272,126) 487,558 575,580 (241,620) - (4,249) 7,668 46 (401,454) (4,415) 726,152 - 26,678 2,565,392 - 1,096,040 (79,326) 1,364,171 (407,038) (64,295) 253,424 162,336 (88,016) - (1,217) (11,489) 71,963 5,593 (559,485) 285,835 (33,613) 5,335 40,062 (41,021) 433,925 (Continued)

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UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds of debt investments with no active market Proceeds from sale of power facilities business Proceeds from sale of power facilities business held for sale Acquisition of associates and joint ventures Net cash inflow on disposal of associates and joint ventures Net cash outflow on acquisition of subsidiaries Net cash inflow on disposal of subsidiaries Proceeds from sale of non-current assets held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other receivables from related parties - non-current Financing provided to related parties Repayments by related parties Acquisition of intangible assets New cash flow due to consolidation Increase in restricted assets Increase in pledged time deposits Decrease in finance lease receivables Interest received Dividends received Increase in refundable deposits Decrease in refundable deposits Increase in other non-current assets Decrease in other non-current assets Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term bank loans Decrease in short-term bank loans Increase in short-term bills payable Decrease in short-term bills payable Proceeds from long-term bank loans Repayments of long-term bank loans Proceeds from issue of preference share liabilities Repayments of preference share liabilities Increase in guarantee deposits Decrease in guarantee deposits Proceeds from issuance of common shares for cash Interest paid Increase (decrease) in non-controlling interests Net cash generated from financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS, END OF THE YEAR	2018 $ - 127,645 159,998 (441) - - 1,258,722 135,189 (2,548,523) 26 182,983 - 1,263,183 (3,739) 5,397,530 (1,059,757) (299,866) 431,789 607,450 3,680 (309,197) 188,607 (17,881) 6,927 5,524,325 17,688,129 (21,008,981) 2,742,294 (3,076,005) 5,948,438 (4,599,633) 33,756 (7,015) 7 (379) 2,781,307 (551,314) 591,582 542,186 39,991 5,125,218 4,430,627 $ 9,555,845	2017 $ 146,453 - - (15,800) 40,682 (143,481) 432,697 1,209,182 (4,162,284) 1,741 (80,826) (1,282,890) 916,350 - - (1,528,825) (166,856) 91,296 298,514 4,415 (645,599) 222,418 (22,125) 3,343 (4,681,595) 28,161,918 (27,300,484) 705,400 (348,300) 4,625,026 (3,510,782) 34,948 (470,000) 73 (91) - (360,764) (779,017) 757,927 (86,766) (3,576,509) 8,007,136 $ 4,430,627

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 22, 2019)

(Concluded)

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UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. ORGANIZATION AND OPERATION

United Renewable Energy Co., Ltd. (formerly Neo Solar Power Corp.) (the Corporation) was incorporated in the Republic of China on August 26, 2005. The Corporation specializes in manufacturing high-quality solar cells, solar cell modules and wafers. The Corporation’s main business activities include researching, developing, designing, manufacturing and selling solar cells as well as participating in other solar-related businesses. Its ordinary shares have been listed on the Taiwan Stock Exchange (TSE) since January 2009. On October 1, 2018, the Corporation merged the former Gintech Energy Corporation (Gintech Energy) and Solartech Energy Corporation (Solartech Energy) with the Corporation as the surviving company. For the main business activities of the Corporation and its subsidiaries (collectively referred to as “the Group”), refer to Notes 18 and 46.

The consolidated financial statements are presented in the Corporation’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by Group’s board of directors on March 22, 2019.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China (FSC)

Except for the following, whenever applied, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC would not have any material impact on the Group’s accounting policies:

1) IFRS 9 “Financial Instruments” and related amendments

IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement”, with consequential amendments to IFRS 7 “Financial Instruments: Disclosures” and other standards. IFRS 9 sets out the requirements for classification, measurement and impairment of financial assets and hedge accounting. Refer to Note 4 for information relating to the relevant accounting policies.

Classification, measurement and impairment of financial assets

On the basis of the facts and circumstances that existed as at January 1, 2018, the Group has performed an assessment of the classification of recognized financial assets and has elected not to restate prior reporting periods.

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The following table shows the original measurement categories and carrying amounts under IAS 39 and the new measurement categories and carrying amounts under IFRS 9 for each class of the Group’s financial assets and financial liabilities as at January 1, 2018.

				Measurement	Measurement	Category					Carrying Amount	Carrying Amount	Carrying Amount	Carrying Amount
			IAS 39			IFRS		9		IAS 39			IFRS 9			Note
Financial asset classification
Cash and cash equivalents,		Loans and receivables			Amortized		cost		$	11,549,608		$ 11,549,608				(1)
notes and accounts
receivable, accounts
receivable from related
parties, pledged time
deposits, restricted assets,
refundable deposits and
other receivables
Equity securities		Available for sale			FVTOCI						163,611			203,428		(2)
Derivatives		Held for	trading		Mandatorily at			FVTPL			141,620			141,620
Debt investments		Amortized cost			Amortized		cost				149,240			149,240
Financial liabilities
classification
Short-term loans, short-term		Amortized cost			Amortized		cost			20,581,872			20,581,872
bills payable, notes and
accounts payable, accounts
payable to related parties,
payables to contractors and
equipment suppliers,
accrued expenses,
long-term loans and bonds
payable
Derivatives		Held for	trading		Held for trading						99,756			99,756
											Retained
	Carrying								Carrying		Earnings		Other Equity
	Amount as of							Amount as of			Effect on			Effect on
	December 31,			Reclassifi-		Remea-		January 1, 2018			January 1,			January 1,
Financial Assets	2017	(IAS 39)		cations		surements			(IFRS 9)		2018			2018		Note
FVTOCI	$	-	$	-	$		-	$	-	$		-	$		-
- Equity instruments		-		163,611		39,817			203,428		98,826			(59,009)		(2)
Add: Reclassification from		-		163,611		39,817			203,428		98,826			(59,009)
available-for-sale
Amortized cost		-		-			-		-			-			-
Add: Reclassification from		-		11,549,608			-		11,549,608			-			-	(1)
loans and receivables
		-		11,549,608			-		11,549,608			-			-
Total	$	-	$	11,713,219	$	39.817		$	11,753,036	$	98,826		$	(59,009)

(1) Cash and cash equivalents, notes and accounts receivable, accounts receivable from related parties, pledged time deposits, restricted assets, refundable deposits and other receivables that were classified as loans and receivables under IAS 39 are now classified at amortized cost with assessment of future 12-month or lifetime expected credit losses under IFRS 9.
(2) As equity investments that were previously classified as available-for-sale financial assets under IAS 39 are not held for trading, the Group elected to designate all of these investments as at FVTOCI under IFRS 9. As a result, the related other equity-unrealized gain/loss on available-for-sale financial assets in the amount of $71,882 thousand would result in an increase in other equity - unrealized gain/loss on financial assets at FVTOCI.

As equity investments previously measured at cost under IAS 39 are remeasured at fair value under IFRS 9, the adjustments would result in an increase in financial assets at FVTOCI of $39,817 thousand, an increase in other equity - unrealized gain/loss on financial assets at FVTOCI of $18,567 thousand and an increase in retained earnings of $21,250 thousand on January 1, 2018.

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For those equity investments previously classified as available-for-sale financial assets (including measured at cost financial assets) under IAS 39, the impairment losses that the Group had recognized have been accumulated in retained earnings. Since these investments were designated as at FVTOCI under IFRS 9 and no impairment assessment is required, the adjustments would result in a decrease in other equity - unrealized gain/loss on financial assets at FVTOCI of $149,458 thousand and an increase in retained earnings of $77,576 thousand on January 1, 2018.

2) IFRS 15 “Revenue from Contracts with Customers” and related amendments

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers, and supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations. Refer to Note 4 for the related accounting policies.

The Group elects to retrospectively apply IFRS 15 to contracts that are not complete on January 1, 2018 and elects not to restate prior reporting periods with the cumulative effect of the initial application recognized at the date of initial application.

The anticipated impact on assets, liabilities and equity when retrospectively applying IFRS 15 on January 1, 2018 is detailed below:

	Carrying	Carrying
	Amount as of
	December 31,
		2017	Adjustments		Carrying
	(IAS 18 and		Arising from		Amount as of
	Revenue-related			Initial	January 1, 2018
	Interpretations)		Application		(IFRS 15)		Note
Amounts due from customers for	$	64,295	$	(64,295)	$	-	(2)
construction contracts
Contract assets - current		-		64,295		64,295	(2)
Total effect on assets	$	64,295	$	-	$	64,295
Provisions - current	$	1,609	$	(1,609)	$	-	(1)
Amounts due to customers for		71,963		(71,963)		-	(2)
construction contracts
Receipts in advance		374,623		(236,552)		138,071	(2)
Contract liabilities - current		-		308,515		308,515	(2)
Other current liabilities		98,835		1,609		100,444	(1)
Total effect on liabilities	$	547,030	$	-	$	547,030

(1) Prior to the application of IFRS 15, the Group recognized the estimation of sales returns and allowances as provisions. Under IFRS 15, the Group recognizes such estimation as a refund liability (classified under accrued expenses and other current liabilities).

(2) Currently, the net effect of the progress billings, cost incurred and recognized profit (loss) of a construction contract is recognized as amounts due from (to) customers for construction contracts under IAS 11. Under IFRS 15, the net effect of revenue recognized and consideration received and receivable is recognized as a contract asset or a contract liability.

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	December 31,	December 31,
		2018
Decrease in amounts due from customers for construction contracts	$	(96,617)
Increase in contract assets - current		96,617
Increase (decrease) in assets	$	-
Increase in contract liabilities - current	$	345,252
Decrease in amounts due to customers for construction contracts		(102,876)
Decrease in receipts in advance		(242,376)
Increase (decrease) in liabilities	$	-

b. The Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed by FSC for application starting from 2019

New, Amended or Revised Standards and Interpretations (the“New IFRSs”) Annual Improvements to IFRSs 2015-2017 Cycle Amendments to IFRS 9 “Prepayment Features with Negative Compensation” IFRS 16 “Leases” Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures” IFRIC 23 “Uncertainty over Income Tax Treatments”	Effective Date Announced by IASB (Note 1)
	January 1, 2019 January 1, 2019 (Note 2) January 1, 2019 January 1, 2019 (Note 3) January 1, 2019 January 1, 2019

New, Amended or Revised Standards and Interpretations
(the“New IFRSs”)
Annual Improvements to IFRSs 2015-2017 Cycle

Amendments to IFRS 9 “Prepayment Features with Negative
Compensation”

IFRS 16 “Leases”

Amendments to IAS 19 “Plan Amendment, Curtailment or
Settlement”

Amendments to IAS 28 “Long-term Interests in Associates and Joint
Ventures”

IFRIC 23 “Uncertainty over Income Tax Treatments”

Effective Date
Announced by IASB (Note 1)

January 1, 2019
January 1, 2019 (Note 2)
January 1, 2019
January 1, 2019 (Note 3)
January 1, 2019
January 1, 2019

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The FSC permits the election for early adoption of the amendments starting from 2018.
Note 3: The Group shall apply these amendments to plan amendments, curtailments or settlements occurring on or after January 1, 2019.
1) IFRS 16 “Leases”

IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and a number of related interpretations.

Definition of a lease

Upon initial application of IFRS 16, the Corporation will elect to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into. Contracts identified as containing a lease of power facility, which are currently identified as containing a lease under IAS 17 and IFRIC 4, will not meet the definition of a lease under IFRS 16 and will be accounted for in accordance with other standards because the customers do not have the right to direct the use of the identified assets. Contracts that are reassessed as containing a lease will be accounted for in accordance with the transitional provisions under IFRS 16.

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The Group as lessee

Upon initial application of IFRS 16, the Group will recognize right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value and short-term leases will be recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group will present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the interest and principal portions of lease liabilities will be classified within financing activities. Currently, payments under operating lease contracts, including property interest qualified as investment properties, are recognized as expenses on a straight-line basis. Cash flows for operating leases are classified within operating activities on the consolidated statements of cash flows.

The Group anticipates applying IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized on January 1, 2019. Comparative information will not be restated.

Lease liabilities will be recognized on January 1, 2019 for leases currently classified as operating leases with the application of IAS 17. Lease liabilities will be measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Except for the following practical expedients which are to be applied, the Group will apply IAS 36 to all right-of-use assets.

The Group expects to apply the following practical expedients:

a) The Group will apply a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
b) The Group will account for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.
c) The Group will exclude initial direct costs from the measurement of right-of-use assets on January 1, 2019.
d) The Group will use hindsight, such as in determining lease terms, to measure lease liabilities.

For leases currently classified as finance leases under IAS 17, the carrying amount of right-of-use assets and lease liabilities on January 1, 2019 will be determined as the carrying amount of the leased assets and finance lease payables as of December 31, 2018.

The Group as lessor

The Group will not make any adjustments for leases in which it is a lessor and will account for those leases with the application of IFRS 16 starting from January 1, 2019.

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Impact on assets, liabilities and equity on January 1, 2019

Lease receivable- current Lease receivable - non-current Account Receivable Investment accounted for using the equity method Property, Plant and Equipment Right of Use Asset Total effect on assets Lease liabilities - current Total effect on liabilities Retained Earnings Non-Controlling Interests Other Equity Total effect on equity	Carrying Amount as of December 31, 2018 $ 273,941 5,352,933 2,444,971 2,381,220 20,056,530 - $ 30,509,595 $ - $ - $ (369,468) 897,999 (873,443) $ (344,912)	Adjustments Arising from Initial Application Adjusted Carrying Amount as of January 1, 2019 $ (273,242) $ 699 (5,316,9165) 36,018 95,601 2,540,572 (9,964) 2,371,256 5,162,978 25,219,508 921,223 921,223 $ 579,681 $ 31,089,276 $ 921,223 $ 921,223 $ 921,223 $ 921,223 $ (306,410) $ (675,878) (34,173) 863,826 (959) (874,402) $ (341,542) $ (686,454)

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 3 “Definition of a Business” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IAS 1 and IAS 8 “Definition of Material”	Effective Date Announced by IASB (Note 1)
	January 1, 2020 (Note 2) To be determined by IASB January 1, 2021 January 1, 2020 (Note 3)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.
Note 3: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.
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1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

The amendments stipulate that, when an entity sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or loss resulting from the transaction is recognized in full. Also, when an entity loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Group sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Group’s interest as an unrelated investor in the associate or joint venture, i.e. the Group’s share of the gain or loss is eliminated. Also, when the Group loses control of a subsidiary that does not contain a business but retains significant influence or joint control over an associate or a joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Group’s interest as an unrelated investor in the associate or joint venture, i.e. the Group’s share of the gain or loss is eliminated.

2) Amendments to IFRS 3 “Definition of a Business”

The amendments clarify that, to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process applied to the input that together significantly contribute to the ability to create outputs. The amendments narrow the definitions of outputs by focusing on goods and services provided to customers, and the reference to an ability to reduce costs is removed. Moreover, the amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs.

In addition, the amendments introduce an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
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2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within twelve months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within twelve months after the reporting period; and
3) Liabilities for which the Corporation does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group (i.e. its subsidiaries, including structured entities). Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective date of acquisition up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of NSP and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group’s losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Group.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

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The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under the cost on initial recognition of an investment in an associate.

See Note 18 and Table 7 following the Notes for the detailed information of subsidiaries, including the percentage of ownership and the main business of the subsidiaries.

e. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as incurred.

Goodwill is measured as the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree in excess of the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after re-assessment, the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held interests in the acquiree, the excess is recognized immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured at fair value. Other types of non-controlling interests are measured at fair value.

When a business combination is achieved in stages, the Group’s previously held equity interest in an acquiree is remeasured to fair value at the acquisition date, and the resulting gain or loss is recognized in profit or loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted retrospectively during the measurement period or additional assets or liabilities are recognized to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

f. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period. When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For purposes of presenting consolidated financial statements, the assets and liabilities of the Corporation’s foreign operations (including subsidiaries, associates, joint ventures and branches in other

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countries that use a currency different from the currency of the Group) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising are recognized in other comprehensive income and attributed to the owners of the Group and non-controlling interests as appropriate.

In relation to a partial disposal of a subsidiary that results in the Corporation losing control over the subsidiary, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

g. Inventories

Inventories consist of raw materials, supplies, work-in-process, finished goods and construction in progress. Inventory are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost on the balance sheet date.

h. Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence and is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Corporation and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Group uses the equity method to account for its investments in associates and joint ventures.

Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Group also recognizes the changes in the Group’s share of equity of associates and joint venture attributable to the Group.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

If the fair value measurement of the identifiable assets and liabilities for associates and joint ventures is incomplete by the end of the reporting period in which the investment occurs, the Corporation reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted retrospectively during the measurement period, to reflect new information obtained about facts and circumstances that existed as of the investment date that, if known, would have affected the amounts recognized as of that date.

When the Group subscribes for additional new shares of the associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group records such a difference as an adjustment to investments with the corresponding amount charged or

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credited to capital surplus - changes in the Group’s share of equity of associates and joint ventures, and the investment is accounted for using the equity method. If the Group’s ownership interest is reduced due to the additional subscription of the new shares of associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from the investment accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate and joint venture), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate and joint venture.

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate and the joint venture on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.

When a Group entity transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate and joint venture that are not related to the Group.

i. Property, plant, and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss.

Properties under construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. These properties are depreciated and classified to the appropriate categories of property, plant and equipment when they are completed and ready for their intended use.

Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. If the lease term is shorter than the useful lives, assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

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Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

j. Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (CGU) or groups of cash-generating units (referred to as cash-generating units) that is expected to benefit from the synergies of the combination.

A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a CGU is acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first, to reduce the carrying amount of any goodwill allocated to the unit and then, to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill should not be reversed in subsequent periods.

If goodwill has been allocated to a CGU and the entity disposes of an operation within that unit, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal.

k. Intangible assets
1) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are reported at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

l. Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The Group assets are allocated to the smallest group of CGUs on a reasonable and consistent basis of allocation.

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The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is reversed, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

m. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sales transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation of those assets would cease.

n. Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the financial instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a settlement date basis.

a) Measurement category

2018

The group classified its financial assets into the following categories: financial asset at FVTPL, financial assets at amortized cost and equity instruments at FVTOCI.

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 41.

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ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables at amortized cost and financial liability with no active market are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Cash equivalents include time deposits, which are highly liquid, readily convertible to a known amount of cash. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2017

Financial assets are classified into the following categories: Financial assets at FVTPL, available-for-sale financial assets and loans and receivables.

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are either held for trading or designated as at FVTPL.

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ii. Available-for-sale financial assets

Available-for-sale (AFS) financial assets are non-derivatives that either are designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

AFS financial assets are measured at fair value. Dividends on AFS equity investments are recognized in profit or loss. Other changes in the carrying amounts of AFS financial assets are recognized in other comprehensive income and accumulated under other equity - unrealized gains (losses) on available-for-sale financial assets. When the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the other equity - unrealized gains (losses) on available-for-sale financial assets is reclassified to profit or loss.

Dividends on AFS equity instruments are recognized in profit or loss when the Corporation’s right to receive the dividends is established.

AFS equity investments with no quoted market prices in an active market and with fair values that cannot be reliably measured are measured at cost less any identified impairment loss at the end of each reporting period and are recognized in a separate line item as financial assets carried at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are remeasured at fair value. The difference between the carrying amount and the fair value is recognized in other comprehensive income. Any impairment losses are recognized in profit or loss.

iii. Loans and receivables

Loans and receivables (including notes and accounts receivable, cash and cash equivalents and debt investments with no active market) are measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables when the effect of discounting is immaterial.

Cash equivalents include time deposits that are highly liquid, readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets and contract asset

2018

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments that are measured at FVTOCI, lease receivables, as well as contract assets.

The Group always recognizes lifetime expected credit losses (i.e. ECLs) for trade receivables, lease receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

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Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of such a financial asset.

2017

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For financial assets carried at amortized cost, such as trade receivables, assets are collectively assessed for impairment even if they were assessed as not impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Corporation’s past experience in collecting payments and an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortized cost, the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets measured at amortized cost, if the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

For available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

i. Significant financial difficulty of the issuer or counterparty; or
ii. Breach of contract, such as a default or delinquency in interest or principal payments; or
iii. It becoming probable that the borrower will undergo bankruptcy or financial reorganization; or
iv. The disappearance of an active market for that financial asset because of financial difficulties.

When an AFS financial asset is considered impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

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For AFS equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income and accumulated under unrealized gains or losses.

For financial assets that are carried at cost, impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. This impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, with the exception of trade receivables and other receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable and other receivables are considered uncollectable, they are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss, except for uncollectable trade receivables and other receivables that are written off against the allowance account.

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

Before 2017, on derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. Starting from 2018, on derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

Debt and equity instruments issued by the Group are classified either as financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Corporation’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Corporation’s own equity instruments.

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3) Financial liabilities

a) Subsequent measurement

Except in the following situation, all the financial liabilities are measured at amortized cost using the effective interest method:

i. Financial liabilities at fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss when the financial liability is held for trading.

Financial liabilities held for trading are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any interest or dividend paid on the financial liability. Fair value is determined in the manner described in Note 41.

b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid is recognized in profit or loss.

4) Convertible bonds

The conversion options component of the convertible bonds issued by the Group that is settled other than by the exchange of a fixed amount of cash or other financial asset for a fixed number of the Corporation’s own equity instruments is classified as derivative financial liabilities.

On initial recognition, the derivative financial liabilities component of the convertible bonds is recognized at fair value, and the initial carrying amount of the component of non-derivative financial liabilities is determined by deducting the amount of derivative financial liabilities from the fair value of the hybrid instrument as a whole. In subsequent periods, the non-derivative financial liabilities component of the convertible bonds is measured at amortized cost using the effective interest method. The derivative financial liabilities component is measured at fair value and the changes in fair value are recognized in profit or loss.

Transaction costs that relate to the issue of the convertible bonds are allocated to the derivative financial liabilities component and the non-derivative financial liabilities component in proportion to their relative fair values. Transaction costs relating to the derivative financial liabilities component are recognized immediately in profit or loss. Transaction costs relating to the non-derivative financial liabilities component are included in the carrying amount of the liability component.

5) Derivative financial instruments

The Group enters into foreign exchange forward contracts and to manage its exposure to foreign exchange rate and interest rate risks.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately, but if the derivative is designated and effective as a hedging instrument, the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; otherwise, the derivative is recognized as a financial liability.

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Before 2017, derivatives embedded in non-derivative host contracts are treated as separate derivatives when they meet the definition of a derivative, such that their risks and characteristics are not closely related to those of the hybrid contracts and the contracts are not measured at fair value through profit or loss. Starting from 2018, derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.

o. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

The warranty of obligations products that meet the eligibility criteria are recognized at the date of sale of the relevant products and at the Group management’s best estimate of the expenditure required to settle the obligations.

p. Revenue recognition

2018

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

For contracts where the period between the date on which the Group transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of solar cell, modules and power facilities construction. Sales of solar cell, modules and electric power plants are recognized as revenue when the goods are delivered to the customer’s specific location to fulfill contractual obligation.

Revenue from the sale of goods is measured at the fair value of the consideration receive or receivable, which states net of discounts and other similar sales returns and allowances. In consideration of historical experience and other factors related to contract conditions, the Group recognizes such sales returns and allowances as contract liabilities shown in the consolidated balance sheet as other current liabilities.

If there is a need to cut or remove material before processing, such processed products do not transfer substantially all the risks and rewards to the customer, thus revenue can not be recognized.

2) Construction contract revenue

Customers provide construction contract with specifications while they are construction in progress, and thus, the Group recognizes revenue over time. The Group measures the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Contract assets are recognized during the construction and are reclassified to trade receivables at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the Group

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recognizes contract liabilities for the difference. Certain payments, which are retained by the customer as specified in the contract, are intended to ensure that the Group adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Group satisfies its performance obligations.

When Contractual obligation cannot be estimated reliably, revenue is recognized only to the extent of contract costs incurred that is probable to be recoverable.

3) Revenue from the sale of power facilities construction

Revenue is recognized from the sale of solar energy power plant. Revenue from the sale of electric power plants is recognized as a sale when customer obtains control over the assets to fulfill contractual obligation.

4) Processing revenue

Revenue is recognized from providing process of solar cells services to customers. Processing revenue is recognized as a sale when customer obtains control over the assets to fulfill contractual obligation.

5) Services revenue

Service revenue is recognized when services are provided.

6) Electricity revenue

Electricity charges are calculated based on the actual amount of consumption at applicable rates.

2017

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Allowances for sales returns and allowance and liability for returns are recognized at the time of sale based on the seller’s reliable estimate of future returns and based on past experience and other relevant factors.

1) Sale of goods

Revenue from the sale of goods is recognized when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:

a) The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
b) The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
c) The amount of revenue can be measured reliably;
d) It is probable that the economic benefits associated with the transaction will flow to the Group; and
e) The costs incurred or to be incurred can be measured reliably.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of risks and rewards of the materials’ ownership.

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2) Revenue from the sale of power facilities construction

The revenue from the sale of power facilities is recognized in accordance with IAS 18 “Revenue”.

3) Rendering of services

Service income is recognized when services are provided.

4) Construction contracts

When the outcome of a construction contract can be estimated reliably, revenue and costs are recognized by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred to date relative to the estimated total contract costs. Variations in contract work and claims and incentive payments are included to the extent the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed the total contract revenue, the expected loss is recognized as an expense immediately.

When contract costs incurred to date plus recognized profits less recognized deficits exceed progress billings, the surplus is shown as the gross amount due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognized profits less recognized deficits, the surplus is shown as the gross amount due to customers for contract work. Amounts received before the related work is performed are included in the consolidated balance sheet as a liability under other current liabilities. Amounts billed for work performed but not yet paid by the customer are included in the consolidated balance sheet under trade receivables.

5) Electricity charges are calculated based on the actual amount of consumption at applicable rates.
6) Dividend and interest income

Dividend income from investments is recognized when the Group’s right to receive payment has been established and if it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued over time by reference to the principal outstanding and the effective interest rate applicable.

q. Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Because the Group entered into several electricity purchase agreements which were covered by IFRIC 4 “Determining Whether an Arrangement Contains a Lease”, they were accounted for as finance leases.

1) The Group as lessor

Amounts due from lessees under finance leases are recognized as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the lease.

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2) The Group as lessee

Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

r. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalization.

Other than the situations stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

s. Government grants

Government grants are recognized when there is reasonable assurance that the Group will comply with the conditions attached to and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate.

Government grants receivable as compensation for expenses or losses already incurred or for immediate financial support, with no future related costs, are recognized as other income in profit or loss in the period in which they become receivable.

t. Employee benefits
1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

u. Share-based payment arrangements (Employee share options)
1) Employee share options and restricted shares for employees

The fair values at the grant date of the employee share options and restricted shares for employees are expensed on a straight-line basis over the vesting period, based on the Group’s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options and other equity - unearned employee benefits. The whole amount of benefit is recognized as an expense at the grant date if vested immediately.

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized at the grant date, with a corresponding increase in capital surplus - restricted shares for employees. If restricted shares for employees are granted for consideration, and should be returned, they are recognized as payables. Dividends paid to employees on the restricted shares that do not need to be returned if employees resign in the vesting period, are recognized as expenses when the

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dividends are declared with a corresponding adjustment in retained earnings and capital surplus - restricted shares for employees.

At the end of each reporting period, the Group revises its estimate of the number of employee share options and restricted shares for employees expected to vest. The impact of the revision of the original estimate is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to capital surplus - employee share options or capital surplus - restricted shares of employees.

2) Share-based payment transactions of the acquiree in a business combination

When the share-based payment awards held by the employees of an acquiree (acquiree awards) are replaced by the Group’s share-based payment awards (replacement awards), both the acquiree awards and the replacement awards are measured in accordance with the market-based measure at the acquisition date. The portion of the replacement awards that is included in measuring the consideration transferred in a business combination equals the market-based measure of the acquiree awards multiplied by the ratio of the portion of the vesting period completed to the greater of the total vesting period or the original vesting period of the acquiree award. The market-based measure of the replacement awards in excess of the market-based measure of the acquiree awards included in measuring the consideration transferred is recognized as a remuneration cost for post-combination service.

v. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

Based on the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve the retention of earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be used.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and in associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to use the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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Deferred tax liabilities and assets are measured at the tax rates that are expected to apply to the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the Group’s expectations, at the end of the reporting period, as to the manner by which the carrying amount of its assets and liabilities will be recovered or settled.

3) Current and deferred tax for the year

Current and deferred taxes are recognized in profit or loss, but when these taxes pertain to items that are recognized in other comprehensive income or directly in equity, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

a. Business model assessment for financial assets - 2018

The Group determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgment about all relevant evidence including how the performance of the assets is evaluated, the risks that affect the performance of the assets and how these are managed, and how the managers of the assets are compensated. The Group monitors financial assets measured at amortized cost or at fair value through other comprehensive income, and when assets are derecognized prior to their maturity, the Group understands the reasons for their disposal and whether the reasons are consistent with the objective of the business for which the assets were held. Monitoring is part of the Group’s continuous assessment of whether the business model for which the remaining financial assets are held continues to be appropriate and, if it is not appropriate, whether there has been a change in the business model such that a prospective change to the classification of those assets is proper.

b. Estimated impairment of financial assets - 2018

The provision for impairment of trade receivables, investments in debt instruments, and financial guarantee contracts is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. For details of the key assumptions and inputs used, see Note 9 and 13. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

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c. Write-down of inventories

The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale. The estimation of the net realizable value was based on current market conditions and historical experience with selling products of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

d. Useful lives of property, plant and equipment

As described in Note 4(i) above, the Group reviews the estimated useful lives of property, plant and equipment at each balance sheet date. Based on an evaluation report by China Property Appraising Co., Ltd., which used industry meta-analysis, functional analysis and economic analysis, the actual useful lives of the NSP’s equipment exceeded their original useful lives. Management thus determined that the useful lives of some machinery and equipment should be extended from 6 years to 8 or 11 years beginning from April 1, 2013.

e. Estimated impairment of assets other than goodwill

In assessing assets for impairment, income and expenses that may occur in the future, assets’ useful lives, and independent cash flows for the particular asset group are based on subjective judgment in accordance with the asset’s usage patterns and the industrial characteristics. Any change in the economic condition or in the estimation due to the Group’s strategy may lead to a material impairment loss in the future.

f. Assessment of impairment losses on prepayments of long-term purchase contract

To ensure the stability of the supply of raw materials in the manufacturing process, the Group entered into several long-term materials supply agreements and made certain prepayments for later purchase deductions. The purchase prices were negotiated between the parties of the contracts, and the purchase quantities of materials depend on the provisions of the contracts in addition to the operations of the supplier. The Group assesses if the prepayment is impaired, when the deduction of prepayments slow down. If the operations and financial positions of suppliers deteriorate and they cannot provide a stable supply, if adverse changes in the supply and demand of the market cause the actual purchase volume to be insufficient, and if the raw material prices decline, this may indicate an impairment of the prepayments.

g. Income taxes

The realizability of the deferred tax asset mainly depends on whether sufficient future profits or taxable temporary differences will be available. If the actual future profits generated are less than expected, a material reversal of deferred tax assets may arise, which would be recognized in profit or loss for the period in which such a reversal takes place.

h. Finance lease receivables

In assessing the amounts of finance lease receivables and revenue, management should consider the estimation of the Group’s future cash flows and the discount rate used to determine the present value of minimum lease payments. Relevant assumptions include the expected operating rate of certain power-generating facilities and the economic lives and recoverable residual value of these facilities. If actual future cash flows are less than expected, a material impairment loss may arise. For further disclosures of finance lease receivables, refer to Note 14.

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i. Assessment of bargain purchase gain

The fair value assessment of the acquisition-date assets and liabilities and the amount of the bargain purchase gain were based on the purchase price allocation report. The impact of the recognition of bargain purchase gain due to the adopted method and assumptions which involve the use of critical accounting judgements and estimations. For further disclosures of assessment of bargain purchase gain, refer to Note 35.

6. CASH AND CASH EQUIVALENTS

Demand deposits Checking accounts Cash on hand Cash equivalents Bank acceptances Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2018 $ 9,080,667 121,377 1,000 - 328,785 24,016 $ 9,555,845	2017 $ 3,960,746 96,059 1,135 10,932 361,755 - $ 4,430,627

The market rate intervals of cash in the bank at the end of the reporting period were as follows:

Bank deposits	December 31
	2018 2017 0%-1.89% 0%-1.82%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Financial assets held for trading Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts (a) Financial assets at FVTPL-non-current Financial assets held for trading Derivative financial assets (not under hedge accounting) Put options (b) Long call options (c)		December 31	December 31
		2018 $ - $ - 243,130 $ 243,130	2017 $ 106 $ 23,647 117,840 $ 141,514 (Continued)

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Financial liabilities at FVTPL-current Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts (a) Financial liabilities at FVTPL-non-current Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Short put options (d)		December 31	December 31
		2018 $ - $ 191,790	2017 $ 5,742 $ 94,014 (Concluded)

a. At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

					Contract Amount	Contract Amount
			Currency	Maturity Date		(In Thousands)
December	31,	2017
Buy			Buy USD/Sell NTD	January 29, 2018	USD	6,000/NTD 178,620
Buy			Buy USD/Sell NTD	January 29, 2018	USD	4,000/NTD 119,080
Buy			Buy USD/Sell NTD	March 1, 2018	USD	5,000/NTD 148,775
Buy			Buy USD/Sell NTD	March 14, 2018	USD	5,000/NTD 149,200
Sell			Sell GBP/Buy USD	February 21, 2018	GBP	5,000/USD 6,710
Sell			Sell GBP/Buy USD	February 22, 2018	GBP	4,000/USD 5,372
Sell			Sell EUR/Buy USD	February 27, 2018	EUR	3,000/USD 3,574
Sell			Sell EUR/Buy USD	February 27, 2018	EUR	3,000/USD 3,575
Sell			Sell GBP/Buy USD	February 28, 2018	GBP	2,000/USD 2,684
Buy			Sell GBP/Buy USD	February 27, 2018	GBP	3,000/USD 4,046

The Corporation entered into derivative transactions during 2017 to manage exposures of assets and liabilities denominated in foreign currency related to exchange rate changes.

b. Put options

The Corporation entered into equity purchase agreements with Clean Focus Yield Limited (“CFY”) with the right of redemption, in which the Corporation may require CFY to redeem all of its shares with certain conditions, and the Corporation’s board of directors approved to waive the right of put options on March 20, 2018.

c. Long call options

As stated in Note 24 (d), GES MEGASIXTEEN, LLC (“MEGASIXTEEN”) was set up for the purpose of tax deductions, and MEGASIXTEEN expects to have a higher of fair value or 5.5% return of the investment from MPC AC 2017 Energy Fund, LLC (“MPC”) from the flip date (December 2022). The agreement is subject to non-controlling equity interests should MPC purchase the rights to buy back all of the Class A shares issued by GES AC SOLAR 2017, LLC (“GES AC”).

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As stated in Note 24 (d), TEV Solar Alpha 18 (“TEV Solar”) was set up for the purpose of tax deductions, and TEV Solar expects the return on the investment in Advantage Capital Solar Partners II, LLC (“ACS”) to be at the higher of fair value or 7% of the capital injection of ACS, starting from the flip date (June 2024). The agreement is subject to stipulations on non-controlling equity interests should ACS purchase the rights to buy back all of the Class A shares issued by AC GES Solar 2018 LLC (“AC GES Solar”)

d. Short put options

As stated in Note 24 (c), MEGASIXTEEN's borrower, Indiana Municipal Power Agency (“IMPA”), has agreed that it will execute the right to buy back all of the equity (Class A and B shares) of GES AC from the flip date.

As stated in Note 24 (c), TEV II's borrower, IMPA, has agreed that it will execute the right to buy back all of the equity (Class A and B shares) of AC GES Solar from the flip date.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

	December 31,	December 31,
		2018
Current
Domestic investments
Domestic quoted shares
CTCI Corporation (“CTCI”)	$	133,333
Non-current
Domestic investments
Domestic quoted shares
Sino-American Silicon Products Inc. (“SAS”)	$	1,337,855
ThinTech Materials Technology Co., Ltd. (“TTMC”)		122,292
Unlisted ordinary shares
EXOJET Technology Corporation (“EXOJET”)		45,962
Top Green Energy Technologies Inc.(“TGET”)		27,098
Taiwan Special Chemicals Corporation(“TSCC”)		18,601
NTNU Innovation Investment Holding Company(“NTNU”)		2,000
		1,553,808
Overseas investments
Unlisted ordinary shares
ASIA GLOBAL VENTURE CAPITAL CO., LTD		22,137
SUN APPENNINO CORPORATION		19,338
TG ENERGY SOLUTIONS LLC		615
FICUS CAPITAL CORPORATION		-
		42,090
	$	1,595,898

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The Group invested in corporation mentioned above for long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes. These investments in equity instruments were classified as available-for-sale under IAS 39. Refer to Notes 3, 10 and 11 for information relating to their reclassification and comparative information for 2017.

As of December 31, 2018, the carrying amount of the Group’s investment in TTMC’s private-placement shares amounted to $115,920 thousand; under Article 43-8 of the Securities and Exchange Act, there is a legally enforceable restriction on private-placement shares, which prevents their trading.

Refer to Note 43 for the amount of investments in equity instruments at FVTOCI pledged by the Group to secure borrowings.

9. FINANCIAL ASSETS AT AMORTIZED COST - 2018

	December	31,
	2018
Non-current
Overseas investment
Puttable preference shares (C-Shares III) - Phanes Holding Inc. (Phanes Holding)	$ 153,700
Less: Allowance for impairment loss		-
	$ 153,700

The subsidiary, General Energy Solutions (GES), received contractual cash flows as a result of holding the financial asset to maturity, and the cash flows received were solely payments of principal and interest on the principal amount outstanding and were classified under "Financial assets at amortized cost" since January 1, 2018.

Phanes Holding, a project developer, is an overseas unlisted company. The subsidiary, GES, has successfully built several power facilities in the UK and the Dominican Republic through the cooperative relationship with Phanes. In order to build a long-term cooperative strategic relationship with Phanes, the subsidiary, GES, subscribed for the following preference shares issued by Phanes at par:

Five-year puttable preference shares (C-Shares III) for 24,000 shares amounting to USD5,000 thousand for 100% interest.

For the year ended December 31, 2018, the interest income of puttable preference shares amounted to $11,487 thousand. The related interest receivable, classified as other receivables from related parties, amounted to $10,759 thousand at December 31, 2018.

As of December 31, 2018, financial assets at amortized cost owned by GES had not been pledged as security.

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The Group only invests in debt instruments that are rated the equivalent of investment grade or higher and have low credit risk for the purpose of impairment assessment. The Group's exposure and the external credit ratings are continuously monitored. The Group reviews changes in other public information and makes an assessment about whether there has been a significant increase in credit risk since the last period to the reporting date.

The Group considers the current financial condition of debtors and industry forecasts to estimate 12-month or lifetime expected credit losses. The Group’s current credit risk grading framework comprises the following categories:

				Gross
				Carrying
		Basis for Recognizing		Amount at
		Expected Credit	Expected Loss	December 31,
Category	Description	Losses	Rate	2018
Performing	The counterparty has a low risk of	12-month ECLs	-	$153,700
	default and a strong capacity to
	meet contractual cash flows
AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017
				December 31,
				2017
Non-current
Domestic quoted shares
ThinTech	Materials Technology Co., Ltd. (“TTMC”)			$ 109,065

10. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

As of December 31, 2017, the carrying amount of the Corporation’s investment in TTMC’s private-placement shares amounted to $103,250 thousand. Under Article 43-8 of the Securities and Exchange Act, there is a legally enforceable restriction on private-placement shares, which prevents their trading.

Except that which is stated above, the AFS financial assets have not been pledged as security or for other purposes.

11. FINANCIAL ASSETS CARRIED AT COST - 2017

	December 31,
	2017
Non-current
Domestic quoted shares
EXOJET Technology Corporation (“EXOJET”)	$ 30,100
Overseas unlisted common shares
SUN APPENNINO CORPORATION	22,590
FICUS CAPITAL CORPORATION	1,259
TG ENERGY SOLUTIONS LLC	597
	$ 54,546
	(Continued)

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	December 31,
	2017
Non-current
Classified according to financial asset measurement categories
Available-for-sale financial assets	$ 54,546
	(Concluded)

Management believed that the above unlisted equity investments held by the Corporation had fair values that could not be reliably measured because the range of reasonable fair value estimates was significant; thus, these investments were measured at cost less impairment at the end of the reporting period.

The financial assets carried at cost have not been pledged as security or for other purposes.

12. DEBT INVESTMENTS WITH NO ACTIVE MARKET - 2017

	December 31,	December 31,
		2017
Puttable preference shares (C-Share II) - Phanes Holding Inc. (Phanes Holding)	$	-
Puttable preference shares (C-Shares III) - Phanes Holding Inc. (Phanes Holding)		149,240
		149,240
Less: Current portion		-
	$	149,240

Phanes Holding Inc. (Phanes), a project developer, is an overseas unlisted company. The subsidiary, General Energy Solutions (GES), has successfully built several power facilities in the UK and the Dominican Republic through the cooperative relationship with Phanes. In order to build a long-term cooperative strategic relationship with Phanes, the subsidiary, GES, subscribed for the following preference shares issued by Phanes at par:

a. Two-year puttable preference shares (C-Shares II) for 4,500 shares amounting to US$4,500 thousand for 100% interest
b. Five-year puttable preference shares (C-Shares III) for 24,000 shares amounting to US$5,000 thousand for 100% interest

The above preference shares carried no voting rights and no dividend rights but carried preferential rights on dividends specified at 7% of the par value. The preference shares can be redeemed prior to or later than the maturity date under the agreement between GES and Phanes. The above current portion has been classified as a current asset. The aforesaid preference shares (C-Shares II) was redeemed in October 2017.

For the year ended of December 31, 2017, the interest income of puttable preference shares amounted to $19,090 thousand ; interest receivable amounted to $10,790 thousand, and was classified as other receivables from related parties.

Both debt investments, both with no active market, had not been pledged as security as of December 31, 2017.

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13. NOTES AND ACCOUNTS RECEIVABLE, INSTALLMENT ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Notes and accounts receivable Notes and accounts receivable Accounts receivable from related parties Less: Allowance for impairment loss Other receivables Other receivables from related parties Sales tax refund receivable Others Less: Allowance for impairment loss		December 31	December 31
		2018 $ 3,106,896 554,452 (622,654) $ 3,038,694 $ 1,103,134 97,454 120,362 (8,400) $ 1,312,550	2017 $ 1,916,351 170,506 (616,275) $ 1,470,582 $ 1,960,590 8,908 90,718 - $ 2,060,216

a. Notes and accounts receivable

2018

The credit periods for the sale of goods were (a) 30 to 90 days after the end of the month; (b) 7 to 150 days from the invoice date; and (c) 45 to 90 days for letters of credit and the average credit periods for power facility construction were 180 to 360 days. No interest was charged on accounts receivable. For overdue accounts receivable, interest was charged on the basis of management’s judgment.

In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience shows significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

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The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2018

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due 0%-0.02% $ 1,840,553 (49) $ 1,840,504	Less Than or Equal to 30 Days 0%-0.10% $ 339,031 (65) $ 338,966	31 to 60 Days 0%-2.84% $ 262,859 (1,679) $ 261,180	61 to 90 Days 9 0%-15.92% $ 84,684 (923) $ 83,761	1 to 120 Days 0%-29.08% $ 59,070 (2,684) $ 56,386	121 to 150 Days 0%-31.85% $ 79,493 (22,741) $ 56,752	151 to 180 Days 0%-26.15% $ 4,060 (145) $ 3,915	Over 180 Days C 0%-100% $ 397,230 - $ 397,230	Signs of ounterparty Default 100% $ 594,368 (594,368) $ -	Total $ 3,661,348 (622,654) $ 3,038,694

The movements of the loss allowance of trade receivables are as follows:

Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1, 2018 per IFRS 9 Add: Impairment losses Less: Amounts written off Foreign exchange gains and losses Balance at December 30, 2018	2018 $ 616,275 - 616,275 34,003 (23,506) (4,118) $ 622,654

2017

The Group applied the same credit policy in 2018 and 2017. In determining the recoverability of accounts receivable, the Group considered any change in the credit quality of the accounts receivable since the date credit was initially granted to the end of the reporting period. Allowance for impairment loss was recognized on the basis of the irrecoverable amounts estimated through aging analyses, reference to past default of the counterparties and an assessment of the counterparties’ current financial positions.

For the accounts receivable that were past due at the end of the reporting period, the Group did not recognize an allowance for impairment loss because there was no significant change in credit quality and the amounts were considered recoverable. In addition, the Group had obtained proper collateral or other credit enhancements for these receivables. As of December 31, 2017, the amounts of collateral or other credit enhancements for these receivables were $10,950 thousand. The Group had no legal right to offset the receivables against any amounts owed by the Group to the counterparties.

The aging of receivables is as follows:

	December 31,
	2017
Up to 60 days	$ 1,465,637
61-90 days	-
91-120 days	-
More than 120 days	621,220
Total	$ 2,086,857

The above analysis was based on the past-due date from the end of the credit term.

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The aging of receivables that were past due but not impaired is as follows:

	December 31,
	2017
Up to 60 days	$ 104,075
61-90 days	-
91-120 days
More than 120 days	4,946
Total	$ 109,021

The above analysis was based on the past due date from the end of the credit term.

Movements in the allowance for impairment loss recognized on notes receivable and accounts receivable are as follows:

Individually Assessed for Impairment Collectively Assessed for Impairment Balance at January 1, 2017 $ 545,710 $ - Impairment loss recognized on receivables 78,222 - Amount transferred from disposal of subsidiaries (2,126) - Amounts written off (102) - Translation adjustments (5,429) - Balance at December 31, 2017 $ 616,275 $ -	Total $ 545,710 78,222 (2,126) (102) (5,429) $ 616,275

The allowance for impairment loss included individually impaired accounts receivable amounting to $616,275 thousand as of December 31, 2017. These amounts relate to the Group’s risk control process involving customers with tight cash flows. The impairment recognized represents the difference between the carrying amount of these accounts receivable and the present value of the expected proceeds received from liquidation. The Group did not hold any collateral on these impaired receivables.

b. Other receivables

2018

The credit period was 60 days after the end of the month.

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	December 31,	December 31,
		2018
Up to 60 days	$ 1,187,546
61-90 days		398
91-120 days		6,570
More than 120 days		126,436
Total	$ 1,320,950
The aging of other receivables that were impaired is as follows:
	December 31,
		2018
Up to 60 days	$	8,400
61-90 days		-
91-120 days		-
More than 120 days		-
Total	$	8,400

The above analysis is based on the past-due date from the end of the credit term.

The movements of the loss allowance of other receivables are as follows:

Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1, 2018 per IFRS 9 Add: Impairment losses Balance at December 31, 2018 2017	2018 $ - - - 8,400 $ 8,400

The credit period was 60 days after the end of the month. The allowance for impairment loss was recognized on the basis of estimated irrecoverable amounts determined by an aging analysis, reference to past default experiences of the counterparties and an assessment of the counterparties’ current financial positions.

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The status of other receivables at the end of the reporting period is presented in the following table.

	December 31,
	2017
Neither past due nor impaired	$ 1,976,109
Past due but not impaired - 61 days to 90 days	89
Past due but not impaired - 91 days to 120 days	61
Past due but not impaired - more than 120 days	83,957
Both past due and impaired - more than 120 days	-
Total	$ 2,060,216

The above analysis is based on the past due date from the end of the credit term.

Collateral Interest Rate Fixed rate NTD-denominated loans receivables at NTD200,000 thousand $ - 1.608% Fixed rate USD-denominated loans receivables at USD3,500 thousand (1) - 5%		December 31	December 31
		2018 $ 200,000 107,590 $ 307,590	2017 $ - 358,176 $ 358,176

1) The repayments of USD8,500 thousand were received in 2018, and the remaining principal is expected to be received in full on the maturity date.

14. FINANCE LEASE RECEIVABLES

Gross investment in leases Not later than 1 year Over 1 year to 5 years Later than 5 years Less: Unearned finance income Present value of minimum lease payments		December 31	December 31
		2018 $ 714,190 2,476,238 7,868,447 11,058,875 (5,432,001) $ 5,626,874	2017 $ 564,638 1,997,752 6,193,761 8,756,151 (4,762,362) $ 3,993,789

The Group entered into several electricity purchase agreements (refer to Note 44) for the Group to sell all electricity to Corporación Dominicana de Empresas Eléctricas Estatales, Taiwan Power Company, Good Energy Limited, Indianapolis Power & Light Company and DP World FZE, etc. after the electric generating facilities are operating with the distribution system. The average term of finance leases entered into was 15 to 25 years. Since these agreements were covered by IFRIC 4 “Determining Whether an Arrangement contains a Lease” and IAS 17 “Leases,” they were accounted for as finance leases.

The interest rate inherent in the leases was fixed at the contract date for the entire lease term. The effective interest rate contracted was 1.234% to 14.279% per annum.

48 -

The amounts of finance lease receivables pledged as collateral for bank loans are shown in Note 43.

Loss allowance of finance lease receivables was estimated at the reporting date. For those with credit risk that did not increase significantly since initial recognition, 12-month ECL was applied; for those with credit risk that increased significantly since initial recognition, lifetime ECL was applied. As of December 31, 2018, no finance lease receivable was past due. The Group has not recognized any loss allowance for finance lease receivables after considering historical experience, industry forecasts and the collaterals.

The finance lease receivables as of December 31, 2018 and 2017 were neither past due nor impaired.

The Group derecognized lease receivable as of December 31, 2018 and 2017 in $771,348 thousand and $1,306,805 thousand because of disposal of subsidiaries.

15. AMOUNTS DUE FROM (TO) CUSTOMERS FOR CONSTRUCTION CONTRACTS

	December 31,	December 31,
		2017
Amounts due from customers for construction contracts
Construction costs incurred plus recognized profits less recognized
losses to date	$	465,894
Less: Progress billings		(401,599)
Amounts due from customers for construction contracts	$	64,295
Amounts due to customers for construction contracts
Progress billings	$	211,861
Less: Construction costs incurred plus recognized profits less
recognized losses to date		(139,898)
Amounts due to customers for construction contracts	$	71,963

For the year ended December 31, 2017, the Group recognized construction revenue of $605,792 thousand.

The Group adopted IFRS 15 since 2018. The net effect of revenue recognized, consideration received and receivable are recognized as contract assets (liabilities), refer to Note 30 for the details.

16. INVENTORIES

Finished goods and goods Work in progress Raw materials Power facilities construction in progress		December 31	December 31
		2018 $ 1,220,727 10,174 684,287 1,470,298 $ 3,385,486	2017 $ 899,821 81,688 461,919 1,529,163 $ 2,972,591

Power facilities construction in progress is the cost relevant to power facilities construction which will be sold in the near future.

49 -

In 2018, the cost of sales related to inventories was $13,722,481 thousand, which included (1) unallocated fixed manufacturing overhead of $1,075,295 thousand; (2) income of $3,527 thousand from the sale of scraps; (3) losses on purchase contracts of $319,657 thousand; and (4) reversal of inventories write-downs of $19,129 thousand; (5) loss of $14,189 thousand from the disposal of obsolete inventories.

In 2017, the cost of sales related to inventories was $12,204,604 thousand, which included (1) unallocated fixed manufacturing overhead of $795,159 thousand; (2) income of $7,276 thousand from the sale of scraps; (3) losses on purchase contracts of $1,063,138 thousand; and (4) reversal of inventories write-downs of $307,015 thousand; (5) loss of $34,889 thousand from the disposal of obsolete inventories.

Refer to Note 43 for the carrying amount of inventories pledged by the Corporation to secure borrowings.

17. NON-CURRENT ASSETS HELD FOR SALE

Power facilities Machinery and equipment Office equipment Miscellaneous equipment		December 31	December 31
		2018 $ - - - - $	2017 $ 143,090 134,006 9 3,673 $ 280,778

In the second and fourth quarter of 2017, the Group intended to dispose of a parcel of power facilities and reclassified such assets to non-current assets classified as held for sale. The Group assessed that there were no indications of impairment because their recoverable amount was estimated to be higher than their carrying amount. No impairment loss was recognized on classification of the land as held for sale for the year ended December 31, 2017. The above-mentioned power facilities held for sale have already completed the disposal procedures in the second and third quarter of 2018. This transaction generated a profit of $6,387 thousand.

On November 10, 2015, the Corporation’s board of directors approved the disposal of a parcel of assets to TS Solartech Sdn Bhd. by installment payment. The first disposal was completed on November 27, 2015; the second parcel of machinery and equipment was intended for transfer out before November 2016. However, installment accounts receivable from TS Solartech Sdn Bhd., due to the disposal of machinery, were not recoverable after assessment, so the Corporation reclaimed those pieces of equipment in accordance with the contract, and that disposal group held for sale was reclassified to property, plant and equipment. the Corporation intended to dispose of the above equipment and reclassified such assets to non-current assets classified as held for sale in fourth quarter of 2017. The Corporation assessed that there were indications of impairment because their recoverable amounts measured at fair value on a non-recurring basis of $137,688 thousand was estimated to be less than their carrying amounts, and thus, an impairment loss of $31,593 thousand was recognized, and the disposal was completed in the first quarter of 2018.

On May 9, 2017, board of directors of the Corporation approved the disposal of the building in Zhu-nan and its auxiliary equipment and reclassified such assets to non-current assets classified as held for sale in the second quarter of 2017. The Corporation signed the disposal contract on July 11, 2017, and the Corporation assessed that there were no indications of impairment because the selling price was higher than the carrying amount; the disposal was completed in the third quarter of 2017

In the first quarter of 2017, the Corporation intended to dispose of a parcel of machinery and equipment and reclassified such assets to non-current assets classified as held for sale. The Group assessed that there were indications of impairment because their recoverable amount measured at fair value on a non-recurring basis of $45,097 thousand was estimated to be less than their carrying amount; and thus, an impairment loss of

50 -

$12,076 thousand was recognized for the three months ended March 31, 2017, and the disposal was completed in the second quarter of 2017.

18. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements

Investor
Investee
Main Business
The Corporation
General Energy Solutions Inc. (“GES”)
Electronic component manufacturing
and selling
Prime Energy Corp. (“Prime Energy”)
Electronic component manufacturing
and selling
New Ray Investment Corp. (“New Ray
Investment”)
Investment company
DelSolar Holding Singapore Pte. Ltd.
(“DelSolar Singapore”)
Investment company
DelSolar Holding (Cayman) Ltd. (“DelSolar
Cayman”)
Investment company
NSP Systems (BVI) Ltd. (“NSP BVI”)
Investment company
NSP UK Holding Limited (“NSP UK”)
Investment company
Best Power Service Corp. (“BPS”)
Solar-related business
NSP System Development Corp. (“NSP
System”)
Solar-related business
GES Energy Middle East FZE (“GES ME”) Solar-related business
Utech solar corporation (“Utech”)
Electronic component manufacturing
and selling
Ultimate Energy Solution Limited (“UES”) Investment company
Solartech Materials Corporation (“SMC”)
Electronic component manufacturing
and selling
Apex solar Corporation (“Apex”)
Electronic component manufacturing
and selling
Solartech Japan Corporation (“Solartech
JP”)
Electronic component manufacturing
and selling
Zhongyang Corporation (“Zhongyang”)
Electronic component manufacturing
and selling
Huiyang Corporation (“Huiyang”)
Electronic component manufacturing
and selling
True Honour Limited
Investment company
GES
Yong Liang Ltd. (“Yong Liang”)
Solar-related business
Yong Han Ltd. (“Yong Han”)
Solar-related business
Yong Zhou Ltd. (“Yong Zhou”)
Solar-related business
Yun Yeh Energy INC. (“Yun Yeh”)
Solar-related business
Ever Lite Power Inc. (“Ever Lite”)
Electronic component manufacturing
and selling
Yong Yao Ltd. (“Yong Yao”)
Solar-related business
Yong Shun Ltd. (“Yong Shun”)
Solar-related business
Abacus Renewable One Japan Ltd.
(“Abacus”)
Solar-related business
General Energy Solutions UK Limited
(“GES UK”)
Investment company
ELECTRONIC J.R.C. S.R.L (“JRC”)
Solar-related business
GES UK
General Energy Solutions USA. Inc. (“GES
USA”)
Investment company
GES JAPAN CORPORATION (“GES
JAPAN”)
Investment company
NCH Solar 1 Limited (“NCH Solar 1”)
Solar-related business
GES Solar 2 Limited (“GES Solar 2”)
Solar-related business
GES Solar 3 Limited (“GES Solar 3”)
Solar-related business
General Energy Solutions CANADA Inc.
(“GES CANADA”)
Investment company
GES USA
ET ENERGY SOLUTIONS LLC (“ET
ENERGY”)
Solar-related business
TIPPING POINT ENERGY COC PPA
SPE-1, LLC (“TIPPING POINT”)
Solar-related business
MEGATWO, LLC (“MEGATWO”)
Solar-related business
GES MEGAFIVE, LLC (“MEGAFIVE”)
Solar-related business
GES MEGASIX, LLC (“MEGASIX”)
Solar-related business
GES MEGASEVEN, LLC
(“MEGASEVEN”)
Solar-related business
GES MEGAEIGHT, LLC
(“MEGAEIGHT”)
Solar-related business
GES MEGANINE, LLC (“MEGANINE”)
Solar-related business
GES MEGATEN, LLC (“MEGATEN”)
Solar-related business
GES MEGAELEVEN, LLC
(“MEGAELEVEN”)
Solar-related business
GES MEGATWELVE, LLC
(“MEGATWELVE”)
Solar-related business
GES MEGATHIRTEEN, LLC
(“MEGATHIRTEEN”)
Solar-related business

% of Ownership
December 31
2018
2017
Remark
100.00
100.00
5
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
60.00
60.00
-
100.00
100.00
-
100.00
100.00
-
98.30%
-
11
100.00%
-
11
100.00%
-
11
100.00%
-
11
100.00%
-
11
100.00%
-
11
100.00%
-
11
99.50%
-
11
100.00
100.00
-
-
100.00
2
100.00
100.00
-
-
100.00
2
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
-
-
2
100.00
100.00
-
1.00
1.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
-
-
1
-
55.00
2
100.00
100.00
-
-
-
1
-
-
1
-
55.00
2
100.00
100.00
-
100.00
-
8

(Continued)

51 -

Investor
Investee
Main Business

GES USA
GES MEGAFOURTEEN, LLC
(“MEGAFOURTEEN”)
Solar-related business
GES MEGAFIFTEEN, LLC
(“MEGAFIFTEEN”)
Solar-related business
GES MEGASIXTEEN, LLC
(“MEGASIXTEEN”)
Solar-related business
GES MEGASEVENTEEN, LLC
(“MEGASEVENTEEN”)
Solar-related business
GES MEGANINETEEN, LLC
(“MEGANINETEEN”)
Solar-related business
GES MEGATWENTY, LLC
(“MEGATWENTY”)
Solar-related business
GES ASSET ONE, LLC. (“ASSET ONE”) Solar-related business
GES ASSET TWO, LLC. (“ASSET TWO”) Solar-related business
GES ASSET THREE LLC (“ASSET
THREE”)
Solar-related business
GES ASSET FOUR LLC (“ASSET
FOUR”)
Solar-related business
CENERGY PORTFOLIO LLC
(“CENERGY”)
Solar-related business
SH4 SOLAR LLC (“SH4”)
Solar-related business
Cedar Falls Solar Farm, LLC (“CEDAR
FALLS”)
Solar-related business
Schenectady Solar, LLC (“Schenectady”)
Solar-related business
Village of Coxsackie Municipal Solar
Project One, LLC (“VOC”)
Solar-related business
Heywood Solar PGS, LLC (“HEYWOOD”) Solar-related business
SEG MI 57 LLC (“SEG”)
Solar-related business
Kinect Solar Fund 1, LLC (“KINECT”)
Solar-related business
RER CT 57, LLC (“RER CT 57”)
Solar-related business
MP Solar, LLC (“MP Solar”)
Solar-related business
Ventura Solar LLC (“Ventura”)
Solar-related business
TEV II, LLC (TEV II) Investment Company Solar-related business
GES JAPAN
GES FUKUSHIMA CORPORATION
(“GES FUKUSHIMA”)
Solar-related business
GES KYUSHU CORPORATION
(“GES KYUSHU”)
Solar-related business
Hashimoto Corporation (“Hashimoto”)
Solar-related business
GES CANADA
ELECTRONIC J.R.C., S.R.L (“JRC”)
Solar-related business
MEGATWO
Munisol S.A.P.I. de C.V. (“MUNISOL”)
Solar-related business
ASSET THREE
GES Asset Three Shima’s, LLC
(“SHIMA’S”)
Solar-related business
GES Asset Three Waimea, LLC
(“WAIMEA”)
Solar-related business
GES Asset Three Honokawai, LLC
(“HONOKAWAI”)
Solar-related business
GES Asset Three Eleele, LLC (“ELEELE”) Solar-related business
GES Asset Three Hanalei, LLC
(“HANALEI”)
Solar-related business
GES Asset Three Kapaa, LLC (“KAPAA”) Solar-related business
GES Asset Three Koloa, LLC (“KOLOA”) Solar-related business
CENERGY
Smart Farm Inashiki Godo Kaisha
(“Inashiki GK”)
Solar-related business
Smart Farm Namegata Godo Kaisha
(“Namegata GK”)
Solar-related business
MEGASIXTEEN
GES AC SOLAR 2017, LLC (“GES AC”)
Solar-related business
GES AC
Anderson North Solar Project LLC
(“Anderson N.”)
Solar-related business
Anderson South Solar Project LLC
(“Anderson S.”)
Solar-related business
Flora Solar Project LLC (“Flora”)
Solar-related business
Greenfield Solar Project LLC
(“Greenfield”)
Solar-related business
Spiceland Solar Project LLC (“Spiceland”) Solar-related business
TEV II
TEV Solar Alpha18 LLC (TEV Solar)
Solar-related business
TEV Solar
AC GES Solar 2018 LLC (AC GES Solar)
Solar-related business
AC GES Solar
Richmond 2 Solar Park, LLC (Richmond)
Solar-related business
Rensselaer 2 Solar Park, LLC (Rensselaer)
Solar-related business
Advance Solar Park, LLC (Advance)
Solar-related business
DelSolar Cayman
DelSolar (HK) Ltd. (“DelSolar HK”)
Investment company
DelSolar US Holdings (Delaware)
Corporation (“DelSolar US”)
Investment company
NSP SYSTEM NEVADA HOLDING
CORP. (“NSP NEVADA”)
Solar-related business
URE NSP Corporation (URE NSP)
Solar-related business
NSP BVI
NSP HK Holding Ltd. (“NSP HK”)
Solar-related business
Clean Focus GP Limited (“CFGP”)
Solar operation management services

% of Ownership
December 31
2018
2017
Remark
-
-
2
-
55.00
2
100.00
-
7 and 8
-
-
1
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
-
-
1
100.00
100.00
-
-
-
1
-
-
1
100.00
100.00
-
100.00
100.00
-
-
-
1
-
-
1
55.00
55.00
4
100.00
-
1
100.00
100.00
-
100.00
100.00
-
55.00
55.00
4
55.00
55.00
4
50.00
-
9
-
-
2
-
100.00
2 and 6
100.00
100.00
6
99.00
99.00
-
100.00
100.00
-
100.00
-
8
100.00
100.00
-
100.00
-
8
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
-
-
3
-
-
3
67.59
67.59
7
100.00
100.00
7
100.00
100.00
7
100.00
100.00
7
100.00
100.00
7
100.00
100.00
7
100.00
-
9
66.19
-
10
100.00
-
10
100.00
-
10
100.00
-
10
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
-
12
-
-
1

60.00
60.00
-
(Continued)

52 -

Investor
Investee
Main Business

DelSolar Singapore
DelSolar India EPC Company Private Ltd.
(“DelSolar India”)
Solar-related business
Neo Solar Power Malaysia Sdn. Bhd (“NSP
Malaysia”)
Technical management services
Neo Solar Power Vietnam Co., Ltd (“NSP
Vietnam”)
Technical management services
NSP UK
NSP Germany GmbH (“NSP Germany”)
Solar-related business
PV-Power-Park Pro1 Verwaltings GmbH
(“PV-Power-Park”)
Solar-related business
NSP Indygen UK Ltd. (“NSP Indygen”)
Solar-related business
NSP System
Hsin Jin Optoelectronics (“Hsin Jin
Optoelectronics”)
Solar-related business
.
Hsin Jin Solar Energy Co., Ltd. (“Hsin Jin
Solar Energy”)
Solar-related business
Si Two Corp. (“Si Two”)
Solar-related business
NSP HK
XYH (Suzhou) Energy Ltd. (“XYH
Suzhou”)
Solar-related business
CFGP
Clean Focus GP (HK) Limited. (“CFGP
(HK)”)
Solar operation management services
DelSolar HK
DelSolar (Wu Jiang) Ltd. (“DelSolar Wu
Jiang”)
Solar-related business
NSP Japan Inc. (“NSP Japan”)
Solar-related business
Neo Solar Power (Nanchang) Ltd. (“NSP
Nanchang”)
Solar-related business
NSP NEVADA
Livermore Community Solar Farm, LLC
(“Livermore”)
Solar-related business
HI Solar Green 1 LLC
Solar-related business
HI Solar Green 2 LLC
Solar-related business
HI Solar Green 3 LLC
Solar-related business
HI Solar Green 4 LLC
Solar-related business
HI Solar Green 5 LLC
Solar-related business
HI Solar Green 6 LLC
Solar-related business
HI Solar Green 7 LLC
Solar-related business
HI Solar Green 8 LLC
Solar-related business
HI Solar Green 9 LLC
Solar-related business
HI Solar Green 10 LLC
Solar-related business
GES MEGASEVEN, LLC
(“MEGASEVEN”)
Solar-related business
GES MEGAELEVEN, LLC
(“MEGAELEVEN”)
Solar-related business
GES MEGAFOURTEEN, LLC
(“MEGAFOURTEEN”)
Solar-related business
GES MEGAFIFTEEN, LLC
(“MEGAFIFTEEN”)
Solar-related business
Heywood Solar PGS, LLC (“HEYWOOD”) Solar-related business
Industrial Park Drive Solar, LLC
(“Industrial Park”)
Solar-related business
Hillsboro Town Solar, LLC (“Hillsboro”)
Solar-related business
MP Solar, LLC (“MP Solar”)
Solar-related business
Ventura Solar, LLC (“Ventura”)
Solar-related business
DelSolar US
DelSolar Development (Delaware) LLC
(“DelSolar Development”)
Solar-related business
Clean Focus Renewables Inc. (“CFR”)
Solar-related business
USD1 Owner LLC (“USD1”)
Solar-related business
Beryl Construction LLC (“Beryl”)
Solar-related business
NSP Indygen
UKEG POTTERS BAR LIMITED
(“POTTERS BAR”)
Solar-related business
UKEG CLAY CROSS LIMITED (“CLAY
CROSS”)
Solar-related business
UKEG BELPER LIMITED (“BELPER”)
Solar-related business
GDL Bryncrynau Ltd. (“Bryncrynau”)
Solar-related business
GDL Upper Meadowley Ltd.
(“Meadowley”)
Solar-related business
CFGP (HK)
Clean Focus GP (Shanghai) Limited.
(“CFGP (Shanghai)”)
Solar operation management services
DelSolar Wu Jiang
Neo Solar Power (Nanchang) Ltd. (“NSP
Nanchang”)
Solar-related business
DelSolar Development
DSS-USF PHX LLC
Solar-related business
DSS-RAL LLC
Solar-related business
CFR
Rugged Solar LLC
Solar-related business
AVS Phase 2 LLC
Solar-related business
Clear Solar I LLC
Solar-related business
CEC Solar #1117 LLC (CEC Solar #1117)
Solar-related business
CEC Solar #1118 LLC (CEC Solar #1118)
Solar-related business
CEC Solar #1119 LLC (CEC Solar #1119)
Solar-related business
CEC Solar #1121 LLC (CEC Solar #1121)
Solar-related business
CEC Solar #1122 LLC (CEC Solar #1122)
Solar-related business
CEC Solar #1128 LLC (CEC Solar #1128)
Solar-related business

% of Ownership
December 31
2018
2017
Remark
-
100.00
3
100.00
100.00
-
100.00
100.00
-
90.00
90.00
-
100.00
100.00
-
-
-
1
80.00
80.00
-
60.00
60.00
-
100.00
100.00
-
100.00
100.00
-

100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
11.36
11.36
-
75.00
75.00
-
-
-
2
-
-
2
-
-
2
-
-
2
-
-
2
-
-
2
-
-
2
-
-
2
-
-
2
-
-
2
-
45.00
2
-
45.00
2
-
-
2
-
45.00
2
45.00
45.00
4
100.00
100.00
-
100.00
100.00
-
45.00
45.00
4
45.00
45.00
4
100.00
100.00
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
4
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2

100.00
100.00
-
88.64
88.64
-
100.00
100.00
-
100.00
100.00
-
100.00
100.00
1
-
-
1
-
-
1
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
(Continued)

53 -

Investor
Investee
Main Business

CFR
CEC Solar #1130 LLC (CEC Solar #1130)
Solar-related business
CEC Solar #1133 LLC (CEC Solar #1133)
Solar-related business
Klamath Falls Solar 2 LLC (Ewauna)
Solar-related business
232 Long Beach 29 Solar I, LLC (Long
Beach)
Solar-related business
233 Randolph 74 Solar I LLC (Randolph)
Solar-related business
CF Roseville Owner LLC (Roseville)
Solar-related business
NHSG Alpine Ridge Solar, LLC (NHSG)
Solar-related business
UES
Renewable Energy Solution Limited (RES) Investment company
RES
Gintech (Thailand) Limited (Gintech
Thailand)
Solar-related business

% of Ownership
December 31
2018
2017
Remark
-
-
1 and 2
-
-
1 and 2
-
-
1 and 2
-
-
1
-
-
1
-
-
1 and 2
-
-
1 and 2
100.00%
-
11
100.00%
-
11

(Concluded)

Note 1: The subsidiary was deemed as a subsidiary of the Group in accordance with IFRS 10.
Note 2: HI Solar Green 1 LLC, HI Solar Green 2 LLC, HI Solar Green 3 LLC, HI Solar Green 4 LLC, HI Solar Green 5 LLC, HI Solar Green 6 LLC, HI Solar Green 7 LLC, HI Solar Green 8 LLC, HI Solar Green 9 LLC and HI Solar Green 10 LLC were all disposed of in January 2017. Abacus was disposed in June 2017. GES FUKUSHIMA was disposed in July 2017. MEGAFOURTEEN was disposed in November 2017. The liquidation of New Castle was completed in December 2017. Yong Han was disposed of in March 2018. Yun Yeh was disposed of in March 2018. MEGASEVEN, MEGAELEVEN and MEGAFIFTEEN were all disposed of in June 2018. GES KYUSHU was disposed of in October 2018. POTTERS BAR,CLAY CROSS, BELPER, Bryncrynau and Meadowley were all disposed of in October 2018. CEC Solar #1117, CEC Solar #1118, CEC Solar #1119, CEC Solar #1121, CEC Solar #1122, CEC Solar #1128, CEC Solar #1130, CEC Solar #1133, and Ewauna were all disposed of in the fourth season.
Note 3: The cancellation of Inashiki GK and Namegata GK were completed in April 2017, the cancellation of DelSolar India was completed in March 2018.
Note 4: HEYWOOD was 55% - owned by GES USA and 45% - owned by NSP NEVADA in February 2017. Beryl was 100% - owned by DelSolar US in March 2017. MP Solar and Ventura were 55% - owned by GES USA and 45% - owned by the Corporation NEVADA in October 2017, respectively.
Note 5: The Corporation considers the development of the solar energy industry and the growth of future requirements in its investment strategy. In order to expand the solar energy industry and strengthen the operating ability, on October 16, 2017, the Corporation’s board of directors approved to increase the investment in GES by 46,104,764 ordinary shares of GES by public tender offer (approximately 24.11% of the total issued ordinary shares of GES). As of November 6, 2017, the acquisition date, the Corporation acquired 43,090,282 shares and obtained a total of 3,014,482 shares from other shareholders in November and December 2017, and GES became a 100%-owned subsidiary of the Group.
Note 6: GES JAPAN acquired 55% ownership of GES KYUSHU and Hashimoto; thus, GES KYUSHU and Hashimoto became 100%-owned subsidiaries in October 2017.
Note 7: MEGASIXTEEN was established for taxation purposes based on an agreement. MEGASIXTEEN established GES AC with MPC AC 2017 Energy Fund, LLC (”MPC”), and acquired 67.59% of the shares of GES AC in December 2017. Through GES AC, MEGASIXTEEN owned 5 Power Facilities LLC under GES AC.
Note 8: As GES USA had injected capital in MEGASIXTEEN and MEGATHIRTEEN since the first quarter and second quarter of 2018, MEGASIXTEEN became a 100%-owned subsidiary of GES USA. In view of the fact that the power facilities of SHIMA and HONOKAWAI had
54 -

been operated since the first quarter of 2018, SHIMA and HONOKAWAI became 100%-owned subsidiaries to ASSET THREE.

Note 9: GES USA and non-related party, Telamon Enterprise Ventures (“Telamon”) established TEV II and each acquired 50% of the shares of TEV II, based on an agreement. GES USA is responsible for all relevant events and the risk of fluctuating return, thus, GES USA obtains substantial control over TEV II.
Note 10: TEV II acquired 100% of the shares of TEV Solar. TEV Solar and non-related party, Advantage Capital Solar Partners II, LLC(“ACS”) established AC GES Solar. TEV Solar acquired 66.19% of the shares of AC GES Solar which is the 100% owner of three LLC solar power facilities engaged in solar-related business.
Note 11: The acquisitions of subsidiaries were due to the absorption merging of two corporations, Gintech Energy and Solartech Energy on October 1, 2018.
Note 12: As DelSolar Cayman had injected capital in URE NSP in November 2018, URE NSP became a 100%-owned subsidiary of DelSolar Cayman.
b. Details of subsidiaries that have material non-controlling interests

As of December 31, 2018, the Group did not have subsidiaries that have material non-controlling interests.

Name of Subsidiary Principal Place of Business GES Hsin-Chu GES AC America CFGP British Virgin Islands (Loss) Gain Allocated to Non-controlling Interests For the Year Ended Name of Subsidiary December 31, 2017 GES (Without non-controlling interests of subsidiaries) $ 19,978 GES AC - CFGP (26,756) Others 952 Total $ (5,826)	% of Ownership and Voting Rights Held by Non-controlling Interests
	December 31, 2017 - 32.41 40.00 Accumulated Non-controlling Interests
	December 31, 2017 $ - 175,793 62,661 19,954 $ 258,408

55 -

Summarized financial information in respect of each of the Group’s subsidiaries with material non-controlling interests is set out below. The summarized financial information below represents amounts before intragroup eliminations.

	December 31,	December 31,
		2017
GES and GES’s subsidiaries
Current assets	$	946,606
Non-current assets		6,732,726
Current liabilities		(4,244,955)
Non-current liabilities		(1,230,492)
Equity	$	2,203,885
Equity attributable to:
Owners of GES	$	1,821,774
Non-controlling interests of GES		-
Non-controlling interests of GES’s subsidiaries		382,111
	$	2,203,885
	For the Year
		Ended
	December 31,
		2017
Revenue	$	521,594
Income for the year	$	38,262
Other comprehensive loss for the year		(161,308)
Total comprehensive loss for the year	$	(123,046)
Profit attributable to:
Owners of GES	$	21,038
Non-controlling interests of GES		19,978
Non-controlling interests of GES’s subsidiaries		(2,754)
	$	38,262
Total comprehensive loss attributable to:
Owners of GES	$	(108,990)
Non-controlling interests of GES		(11,302)
Non-controlling interests of GES’s subsidiaries		(2,754)
	$	(123,046)
Net cash inflow from:
Operating activities	$	1,309,371
Investing activities		(2,637,541)
Financing activities		932,438
Effects of exchange rate changes		(7,913)
Net cash outflow	$	(403,645)

56 -

	December 31,	December 31,
		2017
GES AC and GES’s Subsidiaries
Current assets	$	24
Non-current assets		1,097,869
Current liabilities		(829,270)
Non-current liabilities		(49,656)
Equity	$	218,967
Equity attributable to:
Owners of GES AC	$	43,174
Non-controlling interests of GES AC		175,793
	$	218,967
CFGP and CFGP’s subsidiaries
Current assets	$	35,318
Non-current assets		153,429
Current liabilities		(1,639)
Equity	$	187,108
Equity attributable to:
Owners of CFGP	$	124,447
Non-controlling interests of CFGP		62,661
	$	187,108
	For the Year
		Ended
	December 31,
		2017
Revenue	$	-
Loss for the year	$	(66,889)
Other comprehensive income for the year		-
Total comprehensive loss for the year	$	(66,889)
Loss attributable to:
Owners of CFGP	$	(40,133)
Non-controlling interests of CFGP		(26,756)
	$	(66,889)
Total comprehensive loss attributable to:
Owners of CFGP	$	(40,133)
Non-controlling interests of CFGP		(26,756)
	$	(66,889)
		(Continued)

57 -

	For the Year	For the Year
		Ended
	December 31,
		2017
Net cash inflow from:
Operating activities	$	32,960
Financing activities		-
Effects of exchange rate changes		33
Net cash inflow	$	32,993
		(Concluded)

19. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures a. Investments in associates Material associates Clean Focus Yield Limited (“CFY”) Neo Cathay Power Corp. (“Neo Cathay”) Associates that are not individually material Clean Focus Yield Limited (“CFY”) Neo Cathay Power Corp. (“Neo Cathay”) TS Solartech SDN BHD (“TSST”) V5 Technology Gintung energy Corp. (“Gintung”) MEGATHREE JNV SOLAR POWER CO., LTD. (“JSP”) Sunshine PV Corp. (“Sunshine PV”) Solar PV Corp (“Solar PV”)		December 31	December 31
		2018 2017 $ 2,314,046 $ 1,822,981 67,174 64,792 $ 2,381,220 $ 1,887,773 December 31
		2018 $ - - - 1,295,281 608,316 254,093 69,860 44,424 34,539 7,533 - - 2,314,046 $ 2,314,046	2017 $ 1,130,375 578,238 1,708,613 - - - 72,402 - 32,650 9,316 - - 114,368 $ 1,822,981

58 -
1) Material associates

As of December 31, 2018, the Group did not have material associates.

At the end of the reporting period, the proportion of ownership and voting rights in associates held by the Group were as follows:

Name of Company CFY Neo Cathay	December 31
	2018 2017 - 26.99% - 40.00%

Summarized financial information in respect of each of the Group’s material associates is set out below. The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRS adjusted by the Corporation for equity accounting purposes.

CFY

	December 31,	December 31,	December 31,
			2017
Current assets	$		3,421,244
Non-current assets			9,936,667
Current liabilities		(2,600,813)
Non-current liabilities		(5,418,742)
Equity			5,338,356
Non-controlling interest		(2,514,794)
Unrecognized changes in equity of profit and loss and
non-other comprehensive income			(18,159)
	$		2,805,403
Proportion of the Group’s ownership			26.99%
Equity attributable to the Group	$		757,178
Unrealized gain with associates			(4,588)
Goodwill			370,712
Other adjustments			7,073
Investment carrying value	$		1,130,375
	For the Year
			Ended
	December 31,
			2017
Revenue	$		417,826
Profit from operations	$		417,826
Net profit for the period	$		94,486
Other comprehensive loss	$		(1,745)
Total comprehensive income for the period	$		92,741

59 -

Neo Cathay

Current assets Non-current assets Current liabilities Equity Proportion of the Corporation’s ownership Equity attributable to the Corporation Unrealized gain with associates Investment carrying value Revenue Loss from operations Net profit (loss) for the period Other comprehensive loss Total comprehensive income (loss) for the period	December 31, 2017 $ 681,238 817,097 (400) $ 1,497,935 40.00% $ 599,173 (20,935) $ 578,238 For the Year Ended December 31, 2017 $ - $ - $ 846 $ - $ 846

A valuation report of CFY received in fourth quarter of 2017, the Group adjusted the initial accounting and tentative amount estimated at the acquisition date according to the valuation report.

2) Aggregate information of joint ventures that are not individually material

At the end of the reporting period, the proportion of ownership and voting rights in joint ventures held by the Corporation were as follows:

Name of Company CFY Neo Cathay TSST V5 Technology Gintung MEGATHREE JSP Sunshine PV Solar PV	December 31
	2018 2017 28.67% - 40.00% - 42.12% - 41.43% 41.43% 36.38% - 40.00% 40.00% 35.00% 35.00% 19.47% - 19.92% -

The acquisitions of TSST, Gintung, Sunshine PV and Solar PV as joint ventures were due to the absorption merging of two corporations, Gintech Energy and Solartech Energy on October 1, 2018.

60 -

Aggregate information of associates that are not individually material was as follows:

The Group’s share of: Net loss for the year Other comprehensive income for the year Total comprehensive (loss) for the year	2018 $ (7,625) (36,641) $ (44,266)	2017 $ (18,306) - $ (18,306)

A valuation report of V5 Technology was received in the fourth quarter of 2017, the Group adjusted the initial accounting and tentative amount estimated at the acquisition date according to the valuation report.

The Group had recognized impairment loss of equity investment of Sunshine PV, an associate, so that the Group did not recognize any share of profit or loss of associates. However, based on the changes in the Group’s share of equity of associates attributable to the Group was $4,026 thousand, as of December 31, 2018.

The Group had recognized impairment loss of equity investment of Solar PV, an associate, so that the Group did not recognize any share of profit or loss of associates. However, based on the changes in the Group’s share of equity of associates attributable to the Group was $361 thousand, as of December 31, 2018.

b. Investments in joint ventures

Joint ventures that are not individually material NSP ET CAP MN HOLDINGS LLC (“JV2”) CF MN DevCo One LLC (“DevCo One”) CF MN DevCo Two LLC (“DevCo Two”)		December	31
		2018 $ 63,088 2,043 2,043 $ 67,174	2017 $ 61,202 1,795 1,795 $ 64,792

At the end of the reporting period, the proportion of ownership and voting rights in joint ventures held by the Corporation were as follows:

Name of Company JV2 (Note 1) DevCo One (Note 2) DevCo Two (Note 2)	December 31
	2018 2017 67.00% 67.00% 40.00% 40.00% 40.00% 40.00%

Note 1: NSP ET CAP MN HOLDINGS LLC (JV2) jointly invested in DelSolar US, a subsidiary of the Corporation, and ET Capital Solar Partners (USA), Inc. on December 28, 2015. As of December 31, 2018, the Group held a 67% equity interest in JV2 and two of three seats of JV2’s board of directors. Based on the contractual arrangement between DelSolar US and ET Capital Solar Partners (USA), Inc., any material management decisions of JV2 shall be approved by the full board of directors. Therefore, DelSolar US concluded that it does not have control over JV2. In addition, as specified in the contractual arrangement, both DelSolar US and ET Capital Solar Partners (USA), Inc. have an equal percentage of profit distribution.

61 -

Note 2: DevCo One was jointly invested in by USD 1 and Novel Energy Solutions, LLC. DevCo Two was jointly invested in by USD 1 and Greenmark Solar, LLC. According to the contract, all of both DevCo One and DevCo Two’s major management decisions are subject to the consent of all investors and hence the Group does not have control over DevCo One and DevCo Two. In addition, as specified in the contractual arrangement, both DevCo One and DevCo Two have a 40% profit distribution.

Aggregate information of joint ventures that are not individually material is as follows:

The Corporation’s share of: Net (loss) income for the year Other comprehensive income for the year Total comprehensive income for the year	2018 $ (17) - $ (17)	2017 $ 9,163 - $ 9,163

The information of the main business, principal operating place and registry country of the above associates and joint ventures is shown in Table 7 “Information of investees”.

Except for TSST and CFY, the investments accounted for using the equity method and the share of profit or loss and other comprehensive income of the investment were calculated based on the financial statements that have been audited. Management believes there is no material impact on the financial statements that have not been audited.

The investments in the associates and joint ventures have been pledged as collateral for bank loans, refer to note 43.

20. PROPERTY, PLANT AND EQUIPMENT

Carrying amounts Land Buildings Machinery and equipment Research and development equipment Office equipment Transportation equipment Rental assets Leasehold improvements Miscellaneous equipment Advance payments and construction in progress		December 31	December 31
		2018 $ 1,537,278 6,978,763 7,727,005 9,041 26,827 1,002 134,826 709,728 225,468 2,706,592 $ 20,056,530	2017 $ 460,731 1,774,910 4,758,939 9,503 4,095 - 69,138 10,597 52,765 4,022,221 $ 11,162,899

62 -

Cost Land Buildings Machinery and equipment Research and development equipment Office equipment Rental assets Leasehold improvements Miscellaneous equipment Property under acceptance or construction Accumulated depreciation Buildings Machinery and equipment Research and development equipment Office equipment Rental assets Leasehold improvement Miscellaneous equipment Accumulated impairment Machinery and equipment Miscellaneous equipment Cost Land Buildings Machinery and equipment Research and development equipment Office equipment Transportation equipment Rental assets Leasehold improvements Miscellaneous equipment Property under acceptance or construction Accumulated depreciation Buildings Machinery and equipment Research and development equipment Office equipment Rental assets Leasehold improvements Transportation equipment Miscellaneous equipment Accumulated impairment Machinery and equipment Inspection-awaited equipment and construction in progress			Year En	ded December 31, 20	17
		Balance, Beginning of Period Acquired from Business Combinations $ 534,450 $ - 4,327,670 - 15,465,286 - 63,735 - 59,394 - 180,408 - 15,655 - 351,352 - 2,824,476 674,595 23,822,426 $ 674,595 1,212,420 $ - 9,577,239 - 41,541 - 49,691 - 84,008 - 10,358 - 268,197 - 11,243,454 $ - 480,877 $ - 891 - 481,768 $ - $ 12,097,204	Additions $ - - 102,466 167 78 - 1,619 2,444 3,876,206 $ 3,982,980 $ 184,167 1,462,225 12,768 4,371 20,377 1,508 37,017 $ 1,722,433 $ 42,639 1,030 $ 43,669 Year En	Deduction R $ (92,559 ) (99,820 ) (166,791 ) (1,083 ) (18,912 ) - - (20,417 ) (3,861,093) $ (4,260,675) $ (27,757 ) (68,309 ) (955 ) (18,893 ) - - (17,416) $ (133,330) $ (17,952 ) - $ (17,952) ded December 31, 20	eclassification $ 20,514 (1,468,862 ) 718,610 38 (11,182 ) - 3,607 (491 ) 653,525 $ (84,241) $ (384,752 ) (88,770 ) - (9,967 ) - (1,565 ) (8,028) $ (493,082) $ (48,466 ) (1,921) $ (50,387) 18	Translation Adjustments $ (1,674 ) - (19,467 ) - (466 ) (16,290 ) 22 (353 ) (145,488) $ (183,716) $ - 1,682 - (385 ) (9,405 ) 5 - $ (8,103) $ - - $ -	Balance, End of Period $ 460,731 2,758,988 16,100,104 62,857 28,912 164,118 20,903 332,535 4,022,221 23,951,369 984,078 10,884,067 53,354 24,817 94,980 10,306 279,770 12,331,372 457,098 - 457,098 $ 11,162,899
	Balance, Beginning of the Period Acquired from Business Combinations $ 460,731 $ 1,075,945 2,758,988 5,395,126 16,100,104 4,502,972 62,857 6,259 28,912 12,530 - 1,088 164,118 - 20,903 712,700 332,535 216,673 4,022,221 274,980 23,951,369 $ 12,198,273 984,078 $ - 10,884,067 - 53,354 - 24,817 - 94,980 - 10,306 - - - 279,770 - 12,331,372 $ - 457,098 $ - - - 457,098 $ - $ 11,162,899		Additions $ - - 87,658 - 5,227 - 82,684 696 1,541 2,202,613 $ 2,380,419 $ 191,223 1,743,533 7,171 4,454 20,220 15,416 86 49,453 $ 2,031,556 $ - 257,949 $ 257,949	Deductions R $ - - (2,000 ) - (425 ) - - - (398 ) (3,349,016) $ (3,551,839) $ - (2,000 ) - (372 ) - - - (398) $ (2,770) $ - - $ -	eclassifications $ - - 131,853 450 9,380 - - 1,294 4,141 (289,803) $ (142,685) $ - - - - - - - - $ - $ - - $ -	Translation Adjustments $ 602 - (21,159 ) - 360 - 7,512 (181 ) (324 ) 103,547 $ 90,357 $ 50 (10,275 ) - 258 4,288 (38 ) - (124) $ (5,841) $ - - $ -	Balance, End of Period $ 1,537,278 8,154,114 20,799,428 69,566 55,984 1,088 254,314 735,412 554,168 2,964,542 35,125,894 1,175,351 12,615,325 60,525 29,157 119,488 25,684 86 328,701 14,354,317 457,098 257,949 715,047 $ 20,056,530

Due to the estimated decline in the net realizable value of the material module of the second phase solar power plant owned by the subsidiary of the Group in Dominica, the Group recognized an impairment loss of $257,949 thousand in other income and expenses for the year ended December 31, 2018. The fair value of the recoverable amount was categorized as a Level 3 measurement and was measured using the market approach. The key assumptions included the market quotation of the same type of module and the economic residual value to estimate the selling price.

For the impairment loss recognized and related disclosures in 2017, refer to Note 17.

63 -

Property, plant and equipment are depreciated on a straight-line basis over the following estimated useful lives of the assets:

Buildings 15-21 years Machinery and equipment 4-11 years Research and development equipment 4-6 years Office equipment 3-4 years Rental assets 10 years Leasehold improvements 4-11 years Transportation Equipment 3-5 years Miscellaneous equipment 3-16 years

The major components of the buildings held by the Group included plants and electric-powered machinery, which are depreciated over their estimated useful lives of 15 to 21 years.

Refer to Note 43 for the carrying amount of property, plant and equipment pledged by the Group to secure borrowings.

For the year ended December 31, 2018, the deductions included the transfer to finance lease receivables of $2,823,866 thousand, the disposal of property, plant and equipment of $53 thousand, and the transfer due to disposal of subsidiaries of $525,150 thousand.

For the year ended December 31, 2018, there were reclassifications from inventory of $109,854 thousand from prepayment for equipment $3,037 thousand; from property under acceptance or construction of $255,846 thousand to other expenses.

For the year ended December 31, 2017, the deductions were amounts transferred to finance lease receivables of $3,762,665 thousand, purchase discount and adjustment to cost of property, plant and equipment of $41,442 thousand, disposal of property, plant and equipment of $117,827 thousand, and amount transferred from disposal of subsidiaries $187,479 thousand.

For the year ended December 31, 2017, there were reclassifications from power facility construction in progress of $1,844,413 thousand to property under acceptance or construction, from power facility construction in progress of $20,514 thousand to land; from property under acceptance or construction of $7,313 thousand to other expenses and from building, machinery, equipment and miscellaneous equipment of $1,398,386 thousand to non-current assets classified as held for sale.

21. INTANGIBLE ASSETS

Carrying amounts of each class Contracts with consultants Contracts with customers Goodwill Software Patents Brands Others		December 31	December 31
		2018 $ 135,606 37,365 11,969 2,836 1,202 - 13,984 $ 202,962	2017 $ 141,805 106,455 11,622 - - - 1,468 $ 261,350

64 -

Cost Balance at January 1 Acquired from business combinations Acquired fair value adjustment Disposal of subsidiaries Translation adjustments Balance at December 31 Accumulated amortization Balance at January 1 Amortization Disposal of subsidiaries Translation adjustments Balance at December 31				For the Year E	nded December 31, 2017	nded December 31, 2017
	C	ontracts with Consultants $ 166,140 - - - (12,512) (153,628) - 12,045 - (222) 11,823 $ 141,805	Goodwill C $ 46,064 - (32,601 ) (893 ) (948) 11,622 - - - - - $ 11,622	ontracts with Customers $ 87,501 109,415 - (82,504 ) (7,511) 106,901 - 1,498 (1,031 ) (21) 446 $ 106,455	Brands $ 133,790 - - (89,408 ) - 44,301 102,551 2,386 (78,636 ) - 44,301 $ -	Patents $ 596 - - (596 ) - - 167 29 (196 ) - - $ -	Others $ 1,587 - - - (119) 1,468 - - - - - $ 1,468	Total $ 435,597 109,415 (32,601 ) (173,401 ) (21,090) 317,920 120,718 15,958 (79,863 ) (243) 56,570 $ 261,350

Cost Balance at January 1 Acquired from Business Combinations Additions Disposal of subsidiaries Translation adjustments Balance at December 31 Accumulated amortization Balance at January 1 Amortization Disposal of subsidiaries Translation adjustments Balance at December 31						Year Ended Dec	e	mber 31, 2018
		Contracts with Consultants $ 153,628 - - - 4,591 158,219 11,823 10,245 - 545 22,613 $ 135,606	Goodwill $ 11,622 - - - 347 11,969 - - - - - $ 11,969	Contracts with Customers		Brands		Patents		Software $ - 2,493 665 - - 3,158 - 322 - - 322 $ 2,836	Others $ 1,468 13,888 - - 112 15,468 - 1,477 - 7 1,484 $ 13,984	Total
				$ 106,901 - 3,074 (74,532 ) 4,509 39,952 446 4,586 (2,447 ) 2 2,587 $ 37,365		$ 44,301 - - - - 44,301 44,301 - - - 44,301 $ -		$ - 1,250 - - - 1,250 - 48 - - 48 $ 1,202				$ 317,920 17,631 3,739 (74,532 ) 9,559 274,317 56,570 16,678 (2,447 ) 554 71,355 $ 202,962

Contracts with consultants are for the on-going management and long-term maintenance of the power station.

Contracts with customers were long-term electricity purchase agreements that the Group entered into with local power companies and with expected 20-year revenue generation from sale of electricity.

The above items of intangible assets are amortized on a straight-line basis over 1 to 15.16 years.

A valuation report received in 2017 indicated that the fair value of non-controlling of non-controlling interest of CFGP and fair value of identifiable net assets acquired is $146,321 thousand. The Corporation adjusted the initial accounting and tentative amount estimated at the acquisition date.

For the year ended December 31, 2018 and 2017, the Group did not recognize any impairment loss.

No intangible assets were pledged as collateral for the Group’s bank loans.

22. PREPAYMENTS FOR LEASES

Current assets Non-current assets		December	31
		2018 $ 4,748 19,469 $ 24,217	2017 $ 12,117 19,700 $ 31,817

65 -

Prepayments for leases, which mainly included land use rights paid for power facilities construction in the U.S., were amortized on a straight-line basis over 30 years. As of December 31, 2018 and 2017, such land use rights amounted to $19,469 thousand and $19,700 thousand, respectively. The Group had obtained the certificates of land use rights.

23. PREPAYMENTS AND OTHER ASSETS

Prepayments Payments in advance Prepayments for equipment Others Other assets Restricted assets Pledged time deposits Temporary payment Others Prepayments Current Non-current Other assets Current Non-current		December 31	December 31
		2018 $ 2,286,892 311,706 547,164 $ 3,145,762 $ 3,701,289 595,018 264,385 620,005 $ 5,180,697 $ 638,326 2,507,436 $ 3,145,762 $ 4,981,243 199,454 $ 5,180,697	2017 $ 828,595 246,895 139,857 $ 1,215,347 $ 2,386,553 209,277 18,395 406,193 $ 3,020,418 $ 205,275 1,010,072 $ 1,215,347 $ 1,079,956 1,940,462 $ 3,020,418

The Group recognized impairment loss on prepayments after assessment; for further disclosures, refer to Note 44.

66 -

24. LOANS

a. Short-term borrowings

Secured borrowings Bank loans Non-financial loans Unsecured borrowings Line of credit borrowings		December 31	December 31
		2018 $ 270,000 41,808 311,808 6,557,820 $ 6,869,628	2017 $ 180,528 83,592 264,120 7,965,195 $ 8,229,315

1) The range of weighted average effective interest rates on bank loans was 0.8800%-4.0698% and 0.8000%-6.0000% per annum as of December 31, 2018 and 2017, respectively.
2) The secured non-financial loans were the refundable deposits that were pledged as collateral for loans to Co-operative Assets Management Co., Ltd. Robina Finance & Leasing Corp. The borrowing rate were 4.1096%-6.5000% and 3.7500% as of December 31, 2018 and 2017, respectively.
3) The unused amounts of short-term bank loan facilities were $5,227,083 thousand and $4,041,472 thousand, as of December 31, 2018 and 2017, respectively.
4) The assets pledged as collaterals for short-term bank loans are shown in Note 43.
b. Short-term bills payable

Commercial papers Less: Unamortized discount on bills payable		December 31	December 31
		2018 $ 276,600 (164) $ 276,436	2017 $ 607,100 (704) $ 606,396

Outstanding short-term bills payable were as follows:

December 31, 2018

	Nominal	Discount	Discount	Carrying	Interest
Promissory Institutions	Amount	Amount		Value	Rate
Commercial papers
International Bills Finance
Corporation	$ 163,200	$	78	$ 163,122	0.700%
International Bills Finance
Corporation	113,400		86	113,314	2.490%

67 -

December 31, 2017

	Nominal	Discount	Discount	Carrying	Interest
Promissory Institutions	Amount	Amount		Value	Rate
Commercial papers
International Bills Finance
Corporation	$ 307,100	$	254	$ 306,846	0.600%
International Bills Finance
Corporation	50,000		4	49,996	2.290%
Taiwan Cooperative Bills
Finance Corporation	200,000		415	199,585	0.972%
Taiwan Cooperative Bills
Finance Corporation	50,000		31	49,969	2.200%

The Corporation did not pledge any asset as collateral for the short-term bills payable.

c. Long-term bank loans

Secured loan
3.6 billion syndicated loan from Mega Bank (1)

4.2 billion syndicated loan from First Bank (1)
4.5 billion syndicated loan from First Bank (1)
3.3 billion syndicated loan from Taiwan Cooperative Bank

FMO & DEG Bank

Cathy Bank

CTBC Bank loan (1)

KGI Bank loan
Taiwan Cooperative Bank loan (1)
0.55 billion syndicated loan from First Bank (1)

Mega Bank

Yuanta bank

Far Eastern Bank

Union Bank of Taiwan loan (1)
EnTie bank
Unsecured loan
King’s Town Bank

0.5 billion syndicated loan from First Bank (1)

The Shanghai Commercial & Savings Bank (1)
First Bank loan (1)

Cota Commercial Bank loan (1)
Other borrowings
Machinery and equipment Financing from EQUVO Pte., Ltd.
IMPA (2)
Robina Ventures Incorporation
Inventory Financing from JihSun International Leasing &
Finance Co., Ltd.
Chailease International Financial Services. Co., Ltd.

December 31

2018
2017
$ 2,832,000 $ -
2,570,000
-
2,369,560
-

1,327,550
2,160,000

1,149,430
-

796,164
554,844

412,458
-
250,000
-
210,022
-

178,750
-

95,110
-

72,191
78,218

68,535
151,621
11,660
-
-
119,030

1,210,000
1,470,000

337,500
-
107,407
-

23,515
-
16,664
-

672,941
-
554,631
58,120
102,949
54,682
90,370
-
81,384
255,507
(Continued)

68 -

Inventory Financing from Hotai Finance Corporation Inventory Financing from Taichung Bank Leasing & Finance Co., Ltd Credit loan from IBT Leasing Corporation Limited Credit loan from JihSun International Leasing & Finance Co., Ltd. Credit loan from Taichung Bank Leasing & Finance Co., Ltd. Inventory Financing from IBT Leasing Corporation Limited inventory Financing from Robina Finance Leasing Corporation Limited Less: Current portion The range of interest rate The period of contracts		December 31
		2018 2017 $ 77,344 $ - 71,555 - 59,714 16,807 23,799 50,000 23,477 48,005 7,327 83,777 - 150,000 15,804,007 5,250,611 (6,275,497) (3,092,575) $ 9,528,510 $ 2,158,036 1.6894%- 7.8200% 1.6200%- 6.5000% December 30, 2014 to November 1, 2043 July 31, 2015 to November 29, 2042 (Concluded)

Note 1: Acquisitions through business combinations of Gintech Energy and Solartech Energy on October 1, 2018.
Note 2: MEGASIXTEEN and TEV II entered into a long-term contract with IMPA for a term of 25 years. A derivative, which has a right to sell, as a liability, was embedded in the host contract. Such right was designated on initial recognition as one to be measured at fair value through profit or loss; the embedded derivative was required to be separated from the host contract as the economic characteristics of the embedded derivative were not closely related to those of the host contract, resulting in an approximate effective interest rate of 11.08% and 11.38%, respectively.
1) The bank borrowing restrictions are as follows:

Short-term borrowings

During the credit period, while the power facilities are in operation, the agreement on the Cathay Bank secured loans requires the maintenance of certain financial ratios based on annual nonconsolidated financial statements of ASSET THREE and its subsidiaries and MEGATHIRTEEN. The related restrictions are as follows:

a) The interest coverage ratio should not be less than 110%; and
b) Debt service coverage ratio of [(Income before tax + Depreciation + Amortization + Interest expense + Reserve funds) ÷ principal and interest paid in the current year] should not be less than 150%.

If ASSET THREE and MEGATHIRTEEN fails to achieve the above financial ratios, the bank will demand immediate payment of the loan from ASSET THREE and MEGATHIRTEEN. As of December 31, 2018, the borrowings amounted to $137,937 thousand were all reclassified to

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long-term loans. As of December 31, 2017, such requirements were not applicable since the power facility was not in operation before the commercial operation date.

During the credit period, the agreement on the Taiwan Cooperative Bank, EnTie Commercial Bank and Yuanta Commercial Bank syndicated loans requires the maintenance of certain financial ratios based on the Corporation’s annual and semiannual nonconsolidated financial reports. The related restrictions are as follows:

a) Current ratio (Current assets ÷ Current liabilities): At least 100%;
b) Debt to equity ratio (Total liabilities ÷ Tangible net worth): No more than 300% and 125%;
c) Interest coverage ratio [(Income before tax + Depreciation + Amortization + Interest expense) ÷Interest expense]: At least 100%; and
d) Tangible net worth: At least $2 billion and $10 billion.

The Corporation and GES were not in compliance with the above loan requirements as shown in their nonconsolidated and consolidated financial statements as of December 31, 2018 and 2017. However, during the grace period from the date that the nonconsolidated and consolidated financial statements were authorized for issue until the date that the nonconsolidated and consolidated financial statements as of and for the year ended December 31, 2018 are authorized for issue, such situation will not constitute a breach of the agreements, but GES shall pay an additional 0.2% interest per annum based on the loan balance according to the loan agreements. In addition, should the Corporation and GES fail to achieve the financial ratios in the next examination, the lender will demand 15% of the total borrowing amounts as reserve funds and an extra 0.2% interest will be charged until the Corporation and GES attain the required ratios. According to the agreement, GES has deposited amounts of $83,244 thousand and $117,150 thousand as of December 31, 2018 and 2017, respectively.

- Long term borrowings

During the credit period, the agreement on the Mega Bank syndicated loans requires the maintenance of certain financial ratios based on the Corporation’s annual and semiannual nonconsolidated financial reports. The related restrictions are as follows:

a) Current ratio (Current assets ÷ Current liabilities): At least 100%; and
b) Debt to equity ratio (Total liabilities and the guarantee balance ÷ Tangible net worth): No more than 150%;

The Corporation did not violate the required financial ratios as of December 31, 2018.

During the credit period, from 2019, the agreement on the First Bank syndicated loans requires the maintenance of certain financial ratios based on the Corporation’s annual and semiannual nonconsolidated financial reports. The related restrictions are as follows:

a) Current ratio (Current assets ÷ Current liabilities): At least 100%;
b) Debt to equity ratio (Total liabilities and the guarantee balance ÷ Tangible net worth): No more than 120%;
c) Interest coverage ratio [(Income before tax + Depreciation + Amortization + Interest expense) ÷ Interest expense]: At least 1; and
d) Tangible net worth: At least $6 billion.
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During the credit period, the agreement on the Frist Bank NT$4.5 billion syndicated loans requires the maintenance of certain financial ratios based on Utech’s annual and semiannual nonconsolidated financial reports. The related restrictions are as follows:

a) The current ratio (ratio of current assets to current liabilities) should not be less than 100%;
b) The leverage ratio (ratio of total liabilities to tangible net worth) should not exceed 250% and 200%, as of 2018 and 2019, respectively;
c) The interest coverage ratio [(income before tax + depreciation + amortization + interest expense) ÷interest expense] at least 4; and
d) Tangible net worth (net worth - intangible assets) should be at least $1.2 billion and $1.3 billion, as of 2018 and 2019, respectively.

Utech did not meet the required current ratio, interest coverage ratio and tangible net worth as of December 31, 2018. An additional interest should be accrued during the improvement period, from December 31, 2018 to December 31, 2019, and such situation will not constitute a breach of the agreements.

During the credit period, the agreement on the Taiwan Cooperative Bank syndicated loans requires the maintenance of certain financial ratios based on the Corporation’s annual and semiannual nonconsolidated financial reports. The related restrictions are as follows:

a) Current ratio (Current assets ÷ Current liabilities): At least 100%;
b) Debt to equity ratio (Total liabilities and the guarantee balance ÷ Tangible net worth): No more than 125%;
c) Interest coverage ratio [(Income before tax + Depreciation + Amortization + Interest expense) ÷ Interest expense]: At least 3; and
d) Tangible net worth: At least $10 billion.

The Corporation did not violate the required financial ratios as of December 31, 2018.

The Corporation did not meet the required current ratio, debt to equity ratio and interest coverage ratio as of December 31, 2017; thus, the Corporation paid the related compensation expenses under the loan agreements during 2018.

Under the syndicated loan agreement with FMO Bank and DEG Bank, JRC should comply with all of the following financial covenants in its annual and semiannual consolidated financial statements:

a) The leverage ratio (ratio of total liabilities to tangible net worth) should not exceed 233%;
b) The interest coverage ratio [(income before tax + depreciation + amortization + interest expense) ÷ principal and interest paid in current year] should not be less than 115%; and
c) The balance of reserve funds should not be less than US$ 3,000 thousand.

JRC did not meet the required financial covenants as of December 31, 2018. JRC has deposited reserve funds, and such situations will not constitute a breach of the agreements.

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During the credit period, the agreement on the Cathay Bank secured loans requires the maintenance of certain financial ratios based on annual nonconsolidated financial reports of ET ENERGY, CEDAR FALLS, RER CT 57, MEGAEIGHT, MEGATWELVE and MEGATHIRTEEN. The related restrictions are as follows:

a) Debt service coverage ratio [(Income before tax + Depreciation + Amortization + Interest expense) ÷ principal and interest paid in the current year]: DSCR no less than 110% or 120%;

The companies mentioned above did not meet the required debt service coverage ratio, under the loan agreements, the bank could increase the amount of reserve funds and they have deposited US$751 thousand (NT$23,096 thousand) as reserve funds, and such situations will not constitute a breach of the agreements.

For the credit duration, the agreement on the Cathay Bank secured loans requires the maintenance of certain financial ratios based on the consolidated financial reports of GES USA. The related restrictions are as follows:

a) Current ratio (Current assets ÷ Current liabilities): At least 100%; and
b) Debt to equity ratio (Total liabilities ÷ Tangible net worth): No more than 300%.

GES USA did not violate the required financial ratios as of December 31, 2018.

GES USA did not meet the required debt service coverage ratio as of December 31, 2017, but it has applied to the bank for the exemption; under the loan agreements, the bank could increase the amount of reserve funds or reduce the loan quota, and such situation will not constitute a breach of the agreements.

Under the long-term loan agreement with Far Eastern International Bank, GES is a guarantor for Yong Liang and Yong Yeh; the Group should be in compliance with all of the following financial covenants in its annual and semiannual consolidated financial statements:

a) The leverage ratio (ratio of total liabilities to tangible net worth) should not exceed 150%; and
b) Tangible net worth should be at least $1.1 billion.

During the credit period, the agreement on the Far Eastern International Bank and EnTie Commercial Bank syndicated loans with Yong Han requires the maintenance of certain financial ratios based on the Corporation’s annual and semiannual consolidated financial reports. The related restrictions are as follows:

a) The current ratio (ratio of current assets to current liabilities) should not be less than 100%;
b) The leverage ratio (ratio of total liabilities to tangible net worth) should not exceed 300%;
c) The interest coverage ratio [(income before tax + depreciation + amortization + interest expense) ÷interest expense] should not be less than 100%; and
d) Tangible net worth should be at least $2 billion.

The long-term loans of Yong Han and Yong Yue as mentioned above were sold to associate-New Cathay at the end of March, 2018. And the sale was carried out with the long-term loans.

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As of December 31, 2018 and 2017, Yong Han did not meet the financial ratio required by the syndicated loan agreement. According to the agreement, when the Group breaches any agreed financial ratios, it should improve the ratios during the grace period from the date that the 2018 consolidated financial statements were authorized for issue. An additional 0.1% interest should be accrued during the improvement period, and such situations will not constitute a breach of the agreements.

The assets pledged as collaterals for long-term bank loans are shown in Note 43.

The unused amounts of long-term bank loan facilities were NT$901,905 thousand and NT$1,354,271 thousand as of December 31, 2018 and 2017, respectively.

2) Other loan restrictions are as follows:
a) Under its agreement with IMPA, GES estimated that the fair value of its call option was US$3,150 thousand (roughly NT$94,014 thousand) at the date the agreement was signed in December 2017. The revalued fair value at December 31, 2018 was US$2,701 thousand (roughly NT$83,032 thousand). The fair values were estimated using the Black-Scholes pricing model under the following assumptions:
- i. The executed price was approximately US$13,347 thousand (measured by reference to the flip date fair value);
- ii. The expected volatility was 18% and 17%, respectively;
- iii. The expected term of the option was 4 years and 5 years, respectively; and
- iv. Risk-free interest rate was 2.8% and 2.2%, respectively.

The expected volatility was derived from the average historical share volatilities of the entity and a peer group of public companies within the Group’s industry which it considers to be comparable to its business over the period. The expected term of share options represents the period that the entity issues the shares until the flip date. The risk-free interest rate is based on the U.S. Treasury yield curve.

b) Under its agreement with IMPA, GES estimated that the fair value of its call option was US$3,538 thousand (roughly NT$108,758 thousand) at the date the agreement was signed in November 2017. The fair values were estimated using the Black-Scholes pricing model under the following assumptions:
i. The executed price was approximately US$14,051 thousand (measured by reference to the Flip Date fair value);
ii. The expected volatility was 18%;

iii. The expected term of the option was 5.5 years; and

iv. Risk-free interest rate was 2.9%.

In 2018, GES recognized $13,540 thousand of unrealized gain on financial liabilities at fair value through profit or loss, which was classified under “Gain on financial liabilities (assets) at fair value through profit or loss”.

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c) The Group entered into a loan agreement with IBT Leasing Co., Ltd., Jih Sun International Leasing & Finance Co., Ltd. and other non-financial institutions. Notes payable were used by the Group to repay the outstanding principal amount, including interest, in equal installments; as of December 31, 2018 and 2017, the sum of all outstanding installments were $342,353 thousand and $360,038 thousand, including interest amounting to $7,439 thousand and $11,412 thousand, respectively.
d. Preference share liabilities

Class A preference shares Translation adjustments Less: Current portion		December 31	December 31
		2018 $ 60,051 913 (16,481) $ 44,483	2017 $ 34,949 - (8,530) $ 26,419

1) Class A preference shares

For the purpose of tax deductions, the contents of the agreement included two parts as follows:

a) MEGASIXTEEN, a US subsidiary of GES, entered into a contract with MPC, a non-controlling interest, to setup a startup company, GES AC, in order to carry out the solar energy business and activities through its five limited liability companies; all of those limited liability companies entered into a 25-year sales contract with IMPA for the sale of electricity. As of December 31, 2018, the amount of injection from MPC and MEGASIXTEEN into Class A shares and Class B shares, respectively, are as follows:
i. Class A shares: MPC owns 32.41% of GES AC’s outstanding common shares, amounting to US$11,920 thousand (roughly NT$347,105 thousand) and US$3,113 thousand (roughly NT$92,917 thousand). MPC will be given priority to receive 0.65% of the accumulated cash dividends with a fixed asset management fee on a quarterly basis. The Class A shareholders have voting rights and are entitled to 99% of the profit sharing during the first five years of GES AC’s business operations.
ii. Class B shares: MEGASIXTEEN owns 67.59% of GES AC’s outstanding common shares, amounting to US$24,862 thousand (roughly NT$723,987 thousand) and US$5,887 thousand (roughly NT$175,715 thousand). The Class B shareholders have voting rights, and GES AC’s financial management and control remains under the control of Class B shareholders and is subject to a managing member fee. MEGASIXTEEN will receive 1% of the profit sharing during the first five years of GES AC’s business operations.

The contract contained a financial liability component, which was not closely related to the host contract, amounting to $34,949 thousand. The obligation was designated on initial recognition as one to be classified as “Preference shares - current and non-current liabilities”.

For 2018 and 2017, the Group paid preference share dividends of US$32 thousand (roughly NT$922 thousand) and zero, respectively, which was classified under “Finance costs - Puttable preference shares”; the Group paid the agreed amount in the form of cash dividends and a fixed asset management fee of US$317 thousand (roughly NT$9,576 thousand) as repayments of Class A preference shares. Cash dividends of US$53 thousand (roughly NT$1,639 thousand) were not yet paid out by the Group, and this was classified under “Other payables”.

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Five limited liability companies within GES AC estimated the fair value of total shareholdings to be US$13,433 thousand (roughly NT$412,941 thousand) and US$14,027 thousand (roughly NT$418,678 thousand), as of December 31, 2018 and 2017, respectively; the fair value measurements are those derived from valuation techniques that include inputs that are not based on observable market data; therefore the entities made estimates and judgments about their fair values using an income approach defined as using Level 3 inputs under IFRS 13 fair value measurement standards. The fair values using the Level 3 fair value measurement standards were estimated using the following significant assumptions, as of December 31, 2018 and 2017:

i. A discount rate of 7% and 6.8%, respectively;
ii. Final valuation based on a 0.5% lapse rate of tariff rates on long-term sales of electricity; and

iii. Financial multipliers by peer companies.

MEGASIXTEEN has the preferred rights to repurchase all Class A shares at the higher of the fair value or 5.5% of the amount of capital injection by MPC which is the value applicable under the contract; MEGASIXTEEN is expected to have such rights for a certain period of time starting from the flip date (December 2022). The long call option is estimated at a fair value of US$3,948 thousand (equivalent to approximately NT$117,840 thousand) and reevaluated at a fair value of US$3,760 thousand (equivalent to approximately NT$115,587 thousand) at December 31, 2018, using the Black-Scholes pricing model with the following significant assumptions:

i. The executed price of approximately US$656 thousand (measured by reference to the flip date fair value);
ii. The expected volatility of 18%~17%, respectively;
iii. The expected term of the option of 4 years and 5 years, respectively; and

iv. A risk-free interest rate of 2.8% and 2.2%, respectively.

The expected volatility is derived from the average historical share volatilities of the entity and a peer group of public companies within the entity’s industry that the Group considers to be comparable to the entity’s business over a period. The expected term of share options represents the period that the entity issues the shares to the flip date. The risk-free interest rate is based on the U.S. Treasury yield curve.

b) A US subsidiary of GES had injected capital in TEV II, and owned 50% legal right, and reinvested into TEV Solar to own 100% right. In order to carry out the solar energy business and activities through its three limited liability companies, a US subsidiary of GES entered into a contract with ACS, a non-controlling interest, to setup a startup company, AC GES Solar; all of those limited liability companies entered into a 25-year sales contract with IMPA for the sale of electricity. As of December 31, 2018, the amount of injection from ACS and TEV solar into Class A shares and Class B shares, respectively, are as follows:
i. Class A shares: ACS owns 33.81% of AC GES Solar’s outstanding common shares, amounting to US$10,051 thousand (roughly NT$308,970 thousand). ACS will be given priority to receive 0.675% of the accumulated cash dividends with a fixed asset management fee on a quarterly basis. The Class A shareholders have voting rights and are entitled to 99% of the profit sharing during the first five and half years of AC GES Solar’s business operations.
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ii. Class B shares: A US subsidiary of GES owns 66.19% of AC GES Solar’s outstanding common shares, amounting to US$19,674 thousand (roughly NT$604,780 thousand). The Class B shareholders have voting rights, and AC GES Solar’s financial management and control remains under the control of Class B shareholders and is subject to a managing member fee. A US subsidiary of GES will receive 1% of the profit sharing during the first five and half years of AC GES Solar’s business operations.

The contract contained a financial liability component, which was not closely related to the host contract, amounting to $33,756 thousand. The obligation was designated on initial recognition as one to be classified as “Preference shares - current and non-current liabilities”.

Three limited liability companies within AC GES Solar estimated the fair value of total shareholdings to be US$14,050 thousand (roughly NT$431,901 thousand) as of December 31, 2018; the fair value measurements are those derived from valuation techniques that include inputs that are not based on observable market data; therefore the entities made estimates and judgments about their fair values using an income approach defined as using Level 3 inputs under IFRS 13 fair value measurement standards. The fair values using the Level 3 fair value measurement standards were estimated using the following significant assumptions, as of December 31, 2018:

i. A discount rate of 7%;
ii. Final valuation based on a 0.5% lapse rate of tariff rates on long-term sales of electricity; and
iii. Financial multipliers by peer companies.

TEV Solar has the preferred rights to repurchase all Class A shares at the higher of the fair value or 7% of the amount of capital injection by ACS which is the value applicable under the contract; TEV Solar is expected to have such rights for a certain period of time starting from the flip date (June 2024). The long call option is estimated at a fair value of US$4,149 thousand (equivalent to approximately NT$127,543 thousand) at December 31, 2018, using the Black-Scholes pricing model with the following significant assumptions:

i. The executed price of approximately US$704 thousand (measured by reference to the flip date fair value);
ii. The expected volatility of 18%;
iii. The expected term of the option of 5.5 years; and
iv. A risk-free interest rate of 2.9%, respectively.

As of December 31, 2018 and 2017, GES recognized $5,669 thousand and zero loss on financial liabilities at fair value through profit or loss, which was classified under “Loss on financial liabilities (assets) at fair value through profit or loss”.

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2) Non-convertible Non-participating Redeemable Fixed Rate Cumulative First Preference Shares, Series A (“First Preference Shares, Series A”):

In their meeting on June 27, 2014, GES’s shareholders proposed to offer First Preference Shares, Series A (“FP Shares”); on October 24, 2014, GES’s board of directors approved the issuance of these shares at a premium price of $50 per share, with an aggregate amount of $470,000 thousand.

The FP Shares are entitled to receive fixed cumulative preferential cash dividends at a rate of 5%, equal to $50 per share per annum. If profit is not sufficient to make distributions on these shares, the shortfall will be carried over to the next year.

The FP Shares are entitled to preferential cash dividends only, and the shareholders do not have rights to participate in or claim a part of the surplus profits of GES.

The FP Shares’ shareholders have a claim on the liquidation proceeds of a share Corporation equal to its par value. This claim has priority over that of ordinary shareholders, who have only a residual claim.

FP Shares’ shareholders do not have voting rights.

The FP Shares’ shareholders and ordinary shareholders have the same pre-emption rights when GES increases its capital by offering new ordinary shares.

Within three years after the FP Shares issuance date, GES has the option to redeem for cash all of the outstanding FP Shares. If this redemption does not take place, the rights and obligations of outstanding FP Shares will be extended until redemption.

GES’s board of directors approved the redemption and cancellation of FP Shares on August 4, 2017. The cancellation date and dividend distribution date was both on October 24, 2017. The cancellation of the FP shares and the 100% redemption for cash amounted to $537,232 thousand, calculated by the issuance amount of $470,000 thousand and unpaid dividends on the FP Shares of $67,232 thousand accumulated to October 23, 2017.

25. BONDS PAYABLE

Secured overseas convertible bonds (a) Less: Current portion		December 31	December 31
		2018 $ 3,614,497 (3,614,497) $ -	2017 $ 3,425,011 - $ 3,425,011

a. Secured overseas convertible bonds

On October 27, 2016, the Corporation issued the third secured overseas convertible bonds, listed on the Singapore Exchange. The convertible bonds contained the host liability instrument, the conversion option and derivative instrument of redemption option. The effective interest rate of the host liability instrument on initial recognition was 3.186% per annum, and the conversion option derivative instruments were measured at fair value through profit or loss.

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Movements of the host liability instrument, the conversion option and derivative instrument of the redemption option are as follows:

Date of issue Rate adjusted Interest charged at an effective interest rate Accrued interest payable Loss due to changes in fair value Balance at December 31, 2016 Rate adjusted Interest charged at an effective interest rate Accrued interest payable Loss due to changes in fair value Balance at December 31, 2017 Rate adjusted Interest charged at an effective interest rate Accrued interest payable Loss due to changes in fair value Balance at December 31, 2018		Host Liability Instrument US$ NT$ $ 111,553 $ 3,518,939 - 81,974 631 20,244 (160) (5,119) - - 112,024 3,616,038 - (273,624) 3,627 109,977 (903) (27,380) - - 114,748 3,425,011 - 103,951 3,744 112,981 (909) (27,446) - - $ 117,583 $ 3,614,497		Conversion Option and Derivative Instrument of Redemption Option	Conversion Option and Derivative Instrument of Redemption Option
		US$ $ 111,553 - 631 (160) - 112,024 - 3,627 (903) - 114,748 - 3,744 (909) - $ 117,583		US$ $ 5,532 - - - (5,520) 12 - - - (12) - - - - - $ -	NT$ $ 174,728 8 - - (174,349) 387 - - - (387) - - - - - $ -

The agreement of ING Bank requires the maintenance of certain financial ratios during the conversion period of the third secured overseas convertible bonds based on the Corporation’s annual and semiannual unconsolidated financial reports. The related restrictions are as follows:

1) Current ratio (Current assets ÷ Current liabilities): At least 110%;
2) Debt to equity ratio (Total liabilities ÷ Total tangible net worth): No more than 125%, where contingent liabilities are included when total liabilities are calculated;
3) Interest coverage ratio [(Income before tax + Depreciation + Amortization + Interest expense) ÷ Interest expense]: At least 3; and
4) Tangible net worth: At least $10 billion..

The Corporation did not violate the required financial ratios as of December 31, 2018.

The Corporation did not meet the required current ratio, debt to equity ratio and tangible net worth as of December 31, 2017; thus, the Corporation transferred $1,861,336 thousand into the escrow account as required under the loan agreement, respectively. The Corporation was in compliance with the above ratio requirements except for the current ratio, debt to equity ratio and interest coverage ratio; though the financial ratios did not meet this requirement, it was not considered a breach of the agreement.

The assets pledged as collaterals for bonds payable are shown in Note 43.

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26. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses Bonus Loss on contracts Salaries Interest Others Other liabilities Deferred revenue Advance receipts from customers Others Current Non-current		December 31	December 31
		2018 $ 284,718 260,480 221,354 133,996 1,192,561 $ 2,093,109 $ 245,677 94,832 21,606 $ 362,115 $ 131,650 230,465 $ 362,115	2017 $ 152,376 851,730 112,328 361,711 1,058,796 $ 2,536,941 $ 200,165 73,522 14,478 $ 288,165 $ 98,835 189,330 $ 288,165

27. PROVISIONS

Current Customer returns and rebates Non-current Warranties Customer returns and rebates Balance at January 1 Reclassified to refund liability Additions Reversals Usage Effects of exchange rates Balance at December 31		December 31	December 31
		2018 $ - $ 305,138 $ 1,609 (1,609) - - - - $ -	2017 $ 1,609 $ 246,033 $ 4,890 - 2,119 (4,249) (1,149) (2) $ 1,609 (Continued)

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Warranties Balance at January 1 Additions Usage Effects of exchange rate changes Balance at December 31		December 31	December 31
		2018 $ 246,033 62,485 (3,306) (74) $ 305,138	2017 $ 207,018 42,327 (3,235) (77) $ 246,033 (Concluded)

The provision for customer returns and rebates was based on historical experience, management’s judgments and other known reasons for possible returns and rebates. The provision was recognized as a reduction of operating income in the periods the related goods were sold.

The Group has adopted IFRS 15 starting from January 1, 2018. The Group recognized the estimation of sales returns and allowances as a refund liability, which was classified under other current liabilities.

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits on the Group’s obligations stated in sales agreements. The estimate was based on historical warranty trends and may vary as a result of the entry of new materials, altered manufacturing processes or other events affecting product quality.

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits on the Corporation’s obligations stated in sales agreements. The estimate was based on historical warranty trends and may vary as a result of the entry of new materials, altered manufacturing processes or other events affecting product quality.

28. RETIREMENT BENEFIT PLANS

The Group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages in accordance with the Labor Pension Act and these contributions are recognized as pension costs.

The employees of the Group’s subsidiaries in the People’s Republic of China (PRC) are members of a state-managed retirement benefit plan operated by the government of the PRC. The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The Group’s only obligations to the retirement benefit plan is to make contributions equal in the amount of the specified contributions.

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29. EQUITY

a. Share capital

1) Ordinary shares

Number of shares authorized (in thousands) Amount of shares authorized Number of shares issued and fully paid (in thousands) Shares issued Share premiums	December 31, 2018 3,200,000 $ 32,000,000 2,515,759 $ 25,157,599 963,007 $ 26,120,606	December 31, 2017 1,200,000 $ 12,000,000 1,019,256 $ 10,192,564 6,020,328 $ 16,212,892

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and a right to dividends.

Of the Corporation’s authorized shares, 80,000 thousand shares had been reserved for the issuance of employee share options.

On March 21, 2017, the Corporation’s board of directors approved an increase in its capital by an issuance of up to 180,000 thousand shares through private-placement shares, which was approved by the shareholders in their meeting on June 14, 2017. On January 29, 2018, the Corporation’s board of directors resolved not to continue handling the private-placement issuance.

On October 16, 2017, the Corporation considered the development of the solar energy industry and the growth of future requirements in its investment strategy in order to expand its share in the solar energy industry and strengthen operating ability. The Corporation’s board of directors approved to increase the investment in GES by 46,104,764 ordinary shares of GES by public tender offer (approximately 24.11% of the total issued ordinary shares of GES), and GES will become a 100%-owned subsidiary of the Corporation. As of November 6, 2017, the acquisition date, the Corporation acquired 43,090,282 shares, and obtained a total of 3,014,482 shares from other shareholders in November and December 2017.

On October 16, 2017, the Corporation’s board of directors approved to sign the merger intent letter with Gintech and SEC, with the Corporation as the surviving company after the merger, and will be renamed United Renewable Energy Co., Ltd. as soon as possible after the effective date of the merger in order to reflect the equality and common objective of the merged companies which is to pursue progress of the merged company.

On January 29, 2018, the Corporation’s board of directors approved to sign a merger agreement with Gintech and SEC, and the date of the merger is October 1, 2018. On March 28, 2018, the Corporation, Gintech and SEC approved the merger in their shareholders’ meeting.

In connection with the combined contract, Gintech and SEC are entitled to convert outstanding ordinary shares, including private equity and restricted employee share options, through a share swap at a 1:1.39 and 1:1.17 ratio (“sum of the consideration”), respectively. Regarding the share swap, the Corporation expected a total capital increase of NT$11,644,007 thousand and issued new shares amounted to 1,164,401 thousand shares (including 40,122 thousand shares of private-placement shares,), all ordinary shares, with a par value of NT$10 which was approved by the FSC on July 23, 2018. On August 3, 2018, the Corporation’s board of directors ruled that, due to the cancellation of part of the issue of employee rights shares issued by the Corporation, Gintech and SEC, the conversion equity was changed, and the new shares issued by the merger and capital

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increase were adjusted from 1,164,401 thousand shares to 1,164,020 thousand shares, the base date of the merger and the date of listing of the new shares issued by the capital increase were October 1, 2018.

To meet the needed amount of consideration to be paid for the combination through the issuance of ordinary shares and the liquidity requirement of the merged entity, the Corporation processed a NT$14,000,000 thousand capital increase. The Corporation’s total amount of capital is NT$32,000,000 thousand after the capital increase. The number of ordinary shares issued with a par value of NT$10 was 3,200,000 thousand shares.

On January 29, 2018, the Corporation’s board of directors approved to increase its capital by an issuance of up to 380,000 thousand shares through private-placement shares, which was also subject to approval by the shareholders in their meeting on March 28, 2018. On October 1, 2018, the Corporation’s board of directors approved an increase of its capital by $2,781,307 thousand through a private placement of 334,292 thousand new ordinary shares at NT$8.32 per share with the effective date on October 15, 2018.

To integrate the overall resources and to improve the operational efficiency of the Group, on February 22, 2019, the Corporation’s board of directors approved to sign a simplified merger agreement with 100% sharing subsidiary, GES, according to Article 19 of the Corporate Mergers and Acquisitions Act and other relevant laws and regulations, with the Corporation as the surviving company and GES as the extinct company after the merger ("the merger"). Considering that the entire issued share capital of GES was held by the Corporation, the share capital of GES held by the Corporation will be cancelled at no cost on the date of the merger. In the merger, the Corporation does not need to pay in exchange for shares. The tentative date of the merger is March 31, 2019. If the date of the merger, other related matters or matters not resolved need to change because of the administrative guidance by competent authorities, laws, or changes in our objective or social environment, it is proposed to fully authorize the chairman or his designee to handle the matter.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Share premiums May only be used to offset a deficit (2) Share of change in equity interests of associates and joint ventures Share premiums - employee restricted shares Share premiums - employee share options May not be used for any purpose Arising from employee restricted shares		December 31	December 31
		2018 $ 963,007 42,000 - - 6,016 $ 1,011,023	2017 $ 5,899,866 - 117,440 3,022 7,837 $ 6,028,165

1) Such capital surplus may be used to offset a deficit; in addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Group’s capital surplus and once a year).

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2) Such capital surplus arises from the effect of changes in ownership interest in a subsidiary resulting from equity transactions other than actual disposal or acquisition, or from changes in capital surplus of a subsidiary accounted for using the equity method and adjustments for the capital surplus generated from the convertible bonds when they expire.
c. Retained earnings and dividend policy

Under the dividend policy, if the Group made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Group’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors before and after the amendment, refer to Note 31 (f).

The Articles of Incorporation of the Group also stipulate a dividend policy that the issuance of share dividends takes precedence over the payment of cash dividends. In principle, cash dividends should be not less than 10% of total dividends distributed.

An appropriation of earnings to legal reserve shall be made until the legal reserve equals the Group’s paid-in capital. Legal reserve may be used to offset deficits. If the Group has no deficit and the legal reserve has exceeded 25% of the Group’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Group.

The offset of accumulated deficits for 2017 and 2016 had been proposed by the Corporation’s board of directors on June 20, 2018 and had been approved in the shareholders’ meeting on June 14, 2017, respectively. The information is as follows:

Offset of Accumulated Deficits with capital surplus Offset of Accumulated Deficits with capital surplus	Offset of Accumulated Deficits	Offset of Accumulated Deficits
	For the Year Ended December 31
		2017 2016 $ 4,611,501 $ 6,309,786 Offset of Accumulated Deficits $ (369,468)

The offset of accumulated deficit in 2018 is subject to resolution in the shareholders’ meeting expected to be held on June 17 , 2019.

83 -
d. Other equity items
1) Unrealized loss on available-for-sale financial instruments

	For the Year
	Ended
	December 31,
	2017
Balance at January 1	$ (53,259)
Unrealized loss on revaluation of available-for-sale financial
assets	(18,623)
Balance at December 31	$ (71,882)

The unrealized loss on available-for-sale financial assets represents the cumulative losses on the fair value changes of available-for-sale financial assets, which have been recognized in other comprehensive income.

2) Unrealized gain on financial assets at FVTOCI

	For the Year
	Ended
	December 31,
	2018
Balance at January 1 per IAS 39	$ (71,882)
Adjustment on initial application of IFRS 9	(59,009)
Balance at January 1 per IFRS 9	(130,891)
Recognized during the period
Unrealized gain - equity instruments	(397,006)
Balance at December 31	$ (527,897)

e. Treasury shares

	Shares Held by
	Subsidiaries (In
	Thousands of
Purpose of Buy-back	Shares)
Number of shares at January 1, 2018	-
Acquisitions through business combinations	1,883
Number of shares at December 31, 2018	1,883

84 -

The Corporation acquired treasury shares as result of merging Gintech on October 1, 2018.

Number of Shares Held (In Thousands Carrying Name of Subsidiary of Shares) Amount Market Price December 31, 2018 UTECH SOLAR CORPORATION 1,883 $ 18,699 $ 14,747

The shares of the Corporation held by Utech has been treated as treasury stock. They are same as general shareholders except for the rights of cash injection and the rights of voting.

30. REVENUE

For the Year Ended December 31, 2018

Revenue from contracts with customers Revenue from the sale of goods Revenue from the sale of power facilities Revenue from construction contracts Service revenue Processing fee revenue Revenue from the sale of electricity Revenue from other activities Others Interest income from contracts with customers Revenue from the sale of electricity Revenue from other activities			Reportable Segments	Reportable Segments	Reportable Segments
		Modules $ 7,190,802 - - - - - - 7,190,802 - - - - $ 7,190,802	Solar Cells $ 3,249,827 - - - 65,339 - - 3,315,166 - - - - $ 3,315,166	Power Facilities $ 5,127 712,943 613,411 236,975 - 14,196 28,898 1,611,550 386,893 57,044 23,698 467,635 $ 2,079,185	Others $ 47,663 - - 1,143 - - 349,917 398,723 - - 44 44 $ 398,767	Total $ 10,493,419 712,943 613,411 238,118 65,339 14,196 378,815 12,516,241 386,893 57,044 23,742 467,679 $ 12,983,920

For the Year Ended December 31, 2017

Revenue from contracts with customers Revenue from the sale of goods Revenue from construction contracts Revenue from the sale of power facilities Processing fee revenue Revenue from other activities			Reportable Segments	Reportable Segments	Reportable Segments
		Modules $ 5,006,856 - - - - $ 5,006,856	Solar Cells $ 3,737,631 - - 125,455 - $ 3,863,086	Power Facilities $ 50,528 605,792 15,205 - 425,275 $ 1,096,800	Others $ 49,580 - - - 231,565 $ 281,145	Total $ 8,844,595 605,792 15,205 125,455 656,840 $ 10,247,887

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a. Contract balances

	December 31,	December 31,
		2018
Notes and accounts receivable (Note 13)	$	3,038,694
Contract assets
Power facility construction contracts	$	96,617
Less: Allowance for impairment loss		-
Contract assets - current	$	96,617
Contract liabilities
Sale of goods	$	242,376
Power facility construction contracts		102,876
Contract liabilities - current	$	345,252

The changes in the contract asset and the contract liability balances primarily result from the timing difference between the Group’s performance and the customer’s payment; other significant changes are as follows:

	For the Year	For the Year
		Ended
	December 31,
		2018
Contract assets
Transfers of beginning balance to receivables	$	56,819

Revenue of the reporting period recognized from the contract liabilities incurred from the beginning of the year and from the performance obligations satisfied in previous periods is as follows:

	For the Year
	Ended
	December 31,
	2018
From contract liabilities incurred from the beginning of the year
Sale of goods	$ 214,676
Power facility construction contracts	49,372
	$ 264,048

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b. Disaggregation of revenue

Geographical markets Taiwan Germany America China Others Timing of revenue recognition Satisfied at a point in time Satisfied over time	For the Year Ended December 31, 2018 $ 6,688,542 1,991,574 929,117 653,442 2,253,566 $ 12,516,241 $ 11,882,068 634,173 $ 12,516,241

c. Partially completed contracts

The transaction price, allocated to the performance obligations that are not fully satisfied and the expected timing for recognition of revenue are as below:

		December 31,
		2018
Power facility construction contracts - in	2019	$ 97,038

The above information does not include contracts with expected duration equal to or less than one year.

31. COMPREHENSIVE INCOME (LOSS)

a. Other income and expenses

Impairment loss on property, plant and equipment Gain (loss) on disposal of non-current assets held for sale Loss on disposal of property, plant and equipment	For the Year Ended	For the Year Ended	December 31
		2018 $ (257,949) (2,403) (26) $ (260,378)	2017 $ (43,669) 1,383 (116,086) $ (158,372)

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b. Interest income and other income

For the Year Ended	For the Year Ended	For the Year Ended	December 31
2018 $ 69,250 14,719 11,487 9,317 $ 104,773 $ 38,833 7,742 6,822 3,211 40,778 $ 97,386 For the Year Ended			2017 $ 22,305 120,774 19,090 86 $ 162,255 $ 4,627 2,540 - 22,860 55,302 $ 85,329 December 31
2018 2017 $ 480,268 $ 295,925 112,981 109,977 13,024 286,388 47,135 33,862 $ 653,408 $ 726,152 For the Year Ended December 31
	2018 $ 2,031,556 16,678 $ 2,048,234 $ 1,893,136 138,420 $ 2,031,556 $ 16,678	2017 $ 1,722,433 15,958 $ 1,738,391 $ 1,651,767 70,666 $ 1,722,433 $ 15,958

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e. Employee benefits expense

Post-employment benefits (Note 28) Defined contribution plans Share-based payments Equity-settled share-based payments Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 64,183 16,492 1,829,896 $ 1,910,571 $ 1,270,508 640,063 $ 1,910,571	2017 $ 60,407 7,714 1,655,924 $ 1,724,045 $ 1,061,540 662,505 $ 1,724,045

f. Employee’s compensation and remuneration of directors and supervisors

The amendments stipulate distribution of employees’ compensation and remuneration to directors at the rates no less than 3% and no higher than 2%, respectively, of net profit before income tax, employees’ compensation, and remuneration to directors. The Corporation incurred a deficit for the year ended December 31, 2018, 2017 and 2016; thus, neither compensation to employees nor remuneration to directors was estimated.

If there is a change in the proposed amounts after the date the annual consolidated financial statements have been authorized for issue, the differences are accounted for as a change in accounting estimate in the following year.

Information on the compensation to employees and the remuneration to directors, approved by the Corporation’s board of directors in 2019 and 2018 is available on the Market Observation Post System website of the Taiwan Stock Exchange.

g. Net gain (loss) on foreign currency exchange

Foreign exchange gains Foreign exchange losses Net profit (loss)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 2,449,752 (2,510,994) $ (61,243)	2017 $ 741,778 (667,799) $ 73,979

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h. Components of other comprehensive income

Unrealized loss on financial assets at FVTOCI Arising during the year Exchange difference on translating foreign operations: Arising during the year Unrealized (losses) gains on available-for-sale financial assets: Arising during the year	For the Year Ended	For the Year Ended	December 31
		2018 $ (397,006) $ 124,877 $ -	2017 $ - $ (344,571) $ (18,623)

32. INCOME TAXES

a. Income tax recognized in profit or loss

The major components of tax (expense) benefit were as follows:

For the Year Ended December 31 2018 2017 Current tax Current year $ (30,524) $ (27,483) Prior periods 7,218 (1,780) Income tax (expense) benefit recognized in profit or loss $ (23,306) $ (29,263) A reconciliation of profit and current income tax benefit is as follows:	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (30,524) 7,218 $ (23,306)	2017 $ (27,483) (1,780) $ (29,263)

Loss before tax Income tax benefit at the 17% statutory rate Non-deductible expenses in determining taxable income Tax-exempt income Income tax on unappropriated earnings Effect of different tax rate of group entities operating in other jurisdictions Unrecognized loss carryforwards Additional income tax under the Alternative Minimum Tax Act Unrecognized deductible temporary differences Reversal of temporary difference Adjustments for prior years’ tax benefit Income tax (expense) benefit recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (440,303) $ 88,601 (348,914) 767 - 27,952 (519,221) - (82,270) (50,658) (1,391) $ (23,306)	2017 $ (4,130,726) $ 702,224 (68,334) 986 (1,486) 45,743 (537,324) - (186,144) 16,852 (1,780) $ (29,263)

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In 2017, the applicable corporate income tax rate used by the group entities in the ROC is 17%. However, the Income Tax Act in the ROC was amended in February 2018, and the corporate income tax rate was adjusted from 17% to 20%, effective in 2018. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings will be reduced from 10% to 5%. The applicable tax rate used by subsidiaries in China is 25%. Tax rates used by other group entities operating in other jurisdictions are based on the tax laws in those jurisdictions.

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Exchange differences on translating foreign operations Current tax assets and liabilities Current tax assets Tax refund receivable Prepaid income tax Current tax liabilities Income tax payable	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2018 2017 $ 32,886 $ 33,039 For the Year Ended December 31
		2018 $ 75,426 901 $ 76,327 $ 1,910	2017 $ 7,616 941 $ 8,557 $ 19,462

c. Current tax assets and liabilities

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2018

					Recognized in	Recognized in
		Balance,				Other
	Beginning of		Recognized in		Comprehensive			Balance,
		Year	Profit or Loss			Income	End of Year
Deferred tax assets
Investment credits	$	11,431	$	342	$	-	$	11,773
Loss carryforwards		-		422,426		-		422,426
Temporary differences
Depreciation differences on
property, plant and
equipment		7,452		(25)		-		7,427
Credit loss on property, plant
and equipment		-		1,175		-		1,175
								(Continued)

91 -

Balance,
Beginning of
Year
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income

Write-downs of inventories
$ 1,254 $ 502 $ -
Exchange difference on
translating foreign
operation
33,039
-
(153)
Others

37,353

561,573

-

$ 90,529
$ 985,993
$ (153)

Deferred tax liabilities

Temporary differences

Unrealized foreign exchange
gains
$ 17,381
$ 2,419
$ -

Unrealized gains on financial
instruments at fair value
through profit or loss
28,678
927
-
Gain on disposal of
subsidiaries at a
percentage different from
its earlier ownership
percentage
-
6,206
-
Others

7,066

1,050

-

$ 53,125
$ 10,602
$ -

Balance,
End of Year
$ 1,756

32,886
598,926
$ 1,076,369
$ 19,800
29,605
6,206

8,116
$ 63,727
(Concluded)

For the year ended December 31, 2017

						Recognized in	Recognized in	Recognized in
	Balance,						Other
	Beginning		of	Recognized in		Comprehensive			Balance,
		Year		Profit or Loss			Income		End of Year
Deferred tax assets
Investment credits	$	12,362		$	(931)	$		-	$	11,431
Temporary differences
Depreciation differences on
property, plant and
equipment		8,332			(880)			-		7,542
Write-downs of inventories		4,263			(3,009)			-		1,254
Exchange difference on
translating foreign
operation			-		-		33,039			33,039
Others		20,473			16,880			-		37,353
	$	45,430		$	12,060	$	33,039		$	90,529
										(Continued)

92 -

						Recognized in	Recognized in	Recognized in
	Balance,						Other
	Beginning		of	Recognized in		Comprehensive			Balance,
		Year		Profit or Loss			Income		End	of Year
Deferred tax liabilities
Temporary differences
Unrealized foreign exchange
gains	$		-	$	17,381	$		-	$	17,381
Revaluation gain on
property, plant and
equipment			-		-			-			-
Unrealized gains on financial
instruments at fair value
through profit or loss		31,611			(2,933)			-		28,678
Others		10,474			(3,408)			-		7,066
	$	42,085		$	11,040	$		-	$	53,125
									(Concluded)

The investment credits are mainly due to the subsidy policy of GES USA for the award of solar energy under the US policy, which gives a certain amount of investment tax credit according to the cost of the actual construction completed by the solar power plant.

e. Deductible temporary differences, unused loss carryforwards and unused investment credits for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Expiry in 2017 Expiry in 2018 Expiry in 2019 Expiry in 2020 Expiry in 2021 Expiry in 2022 Expiry in 2023 Expiry in 2024 Expiry in 2025 Expiry in 2026 Expiry in 2027 Expiry in 2028 Investment credits Purchase of machinery and equipment Deductible temporary differences		December 31	December 31
		2018 $ - - 137,565 252,753 1,244,132 452,788 114,308 24,818 381,127 1,362,318 1,985,339 3,096,872 $ 9,052,020 $ - $ 6,050,553	2017 $ 3,336,455 152,401 137,955 252,753 1,244,133 488,780 - 17,421 610,985 1,627,349 2,597,532 - $ 10,465,764 $ 208,578 $ 6,715,572

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The tax losses of deferred taxes assets and the investment credits amounted to $176,462 and $268,390, respectively, which yet recognizes by GES USA. And the deductible year are 2016 to 2038.

Under Article 38 of the Business Mergers and Acquisitions Act, any loss of the Group and of DelSolar, Gintech Energy and Solartech Energy from within five years before the merger is tax-deductible pro rata by the shareholders’ holding in the after-merger surviving company and can be deducted from its current year’s profit from within 5 years. The last deduction year is due in 2018.

Under Article 43 of the Business Mergers and Acquisitions Act, amended on July 8, 2015, any loss of the Group, of Gintech Energy and of Solartech Energy from within ten years before the merger is tax-deductible pro rata by the shareholders’ holding in the after-merger surviving company and can be deducted from its current year’s profit from within 10 years. The last deduction year is due in 2028.

f. Information on tax - exemption

As of December 31, 2018, profits attributable to the following expansion projects were exempt from income tax for five years under the Statute for Upgrading Industries:

Statute for Upgrading Industries Expansion of the manufacturing plant acquired through a business combination Third expansion of the manufacturing plant Fourth expansion of the manufacturing plant Fifth expansion of the manufacturing plant Expansion of the manufacturing plant acquired through a business combination	Period
	January 1, 2014-December 31, 2018 January 1, 2015-December 31, 2019 January 1, 2016-December 31, 2020 January 1, 2017-December 31, 2021 January 1, 2017-December 31, 2021

g. Income tax assessments

The Corporation’s income tax returns through 2015 have been assessed by the tax authorities.

33. LOSS PER SHARE

Unit: NT$ Per Share

Basic loss per share Diluted loss per share		Years Ended December 31	Years Ended December 31
		2018 $ (0.34) $ (0.34)	2017 $ (4.08) $ (4.08)

The loss and weighted average number of common shares outstanding (in thousand shares) in the computation of loss per share were as follows:

Net loss for the year

Loss for the year Effect of dilutive potential common share: Interest on convertible bonds (after tax) Loss used in the computation of diluted loss per share		Years Ended December 31	Years Ended December 31
		2018 $ (468,294) - $ (468,294)	2017 $ (4,154,163) - $ (4,154,163)

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Weighted average number of common shares outstanding (in thousand shares):

Weighted average number of common shares used in the computation of basic loss per share Effect of dilutive potential common shares: Convertible bonds Restricted employee share options Employee compensation or bonuses issued to employees Employee share options Weighted average number of common shares used in the computation of diluted loss per share		Years Ended December 31	Years Ended December 31
		2018 1,380,522 - - - - 1,380,522	2017 1,017,105 - - - - 1,017,105

Since the Corporation is allowed to settle the remuneration of employees by cash or shares, whenever applicable, the Corporation assumes that the entire amount of the employee remuneration will be settled in shares; as the effect of the resulting potential shares is dilutive, these shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share. This dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

The Corporation’s the outstanding convertible bonds, restricted employee share options and employee share options were anti-dilutive and were excluded from the computation of diluted loss per share.

34. SHARE-BASED PAYMENT ARRANGEMENTS

Issuance of shares reserved for employees subscription

No share options were granted for the year ended December 31, 2018 and 2017. Other information on the share option plan is as follows:

a. Replaced employee share option plan:

For the nine months ended December 31, 2018 Beginning balance Options canceled Ending balance Options exercisable, end of period	Plan 6 in 2010 Number of Options (In Thousands) Weighted Average Exercise Price ($/Per Share) 26 $ 51.90 (26) 51.90 - - - -	Plan 7 in 2010
		Number of Options (In Thousands) Weighted Average Exercise Price ($/Per Share) 234 $ 61.90 (234) 61.90 - - - -

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b. Employee share option plan of V5 Technology:

Qualified employees of V5 Technology were granted option units numbering 20 thousand and 27 thousand in February 2016 according to the employee share option plan of 2014 and of 2015, respectively. Qualified employees of V5 Technology were granted option units numbering 173 thousand and 80 thousand in May 2015 and November 2014, respectively. Each option entitles the holder to subscribe for one ordinary share of V5 Technology. The options granted are both valid for 5 years and exercisable at certain percentages after the first anniversary from the grant date. The options were granted at an exercise price equal to the closing price of V5 Technology’s ordinary shares on the grant date. For any subsequent changes in V5 Technology’s ordinary shares, the exercise price is adjusted accordingly.

Because the Corporation did not acquire any shares issued for cash of V5 Technology in August 2017, the Corporation’s equity interest in V5 Technology decreased from 60.85% to 41.43%, and control of V5 Technology passed to the acquirer on that date and ceased to be incorporated in the consolidated financial statements.

Restricted share plan for employees

On March 21, 2017, the Corporation’s board of directors approved of a restricted share plan amounting to $21,000 thousand, consisting of 2,100 thousand shares with a par value of $10. Such plan may require consideration to be paid by employees at $10 or $0 per share. On June 14, 2017, the shareholders in their meeting proposed to offer the restricted share plan for employees. The issuance of 2,100 thousand shares was approved by the Financial Supervisory Commission (FSC) on July 24, 2017.

On August 8, 2017, the Corporation’s board of directors approved of a restricted share plan amounting to $21,000 thousand, consisting of 2,100 thousand shares with a par value of $10 per share and distributed out of earnings, which was granted on September 15, 2017 and issued on September 30, 2017. On the granted date, an actual amount of $18,550 thousand was issued, which consisted of 1,855 thousand shares with a fair value of $14.45 per share.

The Corporation replaced restricted share plan for employees due to the merger in October 1, 2018.

Replaced employee share option plan was as follows:

			Adjustment by
			Percentage of
	Original	Outstanding	Outstanding
	Number (In	Number (In	Number (In
Restricted share plan for employees	Thousands)	Thousands)	Thousands)
Gintech Energy	2,000	881	1,225
Solartech Energy	4,455	4,185	4,896

Information on issued employee restricted shares was as follows:

Beginning balance Acquisitions through business combinations Additions Vested Canceled Ending balance	Shares`（`In Thousands`）`	Shares`（`In Thousands`）`	Shares`（`In Thousands`）`
	For Year Ended December 31
		2018 1,761 6,121 - (821) (1,809) 5,252	2017 761 - 1,855 (641) (214) 1,761

96 -

1) Formerly Neo Solar Power Corp. and Gintech Energy

To meet the vesting conditions, an employee has to meet performance conditions over the vesting period as follows:

a) Still on service one year after the grant date with a high rating based on the current year’s performance appraisal - vesting of 50% of restricted shares;
b) Still on service two years after the grant date with a high rating based on the prior year’s performance appraisal - vesting of 50% of restricted shares.

The restrictions on the rights of the employees who acquire the restricted shares but have not met the vesting conditions are as follows:

a) In addition to those disclosed in the restricted share plan, the employees should not sell, pledge, transfer, donate or in any other way dispose of these shares.
b) On behalf of employees, the Corporation signed a trust contract on the restricted shares with a trust institution; thus, based on this contract, the rights of attendance, proposal, speech and voting have all been entrusted to the trust institution.

If an employee fails to meet the vesting conditions, the Corporation will buy back the restricted shares at the offering price and have them canceled but not the share and cash dividends during the period of noncompliance with vesting conditions.

2) Formerly Solartech Energy

Employees are able to subscribe for the restricted shares at $5 per share when they meet the vesting conditions. To meet the vesting conditions, an employee has to meet performance conditions over the vesting period as follows:

a) Still on service three years after the grant date with a high rating based on the prior year’s performance appraisal - vesting of 50% of restricted shares.

The restrictions on the rights of the employees who acquire the restricted shares but have not met the vesting conditions are as follows:

a) In addition to those disclosed in the restricted share plan, the employees should not sell, pledge, transfer, donate or in any other way dispose of these shares.

If an employee fails to meet the vesting conditions, the Corporation will buy back the restricted shares at the offering price and have them canceled

The Corporation recognized compensation costs of $16,492 thousand and $7,668 thousand for the years ended December 31, 2018 and 2017, respectively.

97 -

35. BUSINESS COMBINATIONS

			Proportion of
			Voting Equity
			Interests	Consideration
Subsidiary	Principal Activity	Date of Acquisition	Acquired (%)	Transferred
Gintech Energy	Solar-related business	October 1, 2018	100	$ 7,314,880
Solartech Energy	Solar-related business	October 1, 2018	100	4,399,288
				$ 11,714,168

Gintech Energy and Solartech Energy were acquired in order to continue the expansion of the Group’s activities in manufacturing solar cells and other solar related business.

a. Consideration transferred

Gintech Energy Common share $ 7,308,198 Restricted shares for employees 6,682 $ 7,314,880	Solartech Energy $ 4,386,582 12,706 $ 4,399,288

b. Assets acquired and liabilities assumed at the date of merger

Gintech Energy Current assets $ 8,460,024 Property, plant and equipment 7,413,796 Intangible assets 14,133 Other non-current assets 1,091,060 Current liabilities (4,292,347) Non-current liabilities (4,661,519) $ 8,025,147	Solartech Energy $ 2,706,596 4,784,477 3,498 3,671,817 (2,804,906) (2,383,978) $ 5,977,504

The initial accounting for the acquisition of Gintech Energy and Solartech Energy was only provisionally determined at the end of the reporting period. The tax bases of Gintech Energy and Solartech Energy’s assets were required to be reset based on the market values of the assets. At the date of issuance of these consolidated financial statements, the Group has restated the tax bases as if the initial accounting was completed on the acquisition date.

c. Non-controlling interests

The fair values of non-controlling interests of Gintech Energy and Solartech Energy (1.7% and 0.5% of total equity, respectively) were $27,179 thousand and $214 thousand measured at the acquisition date by using the market-based and asset-based approach.

The key inputs in the market-based measure were the value of cash injection and the value of non-controlling interests that was deducted to reflect the value of the company. Asset-based measure involved the evaluation of the total value of assets and liabilities of the evaluation targets and including non-controlling interests to reflect the value of the company.

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d. Gain on bargain purchase due to consolidation

Gintech Energy Consideration transferred $ 7,314,880 Plus: Fair value of the acquirer’s previously held equity interest - Plus: Non-controlling interests 27,179 Less: Fair value of identifiable net assets acquired of Gintech Energy and Solar Energy (6,023,001) Less: Fair value of identifiable net assets acquired of Gintech Energy and Solar Energy’s subsidiaries (2,002,146) $ (683,088)	Solartech Energy $ 4,399,288 - 214 (5,296,758) (707,746) $ (1,578,002)

e. Net cash inflow due to consolidation

Gintech Energy Consideration paid in cash $ - Less: Cash inflow due to consolidation (5,507,365) $ (5,507,365)	Solartech Energy $ - (340,165) $ (340,165)

f. Impact of acquisitions on the results of the Group

The results of the acquirees since the acquisition date included in the consolidated statements of comprehensive income are as follows:

Gintech Energy Revenue $ 2,016,053 Loss $ (649,676)	Solartech Energy $ 689,709 $ (326,322)

Had these business combinations of Gintech Energy and Solar Energy been in effect at the beginning of the annual reporting period, the Group’s revenue from continuing operations would have been $21,101,207 thousand and $3,391,601 thousand for the year ended December 31, 2018. This pro-forma information is for illustrative purposes only and is not necessarily an indication of the revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2018, nor is it intended to be a projection of future results.

In determining the pro-forma revenue and profit of the Group had Gintech Energy and Solar Energy been acquired at the beginning of the current reporting period, the management had:

1) Calculated depreciation of property, plant and equipment acquired on the basis of the fair values at the initial accounting for the business combination rather than the carrying amounts recognized in the respective pre-acquisition financial statements; and
2) Calculated borrowing costs on the funding levels, credit ratings and debt/equity position of the Group after the business combination.
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36. SUBSIDIARIES ACQUIRED

			Percentage of
			Voting Equity
			Interests	Consideration
	Principal Activity	Date of Acquisition	Acquired (%)	Transferred
GES KYUSHU	Solar - related business	October 3, 2017	100	$ 102,946
Hashimoto	Solar - related business	October 3, 2017	100	44,521
				$ 147,467

The above subsidiaries were acquired to effectively integrate the Group’s overall resources on 2017, diversify the Group’s business, expand its operating scale, enhance its operating performance and boost its competitiveness.

a. Consideration transferred

GES KYUSHU Cash $ 102,946 Assets acquired and liabilities assumed at the date of merger GES KYUSHU Current assets $ 1,852 Property, plant and equipment 455,758 Intangible assets 73,642 Other non-current assets 2,357 Current liabilities (406,687) $ 126,922	Hashimoto $ 44,521 Hashimoto $ 13,568 218,837 35,773 12,038 (228,538) $ 51,678

b. Assets acquired and liabilities assumed at the date of merger

The tax bases of GES KYUSHU’s and Hashimoto’s assets were required to be reset on the basis of market values of the assets. The initial accounting for the acquisition of GES KYUSHU and Hashimoto had been completed as of the balance sheet date and the figures have been restated as if the initial accounting was completed on the acquisition date.

The fair value of GES KYUSHU and Hashimoto were determined with reference to the valuation report. This fair value was estimated by applying an income approach. The following were the key assumptions used in determining the fair value:

1) A discount rate of 5.2% and 7.4%, respectively;
2) The future values is based on a continuous decline rate of 0.5% of the long-term purchases of electricity rates; and
3) Financial parameters of companies similar to GES KYUSHU and Hashimoto.
100 -
c. Goodwill recognized on acquisitions

GES KYUSHU Consideration transferred $ 102,946 Plus: Fair value of the acquirer’s previously held equity interest 23,976 Less: Fair value of identifiable net assets acquired (126,922) Goodwill recognized on acquisitions $ -	Hashimoto $ 44,521 7,157 (51,678) $ -

The fair value of the 45% equity of GES KYUSHU and Hashimoto before the acquisition date were equivalent as at the carrying amount, and therefore, no profit or loss was recognized

d. Net cash inflow due to consolidation

GES KYUSHU Consideration paid in cash $ 102,946 Less: Cash inflow due to consolidation (1,852) $ 101,094	Hashimoto $ 44,521 (2,134) $ 42,387

e. Impact of acquisitions on the results of the Group

The results of the acquirees since the acquisition date included in the consolidated statements of comprehensive income are as follows:

	GES	KYUSHU	Hashimoto	Hashimoto
Revenue	$	150	$	4,588
(Loss) profit	$	(684)	$	2,790

If the business combination of GES KYUSHU and Hashimoto had been in effect at the beginning of the annual reporting period, the Corporation’s revenue would be $10,257,557 thousand and the loss would be $4,151,933 thousand for the year ended December 31, 2017. This pro-forma information is for illustrative purposes only and is not necessarily an indication of revenue and results of operations of the Corporation that would actually be achieved had the acquisition been completed on January 1, 2016, nor is it intended to be a projection of future results.

In determining the Corporation’s pro forma revenue and profit (loss) had the above subsidiaries been acquired at the beginning of the current reporting period, the management performed the following:

1) Calculated the depreciation of plant and equipment acquired on the basis of the fair values determined at the initial accounting for the business combinations rather than the carrying amounts recognized in the pre-acquisition financial statements; and
2) Calculated borrowing costs on the funding levels, credit ratings and debt/equity position of the Corporation after the business combinations.
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37. DISPOSAL OF SUBSIDIARIES

Yong Han and Yong Yeh, which carried out its entire solar-related businesses in Taiwan, were disposed of in March 2018, and control of Yong Han and Yong Yeh passed to the acquirer, Neo Cathay, on that date.

MEGASEVEN, MEGAELEVEN and MEGAFIFTEEN, which carried out theirs entire solar-related businesses in the USA, were disposed of in June 2018, and control of MEGASEVEN, MEGAELEVEN and MEGAFIFTEEN passed to the acquirer on that date.

True Honour Limited was an investment company which was cancelled in October 2018 and returned the shares in December 2018.

GES KYUSHU carried out its entire solar-related business in Japan. The disposal was completed in October 2018, and control of GES KYUSHU was passed to the acquirer on that date.

POTTERS BAR, CLAY CROSS, BELPER, Bryncrynau and Meadowley, which carried out their entire solar-related business in the United States. The disposal was completed in October 2018, and control of the subsidiaries of NSP Indygen was passed to the acquirer on that date.

CEC Solar #1117, CEC Solar #1118, CEC Solar #1119, CEC Solar #1121, CEC Solar #1122, CEC Solar #1128, CEC Solar #1130, CEC Solar #1133, and Ewauna, which carried out their entire solar-related business in the United States. The disposal to related party CF Lessee LOB LLC was completed in the fourth quarter of 2018, and control of the subsidiaries of CFR was passed to the acquired on that date.

On May 30, 2017, the Group had signed an agreement of disposal of Abacus. Abacus, which carried out its entire solar-related business in Japan, was disposed of in June, 2017, and control of Abacus passed to the acquirer on that date.

GES FUKUSHIMA, which carried out its entire solar-related business in Japan, was disposed of in July 2017, and control of GES FUKUSHIMA passed to the acquirer on that date.

The Corporation did not acquire any shares of V5 Technology issued for cash in August 2017, and the Corporation’s equity interests in V5 Technology decreased from 60.85% to 41.43%, and control of V5 Technology was passed to the acquirer on that date.

MEGAFOURTEEN, which carried out its entire solar-related business in the United States, was disposed of in November 2017, and control of MEGAFOURTEEN passed to the acquirer on that date.

a. Consideration received from the disposal

For the Year Ended December 31, 2018 Taiwan USA Japan UK Consideration received in cash and cash equivalents $ 144,476 $ 754,309 $ 279,206 $ 157,315 Sales proceeds receivable 4,960 26,325 - - Total consideration received $ 149,436 $ 780,634 $ 279,206 $ 157,315 For the Year Ended December 31, 2017 Taiwan USA Japan Consideration received in cash and cash equivalents $ - $ 103,638 $ 384,222 Sales proceeds receivable - (21,015) - Total consideration received $ - $ 82,623 $ 384,222		For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
					USA Japan UK $ 754,309 $ 279,206 $ 157,315 26,325 - - $ 780,634 $ 279,206 $ 157,315 For the Year Ended December 31, 2017
				Taiwan $ - - $ -		USA $ 103,638 (21,015) $ 82,623	Japan $ 384,222 - $ 384,222

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b. Analysis of asset and liabilities on the date control was lost

For the Year Ended December 31, 2018 Taiwan USA Japan UK Current assets Cash and cash equivalents $ 23,714 $ - $ 93 $ 96,411 Lease receivables 262,134 - 509,214 - Other receivables 2,163 - - - Other receivables from related parties 64,090 - - - Construction in progress - 339,295 - 895,694 Others 6,759 650 624 - Non-current assets Property, plant and equipment 92,912 432,238 - - Others 24,706 - 4,693 - Current liabilities Accounts payable - - - (189,359) Payables to contractors and equipment suppliers (8,908) - - Current tax liabilities (392) - - - Accrued expenses (163,013) - (416,601) (739,286) Non-current liabilities Long-term bank loans (178,231) - - - Net assets disposed of $ 125,934 $ 772,183 $ 98,023 $ 63,460 For the Year Ended December 31, 2017 Taiwan USA Japan Current assets Cash and cash equivalents $ 29,914 $ - $ 4,234 Accounts receivable 23,843 - - Accounts receivable-related parties 2,415 - - Financial lease receivables - - 1,306,805 Inventories 21,417 - - Other receivables 493 - 23,629 Prepayments 6,583 - - Others 176 - - Non-current assets Property, plant and equipment - 98,428 92,559 Intangible assets 12,065 - 81,473 Refundable deposits 412 - - Others 1,247 - - Current liabilities Notes and accounts payable (2,991) - - Receipts in advance (2,000) - - Current tax liabilities - - (8,239) Accrued expenses (9,684) - (1,352,291) Others (288) - (1) Net assets disposed of $ 83,602 $ 98,428 $ 147,539		For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
					USA $ - - - - 339,295 650 432,238 - - - - - $ 772,183 For the Year	Japan UK $ 93 $ 96,411 509,214 - - - - - - 895,694 624 - - - 4,693 - - (189,359) - - - - (416,601) (739,286) - - $ 98,023 $ 63,460 Ended December 31, 2017
				Taiwan $ 29,914 23,843 2,415 - 21,417 493 6,583 176 - 12,065 412 1,247 (2,991) (2,000) - (9,684) (288) $ 83,602		USA $ - - - - - - - - 98,428 - - - - - - - - $ 98,428	Japan $ 4,234 - - 1,306,805 - 23,629 - - 92,559 81,473 - - - - (8,239) (1,352,291) (1) $ 147,539

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c. Gain (loss) on disposal of subsidiaries

For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
Taiwan $ 149,436 6,927 - (125,934) $ 30,429		USA Japan UK $ 780,634 $ 279,206 $ 157,315 3,848 - - - (72,085) - (772,183) (98,023) (63,460) $ 12,299 $ 109,098 $ 93,855 For the Year Ended December 31, 2017

	Taiwan $ - 83,580 (83,602) 33,019 3,509 - $ 36,506		USA $ 103,638 - (98,428) - - - $ 5,210	Japan $ 384,222 - (147,539) - 11,406 (12,400) $ 235,689

d. Net cash inflow on disposal of subsidiaries

For the Year Ended December 31, 2018 Taiwan USA Japan UK Consideration received in cash and cash equivalents $ 144,476 $ 754,309 $ 279,206 $ 157,315 Less: As-of-yet received accounts receivable of disposal (23,714) - (93) (96,411) $ 120,762 $ 754,309 $ 279,113 $ 60,904 For the Year Ended December 31, 2017 Taiwan USA Japan Consideration received in cash and cash equivalents $ - $ 103,638 $ 384,222 Less: As-of-yet received accounts receivable of disposal - (21,015) - Cash and cash equivalent balances disposed of (29,914) - (4,234) $ (29,914) $ 82,623 $ 379,988		For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
					USA Japan UK $ 754,309 $ 279,206 $ 157,315 - (93) (96,411) $ 754,309 $ 279,113 $ 60,904 For the Year Ended December 31, 2017
				Taiwan $ - - (29,914) $ (29,914)		USA $ 103,638 (21,015) - $ 82,623	Japan $ 384,222 - (4,234) $ 379,988

104 -

38. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On October 16, 2017, the Corporation considers the development of the solar energy industry and the growth of future requirement in its investment strategy in order to expand its share in the solar energy industry and strengthen operating ability, the Corporation’s board of directors approved to increase the investment in GES by 46,104,764 ordinary shares of GES by public tender offer (approximately 24.11% of the total issued ordinary shares of GES), and GES will become 100%-owned subsidiary of the Corporation. As of November 6, 2017, the acquisition date, the Corporation acquired 43,090,282 shares and obtained a total of 3,014,482 shares from other shareholders in November and December 2017.

On April 13, 2017, the Corporation acquired 45 thousand shares of New Castle for $441 thousand, which resulted in an increase of the Corporation’s equity interests in New Castle from 55.00% to 100.00%. New Castle has been dissolved and liquidated in the fourth quarter of 2017 due to failing to achieve investment returns.

The above transaction was accounted for as an equity transaction since the Group did not cease to have control over the subsidiary.

Cash consideration received paid The proportionate share of the carrying amount of the net assets of the subsidiary transferred from (to) non-controlling interests Other equity attributable to shareholders of the Corporation adjustment Exchange difference on translating foreign operations Differences arising from equity transaction Line items adjusted for equity transaction Capital surplus - difference between consideration and carrying amounts adjusted for changes in percentage of ownership in subsidiaries Unappropriated earnings	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2017
		GES $ (954,369) 453,787 40,612 $ (459,970) $ (14,023) (445,947) $ (459,970)	New Castle $ (441) 441 - $ - $ - - $ -

39. OPERATING LEASE ARRANGEMENTS

The Group as lessee

The Corporation leases Hsin-chu plants, Zhu-nan plants and lands and Hukou plants from the Science-Based Industrial Park Administration and GES, respectively, under renewable agreements expiring in December 2026, December 2037 and December 2019, with annual rentals of $10,260 thousand, $9,269 thousand and $4,606 thousand, respectively.

The Corporation leases Taipei office, Kaohsiung office, Taipei parking lots and Zhu-nan dormitory, the lease periods range from 1 to 4 years, with annual rentals of $4,080 thousand, $716 thousand, $80 thousand and $3,648 thousand, respectively.

105 -

GES originally leased plants in Hukou from Hsin Lung Accessories Co., Ltd. under agreements expiring in December 2019. However, due to the process of business combination of the corporation, GES turned to rent office from the Corporation under renewable agreements expiring in December 2019. No default compensation has to be paid for the earlier relocation. Other lease contracts are with HOTAI Leasing Corporation for the company cars under renewable agreements expiring in December 2020.

Yong Zhou, Yong Liang, Yong Yao, Yong Shun and Hashimoto signed 20-year operating lease contracts with unrelated third parties for the use of property such as agricultural and livestock farms for the installation of power plants; these contracts, with total annual rentals of $30,221 thousand, are renewable and will expire in annual succession up to December 2038.

ET ENERGY signed 15-year operating lease contracts with Indianapolis International Airport on the use of property for the installation of power plants; these contracts are renewable and will expire in December 2027 with annual rentals of $7,847 thousand.

GES MEGAFIVE signed 20-year operating lease contracts with Washington Township Land, LLC on the use of property for the installation of power plants; these contracts are renewable and will expire in January 2036 with annual rentals of $383 thousand.

GES MEGATWELVE signed 20-year operating lease contracts with City of Plymouth, Indiana on the use of property for the installation of power plants; these contracts are renewable and will expire in January 2037 with annual rentals of $45 thousand.

As of December 31, 2018 and 2017, refundable deposits paid under operating leases were $32,539 thousand and $23,894 thousand, respectively.

The future minimum lease payments for operating lease commitments are as follows:

Up to 1 year Over 1 year and up to 5 years Over 5 years		December 31	December 31
		2018 $ 57,271 277,023 660,669 $ 994,963	2017 $ 58,777 260,665 639,470 $ 958,912

The lease payments recognized as expenses were as follows:

Minimum lease payments	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 82,637	2017 $ 76,140

40. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance.

Key management personnel of the Group review the capital structure periodically. For this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. On the basis of the recommendations of the key management personnel on balancing the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and/or the amount of new debt issued or existing debt redeemed.

106 -

41. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

December 31, 2018

	Fair Value	Total $ 5,644,187
Level 1 $ - $ -	Level 2 $ - $ - Fair Value
		$ 3,561,877
		Total $ 4,012,410
Level 1 $ - $ -	Level 2 $ - $ -
		$ 3,390,979

The fair values of the financial assets and financial liabilities included in the Level 3 categories above have been determined in accordance with the income approach based on a discounted cash flow analysis, with the most significant unobservable input being the discount rate that reflects the credit risk of counterparties.

The fair value of lease receivables was determined with a discount rate in accordance with the interest rates of the sales with buyback agreements with similar terms.

The fair value of the liability component of convertible bonds, assuming redemptions on October 27, 2019 was determined a with discount rate in accordance with interest rates based on loans with similar terms.

107 -
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2018

Financial assets at FVTPL Long call options Financial assets at FVTOCI Investments in equity instruments at FVTOCI Securities listed in the ROC Equity securities Domestic unlisted shares Foreign unlisted shares Financial liabilities at FVTPL Short call options December 31, 2017 Available-for-sale financial assets Securities listed in the ROC Equity securities Financial assets at FVTPL Long call options Put options Foreign exchange forward contracts Financial liabilities at FVTPL Short call options Foreign exchange forward contracts	Level 1 $ - $ 1,477,560 - - $ 1,477,560 $ - Level 1 $ 5,815 $ - - - $ - $ - - $ -	Level 2 $ - $ 115,920 - - $ 115,920 $ - Level 2 $ 103,250 $ - - 106 $ 106 $ - 5,742 $ 5,742	Level 3 $ 243,130 $ - 93,661 42,090 $ 135,751 $ 191,790 Level 3 $ - $ 117,840 23,674 - $ 141,514 $ 94,014 - $ 94,014	Total $ 243,130
				$ 1,593,480 93,661 42,090
				$ 1,729,231
				$ 191,790
				Total $ 109,065 $ 117,840 23,674 106 $ 141,620 $ 94,014 5,742 $ 99,756

There were no transfers between Level 1 and 2 in the current and prior periods.

108 -
2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2018

Financial assets Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1, 2018 per IFRS 9 Acquisitions through business combinations Purchases Recognized in profit or loss - unrealized Recognized in profit or loss - realized Effect of exchange rate changes Balance at December 31, 2018 Financial liabilities Balance at January 1, 2018 Additions Recognized in profit or loss - unrealized Effect of exchange rate changes Balance at December 31, 2018	Financial Assets at Fair Value Through Profit or Loss Long Call Options Put Options $ 117,840 $ 23,674 - - 117,840 23,674 - - 127,543 - (5,669) - - (23,674) 3,416 - $ 243,130 $ -	Financial Assets at Fair Value Through Profit or Loss Long Call Options Put Options $ 117,840 $ 23,674 - - 117,840 23,674 - - 127,543 - (5,669) - - (23,674) 3,416 - $ 243,130 $ -	Financial Assets at Fair Value Through Other Comprehensive Income	Financial Assets at Fair Value Through Other Comprehensive Income
		Long Call Options $ 117,840 - 117,840 - 127,543 (5,669) - 3,416 $ 243,130	Equity Instruments $ - 94,363 94,363 66,245 59,086 (83,943) - - $ 135,751 Financial Liabilities at Fair Through Profit or Loss
				Short Call Options $ 94,014 108,758 13,540 (24,522) $ 191,790

109 -

For the year ended December 31, 2017

Financial assets Balance at January 1, 2017 Additions Recognized in profit or loss - unrealized Balance at December 31, 2017 Financial liabilities Balance at January 1, 2017 Additions Recognized in profit or loss - unrealized Balance at December 31, 2017	Financial Assets at Fair Through Profit or Loss	Financial Assets at Fair Through Profit or Loss
		Long Call Options Put Options $ - $ - 117,840 43,789 - (20,115) $ 117,840 $ 23,674 Financial Liabilities at Fair Through Profit or Loss
		Short Call Options Redemption and Conversion Options $ - $ 387 94,014 - - (387) $ 94,014 $ -

3) Valuation techniques and inputs applied for the purpose of Level 2 fair value measurement

Financial Instruments Derivatives - foreign exchange forward contracts Securities listed in the ROC	Valuation Techniques and Inputs
	Discounted cash flow: Future cash flows are estimated based on observable forward exchange and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. The Group’s investments in private-placement shares that have quoted prices in an active market but cannot be traded during a lock-up period; their fair values were determined using market prices.

4) Valuation techniques and inputs applied for the purpose of Level 3 fair value measurement
a) Put options

The Black-Scholes model was used to determine the fair value of the put options redeemed, and the most significant unobservable input was volatility. An increase in the historical volatility used in isolation would result in an increase in the fair value of these put options. As of December 31, 2017, the volatility used were 25.20% and 26.54%, respectively.

Sensitivity analysis

The Group’s sensitivity analysis evaluated that the fair values of financial instruments were reasonable except for the impact of possible changes in the evaluation model or evaluation

110 -

parameters which may cause different outputs in the result of the evaluation. For financial instruments defined as Level 3 inputs, impacts of possible changes in the evaluation method on profit or loss and other comprehensive income or loss in the current period were as follows:

			Profit or Loss
			Changes	OCI Changes
			Arising from	Arising from
		Increase (+)/	Fair Value	Fair Value
	Inputs	Decrease (-)	Movements	Movements
For the year ended
December 31, 2017
Financial assets at Fair value
through profit or loss
Put options	25.20%	+0.5%	$ 106	-
Put options	26.54%	+0.5%	$ 117	-

The favorable and unfavorable changes arose from fluctuations in the fair values, which required management inputs that are both significant to the fair value measurement and unobservable. The table above shows the impact on the fair values of financial instruments if they were affected by only one isolated input. The variability and correlation among those inputs were not taken into consideration.

b) Long call options and short call options

Long call options and short call options use the options pricing model to determine their fair value, and the most significant unobservable input was volatility. An increase in the historical volatility used in isolation would result in an increase in the fair value of these options. As of December 31, 2018 and 2017, the volatilities used were 18.00% and 17.00%, respectively.

Sensitivity analysis

The Group’s sensitivity analysis evaluated that the fair values of financial instruments were reasonable, except for the impact of possible changes in the evaluation model or evaluation parameters which may cause different outputs in the result of the evaluation. For financial instruments defined as Level 3 inputs, the impacts of possible changes on the evaluation method on profit or loss and other comprehensive income or loss in the current period were as follows:

			Profit or Loss
			Changes	OCI Changes
			Arising From	Arising From
		Increase (+)/	Fair Value	Fair Value
	Inputs	Decrease (-)	Movements	Movements
The year ended December 31,
2018
Financial assets at fair value
through profit or loss
Long call options	7.00%	+0.5%	$ (10,660)	-
	7.00%	-0.5%	11,396	-
			$ 736
				(Continued)

111 -

			Profit or Loss	Profit or Loss
			Changes		OCI Changes
			Arising From		Arising From
		Increase (+)/	Fair Value		Fair Value
	Inputs	Decrease (-)	Movements		Movements
Short call options	7.00%	+0.5%	$	22,710	-
	7.00%	-0.5%		(25,466)	-
			$	(2,756)
For the year ended
December 31, 2017
Financial assets at fair value
through profit or loss
Long call options	6.80%	+0.5%	$	(5,369)	-
	6.80%	-0.5%		5,748	-
			$	379
Short call options	6.80%	+0.5%	$	11,783	-
	6.80%	-0.5%		(13,252)	-
			$	(1,469)
					(Concluded)

The favorable and unfavorable changes arose from fluctuations in the fair values, which required management inputs which are both significant to the fair value measurement and are unobservable. The table above shows the impact on the fair values of financial instruments if they were affected by only one isolated input. The variability and correlation among those inputs were not taken into consideration.

c) Domestic and foreign unlisted shares

The fair values of domestic and foreign unlisted shares are mainly determined by the asset approach and the market approach.

A market approach is a method of determining the appraisal value of assets or liabilities, based on the selling price of similar items. The Black-Scholes model was used to determine the fair value of domestic and foreign unlisted shares, and the most significant unobservable inputs were price multiplier and volatility. An increase in the price multiplier used in isolation would result in an increase in the fair value of these equity instruments.

An increase in the volatility used in isolation would result in a decrease in the fair value of these equity instruments. As of December 31, 2018, the price multiplier and volatility used to determine the fair value of domestic unlisted shares were 1.4100 and 30.00%, respectively, while the price multiplier and volatility used to determine the fair value of foreign unlisted shares were 1.3100 and 35.06%, respectively.

112 -

Sensitivity analysis

The Group’s sensitivity analysis evaluated that the fair values of financial instruments were reasonable, except for the impact of possible changes in the evaluation model or evaluation parameters which may cause different outputs in the result of the evaluation. For financial instruments defined as Level 3 inputs, the impacts of possible changes in the evaluation method on profit or loss and other comprehensive income or loss in the current period are as follows:

			Profit or Loss
			Changes	OCI Changes
			Arising From	Arising From
		Increase (+)/	Fair Value	Fair Value
	Input	Decrease (-)	Movements	Movements
For the year ended
December 31, 2018
Financial assets at fair value
through other comprehensive
income
Domestic unlisted shares	1.4100	+5.0%	-	$	2,236
	1.4100	-5.0%	-		(2,236)
	30.00%	+1.0%	-		(647)
	30.00%	-1.0%	-		647
Foreign unlisted shares	1.3100	+5.0%	-		967
	1.3100	-5.0%	-		(967)
	35.06%	+1.0%	-		(346)
	35.06%	-1.0%	-		349
				$	3

d) Conversion and redemption options

The fair values of redemption and conversion options are determined using the binomial tree valuation model where the significant unobservable input is historical volatility. An increase in the historical volatility used in isolation would result in an increase in the fair value. As of December 31, 2018 and 2017, the historical volatility used was 42.75% and 27.08%, respectively.

c. Categories of financial instruments

Financial assets FVTPL Held for trading Mandatorily at FVTPL Loans and receivables (Note 1) Available-for-sale financial assets (Note 2) Financial assets at amortized cost (Note 3) Financial assets at FVTOCI Equity instruments	December 31
	2018 2017 $ - $ 141,620 243,130 - - 11,549,608 - 163,611 19,111,812 - 1,729,231 - (Continued)

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December 31 2018 2017 Financial liabilities FVTPL Held for trading $ 191,790 $ 99,756 Amortized cost (Note 4) 30,382,755 20,581,872 (Concluded)

Note 1: The balances include cash and cash equivalents, notes and accounts receivable, accounts receivable from related parties, pledged time deposits, restricted deposits, other receivables, debt investments with no active market, etc. that were measured at amortized cost.
Note 2: The balances include available-for-sale financial assets measured at cost.
Note 3: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, notes and accounts receivable, accounts receivable from related parties, pledged time deposits, restricted deposits, other receivables and debt investments, etc.
Note 4: The balances include short-term loans, short-term bills payable, notes and accounts payable, accounts payable to related parties, amount due to customers for construction contracts, accrued expenses, long-term loans, bonds payable, preference share liabilities, etc. and were carried at amortized cost.
d. Financial risk management objectives and policies

The Group’s major financial instruments included equity, accounts receivable, accounts payable, bonds payable and borrowings. The Group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports, which are tools for analyzing exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Group seeks to minimize the effects of these risks by using derivative financial instruments to hedge against risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors continually. The Group does not enter into financial instrument contracts or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Corporate Treasury function, an independent organization that monitors risks and policies implemented to mitigate risk exposures, reports quarterly to the Group’s board of directors and audit committee:

1) Market risk

The Group’s activities exposed the Group primarily to the financial risks of exchange rate changes (see [a] below) and interest rates (see [b] below). The Group used a variety of derivative financial instruments to manage its exposure to foreign currency and interest rate risks.

There had been no change in the Group’s exposure to market risks or the manner in which these risks were managed and measured.

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a) Foreign currency risk

The Group had foreign currency-denominated sales and purchases, which exposed the Group to exchange rate risk. The Group entered into foreign exchange forward contracts, cross-currency swap contracts, etc. to manage exposures due to exchange rate and interest rate fluctuations. These instruments help reduce, but do not eliminate, the impact of adverse exchange rate movements.

The Group also holds short-term bank loans in foreign currencies in proportion to its expected future cash flows. This allows foreign-currency-denominated bank loans to be serviced with expected future cash flows and provides a partial hedge against transaction translation exposure.

Sensitivity analysis

The Corporation was mainly exposed to USD, EUR and JPY.

The following table details the Group’s sensitivity to a 5% increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currency. The sensitivity analysis included only outstanding foreign currency-denominated monetary items; their translation at the end of the reporting period is adjusted for a 5% change in exchange rates. The sensitivity analysis included cash, accounts receivable, other receivables, short-term bank loans, accounts payable, other payables and long-term bank loans. A positive number below indicates an increase in profit and other equity associated with the New Taiwan dollar’s strengthening 5% against a foreign currency. For a 5% weakening of the New Taiwan dollar against a foreign currency, there would be an equal and opposite impact on profit and other equity and the balances below would be negative.

Profit (loss)	USD Impact For the Year Ended December 31 2018 2017 $ 18,851 $(63,627)	EUR Impact For the Year Ended December 31 2018 2017 $ 8,212 $ 18,162	JPY Impact
			For the Year Ended December 31
			2018 2017 $ (294) $ (454)

The Group’s sensitivity to USD exchange rates decreased in the current period mainly because of the increase in assets recorded in USD. The Group’s sensitivity to EUR exchange rates decreased in the current period mainly because of the decrease in assets recorded in EUR. The Group’s sensitivity to JPY exchange rates decreased in the current period mainly because of the increase in assets recorded in JPY.

b) Interest rate risk

Long-term and short-term bank loans mainly bear floating interest rates. Thus, the fluctuations of market interest rates will result in changes in the effective interest rates for long-term and short-term bank loans and the fluctuation of future cash flows.

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The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2018 2017 $ 7,710,247 $ 5,577,016 (9,849,642) (9,571,897) 12,781,956 6,347,299 (16,909,886) (8,336,096)

The sensitivity analysis below was based on the Group’s exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period. For floating rate assets and liabilities, the analysis was prepared assuming that the amount of the asset and liability outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 1% higher and all other variables were held constant, the Group’s profit for 2018 and 2017 would decrease by $41,279 thousand and $19,888 thousand, respectively, mainly because of the Group’s exposure to interest rates on its variable-rate demand deposits and bank borrowings.

The Group’s sensitivity to interest rates decreased during the current period mainly because of the increase in variable-rate debt instruments.

c) Other price risk

The Group is exposed to equity price risk on financial asset at FVTPL - non-current and available-for-sale financial assets, which are not held for trading.

Sensitivity analysis

The sensitivity analysis below was based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% lower, other comprehensive income for 2018 would decrease by $86,462 thousand as a result of the changes in the fair value of financial assets at FVTOCI.

If equity prices had been 5% lower, other comprehensive income for 2017 would decrease by $5,453 thousand, as a result of the changes in fair value of impaired AFS investments.

The Group’s sensitivity to price increase in the current period mainly because of the increase in financial assets at FVTOCI.

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2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to a failure to discharge an obligation by the counterparties and financial guarantees provided by the Group, could arise from:

a) The carrying amounts of the financial assets recognized in the consolidated balance sheets; and
b) The amount of contingent liabilities on financial guarantees issued by the Group.

To minimize credit risk, the Group’s management has established a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each account receivable at the end of the reporting period to ensure that adequate allowances are set aside for irrecoverable amounts. Thus, the Group’s management considers the Group’s credit risk as significantly reduced.

The credit risk on liquid funds and derivatives was limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

Accounts receivable pertains to a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of the account receivables and, where appropriate, credit guarantee insurance is purchased.

The Group did not have significant credit risk exposure to any single counterparty or any group of counterparties with similar characteristics.

The Group’s concentration of credit risk was 20% and 23% in total accounts receivable as of December 31, 2018 and 2017, respectively, which was related to the Group’s three largest customers.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the use of bank loans and ensures compliance with loan covenants. The Group relies on bank loans as a significant source of liquidity.

a) Liquidity and interest risk rate tables for non-derivative financial liabilities

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The table included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

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December 31, 2018

On Demand or Less than 1 Month Non-derivative financial liabilities Non-interest bearing $ 2,016,411 Variable interest rate liabilities 209,152 Fixed interest rate liabilities 740,290 $ 2,965,853 December 31, 2017 On Demand or Less than 1 Month Non-derivative financial liabilities Non-interest bearing $ 1,088,437 Variable interest rate liabilities 120,819 Fixed interest rate liabilities 1,493,163 $ 2,702,419	1 - 3 Months $ 1,002,906 1,654,468 2,797,702 $ 5,455,076 1 - 3 Months $ 627,719 1,143,142 2,981,364 $ 4,752,225	3 Months to 1 Year $ 658,592 7,705,594 4,699,751 $ 13,063,937 3 Months to 1 Year $ 370,941 5,403,922 1,411,680 $ 7,186,543	1+ Years $ 79,314 8,188,452 1,743,186
			$ 10,010,952
			1+ Years $ 948,493 2,294,207 3,508,057
			$ 6,750,757

As of December 31, 2018 and 2017, the Group believes there were no bank loans on which immediate repayment will be demanded.

The amounts included above for variable interest rate instruments for non-derivative financial assets and liabilities were subject to change if changes in variable interest rates differed from the interest rates estimated at the end of the reporting period.

b) Liquidity and interest risk rate tables for derivative financial liabilities

The following tables show the Group’s liquidity analysis for its derivative financial instruments. The tables were based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis.

December 31, 2018 On Demand or Less than 1 Month 1 - 3 Months Net settled Short call options $ - $ -	3 Months to 1 Year $ -	1+ Years $ 191,790

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December 31, 2017

On Demand or Less than 1 Month 1 - 3 Months Net settled Foreign exchange forward contracts $ 162 $ 5,580 Short call options - - $ 162 $ 5,580	3 Months to 1 Year $ - - $ -	1+ Years $ - 94,014 $ 94,014

42. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Corporation and its subsidiaries (the Corporation’s related parties) had been eliminated on consolidation and are not disclosed in this note. In addition to those disclosed in other notes, transactions between the Group and its related parties are disclosed below.

a. Names and relationships of related parties

Name of Related Party Relationship with the Company Delta Electronics Inc. Investors with significant influence on certain group entities (Note 1) Delta Electronics (Japan), Inc. Other related parties (Note 2) Delta Electronics (Americas) Ltd. Other related parties (Note 2) Delta Greentech Ltd.-Turkey Other related parties (Note 2) Delta Electronics (Switzerland) AG Other related parties (Note 2) Zhongda Electronic (Jiangsu) Co., Ltd. Other related parties (Note 2) Zhongda Electronic Parts And Components (Wujian) Other related parties (Note 2) Co., Ltd. Phanes FZ LLC Other related parties (Note 3) Phanes Holding Other related parties (Note 3) Oryx Solar System Solutions LLC Other related parties (Note 3) TTMC Other related parties SAS Other related parties (Note 4) Taiwan Speciality Chemicals Corporation Other related parties (Note 4) Solar PV Other related parties Shanghai Surui Leasing & Financing Limited Other related parties (Note 5) Clean Focus Management Acquisition LLC Other related parties (Note 5) Neo Cathay Associates Neo Cathay Electric Power Corp. (Neo Cathay Electric) Associates (Note 6) JSP Associates Si One Associates (Note 6) Da Li Energy Associates (Note 6) Yong Han Associates (Note 7) Yun Yeh Associates (Note 7) Shanghai Cenat New Energy Company Limited Associates (Note 8) CFY Associates Clean Focus Corporation (CFC) Associates CF Gainesville Owner One, LLC Associates (Note 8) Clean Focus Development LLC Associates (Note 8) CF SBC Owner One LLC Associates (Note 8) CF Vegas Holdings LLC Associates (Note 8)

(Continued)

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Name of Related Party Relationship with the Company

Greenskies Renewable Energy LLC	Associates (Note 8)
CF Lessee LOB LLC	Associates (Note 8)
Verde Solar Inc.	Associates (Note 8)
V5 Technology	Associates (Note 9)
GES KYUSHU	Associates (Note 10)
Hashimoto	Associates (Note 10)
Gintung Energy	Associates (Note 11)
Sunshine PV	Associates (Note 11)
DevCo One	Joint venture
DevCo Two	Joint venture
JV2	Joint venture
		(Concluded)

Note 1: On October 15, 2018, Delta Company originally held 6.64% of the equity of the Corporation. After the election of the directors of the Corporation on November 20, 2018, the directors representing Delta Company resigned from the board of directors of the Corporation and did not meet the definition of related parties. Therefore, only the outstanding amount as of December 31, 2018 and transactions from January 1, 2018 to November 20, 2018 were disclosed as related party transactions.
Note 2: After the election of the directors of the Corporation on November 20, 2018, directors representing Delta Company resigned from the board of directors of the Corporation. The subsidiaries of Delta Company, Delta Electronics (Americas) Ltd., Delta Electronics (Japan), Inc., Delta Electronics (Switzerland) AG, Delta Greentech Ltd.-Turkey, Zhongda Electronic (Jiangsu) Co., Ltd. and Zhongda Electronic Parts And Components (Wujian) Co., Ltd. did not meet the definition of related parties. Therefore, only the outstanding amount as of December 31, 2018 and transactions from January 1, 2018 to November 20, 2018 were disclosed as related party transactions.
Note 3: Other related parties were entities of the investor who have significant influence over the Group and entities whose parent issued puttable preference shares which were acquired by the Group on December 18, 2015.
Note 4: After the date of merger, October 1, 2018, the Corporation and the directors of the Corporation became the shareholders of SAS and TSCC and became their directors. SAS and TSCC meet the definition of other related parties. Therefore, the outstanding amounts and transactions after October 31, 2018 were disclosed as related party transactions.
Note 5: Same directors with CFGP, so that meet the definition of other related parties.
Note 6: The associates were Neo Cathay’s subsidiaries.
Note 7: Yong Han and Yun Yeh had become subsidiaries of Neo Cathay since March 30, 2018 and were deemed associates; thus, the Group disclosed the trading transactions from March 30, 2018 and the balances as of March 30, 2018.

Note 8: The associates were CFY’s subsidiaries.

Note 9: V5 Technology had become an associate of the Corporation since August 14, 2017 because the Corporation did not acquire any shares issued for cash of V5 Technology; thus, the Group disclosed the trading transactions only from August 14, 2017 and the balances as of December 31, 2018 and 2017.
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Note 10: These associates became subsidiaries after GES acquired them in October 2017.
Note 11: The acquisition of subsidiaries is due to absorption merging the two corporations, Gintech Energy and Solartech Energy on October 1, 2018.
a. Revenue from the sale of goods

Related Party Category Associates Other related parties Investors with significant influence	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 1,287,666 50,677 79 $ 1,338,422	2017 $ 712,893 54,081 5 $ 766,979

Sales of goods between the Group and related parties were based on specifically negotiated terms.

b. Other income

Related Party Category Associates Related parties in substance	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 14,591 79 $ 14,670	2017 $ 377 138 $ 515

c. Dividends

Related Party Category Related parties in substance TTMC	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 3,680	2017 $ 4,415

d. Interest income

Related Party Category Associates CFY CF Lessee LOB LLC Others Joint ventures DevCo One DevCo Two Other related parities Phanes Holding	For the Year Ended	For the Year Ended	December 31
		2018 $ 13,969 - 750 3,546 3,546 11,487 $ 33,298	2017 $ 16,971 30,772 2,015 35,508 35,508 19,090 $ 139,864

The Group’s income revenue was composed of interest income from financing provided to associates and puttable preference shares with other related parties.

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e. Purchase of goods

Related Party Category Investors with significant influence Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 5,406 112 $ 5,518	2017 $ 31,209 - $ 31,209

Purchases of goods between the Group and related parties were based on specifically negotiated terms.

f. Other expenses

Related Party Category Associates Other related parties Investors with significant influence	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 61,206 1,574 652 $ 63,432	2017 $ 12 5,237 15,736 $ 20,985

g. Accounts receivable

Related Party Category Associates CFC Verde Solar Others Other related parties Investors with significant influence Less: Allowance for impairment loss-Associate		December 31	December 31
		2018 $ 367,956 85,042 101,454 - - (21,986) $ 532,466	2017 $ 155,005 - 8,095 7,401 5 - $ 170,506

The outstanding trade receivables from related parties are unsecured. An impairment loss of $ 21,986 thousand and zero was recognized for trade receivables from related parties for the year ended December 31, 2018 and 2017.

h. Other receivables

Related Party Category Associates CF Leases LOB LLC CFY CFC Others	December 31
	2018 2017 $ 493,797 $ 1,127,562 133,141 363,242 113,131 - 16,691 183,422 (Continued)

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Related Party Category Other related parties Clean Focus Management Acquisition LLC Others Joint venture DevCo One Others Less: Allowance for impairment loss-Associate		December 31	December 31
		2018 $ 188,319 13,440 128,426 16,189 (8,400) $ 1,094,734	2017 $ - 10,790 132,116 143,458 - $ 1,960,590 (Concluded)

Other receivables were temporary project fee payments that the Group paid for its associates.

The outstanding receivables from related parties were unsecured. An impairment loss of $ 8,400 thousand and zero was recognized for other receivables from related parties for the years ended December 31, 2018 and 2017.

i. Contract assets

Related Party Category Associates Si One Da Li Energy		December 31	December 31
		2018 $ 45,789 24,261 $ 70,050	2017 $ - - $ -

For the year ended December 31, 2018, no impairment loss was recognized for contract assets from related parties.

j. Amounts due from customers for construction contracts

Related Party Category Associates Si One Da Li Energy		December	31
		2018 $ - - $ -	2017 $ 31,799 19,432 $ 51,231

k. Prepayments

Related Party Category Other related parties SAS		December 31	December 31
		2018 $ 1,118,451	2017 $ -

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l. Other prepayments

Related Party Category Associates Clean Focus Development LLC		December	31
		2018 $ -	2017 $ 1,128

m. Accounts payable

Related Party Category Investors with significant influence Delta Electronics Inc. Other related parties		December	31
		2018 $ 373 68 $ 441	2017 $ 12,820 - $ 12,820

The outstanding payables to related parties were unsecured. No guarantees had been given or received for payables to related parties, and these payables would be settled in cash.

n. Contract liabilities

Related Party Category Associates Si One Others Other related parties SAS Others		December 31	December 31
		2018 $ 88,306 14,681 36,372 11 $ 139,370	2017 $ - - - - $ -

o. Amounts due to customers for construction contracts

Related Party Category Associates Si One Da Li Energy		December	31
		2018 $ - - $ -	2017 $ 51,581 11,419 $ 63,000

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p. Receipts in advance

Related Party Category Other related parties		December	31
		2018 $ -	2017 $ 3,493

q. Payables to contractors and equipment suppliers

Related Party Category Investors with significant influence Other related parties Associates		December	31
		2018 $ 12,936 - - $ 12,936	2017 $ 16,857 6,814 1,700 $ 25,371

r. Other accrued expenses

Related Party Category Associates CFC Others Joint Ventures Other related parties Investors with significant influence		December 31	December 31
		2018 $ 174,754 69,525 118,195 12,273 194 $ 374,941	2017 $ 276,657 35,970 165,732 3,087 711 $ 482,157

Other accrued expenses were expenses and construction fees temporarily paid by related parties for the Group.

No guarantees had been given or received for payables to related parties, and these payables would be settled in cash.

s. Acquisitions of property, plant and equipment

Other related parties Investors with significant influence		Purchase Price	Purchase Price
		For the Year Ended December 31
		2018 $ 164,381 26,830 $ 191,211	2017 $ 171,202 61,726 $ 232,928

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t. Put of financial assets - debt investments with no active market

For the year ended December 31, 2017

Related Party Category Other related parties Phanes Holding Project Receipts Associates Other related parties	Shares Underlying Assets $ 4,500 $ -	For	For	Proceeds Gain (Loss) on Disposal $ 146,453 $ - the Year EndedDecember 31	Proceeds Gain (Loss) on Disposal $ 146,453 $ - the Year EndedDecember 31
			$	2018 132,752 14,345 147,097	2017 $ 36,036 31,853 $ 67,889
			$

u. Project Receipts

The project receipts were the cost of power facility construction, the transaction between the Group and the related parties were based on specifically negotiated terms.

v. Disposal of subsidiaries

For details on disposal of subsidiaries of the Corporation, refer to Note 37.

w. Endorsements and guarantees

For details on loans to related parties and endorsements and guarantees, refer to Note 47.

x. Compensation of key management personnel

Short-term benefits Share-based payments Post-employment benefits	For the Year Ended	For the Year Ended	December 31
		2018 $ 121,461 1,203 195 $ 122,859	2017 $ 61,792 3,228 1,201 $ 66,221

The compensation of directors and other key management personnel was determined by the Compensation Committee on the basis of individual performance and market trends.

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43. PLEDGED OR MORTGAGED ASSETS

The following assets had been pledged or mortgaged as collaterals for long-term and short-term bank loans, bonds payable and deposits for the government:

Property, plant and equipment Finance lease receivables (including current and non-current portions) Restricted assets (classified as other current and non-current assets) Financial assets at fair value through other comprehensive income Refundable deposits Investments accounted for using the equity method Pledged time deposits (classified as other current and non-current assets) Power facilities construction in process (classified as inventory) Inventory Non-current assets held for sales		December 31	December 31
		2018 $ 13,538,543 5,307,313 3,701,289 1,337,855 1,004,824 608,316 595,018 99,575 1,021 - $ 26,193,754	2017 $ 6,369,227 1,698,483 2,386,553 - 852,023 - 209,277 83,456 - 143,090 $ 11,742,109

44. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group were as follows:

a. Significant commitments
1) Long-term purchase contracts:
- a) The Group entered into long-term material supply agreements with multiple suppliers of raw material for silicon chip; the longest contract duration can be effective until December 31, 2022. The Group has to make advance payments as amounts of guarantee and such suppliers shall meet the supply of materials in accordance with contract terms. For the year ended December 31, 2018 and 2017, after the contract assessment, the Group had recognized impairment loss of $487,558 thousand and $575,580 thousand on prepayment and purchasing agreement, respectively due to continuously recording losses and facing deterioration in economic and financial conditions by certain suppliers. The Group recognized prepayments of USD57,944 thousand (approximately NT$1,813,309 thousand), EUR 8,636 thousand( approximately NT$397,190 thousand) shown in the consolidated balance sheet as of December 31, 2018. The Group recognized a reversal of the impairment loss of $78,924 thousand and purchasing agreement losses for $398,581 thousand for the year ended December 31, 2018.
2) Material sell-buy agreements:

As of December 31, 2018, the Group entered into irrevocable sell-buy agreements with several companies.

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The information was as follows:

Company Name	Buyer	Duration	Note
Yong Liang	Taiwan Power Company	20 years	Sale of electricity to third
			parties without prior
			permission is disallowed
ET ENERGY	Indianapolis Power & Light	15 years	Sale of electricity to third
	Company, USA		parties without prior
			permission is disallowed
NCH Solar1	Good Energy Limited, UK	20 years	Sale of electricity to third
			parties without prior
			permission is disallowed
CEDAR FALLS	Cedar Falls Utilities	25 years	Sale of electricity to third
			parties without prior
			permission is disallowed
JRC	Dominican (Corporación	20 years	Sale of electricity to third
	Dominicana de Empresas		parties without prior
	Eléctricas Estatales)		permission is disallowed
	CDEEE
RER CT57	USA Town of East Haddam	25 years	Sale of electricity to third
			parties without prior
			permission is disallowed
GES ME	Dubai DP World FZE	20 years	Sale of electricity to third
			parties without prior
			permission is disallowed
Hashimoto	Kansai Electric Power Co.,	20 years	Sale of electricity to third
	Inc.		parties without prior
			permission is disallowed
Anderson N.	Indiana Municipal Power	25 years	Sale of electricity to third
	Agency		parties without prior
			permission is disallowed
Anderson S.	Indiana Municipal Power	25 years	Sale of electricity to third
	Agency		parties without prior
			permission is disallowed
Richmond	Indiana Municipal Power	25 years	Sale of electricity to third
	Agency		parties without prior
			permission is disallowed
Rensselare	Indiana Municipal Power	25 years	Sale of electricity to third
	Agency		parties without prior
			permission is disallowed

Yong Liang entered into a sell-buy agreement, which included the agreement on the sale of 26 facilities and other related agreements, with Chailease Finance Co., Ltd. (Chailease Finance) in March 2016. The agreement specified that Yong Liang was obliged to assist in all paper work relevant to the alteration, which should be completed by September 30, 2016, and to submit guarantee deposits of $25,000 thousand to Chailease Finance. Chailease Finance will return the guarantee deposits after all the obligations has been fulfilled. As of December 31, 2018, preparation of related document is in progress.

All transactions in the sale of 71 facilities of Yong Tang were completed on September 30, 2014. Because partial facilities have not obtained the registration certificate of power generation facilities and some flaws in the rental agreement need to be supplemented and corrected, the Group needed to submit guarantee deposits of $5,615 thousand of the construction in progress as of December 31, 2018. The settlement agreement was reached between the parties; the security deposit is expected to be collected during 2018.

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3) GES entered into construction contracts with several contractors with a total contact price of $2,906,734 thousand and unpaid amount was $1,416,991 thousand. GES ME entered into construction contracts with several contractors with a total contact price of USD21,176 thousand and unpaid amount was USD2,623 thousand.

BPS, NSP System and GES ME have obtained orders for power facility construction and contracted the projects out to contractors. BPS entered into construction and material contracts with the contractors with a total contract price of $43,717 thousand and the unpaid amount was $15,738 thousand as of December 31, 2018. NSP System entered into construction contracts with the contractors with a total contract price of $1,102,150 thousand and the unpaid amount was $424,289 thousand as of December 31, 2018.

4) GES entered into equity purchase or assets purchase agreements with several companies with a total contract price of $257,175 thousand and the unpaid amount was $119,134 thousand as of December 31, 2018.
5) GES has entered into project agreements for specific solar electric power plants developments with related parties for 30,740 thousand with the amount of 9,222 thousand unpaid.
6) Unused letters of credit amounted to approximately US$3,649 thousand of December 31, 2018.
b. Contingencies
1) The controversy associated with payment for goods between the Group and company CD:

The Group filed an appeal with Wujiang District Intermediate People’s Court on July 3, 2015 to request CEEG (Shanghai) and CEEG (Nanjing), both are CD group companies, to return RMB48,230 thousand. Wujiang District Intermediate People’s Court ruled in the Group’s favor on September 23, 2015, but company CD appealed to the court of second instance on October 8, 2015.

During the appeal, the Group and company CD, a CD group company, reached an agreement on December 30, 2015 after mediation. According to the agreement, CEEG (Shanghai) would propose a specific payment schedule with an expected repayment of RMB48,230 thousand and CEEG (Nanjing) assumed joint liability.

CD Group did not make payments according to the terms of the above payment schedule; hence, the Group has entrusted a law firm to apply for a compulsory enforcement of the award. The Group recognized all above mentioned account receivables as a loss. DelSolar Wu Jiang received a total of RMB20,537 thousand through cash appropriated by the enforcement of the court and cash payments received from CEEG (Shanghai) as of March 18, 2019. CEEG (Shanghai) has repaid a debt to DelSolar Wu Jian with solar cells assemblies for 3,148 thousand as of March 18, 2019; CEEG (Shanghai) will continuously to repay the outstanding amount on the basis of RMB300 thousand per month to DelSolar Wu Jiang.

In addition, the controversy associated with payment for goods between the Group and CEEG’s (Shanghai): In August 2016, the Group has entrusted a law firm to go to arbitration for the overdue payment of CD Group’s CEEG (Shanghai) in the China International Economic and Trade Arbitration Commission (CIETAC). The Group requested payment of USD1,255 thousand. The Group prevailed in the proceeding on December 23, 2016, and CEEG (Shanghai) has to pay USD1,254 thousand in overdue payments and USD25 thousand in overdue penalties to the Group. The Group has applied to the court for a compulsory enforcement of the award.

2) In the controversy of whether to continuously perform the supply agreement, company K requested the help of Hsin-chu district court on January 13, 2016 to demand payment of $10,000 thousand in partial claims. The company K requested to increase the payment to $500,000 thousand in August
129 -
NSP has filed a counterclaim against the company K to Hsin-chu district court on March 21, 2017 to reimburse prepayment and to demand payment of $20,000 thousand in partial claims.

On October 13, 2017, the Hsin-chu district court ruled that the Corporation should pay company K $500,000 thousand and accrued interest payable at 5% per annum beginning from December 31, 2015. Simultaneously, Hsin-chu district court dismissed the Corporation’s request for return of advance payment against supplier K. In the first court session, the Corporation considered the result of verdict as having a lot of violations; thus, the Corporation has engaged an attorney to lodge an appeal to safeguard the legitimate rights of the Corporation. Based on conservatism concept, the Corporation accrued a potential loss and necessary adjustment will be made depending on the ruling.

3) In March 2015, the Corporation received a notice of arbitration initiated by the controversy that resulted from the long-term materials supply agreement, which was signed in February 2008, between DelSolar and company AH. the Corporation believed that there were unsolved issues on the long-term materials supply agreement which will need further clarification from both parties. Therefore, the Corporation engaged an attorney to assist on the process.

AH, the raw material supplier, requested that the Corporation pay the remaining unpaid amount of EUR36,089 thousand for the incomplete work under the outstanding WAFER procurement contract from 2009 to 2012, which was signed between the supplier and the Corporation before the acquisition of DelSolar. AH also requested that the Corporation pay additional interest and other expenses for delaying the performance obligation. AH, the supplier, recorded the above issue and communicated it with the arbitration tribunal. Furthermore, during the period from 2013 to 2015 (after the acquisition of DelSolar), the remaining unpaid amount of EUR68,372 thousand should be paid by the Corporation with additional interest and other expenses to AH, the supplier, under the WAFER procurement contract. However, the material supplier has not yet presented any probable or reliably measurable obligations to the Corporation. the Corporation received the result of arbitration in November 2017, the tribunal ruled that the Corporation should comply with the conditions of the purchase agreement. However, in consideration of the transaction price of wafer each year, significant reduction of the agreed price is necessary. The tribunal adjudicated that EUR28,160 thousand should be paid by the Corporation with additional interest to AH and AH should grant 22,908 thousand pieces of wafers to the Corporation. Having made a preliminary assessment, the Corporation evaluated the impact of the arbitration was immaterial. On May 31, 2013, the acquisition date of DelSolar, the Corporation has provided reserves USD15,454 and accrued a probable losses and interest expense with the result of the arbitration. In order to meet the result settled by the arbitration, the Corporation and AH make the payments and delivery of silicon wafers in accordance with the agreement. The Corporation has paid the principal of EUR27,500 thousand and interest payable of EUR1,175 thousand to the supplier AH in 2018. There will not be any other rights and obligations of delivering silicon wafers on both parties. As of December 13, 2018, the Corporation has recognized additional losses on purchasing contracts for 398,581 thousand and made a reversal of compensation for interests for 239,274 thousand.

4) Company CE has requested an arbitration on the controversy between company CE and its third-party vendor company G at the Hong Kong International Arbitration Centre, where its arbitral awards are enforced and recognized by ROC courts. With respect to the enforcement of such arbitral awards, company CE requested the issuance of an order for attachment and an order for transfer of the Corporation’s debentures of payments of goods. the Corporation’s made a statement that the Corporation continuously disagreed with the demand of company CE since February 2016; therefore, company CE advocated that the Corporation should pay a total of $60,480 thousand and an accrued interest payable at 5% per annum. In August 2017, the Hsin-chu district court ruled that the Corporation should pay CE company $60,480 thousand and accrued interest payable 5% per annum. As company CE has applied for the implementation of debt restructuring in mainland China with its third party vendor company G, and the Corporation instructed legal counsels to subsequently answer the charges. NSP considered the result of the verdict as having a lot of violation, and has engaged an attorney to lodge an appeal. The case is currently before the Taiwan
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High Court. The Corporation has accrued a probable losses and will adjust any amount base on the result of such verdict, if necessary.

5) The dispute over the buy-sell agreement between DelSolar Wu Jiang and company JE, was admitted to the Shanghai Jiading People’s Court on July 25, 2016, and the first, the second and the third court sessions were heard on September 7, 2016, November 25, 2016 and March 4, 2017, respectively. The total amount involved was RMB5,947 thousand, which was composed of a return of advance payments of RMB5,406 thousand, a penalty of RMB500 thousand, and interest losses of RMB41 thousand accrued as of the court filing date. Regarding to the circumstances of the case, DelSoar Wu Jiang has changed the litigation strategy and decided to withdraw the lawsuit on July 6, 2017. On July 10, 2017, DelSoar Wu Jiang has again appealed to the court requiring JE to pay back the prepayments of RMB4,071 thousand, with monetary losses in terms of interest payments incurred from June 23, 2016 to the day on which the appeal was made; the interest was based on the bank interest rate of the comparable period. Waiting for the court decision after two trials on December 5, 2017 and March 14, 2018.
6) JRC, a subsidiary of GES is required to compensate the company, Corporation 40, USD900 thousand due to a consultancy agreement’s lawsuit; the judgement was passed in the Dominican General Court. GES has accrued a probable losses based on accounting conservatism. The litigation case is under appeal with no latest progress.
7) The dispute over the buy-sell agreement between DelSolar Wu Jiang and company CZ, has been filed a petition to Wu Jiang People’s Court by DelSolar Wu Jiang for an order of claiming company CZ’s payment of RMB7,798 thousand, a penalty of RMB693 thousand as of February 3, 2017, the penalty from February 4, 2017 to the date of settlement, and the case acceptance fee and has reconciled on June 15, 2017. CZ company was requested for a payment of RMB7,798 thousand by installment payment, a penalty of RMB872 thousand (as of May 8, 2017) and the case acceptance fee RMB44 thousand. CZ company did not make payments according to the terms of the payment schedule; hence, DelSolar Wu Jiang has entrusted a law firm to apply for a compulsory enforcement of the award. CZ company paid the amount of RMB8,487 thousand and will continue to apply to the court for RMB227 thousand, penalty and litigation expense as of December 12, 2018. A company real estate and two vehicles have been seized by the court and the proceeds are requested to settle all outstanding balances owed to DelSolar Wu Jiang by auction in court.
8) The Corporation entered into a gas distribution agreement with EQ company on May 1, 2011. The agreement stated that EQ company would provide nitrogen, pure oxygen and other gases to GEC factories located at the Hsin-chu Industrial Science Park in Zhu-nan, Miaoli. After the business combination between the Corporation and GEC, the Corporation undertook all the rights, obligations and liabilities of the above mentioned agreement. The Corporation terminated the contract earlier in accordance with the section 7.5 of the agreement due to the factories in Zhu-nan was closed permanently on October 31, 2016. Under the section 7.5 of the agreement about the calculation and amount of early termination, EQ company continuously requested an unreasonable price and thus, no consensus has been reached between the two delegations through ongoing negotiation. EQ company has filed an application for arbitration to request a payment of NTD 60,900 thousand with an annual interest of 5%. The Corporation has instructed counsel to respond the unreasonable request.
9) Company CE requested an arbitration on the controversy between company CE and its third-party vendor company G at the Hong Kong International Arbitration Centre, where its arbitral awards are enforced and recognized by the ROC courts. With respect to the enforcement of such arbitral awards, company CE requested the issuance of an order to obtain the right of withholding payments of goods from Gintech; the company Gintech stated that there was no existing creditor’s right as the company received the order to withhold. As a result, CE has filed an application for arbitration to ensure the existing creditor’s right of NTD 5,000 thousand on March 14, 2016. Additionally, CE has filed another application to expand the request to further ensure the existing creditor’s right of NTD 10,000 thousand. CE company has instructed counsel to respond the request from Gintech.
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45. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

On January 26, 2019, the Group signed a contract with CVI Clean Capital Solar 3 LLC to sell 100% of two subsidiaries, ET ENERGY and TIPPING POINT, and the contract price was US$24,246 thousand.

46. SIGNIFICANT DENOMINATED IN FOREIGN CURRENCIES ASSETS AND LIABILITIES

The Group entities’ significant financial assets and liabilities denominated in foreign currencies are aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

Financial assets Monetary assets USD USD (Note 2) USD (Note 3) EUR JPY RMB GBP DOP Non-monetary assets USD USD EUR MYR Financial liabilities Monetary liabilities USD USD (Note 2) USD (Note 3) USD (Note 4) EUR EUR (Note 2) EUR (Note 3) JPY GBP RMB DOP NTD (Note 3)	December 31	December 31
	2018 Foreign Currencies (In Thousands) Exchange Rate (Note 1) $ 224,768 30.7400 260 6.8677 25,523 32.2222 14,999 35.2200 23,475 0.2781 50,346 4.4760 2,058 38.9500 386 0.6116 1,144 30.7400 805 28.9978 600 32.2300 52,054 7.1190 229,154 30.7400 - - 9,132 32.2222 - - 10,097 35.2200 210 7.8686 29 36.9182 44,610 0.2781 38 38.9500 536 4.4760 1,576 0.6116 146 1.0482	2017
		Foreign Currencies (In Thousands) Exchange Rate (Note 1) $ 212,131 29.8480 928 6.5527 - - 18,675 35.4860 45 0.2634 30 4.5551 13,818 40.0205 1,579 0.6179 1,094 29.8480 62 29.8900 600 37.6500 - - 254,156 29.8480 8 6.5527 - - 1,529 64.3137 8,229 35.4860 210 7.7904 - - 34,500 0.2634 21 40.0205 6,749 4.5551 1,132 0.6179 - -

Note 1: Exchange rates between foreign currencies and the New Taiwan dollar, except where specified.

Note 2: Exchange rates between foreign currencies and RMB.

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Note 3: Exchange rates between foreign currencies and THB.

Note 4: Exchange rates between foreign currencies and INR.

For the year ended December 31, 2018 and 2017, realized and unrealized foreign exchange (losses) gains were $(61,243) thousand and $73,979 thousand, respectively. It is impractical to disclose net foreign exchange (losses) gains by each significant foreign currency due to the variety of the foreign currency transactions of the group entities.

47. SEPARATELY DISCLOSED ITEMS

Following are the additional disclosures required by the Securities and Futures Bureau for the Corporation:

a. Financings provided to others: Table 1 (attached)
b. Endorsements/guarantees provided: Table 2 (attached)
c. Marketable securities held (not including investments in subsidiaries, associates, and joint ventures): Table 3 (attached)
d. Marketable securities acquired and disposed of at costs or prices of at least $300 million or 20% of the paid-in capital: Table 4 (attached)
e. Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: None
f. Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None (attached)
g. Total purchases from or sales to related parties of at least $100 million or 20% of the paid-in capital: Table 5 (attached)
h. Receivables from related parties amounting to at least $100 million or 20% of the paid-in capital: Table 6 (attached)
i. Trading in derivative instruments: None (attached)
j. Related information of investees over which the Corporation exercises significant influence: Table 7 (attached)
k. Investments in mainland China:
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding ratio, investment gain or loss, carrying amount of the investment at the end of the period, repatriated investment gains, and limit on the amount of investment in the mainland China area: Table 8 (attached)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: Table 9 (attached)
l. Intercompany relationships and significant intercompany transactions: Table 10 (attached)
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48. SEGMENT INFORMATION

Financial information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on sales from each type of products. The measurement basis of the reportable segments are the same as the Group’s consolidated financial statements. The Group’s main reportable segments are solar cells, modules and power facilities.

a. Segment revenue and operating results

Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue
For the Year Ended December 31
			2017
			From External Inter-segment Customers Sales $ 5,006,856 $ 810,768 3,863,086 85,169 1,096,800 2,862 281,145 87,603 $ 10,247,887 $ 986,402 Segment Profit or Loss
	$ 499,387

		For the Year Ended December 31
			2018 $ (1,279,860) (55,837) 614,362 (101,887) (823,222) 92,971 (730,251) (1,718,847) (260,027) 2,268,822 $ (440,303)	2017 $ (1,376,193) (1,036,959) 414,122 3,702 (1,995,328) 11,933 (1,983,395) (1,751,181) (158,372) (237,778) $ (4,130,726)

Segment profit or loss represents profit or loss created by each segment without the allocation of operating expenses and non-operating income expenses. This is the measure reported to the Group’s chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

b. Segment assets

The Group does not provide information on assets regularly to the Group’s chief operating decision maker; thus, the measure of assets is zero.

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c. Revenue from major products and services

The following is an analysis of the Group’s revenue from its major products and services.

Modules Solar cells Power facilities Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 7,190,802 3,249,827 712,943 1,830,348 $ 12,983,920	2017 $ 5,006,856 3,737,631 15,205 1,488,195 $ 10,247,887

d. Geographical information

The Group’s revenue from continuing operations from external customers by location of customers’ countries and information about its non-current assets by location of assets are detailed below.

Revenue from External Customers	Revenue from External Customers	Non-current Assets	Non-current Assets
For the Year Ended December 31
		December 31
2018 $ 6,739,846 1,991,574 1,027,606 653,442 24,346 2,815 2,544,291	2017 $ 3,339,331 2,260,769 1,024,351 1,211,172 12,033 1,382 2,398,849	2018 $ 15,519,313 - 531,378 487,322 1,050,214 1,563,839 904,464	2017 $ 6,672,089 - 1,572,469 714,827 717,760 620,470 865,284

$ 12,983,920 $ 10,247,887 $ 20,056,530 $ 11,162,899

Non-current assets exclude investments accounted for using the equity method, prepaid investments in shares, financial instruments, deferred tax assets, goodwill, brands and other assets.

e. Information about major customers

Single customers who contributed 10% or more to the Group’s revenue were as follows:

Custom DP Custom CO	For the Year Ended December 31	For the Year Ended December 31
	2018 Amount % $ 1,795,032 14 1,386,659 11	2017
		Amount % NA (Note) NA (Note) $ 1,358,778 13

Note: Revenue less than 10% of the Group’s revenue.

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TABLE 1

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limit	Note
													Item	Value
0	The Corporation	GES UK CFY Apex Zhongyang Sunshine PV Huiyang Fukushima Plant 1	Other receivables from related party Other receivables from related party Other receivables from related party Other receivables from related party Other receivables from related party Other receivables from related party Other receivables from relatedparty	YES YES YES YES YES YES Note 7	$ 1,109,500 915,090 550,000 500,000 200,000 150,000 18,991	$ - 106,929 300,000 200,000 200,000 130,000 -	$ - 106,929 24,000 - 200,000 - -	2.80% 5.00% 3.00% 3.00% 1.608% 3.00% -	2 2 2 2 2 2 2	$ - - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	$ - - - - 200,000 - -	`－` `－` `－` `－` `－` `－` `－`	$ - - - - - - -	$ 2,490,701 (Note 2, 3, 4 and 5) 2,490,701 (Note 2, 3, 4 and 5) 2,490,701 (Note 2, 3, 4 and 5) 2,490,701 (Note 2, 3, 4 and 5) 2,490,701 (Note 2, 3, 4 and 5) 2,490,701 (Note 2, 3, 4 and 5) 2,490,701 (Note 2, 3, 4 and 5)	$ 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2
1	GES	Ever Lite GES USA	Other receivables from related party Other receivables from relatedparty	YES YES	20,000 93,000	- -	- -	2.20% 2.20%	2 2	- -	Operating capital Operating capital	- -	`－` `－`	- -	156,429 (Note 2, 3, 4 and 5) 156,429 (Note 2, 3, 4 and 5)	625,716 625,716	Note 2 Note 2
2	GES UK	GES JAPAN GES KYUSHU GES USA	Other receivables from related party Other receivables from related party Other receivables from relatedparty	YES YES YES	214,900 92,010 381,250	- - 381,250	- - 381,250	2.20%~2.90% 2.20%~2.90% 2.20%~2.90%	2 2 2	- - -	Operating capital Operating capital Operating capital	- - -	`－` `－` `－`	- - -	2,686,472 (Note 2, 3, 4 and 5) 2,686,472 (Note 2, 3, 4 and 5) 2,686,472 (Note 2, 3, 4 and 5)	2,686,472 2,686,472 2,686,472	Note 2 Note 2 Note 2
3	GES JAPAN	GES UK GES	Other receivables from related party Other receivables from relatedparty	YES YES	121,500 54,000	121,500 54,000	121,500 54,000	2.90% 2.90%	2 2	- -	Operating capital Operating capital	- -	`－` `－`	- -	733,633 (Note 2, 3, 4 and 5) 73,363 (Note 2, 3, 4 and 5)	733,633 293,453	Note 2 Note 2
4	DelSolar Wu Jiang	NSP Nanchang	Other receivables from related party	YES	324,527	313,320	313,320	2.73%	2	-	Operating capital	-	`－`	-	1,141,561 (Note 2, 3, 4 and 5)	1,141,561	Note 2

Note 1: Nature of Financing:
1) For business;
2) For short-term financing.
Note 2: The financing company’s total financing amount for one counterparty should not exceed 40% of the financing company’s net asset value. The net asset value of GES, GES UK, GES JAPAN and DelSolar Wu Jiang is based on the latest audited or reviewed financial statement.
Note 3: The financing company’s total financing should not exceed 20% of its net asset value. A single financing should not exceed the transaction amount between the financing company and counterparty within one year and should not exceed the highest amount of purchases or sales.
Note 4:

The Corporation’s total amount of financing for short-term financing should not exceed 20% of its net asset value and the financing for a counterparty should not exceed 10% of its net asset value.

Note 5: GES’s total amount of financing for short-term financing should not exceed 40% of its net asset value and the financing for a counterparty should not exceed 10% of its net asset value.
Note 6: Overseas subsidiaries wholly-owned directly or indirectly by the Corporation and GES are not subject to Note 2. The financing company’s total financing should not exceed three years and the total amount of financing and the financing for a counterparty should not exceed 100% of its net asset value.

Note 7:

Solartech Energy has disposed of the shares of Fukushima Plant 1 in January 2018 and it became a non-related party on the reporting date.

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TABLE 2

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship
0 1 2 3	The Corporation GES GES USA NSP UK	GES Zhongyang ECOVE solar energy corporation Gintech (Thailand) NSP System NSP UK NSP Indygen GES UK CFR Apex Solar Japan Fukushima Plant 1 Yong Han (Note 6) GES UK Yong Liang GES USA GES Yun Yeh (Note 6) MEGATHIRTEEN TEV solar MUNISOL Meadowley (Note 7) NSP Indygen POTTERS BAR (Note 7) CLAY CROSS (Note 7) Bryncrynau (Note 7) BELPER (Note 7)	Subsidiary Subsidiary Note 4 Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 5 Associate Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	$ 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 4,981,402 1,564,289 1,564,289 1,564,289 1,564,289 1,564,289 1,564,289 1,084,401 1,084,401 1,084,401 143,188 143,188 143,188 143,188 143,188 143,188	$ 1,653,000 1,380,000 719,110 623,825 500,000 367,956 364,500 310,000 310,000 263,000 146,489 145,417 1,000,000 743,900 487,250 296,567 51,120 15,594 636,000 606,050 134,532 87,438 87,438 87,438 87,358 82,311 82,311	$ 1,653,000 770,000 - 623,825 500,000 - 364,500 305,510 305,510 263,000 - - - 619,900 417,250 117,367 51,120 - 255,000 311,550 134,532 - - - - - -	$ 1,092,961 752,294 - 397,103 163,200 - 364,500 305,510 305,510 261,000 - - - 481,765 233,645 117,367 50,000 - 255,000 310,000 134,532 - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - -	6.64 3.09 - 2.50 2.01 - 1.46 1.23 1.23 1.06 - - - 39.63 26.67 7.50 3.27 - 23.52 28.73 12.41 - - - - - -	$ 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 12,453,506 3,128,578 3,128,578 3,128,578 3,128,578 3,128,578 3,128,578 2,168,802 2,168,802 2,168,802 715,940 715,940 715,940 715,940 715,940 715,940	YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES	`－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－`	`－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－`

Note 1: In accordance with the “Rules of Guarantees by the Corporation,” the ceiling for the total guaranteed amount was 50% of the Corporation’s net asset value, and the limit on the guaranteed amount for a single party was 20% of the Corporation’s net asset value. But for business purposes, the limit of the guaranteed amount was the total of the purchases from or sales to the Corporation within the most recent year.

Note 2: Based on the “Rules of Guarantees by GES and GES USA,” the ceiling for the total guaranteed amount was 200% of GES’s and GES USA’s net asset value, and the limit of the guaranteed amount for a single party was 100% of GES’s net asset value. But for business purposes, the limit on the guaranteed amount was the total of the purchases from or sales to GES and GES USA within the most recent year. GES’s and GES USA’s net asset value is based on its latest financial statements.

Note 3: Based on the “Rules of Guarantees by NSP UK,” the ceiling for the total guaranteed amount was 500% of NSP UK’s net asset value, and the limit of the guaranteed amount for a single party was 100% of NSP UK’s net asset value. But for business purposes, the limit on the guaranteed amount was the total of the purchases from or sales to NSP UK within the most recent year. NSP UK’s net asset value is based on its latest financial statements.

Note 4: Gintech Energy has disposed of the share of ECOVE solar energy corporation September, 2018, so it is non related party on the reporting date.

Note 5: Solartech Energy has disposed of the shares of Fukushima Plant 1 in January 2018 and it became a non-related party on the reporting date.

Note 6: Originally a subsidiary of GES, it was sold to Neo Cathay on March, 2018 and became a related party.

Note 7: Originally a subsidiary of NSP Indygen, it has disposed on December, 2018 and became a related party.

Note 8: In accordance with the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” Article 4.1.1. (3), although, the guaranteed party is GES itself, GES issued a separate promissory note to a non-financial enterprise to meet the financing needs, which is still in accordance with the term "endorsements/guarantees" under Article 4 of the regulations.

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TABLE 3

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

MARKETABLE SECURITIES HELD DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31,2018	December 31,2018		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
The Corporation GES Prime Energy New Ray Invetment Apex GES USA	Shares CTCI SAS. TTMC EXOJET TSCC NTNU ASIA GLOBAL VENTURE CAPITAL II CO., LTD. SUN APPENNINO CORPORATION FICUS CAPITAL CORPORATION Shares Puttable preference shares`－`Phanes Holding Shares TTMC Shares TTMC Shares TOP GREEN ENERGY TECHNOLOGIES INC. Shares TG ENERGY SOLUTIONS LLC	Investee Investee Investee Investee Investee Investee Investee Investee Investee Other related party Investee Investee Investee Investee	Financial assets at fair value through other comprehensive income- current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at amortized cost- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current	3,003 21,860 4,000 5,885 1,691 200 1,000 - - 24 359 3,000 8,889 -	$ 133,333 1,337,855 66,240 45,962 18,601 2,000 22,137 19,338 - 153,700 6,372 49,680 27,098 615	0.39 3.73 5.44 12.06 0.85 2.60 10.00 26.09 28.07 100.00 0.49 4.08 7.11 10.00	$ 133,333 1,337,855 66,240 45,962 18,601 2,000 22,137 19,338 - 153,700 6,372 49,680 27,098 615	`－` Note 1 Notes 2 and 3 `－` `－` `－` `－` `－` `－` `－` `－` Notes 2 and 3 - `－`

Note 1: The asset has been pledged as collaterals for long-term bank loans and financing facilities. For the details refer to Note 43.

Note 2: The above amount is based on fair value. For those pertaining to private-placement shares, the amount is based on quoted market prices; and for those that cannot be traded during the lock-up period, the amount is based on relevant market prices.

Note 3: TTMC’s shares held by the Corporation and New Ray Investment through private equity placement were restricted under Article 43-8 of the Securities and Exchange Act.

Note 4: The above marketable securities had not been pledged or mortgaged as of December 31, 2018.

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TABLE 4

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

MARKETABLE SECURITIES ACQUIRED AND DISPOSED AT COSTS OR PRICES OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Shares	Amount	Shares	Shares	Shares	Shares	Carrying Amount	Gain (Loss) on Disposal	Shares	Amount
GES USA MEGASIXTEEN GES UK TEV Solar AC GES Solar	Shares MEGASIXTEEN GES AC GES USA AC GES SOLAR Richmond	Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method Investment accounted for using the equity method	- - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	- - 28,680 - -	$ - 175,722 781,062 - -	11,981 - 11,000 19,675 19,259	$ 351,772 559,484 331,976 593,754 581,226	- - - - -	$ - - - - -	$ - - - - -	$ - - - - -	11,981 - 39,680 19,675 19,259	$ 349,397 766,692 1,054,070 604,816 592,592

Note 1: Included subsidiaries’ issued common shares for cash, the investments in subsidiaries in this period, shares of the gain and loss of associates and joint ventures and exchange differences in translating foreign operations.

Note 2: The transactions were eliminated in the consolidated report.

139 -

TABLE 5

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Corporation NSP System CFR GES	GES NSP System CFC JSP Si One Da li Energy CFC Greenskies Renewable Energy LLC Yong Liang Yong Han	Subsidiary Subsidiary Associate Associate Associate Associate Associate Associate Subsidiary Associate	Sale Sale Sale Sale Sale Sale Sale Purchase Sale Sale	$ 130,258 127,546 233,984 198,580 227,025 105,283 228,784 132,752 106,403 106,323	1.26 1.24 2.27 1.93 67.74 31.41 98.81 31.94 44.41 44.38	60 days from the invoice date 60 days from the invoice date 60 days from the invoice date 60 days from the invoice date 120 days from the invoice date 120 days from the invoice date 90 days from the invoice date 90 days from the invoice date Open account 180 days Open account 180 days	$ - - - - - - - - - -	- - - - - - - - - -	$ - 95,436 118,079 31,643 - - 177,193 - - -	- 3.21 4.09 1.10 - - 100.00 - - -	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1

Note 1: The amounts were based on total notes or accounts receivable (payable) or total purchase (sale) amounts of the buyer (seller).

Note 2: The amounts were based on total sale amounts of the seller or total amount due from customers for construction contracts.

140 -

TABLE 6

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance (Note 1)	Turnover Rate		Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The Corporation DelSolar WuJiang NSP UK DelSolar US NSP NEVADA CFR USD1 GES GES JAPAN GES USA GES UK TEV II	DelSolar US NSP NEVADA GES ME GES Gintech (Thailand) Sunshine PV CFY CFC NSP Nanchang NSP Indygen CFR GES USA CF Lessee LOB LLC CFC Clean Focus Management Acquisition LLC DevCo One CFR GES USA Yong Yao GES Hashimoto GES UK MUNISOL JRC GES USA TEV Solar	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Other related party Associate Subsidiary Grandson company Subsidiary Parent company Subsidiary Parent company Grandson company Grandson company Subsidiary Subsidiary	$ 993,716 578,952 571,235 465,402 264,429 430,503 133,141 118,079 382,686 187,667 943,364 249,840 493,797 290,324 188,319 123,919 245,139 147,750 255,828 226,159 209,810 125,619 773,580 445,217 398,276 609,000	- - - 0.30 - - - 2.20 - - - - - - - - - - - - - - - - - -	$ - 34,365 - 401,316 163,387 - 114,412 118,079 62,338 - - - - - - - - 147,750 66,732 170,489 209,070 - 647,330 445,217 387,655 -	Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation Receivable according to the financial situation	$ - - - 200 302,974 - - - - - - - - - - - - - - - - - - - - -	$ - - - - - 430,503 - 21,980 - - - - - - - - - - - - - - - - - -

141 -

TABLE 7

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of December 31, 2018	Balance as of December 31, 2018	Balance as of December 31, 2018	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2018	December 31, 2017	Shares (Thousands)	% of Ownership	Carrying Value
The Corporation UES RES GES GES UK GES USA	UES DelSolar Cayman GES NSP BVI GES ME Apex NSP System NSP UK Prime Energy New Ray Investment Solartech Japan Zhongyang Huiyang DelSolar Singapore BPS SMC True Honour Limited Utech Neo Cathay TSST V5 Technology Gintung JSP Sunshine PV Solar PV RES Gintech (Thailand) Yong Liang Yong Han Yun Yeh Yong Zhou Ever Lite Yong Yao Yong Shun JRC GES UK GES USA NCH Solar 1 GES Solar 2 GES Solar 3 GES CANADA GES JAPAN ET ENERGY TIPPING POINT MEGATWO MEGATHREE MEGAFIVE MEGASIX MEGASEVEN MEGAEIGHT MEGAELEVEN MEGATWELVE MEGATHIRTEEN MEGAFIFTEEN MEGASIXTEEN MEGASEVENTEEN MEGANINETEEN MEGATWENTY	Independent State of Somoa Cayman Islands Hsin-chu, Taiwan British Virgin Islands Dubai Hsin-chu, Taiwan Tainan, Taiwan London, UK Tainan, Taiwan Tainan, Taiwan Japan Hsin-chu, Taiwan Hsin-chu, Taiwan Singapore Tainan, Taiwan Hsin-chu, Taiwan Independent State of Somoa Miaoli, Taiwan Tainan, Taiwan Malaysia Hsin-chu, Taiwan Taoyuan, Taiwan Taipei,Taiwan Hsin-chu, Taiwan Cayman Islands Independent State of Somoa Thailand Hsin-chu, Taiwan Hsin-chu, Taiwan Hsin-chu, Taiwan Hsin-chu, Taiwan Hsin-chu, Taiwan Changhua, Taiwan Hsin-chu, Taiwan Domincan London, UK Nevada, US London, UK London, UK London, UK Yaboda, Canada Kitakyushu, Japan Indiana, US Ohio, US California, US Delaware, US California, US California, US California, US California, US New York, US Indiana, US Indiana, US Massachusetts, US Indiana, US Indiana, US California, US California, US	Investment company Investment company Electronic component manufacturing and selling Investment company Solar related business Solar related business Solar related business Investment company Electronic component manufacturing and selling Investment company Solar related business Solar related business Solar related business Investment company Solar related business Solar related business Investment company Electronic component manufacturing Investment company Solar related business Electronic component manufacturing and selling Electronic component manufacturing Solar related business Solar related business Investment company Investment company Solar related business Solar related business Solar related business Solar related business Solar related business Electronic component selling Solar related business Solar related business Solar related business Investment company Investment company Solar related business Solar related business Solar related business Investment company Investment company Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business	$ 1,910,636 4,597,639 3,070,777 1,426,179 418,805 145,994 144,200 138,967 90,000 115,000 36,205 24,121 30,427 29,743 6,000 9,720 - 57,169 600,000 417,692 114,084 34,341 10,500 - - 1,971,918 1,964,202 249,000 - - 41,500 6,000 142,000 2,000 3,717 3,170,893 1,185,163 414,684 61,326 3,328 371,356 665,781 141,220 34,471 441,462 38,606 19,527 - - 25,843 - 5,204 58,890 - 351,772 - 4,025 3,769	$ Note 11 4,582,166 3,070,777 1,426,179 418,805 Note 11 144,200 138,967 90,000 115,000 Note 11 Note 11 Note 11 29,743 6,000 Note 11 Note 11 Note 11 600,000 Note 11 114,084 Note 11 10,500 Note 11 Note 11 Note 11 Note 11 219,000 116,000 8,000 41,500 6,000 42,000 1,000 3,717 3,184,814 859,768 414,684 61,326 3,328 371,356 665,781 247,759 34,471 249,911 38,606 19,527 - 89,026 25,843 56,056 5,204 - 102,067 - - 4,025 3,769	61,930 145,126 191,200 45,001 4 48,500 14,420 3,580 9,000 11,500 2 3,500 3,100 1,250 600 1,000 - 63,675 60,000 97,701 7,790 13,460 1,050 13,281 30,500 61,930 29,466 24,900 - - - - 14,200 200 1 103,890 39,680 7,947 1,021 67 10,540 221 4,800 1,155 14,687 1,284 635 - - 790 - 168 2,000 - 11,981 - 132 124	100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 100 - 98.30 40 42.12 41.43 36.38 35 19.47 19.92 100 100 100 - - 100 100 100 100 1 100 100 100 100 100 100 100 100 100 100 40 100 - - 100 - 100 100 - 100 - 100 100	$ 1,863,226 1,775,871 1,533,985 1,407,681 368,249 157,341 145,785 143,188 80,222 64,262 34,333 31,439 30,295 18,692 14,880 9,658 - (134,504 ) 616,896 254,093 69,860 44,424 7,533 - - 1,827,182 1,819,648 249,030 - - 7,059 2,787 140,093 914 1,954 2,643,752 1,054,070 331,104 27,277 (2,842 ) 230,687 733,567 139,843 18,463 308,828 34,539 19,614 (1,483 ) - 24,233 - 3,899 59,014 - 349,397 (23 ) 3,203 5,250	$ (89,195 ) (356,660 ) (369,132 ) 53,546 3,379 7,756 18,796 26,242 (151 ) 1,314 (2,693 ) 7,318 (132 ) 47,981 8,135 (62 ) 47 (186,513 ) 44,306 (42,363 ) (2,714 ) (27,717 ) (5,095 ) (20,676) (1,812) (182,818 ) (183,242 ) 1,382 499 171 (5,576 ) 5,281 (1,794 ) (1,064 ) (223,670 ) (205,793 ) (83,684 ) 7,892 82 (777 ) (192,224 ) 125,192 (3,919 ) (125 ) (11,105 ) 1,752 2,905 (282 ) (468 ) (15 ) (276 ) (621 ) (1,447 ) (923 ) (18,378 ) (23 ) (998 ) 1,010	$ (89,195 ) (356,249 ) (368,747 ) 53,546 3,379 7,756 31,151 26,242 (151 ) 1,314 (2,693 ) 7,318 (132 ) 3,917 5,285 (62 ) 47 (172,974 ) 17,723 (126,958 ) (2,542 ) 10,083 (1,783 ) - - (182,818 ) (183,242 ) 1,382 499 171 (5,576 ) 5,281 (1,794 ) (1,064 ) (2,217 ) (205,793 ) (83,684 ) 7,892 82 (777 ) (192,224 ) 125,192 (3,919 ) (125 ) (11,105 ) 1,734 2,905 (282 ) (258 ) (15 ) (152 ) (621 ) (1,447 ) (508 ) (18,378 ) (23 ) (998 ) 1,010	- - - - - - - - - - - - - - - - Note 12 - - Note 1 - - - Note 13 Note 13 - - - Note 7 Note 7 - - - - - - - - - - - - - - - - - Note 2 Note 7 - Note 7 - Note 8 Note 7 Note 8 Note 2 - -

(Continued)

142 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of December 31, 2018	Balance as of December 31, 2018	Balance as of December 31, 2018	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2018	December 31, 2017	Shares (Thousands)	% of Ownership	Carrying Value
GES USA GES JAPAN GES CANADA MEGATWO ASSET THREE MEGASIXTEEN GES AC TEV II TEV Solar AC GES Solar NSP BVI DelSolar Cayman DelSolar Singapore NSP UK NSP System NSP HK CFGP DelSolar HK NSP NEVADA	ASSET ONE ASSET TWO ASSET THREE ASSET FOUR CENERGY SH4 CEDAR FALLS Schenectady VOC HEYWOOD SEG KINECT RER CT 57 MP Solar Ventura TEV II GES KYUSHU Hashimoto JRC MUNISOL SHIMA'S WAIMEA HONOKAWAI ELEELE HANALEI KAPAA KOLOA GES AC ANDERSON N. ANDERSON S. Flora Greenfield Spiceland TEV Solar AC GES Solar Richmond Rensselaer Advance CFY CFGP NSP Stars NSP HK DelSolar HK DelSolar US NSP NEVADA URE NSP DelSolar India NSP Malaysia NSP Vietnam NSP Germany PV Power Park NSP Indygen Hsin Jin Optoelectronics Hisn Jin Solar Energy Si Two XYH Suzhou CFGP (HK) DelSolar Wu Jiang NSP JAPAN NSP Nanchang Livermore MEGASEVEN MEGAELEVEN MEGAFIFTEEN HEYWOOD Industrial Park Hillsboro MP Solar Ventura	California, US California, US Hawaii, US California, US California, US California, US Iowa, US New York, US New York, US Massachusetts, US New York, US Hawaii, US Connecticut, US California, US California, US Indiana, US Kitakyushu, Japan Wakayama, Japan Dominican Mexico Hawaii, US Hawaii, US Hawaii, US Hawaii, US Hawaii, US Hawaii, US Hawaii, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Indiana, US Cayman Islands British Virgin Islands British Virgin Islands Hong Kong Hong Kong Delaware, US Nevada, US California, US India Malaysia Vietnam Cologne, Germany Frankfurt, Germany UK Tainan, Taiwan Tainan, Taiwan Tainan, Taiwan Jiangsu, China Hong Kong Jiangsu, China Osaka, Japan Jiangxi, China Delaware, US California, US California, US Massachusetts, US Massachusetts, US US US California, US California, US	Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Investment company Solar operation management services Trust company Solar related business Investment company Investment company Solar related business Solar related business Solar related business Technical management services Technical management services Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar operation management services Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business	$ 34,229 - 87,289 - - 20,665 70,428 - - 55,424 24,144 8,143 62,093 99,128 91,867 3,018 - 55,893 371,967 418,778 4,496 16,185 12,260 19,589 8,595 23,391 17,506 738,518 410,752 348,325 58,235 262,480 38,767 3,017 593,754 581,226 299,760 16,106 1,198,860 184,440 - - 3,848,648 454,952 157,543 15,370 - 23,362 4,918 662 779 - 10,647 13,981 20,000 - 16,292 3,688,800 2,982 153,700 4,611 - - - 44,512 12,296 57,245 81,768 75,774	$ 34,229 - 87,289 - - 20,665 67,937 - - 55,424 - 8,143 62,093 99,128 91,867 - 180,132 55,893 371,967 249,891 - 16,185 - 19,589 8,595 23,391 17,506 179,033 410,752 348,325 58,235 262,480 38,767 - - - - - 1,198,860 184,440 - - 3,848,648 454,952 157,543 - 9,222 23,362 4,918 662 779 - 10,647 13,981 20,000 - 13,587 3,688,800 2,982 153,700 4,611 71,501 45,034 79,432 44,512 12,296 10,298 81,768 75,774	1,060 - 2,839 - - 619 2,287 - - - 800 266 2,031 - 3,013 0.2 - 5 74 14,687 153 526 418 637 280 761 569 - 13,507 11,454 1,915 8,631 1,275 0.1 19,675 19,259 9,933 534 9,672 30 - - 125,200 1 - 500 - 760 - 25 - - - - 2,000 - - - 1 - - - - - - - - - -	100 - 100 - - 100 100 - - 55 100 100 100 55 55 50 - 100 99 100 100 100 100 100 100 100 100 67.59 100 100 100 100 100 100 66.19 100 100 100 26.01 60 - - 100 100 100 100 - 100 100 90 100 100 80 60 100 100 100 100 100 11.36 75 - - - 45 100 100 45 45	$ 33,689 (202 ) 69,554 (171 ) 28,953 18,974 71,580 (5,567 ) (1,338 ) 54,088 24,726 10,092 60,960 99,663 92,462 (28,578 ) - 66,095 183,082 330,096 4,620 17,300 14,011 21,169 8,514 23,798 18,718 766,692 420,330 356,509 59,411 268,573 39,459 3,033 604,816 592,592 305,627 16,422 1,295,281 112,473 - (95 ) 1,199,392 406,014 168,002 15,370 - 18,650 (772 ) 2,635 762 18,896 11,922 16,189 19,747 (95 ) (10,870 ) 1,141,551 10,741 45,583 1,589 - - - 43,963 12,296 56,663 81,542 75,650	$ 1,199 (40 ) (4,947 ) (70 ) (145 ) - 1,496 (301 ) (164 ) (313 ) 220 1,188 276 (501 ) (288 ) (2,520 ) 34,755 9,590 (223,670 ) (10,859 ) 1 475 1,316 575 (10 ) 243 438 13,096 5,293 4,549 563 3,355 286 (74 ) 119 562 296 17 421,499 (17,486 ) - - (399,184 ) 30,332 12,304 - - (337 ) (3,779 ) 1,553 (35 ) 26,098 1,265 3,024 (128 ) - (4,008 ) (344,463 ) 160 (482,293 ) (56 ) (468 ) (276 ) (923 ) (313 ) - (572 ) (501 ) (288 )	$ 1,199 (40 ) (4,947 ) (70 ) (145 ) - 1,496 (301 ) (164 ) (172 ) 220 1,188 276 (276 ) (158 ) (735 ) 34,755 9,590 (221,453 ) (10,859 ) 1 475 1,316 575 (10 ) 243 438 131 5,293 4,549 563 3,355 286 (74 ) 1 562 296 17 94,117 (16,638 ) - - (399,184 ) 30,332 12,304 - - (337 ) (3,779 ) 1,398 (35 ) 26,098 1,012 1,814 (128 ) - (4,008 ) (344,463 ) 160 (54,789 ) (42 ) (210 ) (124 ) (415 ) (141 ) - (572 ) (225 ) (130 )	- Note 2 - Note 2 Note 2 - - Note 2 Note 2 Note 6 - - - Note 6 Note 6 Notes 9 and 15 Note 7 - - - Note 8 - Note 8 - - - - Note 15 Note 15 Note 15 Note 15 Note 15 Note 15 Notes 9 and 15 Notes 10 and 15 Notes 10 and 15 Notes 10 and 15 Notes 10 and 15 Note 1 - - Note 3 - - - Note 14 Note 7 - - - - Note 7 - - - - - Note 3 - Note 3 - Note 7 Note 7 Note 7 Note 6 - - Note 6 Note 6

(Continued)

143 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of December 31, 2018	Balance as of December 31, 2018	Balance as of December 31, 2018	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2018	December 31, 2017	Shares (Thousands)	% of Ownership	Carrying Value
DelSolar US NSP Indygen DelSolar Wu Jiang DelSolar Development CFR USD1 CFGP (HK) NSP Stars	DelSolar Development CFR USD1 JV2 Beryl POTTERS BAR CLAY CROSS BELPER Bryncrynau Meadowley NSP Nanchang DSS-USF PHX LLC DSS-RAL LLC Rugged solar LLC AVS Phase 2 LLC Clear Solar I LLC CEC Solar #1117 CEC Solar #1118 CEC Solar #1119 CEC Solar #1121 CEC Solar #1122 CEC Solar #1128 CEC Solar #1130 CEC Solar #1133 Ewauna Long Beach Randolph Roseville NHSG DevCo One DevCo Two CFGP (Shanghai) CFY	Delaware, US Delaware, US Delaware, US Delaware, US Delaware, US UK UK UK UK UK Jiangxi, China US US California, US California, US North Carolina, US Colorado, US Colorado, US US US US US US US US North Carolina, US North Carolina, US California, US New Hampshire, US US US Shanghai, China Cayman Islands	Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar related business Solar operations management services Investment company	$ 149,089 134,334 110,111 25,514 - - - - - - 1,198,860 42,114 78,541 60,102 282,801 - - - - - - - - - - - - - - 13,655 13,655 16,292 -	$ 149,089 134,334 110,111 25,053 - 35,055 24,772 32,329 6,310 9,036 1,198,860 42,114 78,541 - - - - - - - - - - - - - - - - 13,655 13,655 13,587 -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	100 100 100 67 100 - - - - - 88.64 100 100 - - - - - - - - - - - - - - - - 40 40 100 2.66	$ 122,060 (102,442 ) 203,578 63,088 133,046 - - - - - 253,320 46,081 78,281 60,102 282,801 - - - - - - - - - - - - - - 2,043 2,043 (10,870) -	$ (8,712 ) (25,620 ) 4,277 (796 ) 84,327 (7,475 ) (7,095 ) (6,272 ) (13,343 ) (8,864 ) (482,293 ) (204 ) (9,206 ) - - - - - - - - - - - - - - - - - - (4,008 ) 421,499	$ (8,712 ) (25,620 ) 4,277 (398 ) 84,327 (7,475 ) (7,095 ) (6,272 ) (13,343 ) (8,864 ) (427,504 ) (204 ) (9,206 ) - - - - - - - - - - - - - - - - - - (4,008) -	- - - Note 4 - Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Note 3 - - Note 2 Note 2 Note 2 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Notes 2 and 7 Note 2 Note 2 Notes 2 and 7 Notes 2 and 7 - - - Note 5

Note 1: Recognized on the basis of unaudited financial statements as December 31, 2018.

Note 2: The Group’s structured entities.

Note 3: For investments in Mainland China, refer to Table 8.
Note 4: The Group’s ownership interest in JV2 was 67% and the Group accounted for two thirds of the members of the board. According to the agreement, any material operation and management decision of JV2 shall be agreed by board of directors, which means DelSolar US does not have control over JV2. As specified in the agreement, the percentage interest of both members were 50% and 50%, respectively.

Note 5: NSP Stars Limited has no right to the share of CFY’s profit before meeting specific conditions.

Note 6: HEYWOOD, MP Solar and Ventura were each 55% - owned by GES USA and 45% - owned by NSP NEVADA.
Note 7: Yong Han and Yong Yeh were disposed of in March 2018, DelSolar India was cancelled in March 2018. MEGASEVEN, MEGAELEVEN and MEGAFIFTEEN were disposed of in June 2018. GES KYUSHU was disposal of in September 2018. POTTERS BAR, CLAY CROSS, BELPER, Bryncrynau and Meadowley were disposal of in October 2018. CEC Solar #1117, CEC Solar #1118, CEC Solar #1119, CEC Solar #1121, CEC Solar #1122, CEC Solar #1128, CEC Solar #1130, CEC Solar #1133, and Ewauna were disposed of in the fourth quarter 2018.
Note 8: As GES USA had injected capital in MEGASIXTEEN and MEGATHIRTEEN in the first quarter and second quarter of 2018, MEGASIXTEEN became a 100%-owned subsidiary of GES USA. In view of the fact that the power facilities of SHIMA and HONOKAWAI had been operated since the first quarter of 2018, SHIMA and HONOKAWAI became 100%-owned subsidiaries of ASSET THREE.

Note 9: GES USA and non-related party, Telamon Enterprise Ventures(“Telamon”) established TEV II and each acquired 50% of the shares of TEV II based on an agreement. GES USA is responsible for all relevant events and the risk of fluctuating return, thus, GES USA obtains substantial control over TEV II.

Note 10: TEV II acquired 100% of the shares of TEV Solar. TEV Solar and non-related party, Advantage Capital Solar Partners II, LLC(“ACS”) established AC GES Solar. TEV Solar acquired 66.19% of the shares of AC GES Solar which is the 100% owner of three LLC solar power facilities engaged in solar-related business.

Note 11: The acquisition of subsidiaries is due to the absorption merging of two corporations, Gintech Energy and Solartech Energy on October 1, 2018.

Note 12: True Honour Limited was an investment company which was cancelled in October 2018 and returned the shares in December 2018.

Note 13: The Corporation had recognized impairment loss on equity investment in Sunshine PV, an associate, and so the Group did not recognize any share of profit or loss of the associate.

Note 14: As DelSolar Cayman had injected capital in URE NSP in November 2018, URE NSP became a 100%-owned subsidiary of DelSolar Cayman.

Note 15: The original investment amount and proportion of ownership are listed according to legal qualifications.

(Concluded)

144 -

TABLE 8

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Fund	Remittance of Fund	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2018	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Income as of December 31, 2018
						Outward	Inward
DelSolar Wu Jiang NSP Nanchang JiangXi Solar PV Corp. (Note 2)	Solar related business Solar related business Solar related business	USD 120,000 $ 3,688,800 USD 44,000 $ 1,352,560 USD 18,450 $ 567,153	Indirect investments through the Group’s 100% - owned subsidiary Indirect investments through the Group’s 100% - owned subsidiary Indirect investments through the Group’s 100% - owned subsidiary	USD 120,000 $ 3,688,800 USD 5,000 $ 153,700 USD 18,450 $ 567,153		$ - - -	$ - - -	USD 120,000 $ 3,688,800 USD 5,000 $ 153,700 USD 18,450 $ 567,153	( USD 11,415 ) ( $ 344,463 ) ( USD 15,983 ) ( $ 482,293 ) ( USD 32 ) ( $ 966 )	100 100 19.92	( USD 11,415 ) ( $ 344,463 ) (Note 1) ( USD 15,983 ) ( $ 482,293 ) (Note 1) USD - $ -	USD 37,136 $ 1,141,551 (Note 1) USD 9,724 $ 298,902 (Note 1) USD - $ -	$ - - -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2018		Investment Amount Authorized by Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
USD 143,450 $ 4,409,653		USD 161,032 (Note 3 ) $ 4,950,124			$ 14,944,207

Note 1: Amount was recognized on the basis of reviewed financial statements.

Note 2: The acquisition of subsidiaries is due to the absorption merging of two corporations, Gintech Energy and Solartech Energy on October 1, 2018.

Note 3: On December 1, 2015, the Investment Commission, MOEA, authorized the investment of US$3,440 thousand in NSP (Jiangsu) Limited (tentative name) and, on August 31, 2016, authorized DelSolar HK’s investment of US$8,000 thousand in NSP Nanchang, but the capital has not yet been invested as of December 31, 2018.

Note 4: The Group had recognized impairment loss on the equity investment in JiangXi Solar PV Corp., an associate, so that the Group did not recognize any share of profit or loss of associates.

Note 5: The exchange rate used is the rate on December 31, 2018.

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TABLE 9

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

FOR THE YEAR ENDED DECEMBER 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Transaction Type	Purchase/Sale	Purchase/Sale	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized (Gain) Loss	Note
		Amount	%		Payment Term	Comparison with Normal Transaction	Ending Balance	%
NSP Nanchang	Sales Other operating revenue Purchase goods	$ 69 6,986 66,279	- 0.07 1.01	Specifically negotiated terms Specifically negotiated terms Specifically negotiated terms	Specifically negotiated terms Specifically negotiated terms Specifically negotiated terms	Specifically negotiated terms Specifically negotiated terms Specifically negotiated terms	$ - - -	- - -	$ - - -	- - -

Note: Amount was recognized on the basis of reviewed financial statements.

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TABLE 10

UNITED RENEWABLE ENERGY CO., AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
0	For the year ended December 31, 2018 The Corporation	GES Prime Energy New Ray Investment DelSolar US NSP UK NSP NEVADA NSP Indygen NSP Germany GES ME GES UK BPS NSP System NSP Nanchang	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Other receivables Accrued expense Sales Estimated accrued expenses Rental income Financial assets at fair value through other comprehensive income- non-current Long-term investment interest Rental income Other receivables Other receivables Other receivables Sales Support fees Estimated accrued expenses Other receivables Interest income Other income Accounts receivable Rental income Sales Other income Accounts receivable Other receivables Sales Rental income Service revenue Other operating revenue Dividends income (deduction of investments accounted for using the equity method) Other income Payment in advance Sales Other operating revenue Purchase	$ 465,402 931 130,258 114 60 59,085 7,558 60 993,716 77,989 578,952 208 7,133 1,764 571,235 10,044 18,104 5,893 423 35,280 1 95,436 13,200 127,128 28 348 70 48,838 13,200 54,835 69 6,986 66,279	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	1% - 1% - - - - - 2% - 1% - - - 1% - - - - - - - - 1% - - - - - - - - 1%
							(Continued)

147 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
0 1 2 3	The Corporation DelSolar Wu Jiang DSS-RAL LLC NSP UK	Hsin Jin Optoelectronics Hsin Jin Solar Energy Ever Lite Si Two NSP Vietnam CFR Beryl POTTERS BAR Bryncrynau Meadowley Gintech (Thailand) Zhongyang Apex Solartech JP SMC Utech Huiyang NSP Nanchang DelSolar US NSP Indygen	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3	Rental income Rental income Sales Rental income Other receivables Accrued expense Support fees Other receivables Refundable deposits Other receivables Sales Sales Sales Accounts receivable Other receivables Accounts payable Estimated material payments Estimated accrued expenses Other cost of goods sold Purchase Accounts receivable Other receivables Receipt in advance Sales Other income Accrued interest Other receivables Interest income Commission expense Other income Other receivables Purchase Other income Payment in advance Other receivables Accounts payable Accrued expense Purchase Other receivables Other income Other receivables Accounts receivable Interest income Other income Other receivables Other receivables	$ 28 28 26,867 12 123 555 2,124 18,447 3,137 47,556 87 117 109 258,237 6,192 195,407 7,596 5,495 270,484 7,559 64,870 13,970 28,396 1,424 2,700 14 24,000 483 172 815 95 4,149 90 96,132 8,322 217 143 76,633 158 150 320,348 62,338 8,813 324 20,907 187,667	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- - - - - - - - - - - - - - - - - - 2% - - - - - - - - - - - - - - - - - - 1% - - 1% - - - - -
							(Continued)

148 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
4 5 6 7 8 9 10 11	DelSolar US NSP NEVADA USD1 Ever Lite XYH Suzhou Beryl BPS General Energy Solutions	CFR Beryl GES USA Livermore HEYWOOD Industrial Park Hillsboro CFR NSP System GES ME MUNISOL General Energy Solutions Yong Liang Yong Han DelSolar Wu Jiang CFR NSP System GES ME Yong Han Yong Liang Yong Zhou Yun Yeh Ever Lite Yong Yao Yong Shun GES JAPAN GES USA	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other receivables Other payables Other receivables Other receivables Other payables Other receivables Other receivables Other receivables Other receivables Other payables Sales Sales Other operating revenue Sales Sales Sales Other payables Accounts receivable Other payables Sales Other receivables Sales Rental income Other income Sales Other receivables Rental income Other income Other receivables Rental income Other income Rental income Other income Other receivables Accounts payable Rental income Other income Interest income Other receivables Rental income Rental income Accrued expense Interest expense Other receivables Interest income	$ 943,364 31 249,840 45,413 1,153 63,397 81,465 7,487 245,139 1,886 1,250 2,215 526 7,542 2,484 1,756 113 48,691 12,830 6,993 2,784 6,814 17 240 106,403 882 70 1,920 126 70 240 17 60 252 3,631 70 480 71 255,828 70 70 226,159 49 147,750 418	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	2% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
							(Continued)

149 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
11 12 13	GES GES UK GES USA	Hashimoto GES USA GES Solar 2 GES Solar 3 NCH Solar 1 JRC GES JAPAN GES KYUSHU ET ENERGY TIPPING POINT MEGATWO MEGAFIVE MEGASIX MEGATWELVE MEGATHIRTEEN MEGASIXTEEN MEGASEVENTEEN MEGANINETEEN MEGATWENTY ASSET ONE ASSET TWO ASSET THREE ASSET FOUR CENERGY Schenectady VOC HEYWOOD SEG KINECT RER CT 57 MP Solar MUNISOL SHIMA'S WAIMEA HONOKAWAI	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other receivables Other receivables Interest income Other income Other receivables Other income Other receivables Other income Other receivables Other receivables Accrued expense Interest expense Interest income Interest income Accrued expense Other receivables Other receivables Other receivables Accounts receivable Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Accrued expense Other receivables Other receivables Other receivables Accrued expense Other receivables Other receivables Other receivables Accrued expense Other receivables Other receivables Other receivables Other receivables	$ 123 398,276 9,713 483 577 483 1,274 965 467 445,217 125,619 449 4,440 1,638 11,836 3,809 44,987 30,252 7,101 71,766 116 24,491 17,719 4,755 9,920 10,534 1 202 123 171 29,153 203 34,079 8,737 46,413 1,906 16,935 3,141 96,562 773,580 4,013 2,217 8,986	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	2% 1% - - - - - - - 1% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1% - - -
							(Continued)

150 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
13 14 15 16 17 18 19 20 21 22	GES USA GES CANADA MEGATWO ASSET THREE NCH Solar 1 MEGASIXTEEN MEGATWELVE GES AC TEV II TEV Solar	ELEELE HANALEI KAPAA KOLOA Ventura Spiceland AC GES Solar AC Solar Advance Rensselaer Richmond TEV II TEV Solar Alpha JRC MUNISOL SHIMA'S WAIMEA HONOKAWAI ELEELE HANALEI KAPAA KOLOA GES Solar2 GES Solar3 AC Solar Anderson N. Anderson S. Flora Greenfield Spiceland MEGAEIGHT Anderson N. Anderson S. Flora Greenfield Spiceland Advance Rensselaer Richmond TEV Solar Advance Rensselaer Richmond	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other receivables Other receivables Other receivables Other receivables Accrued expense Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Accounts receivable Other receivables Other receivables Accrued expense Accrued expense Accrued expense Accrued expense Accrued expense Other receivables Accrued expense Accrued expense Accrued expense Accrued expense Accrued expense Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	$ 2,873 1,032 3,103 2,322 92,247 107 778 695 52 779 1,502 80 80 67,217 23,691 4,446 13,729 11,435 15,955 8,090 20,500 14,770 188 3,565 17 6 6,067 5,155 1,111 3,916 726 251 2,820 2,505 492 1,648 305 3 3 3 609,000 1,851 1,260 1,085	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1% - - -
							(Continued)

151 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
23 24 25	Yong Liang Yong Zhou GES JAPAN	Yong Yao Yong Liang Yong Han Hashimoto	3 3 3 3	Other receivables Rental income Rental income Other receivables	$ 26,398 134 45 209,810	Note 2 Note 2 Note 2 Note 2	- - - -
0	For the year ended December 31, 2017 NSP	GES Prime Energy V5 Technology New Ray Investment DelSolar US DelSolar India NSP UK NSP NEVADA NSP Indygen NSP Germany GES ME GES UK BPS NSP System NSP Nanchang	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Accounts receivable Other receivables Accrued expenses Sales Rental income Rental income Acquisition of property, plant and equipment Software expense Rental income Other receivables Other receivables Refundable deposits Other receivables Accounts receivable Other receivables Sales Sales Other receivables Support fees Estimated accrued expenses Other receivables Other receivables Interest receivable Interest income Other income Accounts receivable Rental income Sales Accounts receivable Sales Rental income Accounts receivable Accounts payable Prepayments Sales	$ 24,754 380,115 243 52,150 60 644 1,700 600 60 1,038,741 45,653 103 504,024 20,140 879,682 22,068 65,979 70,395 7,067 1,753 389,403 1,046,434 8,369 29,909 1,753 14,207 135 29,978 42,196 254,818 28 9 24,617 54,835 2,210	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- 1% - 1% - - - - - 3% - - 1% - 3% - 1% - - - 1% 3% - - - - - - - 2% - - - - -
							(Continued)

152 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
0 1 2 3 4 5 6	NSP DelSolar Wu Jiang DSS-RAL LLC DSS-USF PHX NSP UK DelSolar US NSP NEVADA	NSP Nanchang Hsin Jin Optoelectronics Hsin Jin Solar Energy Ever Lite Si Two CFR Beryl POTTERS BAR CLAY CROSS BELPER Bryncrynau Meadowley NSP Nanchang DelSolar US DelSolar Development DSS-USF PHX LLC DelSolar US NSP Indygen POTTERS BAR BELPER CFR Beryl MEGASEVEN MEGAELEVEN MEGAFIFTEEN GES USA Livermore	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other operating revenue Purchases Maintenance and repair charges Rental income Rental income Sales Accounts receivable Receipts in Advance Rental income Other receivables Refundable deposits Accounts receivable Other receivables Sales Sales Other receivables Sales Other receivables Sales Accounts receivable Other receivables Sales Other receivables Sales Other receivables Other receivables Accounts receivable Interest income Sales Other income Sale of property, plant and equipment Accrued expenses Other receivables Accrued expenses Other receivables Other receivables Purchases Purchases Other receivables Accrued expenses Other receivables Other receivables Other receivables Other receivables Other receivables Accrued expenses	$ 38,980 101,227 66 28 28 9,299 4,834 8,339 10 17,912 1,596 33,907 12,269 51,676 68,408 70,116 63,166 67,394 67,321 584 70,012 60,269 64,303 59,444 63,033 329,088 63,440 5,288 441 120 488 54 20,300 480 901 752,911 3,186 2,761 952,504 30 116,808 67,458 120,958 46,594 44,095 1,119	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- 1% - - - - - - - - - - - 1% 1% - 1% - 1% - - 1% - 1% - 1% - - - - - - - - - 2% - - 3% - - - - - - -
							(Continued)

153 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
6 7 8 9 10 11 12 13	NSP NEVADA USD1 Ever Lite NSP Indygen XYH Suzhou Beryl BPS GES	Industrial Park Hillsboro HEYWOOD CFR NSP System GES ME GES USA MUNISOL Yong Liang Yong Han POTTERS BAR CLAY CROSS BELPER Bryncrynau Meadowley GES UK DelSolar Wu Jiang CFR NSP System GES ME New Castle Yong Han Yong Liang Yong Zhou Yun Yeh	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other receivables Other receivables Other receivables Other receivables Sales Sales Receipts in Advance Other receivables Sales Sales Sales Accounts receivable Other receivables Other receivables Other receivables Other receivables Other receivables Accrued expenses Service expenses Accrued expenses Other receivables Accounts receivable Sales Receipts in Advance Other receivables Other income Sales Receipts in Advance Rental income Sales Accounts receivable Other receivables Rental income Other income Sales Accounts receivable Other receivables Rental income Other income Other receivables Rental income Other income Other receivables Rental income Other income	$ 34,626 37,699 61,557 3,024 5,083 16,416 2,250 30,479 30,738 2,524 9,579 1,221 89,134 102,936 98,720 100,673 132,884 49 48 114 76,053 2,675 2,862 1,214 1,987 20 6,190 6,930 9 56,423 7,269 252 70 480 14,820 3,400 1,134 70 2,160 126 70 240 126 70 240	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1% - - - - - - - - - - - - - - -
							(Continued)

154 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
13 14 15	GES GES UK GES USA	Ever Lite Yong Yao Yong Shun GES JAPAN GES USA GES UK MUNISOL GES KYUSHU GES USA GES Solar 2 GES Solar 3 NCH Solar 1 JRC GES JAPAN GES KYUSHU ET ENERGY TIPPING POINT MEGATWO MEGAFIVE MEGASIX MEGASEVEN MEGAELEVEN MEGATWELVE MEGATHIRTEEN MEGAFIFTEEN MEGASIXTEEN MEGANINETEEN MEGATWENTY ASSET TWO	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other receivables Rental income Other income Interest income Other receivables Rental income Accrued expenses Sales Accounts receivable Other receivables Interest income Interest income Sales Other receivables Other receivables Interest income Other income Other income Other receivables Other income Other receivables Other receivables Interest income Interest income Other receivables Accrued expenses Other receivables Other receivables Other receivables Other receivables Sales Accounts receivable Other receivables Accrued expenses Accrued expenses Other receivables Other receivables Accrued expenses Other receivables Other operating revenue Accounts receivable Other receivables Other receivables Other receivables Other receivables	$ 20,270 70 480 156 177,394 12 161,478 87,188 86,372 319,301 1,240 563 230,726 168,314 377,113 6,521 471 471 636 941 1,483,561 212,165 4,574 484 82,382 29,650 5,970 5,060 43,493 37,482 7,025 6,895 65,732 119,116 73,833 14 56,040 142,110 14,499 542,240 532,210 15,130 8,954 11,264 156	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- - - - 1% - - 1% - 1% - - 2% 1% 1% - - - - - 4% 1% - - - - - - - - - - - - - - - - - 5% 2% - - - -
							(Continued)

155 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
15 16 17 18 19	GES USA GES CANADA ASSET THREE NCH Solar 1 MEGASIXTEEN	ASSET THREE ASSET FOUR CENERGY SH4 CEDAR FALLS Schenectady VOC HEYWOOD SEG KINECT RER CT 57 MP Solar MUNISOL SHIMA'S WAIMEA HONOKAWAI ELEELE HANALEI KAPAA KOLOA Ventura GES AC Anderson N. Anderson S. JRC SHIMA'S WAIMEA HONOKAWAI ELEELE HANALEI KAPAA KOLOA GES Solar 3 GES AC Flora Greenfield Spiceland	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Other receivables Other receivables Accrued expenses Other receivables Other receivables Other receivables Other receivables Other receivables Sales Accrued expenses Other receivables Other receivables Other receivables Other receivables Accrued expenses Other receivables Sales Other receivables Sales Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Accrued expenses Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Accounts receivable Other receivables Other receivables Other receivables Other receivables	$ 2,143 97 28,307 203 25 746 32,333 7,340 15,632 52,833 1,246 21,754 18,004 2,123 97,044 3 941 628,546 941 147 2,241 3,716 2,602 1,189 3,149 2,351 89,936 53 3 3 3 65,266 9,160 15,117 24,975 18,124 8,345 22,113 16,101 3,663 829,252 3 3 3	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- - - - - - - - - - - - - - - - - 2% - - - - - - - - - - - - - - - - - - - - - - 2% - - -
							(Continued)

156 -

No.	Company Name	Counterparty	Flow of Transactions (Note 1)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Items	Amount	Terms	Percentage to Consolidated Total Gross Sales or Total Assets
20 21 22 23	MEGATWELVE Yong Zhou GES JAPAN Hashimoto	MEGAEIGHT Yong Liang Yong Han GES KYUSHU Hashimoto GES FUKUSHIMA GES KYUSHU	3 3 3 3 3 3 3 3	Other receivables Rental income Rental income Other receivables Other receivables Other income Accrued expenses Maintenance and repair charges	$ 279 178 178 202,420 218,408 1,343 158 162	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	- - - 1% 1% - - -

Note 1: No. 1 represents the transaction from parent company to subsidiary; No. 2 represents the transaction from subsidiaries to parent company; No. 3 represents the transactions between subsidiaries.

Note 2: At normal commercial prices and terms.

(Concluded)

157 -

AI assistant

URE — Annual Report 2018

52346_rns_2018-11-14_bc762470-5b88-409f-86d8-981016cc256e.pdf

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Business combination

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Loss Per Share)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

UNITED RENEWABLE ENERGY CO., LTD. AND SUBSIDIARIES (FORMERLY NEO SOLAR POWER CORP.)

1. ORGANIZATION AND OPERATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

1) IFRS 9 “Financial Instruments” and related amendments

2) IFRS 15 “Revenue from Contracts with Customers” and related amendments

Definition of a lease

The Group as lessee

The Group as lessor

Impact on assets, liabilities and equity on January 1, 2019

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

e. Business combinations

f. Foreign currencies

h. Investments in associates and joint ventures

m. Non-current assets held for sale

1) Financial assets

2018

i. Financial assets at FVTPL

2017

ii. Available-for-sale financial assets

iii. Loans and receivables

b) Impairment of financial assets and contract asset

2018

2017

c) Derecognition of financial assets

2) Equity instruments

3) Financial liabilities

a) Subsequent measurement

2017

3) Rendering of services

4) Construction contracts

q. Leasing

1) The Group as lessor

v. Taxation

1) Current tax

2) Deferred tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

c. Write-down of inventories

d. Useful lives of property, plant and equipment

e. Estimated impairment of assets other than goodwill

f. Assessment of impairment losses on prepayments of long-term purchase contract

g. Income taxes

h. Finance lease receivables

i. Assessment of bargain purchase gain

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

b. Put options

c. Long call options

d. Short put options

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

9. FINANCIAL ASSETS AT AMORTIZED COST - 2018

10. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

11. FINANCIAL ASSETS CARRIED AT COST - 2017

12. DEBT INVESTMENTS WITH NO ACTIVE MARKET - 2017

13. NOTES AND ACCOUNTS RECEIVABLE, INSTALLMENT ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

URE Annual Report 2018