YP - Annual Report 2017 | FinancialReports.eu

Stock Code: 2023

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Annual Report 2017 (Translation)

Information uploaded to: http://sii.twse.com.tw Open information website: http://mops.twse.com.tw Related Information: Same as above.

Published date: May 15, 2018

I. Names, titles and contact info of the Company's spokesperson and deputy spokesperson: Spokesperson: Lin-Maw Wu Title: President Tel: (07)611-7181 E-mail: [email protected]

Deputy spokesperson: Yung-Hsien Chen

Title: Vice President - Finance Tel: (07)611-7181 E-mail: [email protected]

II. Address and Contact of Head Office and Plant:

Head Office: No.369, Yuliao Rd., Qiaotou Dist., Kaohsiung City 825, Taiwan (R.O.C.) Tel: (07)611-7181 Factory: No.369, Yuliao Rd., Qiaotou Dist., Kaohsiung City 825, Taiwan (R.O.C.) (Kaohsiung Plant) Tel: (07)611-7181 Factory: No.297, Yuliao Rd., Qiaotou Dist., Kaohsiung City 825, Taiwan (R.O.C.) (Kaohsiung Plant) Tel: (07)611-7181 Factory: No.6, Gongye 6th Rd., Pingtung City, Pingtung County 900, Taiwan (R.O.C.) (Pingtung Plant) Tel: (08)755-0979 Factory: No.909, Fuxing Rd., Luzhu Dist., Kaohsiung City 821, Taiwan (R.O.C.) (Luzhu Plant) Tel: (07)697-4428 Factory: No.600, Zhong’an Rd., Yanchao Dist., Kaohsiung City 824, Taiwan (R.O.C.) (Yancao Plant) Tel: (07)616-3001

III. Name, address, website, and telephone of stock transfer agency:

Name: Shareholder Service Dept., Taipei Office, Yieh Phui Enterprise Co., Ltd Address: 15F., No.30, Beiping E. Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.) Company website: www.yiehphui.com.tw Tel: (02)2395-6780

IV. Contact Information of the Certified Public Accountants for the Latest Financial Report

Name of CPAs: Ling-Wen Huang, Jen-Yao Hsieh Name of Accounting Firm: Crowe Horwath (TW) CPAs Address: 27F., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 802, Taiwan (R.O.C.) Website: www.crowehorwath.net/tw Tel: (07)331-2133

V. Overseas Trade Places for Listed Negotiable Securities:

Listing location: None Ways for query: None

VI. Company website: www.yiehphui.com.tw

Chapter 1 Letter to Shareholders ..................................................................................... 1

Chapter	2 Company Profile................................................................................................9
I.	Date of Establishment .................................................................................................9
II.	Corporate History .......................................................................................................9
Chapter	3 Corporate Governance Report....................................................................14
I.	Organization ...............................................................................................................14
II.	Information on the Directors, President, Vice Presidents, Associate Managers, and
	Supervisors of Departments and Branch Offices ........................................................16
III.	Compensations to Directors, President and Vice Presidents ......................................35
IV.	Implementation of Corporate Governance .................................................................46
V.	Information on the CPA Expenses ..............................................................................93
VI.	Information on Switching CPA ...................................................................................94
VII.	The Company's Chairman, President, or Managers of Finance or Accounting Who
	Have Worked in the Firm of the CPA(s) or Its Affiliates within the Latest Fiscal
	Year .............................................................................................................................94
VIII.	Transfer or Pledge of Shares by the Company's Directors, Executive Officers and
	Stockholders with More Than 10% of the Company's Shares ...................................95
IX.	Information on the Top 10 Holders of the Company's Shares Who Are Identified as
	Related Parties, Spouse or Relative within Second-Degree of Kinship .......................97
X.	Information on the Number of Shares of the Company Invested by the Company,
	any of the Company’s Directors and Supervisors and Executive Officers or a
	Company Directly or Indirectly Controlled by the Company and Consolidated
	Percentage of Shareholding ..........................................................................................104
Chapter	4 Funding Status...................................................................................................106
I.	Capital and Shares ......................................................................................................106
	(I) Source of Share Capital .....................................................................................106
	(II) Structure of Shareholders ..................................................................................109
	(III) Conditions of Share Distribution ......................................................................110
	(IV) List of Major Shareholders ................................................................................111
	(V) Fair Market Value, Net Worth, Profit, Dividend per Share and Other Relevant
	Information for the Most Recent Two Years .....................................................112
	(VI) Company Dividend Policy and Implementations .............................................113
	(VII) Effect upon Business Performance and Earnings per Share of any Stock

	Dividend Distribution Proposed or Adopted at the Most Recent Shareholders’
	Meeting .............................................................................................................115
	(VIII) Compensation to Employees and Directors ......................................................116
	(IX) Repurchase of Shares by the Company .............................................................117
II.	Issuance of Corporate Bonds ......................................................................................117
III.	Issuance of Preferred Shares .......................................................................................117
IV.	Issuance of Depository Receipts .................................................................................117
V.	Employee Warrants .....................................................................................................117
VI.	Status of New Share Issuance in Connection with Mergers and Acquisitions ...........117
VII.	Implementation of the Capital Utilization Plan ..........................................................117
Chapter	5 Operational Highlights....................................................................................118
I.	Business Content ........................................................................................................118
	(I) Scope of Business .............................................................................................118
	(II) Industry Overview .............................................................................................123
	(III) Overview of Technology and R&D ..................................................................124
	(IV) Short- and Long-Term Business Development Plans .......................................126
II.	Overview of Market, Production and Sales ................................................................126
	(I) Market Analysis ................................................................................................126
	(II) Usage and Manufacturing Processes for the Company's Main Products ..........129
	(III) The Supply Status of the Major Raw Materials ................................................132
	(IV) Information of Customers that Contribute More Than 10% of Total
	Purchase/Sales in the Most Recent Two Years ..................................................133
	(V) Production Volume and Value of the Last Two Years .......................................135
	(VI) Sales Volume and Value of the Last Two Years ................................................136
III.	Employee Information ................................................................................................137
IV.	Environmental Expenditures ......................................................................................137
V.	Labor-management Relations .....................................................................................139
VI.	Important Contracts ....................................................................................................142
Chapter	6 Financial Conditions........................................................................................143
I.	Condensed Balance Sheet and Consolidated Income Statement for the Last Five
	Years ...........................................................................................................................143
II.	Financial Analysis of the Last Five Years ...................................................................148
III.	The Audit Committee’s Audit Report on the Most Recent Fiscal Year ......................154
IV.	Last Fiscal Year's Consolidated Financial Statements of the Parent Company and
	Subsidiaries Audited and Attested by the CPA ...........................................................155
V.	Individual Financial Statement for Last Fiscal Year ...................................................278

VI.		Impact on the Company's Financial Status due to Financial Difficulties Experienced
		by the Company and Its Related Companies during the Last Fiscal Year up to the
		Publication Date of This Report .................................................................................415
Chapter	7	Review, Analysis, and Risks of Financial Status and Performance 416
I.		Financial Status ...........................................................................................................416
II.		Financial Performance ................................................................................................417
III.		Cash Flow ...................................................................................................................421
IV.		Major Capital Expenditures in the Last Fiscal Year and Their Impact on the
		Company's Financial Affairs ......................................................................................422
V.		Investment Policies for the Last Fiscal Year, the Main Reasons for the Profits or
		Losses Generated thereby, Improvement Plans, and Investment Plans for the
		Coming Year .................................................................................................................422
VI.		Risk Analysis and Review ..........................................................................................424
VII.		Other Important Issues ................................................................................................427
Chapter	8	Special Items.......................................................................................................428
I.		Affiliation Information ...............................................................................................428
II.		Private Placement of Securities ..................................................................................444
III.		Holding or Disposal of the Company's Shares by Subsidiaries ..................................444
IV.		Other Required Disclosures ........................................................................................444

Chapter 9 Any Event which has a Material Impact on Shareholders' Rights and Interests or the Company’s Securities as Prescribed in Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act that have Occurred from Last Year to the Printing Date of This Report ............................................................................................................ 445

Chapter 1Letter to Shareholders

Dear Shareholders,

With China’s fully implementation of its policies regarding steel production capacity reduction and environmental governance in 2018, the outlook for our operation is prudently optimistic.

According to "Global Economic Prospects" figures published by the World Bank in January 2018, global economic growth rate for 2017 is revised to 3.7%, which is 0.1 percentage point higher than projected in October 2017, and 0.5 percentage point higher than the estimate of 3.2% in 2016. Forecasts for the 2018 and 2019 global economic growth rates are also revised upward by 0.2 percentage point to 3.9%. The figures indicate that the global economic climate is embarking on an upward trend.

Tax reforms launched by Donald Trump, the U.S. president, are expected to provide a lift to the economic activities. The corporate tax cut is expected to deliver an increase in investment by U.S. corporates in the short run. The tax policy shifts are expected to have a cumulative positive effect on the U.S. economic growth by 1.2% before 2020. In addition, the U.S. economy is currently at its third longest expansion period, with unemployment rates and inflation rates near a record low. Aided with the market perception that U.S. Federal Reserve Bank (Fed) is likely to hike its policy interest rates three times (or, even four times), the U.S. economy is expecting a stable recovery of economic growth.

According to forecasts from the World Steel Association (WSA), global demands in 2018 for steel will increase by 1.6% to 1.648 billion tonnes, with significant increases in Europe and Asia. According to the European Steel Association (EUROFER), steel demands in 2018 in the Europe markets will see a growth, steel-using sectors will continue a robust performance, and the steel consumption volumes in EU, contributed by stable demands from manufacturing and construction industries, will grow by 1.9% in 2018, roughly the same increment as in 2017.

In recent years, the countries in Europe and Americas alike have taken on various policies to block the export of cheap steel products from China. Protectionism in steel trading is growing, dragging the exports of other Asian countries. In addition, China has officially launched the slogan of “supply-side reform” at end of 2015, implementation of which includes expanding de-capacity actions to steel, coal, cement, glass, and aluminum. In 2017, it further implemented policies on eliminating substandard steels, and on contracting steel production volumes during the heating season for environmental purposes. According to the Thirteenth Five-Year Plan, the steel industry will reduce the production capacity of crude steel by 100 million to 150 million tons by 2020. With the prices of coal and steel rising from the bottom, driving the international steel prices to stability and in

turn raising consumer confidence, global steel markets had seen a firming growth.

China’s production volume of crude steel in 2017 increased a mild 2.9% to 832 million tons from 808 million tons in 2018, suggesting that the production capacity of crude steel had reached its peak. The export volume came to 75.43 million tons, a decline of 33 million tons and a shrink of 30.4% as compared to 2016, indicating that its steel export had diminished menace to (and effects on) the global markets.

Looking into 2018, with the global economy on a continuously growth footing, the steel market in general is expected to continue trending upward. Although the global steel market is still speedily shifting and full of uncertainties, Yieh Phui is fully prepared to cope with such challenges with its innovative practices.

I. The Outline of the Operation of 2017

Comparing 2017 with 2016, the volume of Yieh Phui increases 7.32% and that of revenue is NT$5.312 billion, while that of Yieh Phui (China) is NT$11.585 billion due to new production line and the increase in steel price. The volume of Yieh Hsing rises and the increase in revenue is NT$720 million. Overall, the consolidated revenue is NT$71.159 billion, an increase of 34.65% compared to the previous year of NT$52.847 billion. The consolidated net income after tax is NT$1.345 billion, a reduction of 43.44% from NT$2.379 billion of last year, of which NT$1.367 is for the mother company, comparing with last year of NT$2.502 billion, a reduction of 45.35%.

1. The Performance of Business Plan

Consolidated Information of Financial Statements

Unit : NT$ in (000)

Year Item	2017	2016	Changes	Changes%
Operating Revenue	71,158,662	52,847,410	18,311,252	34.65
Operating Costs	64,859,279	45,641,051	19,218,228	42.11
Gross Operating Profit (Loss)	6,299,383	7,206,359	-906,976	-12.59
Operating Expenses	4,088,009	3,362,322	725,687	21.58
Net Operating Profit (Loss)	2,211,374	3,844,037	-1,632,663	-42.47
Non-operating Revenue and Expenses	-406,009	-471,965	65,956	13.97
Net Profit (Loss) before Tax	1,805,365	3,372,072	-1,566,707	-46.46
Income Tax Expenses	460,055	993,527	-533,472	-53.69
Net Profit (Loss) after Tax	1,345,310	2,378,545	-1,033,235	-43.44
Other Comprehensive Income (net)	-504,626	-904,716	400,090	44.22
Total Amount of Comprehensive IncomeinthisTerm	840,684	1,473,829	-633,145	-42.96

Net Profit that Belongs to the Ownerof theParentCompany	1,367,405	2,502,005	-1,134,600	-45.35
Net Profit that Belongs to the Non-controllingInterests	-22,095	-123,460	101,365	82.10
Total Amount of Comprehensive ncome that Belongs to the Owner of theParentCompany	878,961	1,612,620	-733,659	-45.49
Total Amount of Comprehensive ncome that Belongs to the Non-controllingInterests	-38,277	-138,791	100,514	72.42

Financial Information of the Company

Year Item	2017	2016	Changes	Changes%
Operating Revenue	29,179,218	23,867,665	5,311,553	22.25
Operating Costs	25,389,583	20,009,747	5,379,836	26.89
Gross Operating Profit (Loss)	3,789,635	3,857,918	-68,283	-1.77
Operating Expenses	2,328,306	1,793,191	535,115	29.84
Net Operating Profit (Loss)	1,461,329	2,064,727	-603,398	-29.22
Non-operating Revenue andExpenses	208,432	948,024	-739,592	-78.01
Net Profit (Loss) before Tax	1,669,761	3,012,751	-1,342,990	-44.58
Income Tax Expenses	302,356	510,746	-208,390	-40.80
Net Profit (Loss) after Tax	1,367,405	2,502,005	-1,134,600	-45.35

Execution of the Budget: Yieh-Phui has not disclosed financial guidance and is not applicable to the rules on disclosing the execution of the budget.
Analysis of the Revenue/Expenditure and Profitability:

Consolidated Financial Report Information

Consolidated Financial Report Information
Item	2017	2016
Net cash inflow of operating activities (thousand	-1,462,060	3,375,039
dollars)
Equity/Assets (%)	33.98	36.87
Liabilities/Assets (%)	66.02	63.13
Long-term Funds accounting for the ratio of real	152.91	153.50
estates, plantsand equipment(%)
Current ratio(%)	100.90	102.10
Quick ratio(%)	52.82	58.52
Return on assets(%)	2.69	3.83
Return on equity (%)	4.49	8.03
Netprofit margin(%)	1.89	4.50

Item	2017	2016
Earningsper share(dollar)	0.75	1.46
Number of shares bythe end of theyear(share)	1,821,176,011	1,718,090,576

Financial Information of the Company

Financial Information of the Company
Item	2017	2016
Net cash inflow of operating activities (thousand dollars)	537,316	2,003,887
Equity/Assets (%)	54.65	57.09
Liabilities/Assets (%)	45.35	42.91
Long-term Funds accounting for the ratio of real estates, plants and equipment (%)	473.70	434.09
Current ratio(%)	73.79	74.03
Quick ratio(%)	38.28	38.51
Return on assets(%)	3.42	5.98
Return on equity (%)	4.94	9.37
Netprofit margin(%)	4.69	10.48
Earningsper share(dollar)	0.75	1.46
Number of shares bythe end of theyear(share)	1,821,176,011	1,718,090,576

The Summary for Research and Development

Starting from 2007, Yieh Phui has developed the market for coated steel to be used for household appliances and has been recognized by famous appliance producers such as Whirlpool, Fisher &Paykel, SHARP, and Panasonic.

Confronting with fierce market competition, Yieh Phui has been vigorously developing high end quality products for high end market and cooperating with Japanese steel firms to expand in the overseas market. We have seen good results from this collaboration since December 2013 with the volume increasing each month every year, contributing to our earnings and expecting the cumulative total sales to reach 120,000 tons landmark in 2017.

On product differentiation, Yieh Phui has successfully developed anti-microbial metallic coated steel sheets – regular spangle, used for the pipes for air-conditioning, and gained recognition by the public construction projects of Hong Kong, such as MRT and hospitals, and those of Macao. Yieh Phui continues to develop other high end prepainted steel sheets and Al-Zn coated steel sheets for inner panels of ovens. The sales have steadily increased in 2016 and expected to expand in the projects of other appliances. In addition, Yieh Phui has finalized the production of Printed Prepainted Steel Sheets (wood & hairline patterns) for special applications in the industry and will deliver those products in 2017, enhancing the market prospect and the diversity of our offers. In 2017, Yieh Phui plans to develop coated steel with anti-microbial plus and anti-fingerprint treatment to be used in ducting and green construction materials in hospitals and luxurious residences, enhancing market expansion and product diversification.

The trend of globalization has triggered the EU to issue the regulation of RoHS and WEEE, which focus on the recycling of electronic appliances, environment friendly production and their re-use. This policy has won the recognition of the whole world and Yieh Phui has developed products compliant with those regulations and earned big and long-term orders of major appliance producers. Later on in 2007 the EU issued REACH, controlling 16 ingredients in the materials, mixtures and products exporting to EU that may cause cancers, deformation and toxicity to the human reproductive system. Up to the end of 2016, there have been 173 such items and they have been put into Yieh Phui’s quality control and auditing system to protect the environment and the health of consumers. In September 2018, EU may have new environmental instructions on construction materials like metallic and color coated steel sheets. The company has been aggressively and speedily developing multi-combination and multi-purpose products with suppliers of surface treatment and paints, becoming the first among Taiwan’s competitors to produce outdoor environmentally protective coated steel products. Yieh Phui will cooperate with the sales channels of the supply chain of dealers and roll formers, making sure that our products will reach the world market seamlessly and in a timely fashion to score another great performance in expansion and sales.

II. Overview of 2017 business plan:

1. Business Strategy

Yieh Phui has been developing the global market for many years and achieved a system of order transfer that makes us far more flexible than domestic competitors. With a well-developed distribution system, we will continue to secure the established distribution channels and existing customers and expand into the niche markets through a series of sales strategies, including developing niche products, actively seeking strategic alliances and expanding market shares, aiming to reach multiple targets in deeper and broader scope.

Although, under the global marketing strategy, the Company sets its goal for domestic sales at 35%, we have never neglected the development of the domestic market. As always, we actively provide assistance to our downstream processing service providers to minimize the risks of unstable quality, poor capital flow, delayed shipment and exchange rate fluctuation. Our active approach directly enhanced our market competitiveness. In the future the Company will continue to develop the domestic market with our advantages in 6 quality and services and create a win-win business environment for both the Company and our customers.

At the current stage, over 65% of the Company's total sales come from exports. Therefore, the movement of the global market drives the Company's performance. Taiwan has been marginalized in the AFTA (ASEAN Free Trade Area) as China signs FTAs with Japan and South Korea. In addition, anti-dumping and safeguard actions taken by Australia, Thailand,

Indonesia, and the US announced the rising of protectionism. These events highlighted the disadvantageous position of Taiwan in the chain of global trade. Therefore, in addition to urging the government to sign FTA with our trade partners, we will continue to consolidate the resources in the steel industry and seek ways to lower the cost of sales to help our customers and our Company maximize market competitiveness in the global steel industry.

2. Expected sales and marketing strategies:

The Company’s projected sales for 2018 include galvanized steel sheets at 792,307 tons, pre-painted steel sheets at 281,448 tons, rolled steel coils at 980 tons, steel structure engineering at 36,000 tons, crane equipment 48 units and others (sale and purchase, OEM and scraps) at 160,240 tons. The total comes to 1,270,975 tons and 48 units of cranes.

The Company’s (consolidated) projected sales for the major products in 2018 include: galvanized steel sheets at 1,296,307 tons, pre-painted steel sheets at 564,448 tons, rolled steel sheets at 571,980 tons, steel structure engineering at 36,000 tons, crane equipment 48 units, wires at 305,700 tons, stainless steel at 81,300 tons, steel pipes at 158,500 tons and other products at 192,414 tons. With our advantages in quality, secured distribution channels, highly flexible distribution and comprehensive services, the Company strives to achieve the goals set for 2018.

III. Corporate Strategies for Future Development

The vision of Yieh Phui is to become the best steel maker and service provider in the world. To achieve this goal and with the TPM Campaign reaching the fifth stage, Yieh Phui Production & Service System (YPS) will move forward from the fourth stage of “YPS=TPM+MOT” to the fifth “YPS is excellent, TPM is perfect and MOT is outstanding”. Since 2013, Yieh Phui has started a series of changes to deal with the volatility of the steel market. Thus, 2013 is the very first year of Yieh Phui to start the “campaign for changes”. The slogan for the year is “adapting to the trend of steel market, changing the attitude and eager to change”. The slogan for the second year, 2014, is “change and more changes, better than better.” As the campaign reaches the third year, the slogan becomes there is “Just as water retains no constant shape, so in warfare there are no constant conditions. Change with constantly changing conditions. Changes are normality.” We must endeavor to make all necessary adjustments. For the efforts of the past three years, the corporate culture of Yieh Phui has evolved and reached a landmark of being awarded the “Advanced Special Award for TPM Achievement”. The YPS campaign has evolved from “touching service” to “supreme service”. Thus, the campaign for changes has now been turned to innovation and 2016 is the first year of innovation with the slogan “catalyzing creativity through learning and modeling--changing and

improving,” short for utilization, learning from others, collaboration and innovation. 2017 is the second year of innovation and the slogan is “keep innovating and expanding product and service differentiation, creating greatest value for customers and Yieh Phui”. 2018 is the third year of innovation with the slogan of “new epoch, new realities, new thinking, and new forms commit to growth not only in volume but value.”

With excellence in production and outstanding services to promote sales and explore potential markets, the company will continue to innovate to offer more differentiation in products, services and marketing, creating the best value for customers and Yieh Phui coupled with enhancing the satisfaction for services and targeting the sales level of individual positions. In addition to satisfying the demand of customers and outstanding services, the company will make every effort to reduce the cost of sales and increase profitability.

In addition to Yieh Phui’s steady growth in Taiwan, since 2015 Yieh Phui (China) has expanded its operation in Changshu Economic Development Zone, Jiangsu, China, producing one million tons of cold-rolled steel sheets for automobiles and 400,000 tons of hot-dip galvanized steel sheets for automobiles, advancing its technology in the market of steel sheets for automobiles. The first stage of this expansion of pickling and tandem cold mill (PLTCM) had been finished and started production on February 15, 2015, while the production of continuous annealing line (CAL) was done on August 15, 2015, No. 3 continuous coil coating line on February 21, 2017, and No. 4 continuous hot-dip galvanizing line has been available on January 18, 2018. Besides aiming for the 700,000 car market in Riverside Industrial Park, Changshu, Yieh Phui (China) also focuses on the market of cars and car parts around the world. China is a member of ASEAN and its steel enjoys preferential tariff treatment. As a result, the steel products in China are more competitive than those produced in Taiwan for the sale in ASEAN. Then, the production of coated steel sheets in Yieh Phui (China) will reach 1.3 million tons, equivalent to Yieh Phui’s once highest record of 1.3 million tons in Taiwan. For the combined eight production lines of hot-dip galvanizing lines in Taiwan and China, the capacity will reach 2.6 million tons.

IV. Impact from competition, legal environment, and overall economy

The effects of fast expansion of China’s crude steel capacity and steel exports have sparked trade protectionism measures within the international community. In response, China proposed its supply-side reforms in 2015, forcefully implemented the de-capacity policy in 2016, and eliminated substandard steel and imposed a capacity ceiling by the year-end (when it’s the heating season) in 2017. Looking into 2018, when China’s policies dedicated to production cuts and environmental governance are assured, the operating pressure of the global steel industry is likely to diminish.

In Taiwan's domestic market, cheap imports of steel products poured into Taiwan, filling the market with low-price, low-quality materials that pose potential risks to people’s lives and the quality of public infrastructure. As a countermeasure, the government joined the domestic manufacturers of galvanized steel productions to put forward anti-dumping complaints against China and South Korea in 2016, in a hope to curb the adverse effects from imported steel of uneven quality on domestic market. The government also took a follow-up action to assess whether a substantive damage had incurred to domestic steel-related industries and had inflicted a 5-year-term anti-dumping duty starting from August 22, 2016. Nonetheless, attempts of low-price steel imports to enter the Taiwanese market still sustained, and the Company will continuously assess the effects on the domestic market.

In the international market, several countries pushed forward anti-dumping or import defense measures to counter mass steel exports from China. Taiwan did not escape the sanctions. In particular, the double actions (countervailing and anti-dumping) against anti-corrosion sheet steel launched by the United States in early June 2016 had a serious impact on Taiwan, although the final penalty on Taiwan was much lighter than on other countries Looking into this year, several factors will affect the global steel market, e.g., Fed’s policy rate hikes and balance sheet reduction, U.S. section 232 investigations, E.U.’s withdrawal from quantitative easing, the Brexit, and China’s implementation of capacity cuts and environmental governance, etc.. The Company will correspond by examining on time, and adjusting when needed, its operating and selling strategies based on its persistent experience in global marketing.

In recent years, under the dual-production base model formed by Yieh Phui and Yieh Phui (China), the Company has begun to reinforce dual-axis operations through developing export markets outside of China and the niche markets. In response to the environmental trends, we have also been actively developing green steel products, aiming to exceed the competitors in the industry through the blue ocean 9 strategy. In addition to securing the China market, Yieh Phui (China) has also been given the mission to mitigate the impact brought by the 10+3 agreement of ASEAN. We pay close attention to the differences in the tariffs between Taiwan and China for exports to ASEAN countries and make timely adjustments to the productions of these two manufacturing bases. They complement each other and the overall synergy not only helps the Company to improve market share and competitiveness advantage in the ASEAN and other regional markets, but also enable Yieh Phui to develop into an international steel enterprise.

Chairman: I. S. Lin President: Lin-Maw Wu Accounting Supervisor: Chien-Hung Lin

Chapter 2Company Profile

I. Date of establishment:

Date of establishment: April 14, 1978

License number: business registration number 75947936

II. Corporate history

Mergers and Acquisitions in the most recent year up to the date of publication of this annual report: None
Affiliation information: Please see details on page 428.
Company restructuring: None
Massive transfer or exchange of the Company's shares by directors, supervisors or persons holding more than 10 percent of the Company's shares: None
Major changes in ownership and its impact on the Company: None
Major changes in management or business: None
Other important matters that may affect shareholders' interests and its impact on the Company:
1998.05 Official signing of the contract for the fourth continuous galvanizing line for an annual output of 250,000 tons. Environmental protection specialist won awards and commended by the President.
1998.09 Painted sheet steel and PVC coated sheet steel certified for CNS6532 class 2 fire-resistance material for building and interiors. Autonomous management (pickling unit) won the silver medal of the Taiwan Continuous Improvement Award for Business Collaboration.
1998.11 The QA Department Metallurgy Laboratory was certified for CNLA standards.
1998.12 Certified for BS8800 (OHSMS) Occupational Health and Safety Management System.
1999.03 Signed a contract with Sonoda Japan for the second finishing line.
1999.05 Signed a contract with KHI Japan for the third rolling line.
1999.08 Signed a contract with Waldrich Siegen Germany for the third rolling mill.
1999.11 Certified for ISO9002 DNN standards (quality system).
1999.11 Restructured the second production line and success successfully tested the slitter line.
1999.12 The fourth continuous galvanizing line (Pingtung) launched into a cold test.

2000.02 The fourth continuous galvanizing line (Pingtung) launched into a hot test.
2000.05 The third continuous paint line launched into a hot test.
2000.05 The board of directors approved the investment for ICT and optoelectronic products.
2000.08 The third pull-in rolling machine launched into hot test and production. Ye Hui's 100% investment in Singapore-based Intercontinental Steel (ICS) was awarded the Approved International Trader (AIT) by the Ministry of Trade, Singapore.
2001.03 Won the Voluntary Industrial Safety and Health Management Program two-year certification mark from the Council of Labor Affairs.
2001.11 Won the JIPM TPM Award.
2002.04 Grand opening of the Changshu Qiyang Building Materials Co., Ltd. in China.
2002.05 Won the Water Saving Merit Award from the Ministry of Economic Affairs.
2002.10 The board of directors made a resolution to appoint the current President, Wang Cheng-Chieh, as a Senior Consultant (for implementation of the long-term business development plan) and Vice President - Technology, Lin-Maw Wu, as the President.
2002.11 Official ground-breaking ceremony for the Changshu Technomaterial Co., Ltd. (total investment of US$ 231 million with a capital of US$ 79 million).
2003.01 The board of directors approved purchase of the assets of Yieh Hsing steel pipe factory I, steel pipe factory II, galvanizing factory, cold rolling mill machinery division and administration building and investment in Lien kang Heavy Industrial Co., Ltd (approved by the board of directors).
2003.03 Official acquisition of partial assets of Yieh Hsing Co., Ltd. and continued the operations.
2003.03 The Group was officially renamed the E United Group.
2003.09 Issued the first domestic convertible bonds at NT$ 3 billion.
2003.09 Official beam installation ceremony for the plant of Changshu Xinrui Technological Material Co., Ltd. (China)
2004.03 Issued second overseas convertible bonds at US$100 million.
2004.07 Official opening of the E United Group Head Office.
2004.08 The board of directors approved the President of Yieh Phui, Lin-Maw Wu to act concurrently as the Chairman of Xinrui.
2004.12 The first pickling and cold rolling lines of Xinrui Technomaterial Co., Ltd. were officially launched into operation and manufactured the first roll of sheet steel.
2004.12 Won the JIPM-TPM award for continuous pursuit of excellence.
2005.03 The first painting line of Xinrui Technomaterial Co., Ltd. was

officially launched into production and manufactured the first roll of sheet steel.

2005.03 The first galvanizing line of Xinrui Technomaterial Co., Ltd. was officially launched into production and manufactured the first roll of sheet steel; Stage 1 plant construction was completed.
2005.03 Received the 9th Outstanding Business Leader Golden Peak Award (OEMA) for outstanding business, outstanding leader and outstanding product.
2005.08 Merged Lien Kang Heavy Industrial Co., Ltd. and set up the Engineering Business Division.
2005.10 The second cold rolling line of Xinrui Technomaterial Co., Ltd. was officially launched into production and manufactured the first roll of sheet steel.
2005.11 The first galvanizing line of Xinrui Technomaterial Co., Ltd. was launched into trial production for manufacturing of aluminium and zinc products.
2005.12 The second galvanizing and second painting line of Xinrui Technomaterial Co., Ltd. was officially launched into production and manufactured the first roll of sheet steel.
2006.08 Yieh Phui Enterprise Co., Ltd. took over EMMT Systems Corp.
2006.09 EMMT Systems Corp. founded a subsidiary - Groupco Technology Inc. Chairman, Mr. Lin-Maw Wu and President, Mr. Chen Ko-Chin.
2006.10 Jiangsu Provincial People's Government approved reorganization of Changshu Xinrui Technology Materials Co., Ltd. into Yieh Phui (China) Technomaterial Co., Ltd.
2007.06 Certified for QC 080000 IECQ HSPM (Hazardous Substances Process Management System).
2007.10 Ground-breaking ceremony for Guang Lian Steel (Vietnam) Co., Ltd.
2008.03 Yieh Phui was selected the Best Potential Business in the Common Health Magazine LOHAS Business Campaign.
2008.03 EMMT System Corp. continue to invest in AWID, won three seats in the board of directors and acquired over 50% of the company's shares.
2008.11 Invested in Yieh Hsing's private placement for new shares; Yieh Hsing became a subsidiary ofYieh Phui.
2009.02 Passed the Singapore BC1: 2008 FPC (Factory Production Control) certification.
2009.02 Passed the ISO/IEC 17025:2005 testing laboratory certification.
2009.04 The third continuous hot-dip galvanizing line of Yieh Hui (China) was launched into production and manufactured the first roll of sheet steel. Stage 3 construction for plant expansion was completed.
2009.04 Certified for the Indonesian National Standard SNI for Plated Products.

2009.08 Obtained the DNV 2005 Greenhouse Gas Inventory Verification Statement.
2009.08 Galvanized and painted products certified for the JIS Mark.
2009.11 Won the Voluntary Greenhouse Gas Reduction Merit Award by Industrial Development Bureau, Ministry of Economic Affairs.
2010.03 Won the JIOM-TPM Special Award.
2010.05 Yieh Phui (China) received the Indonesia SNI Certification.
2010.06 Yieh Phui (China) increased the total of investment from US$ 321.3 million to 351.3 million and the registered capital from US$ 130 million to 140 million.
2010.09 Yieh Phui led the world's steel industry to propose the first hot-dip galvanized sheet steel product category rules (PCR), which are registered in the Third Category Global Environmental Declarations Network (GEDnet).
2010.10 Received Malaysia MS certification for galvanized and painted steel products.
2010.10 Selected an Industrial Safety and Health Model by the Industrial Development Bureau of the Ministry of Economic Affairs.
2010.11 Received Indonesia National Standard SNI-Surabaya Plated Steel (GL & GI) certification.
2010.12 Steel Pipe Business Division received 2005 GHG inventory Verification Statement.
2010.12 Obtained the first Product Carbon Footprint (CFP) and Category 3 Environmental Product Declaration (EPD) Verification Statement in the domestic galvanized and painted sheet steel indsutry.
2011.03 Yieh Phui's original steel pipe business division separated into Shin Yang Steel Co., Ltd., a 100% subsidiary of Yieh Phui.
2011.03 Awid China Co., Ltd. (Changshu), a subsidiary of EMMT Shanghai was founded.
2011.06 Certified by the Ministry of Economic Affairs for the CNS 12681/ISO 9001: 2008 standards.
2010.07 The brand Yieh Phui named one of Taiwan's Top Brands in the Centennial Celebration Campaign of the Ministry of Economic Affairs.
2010.08 Won the Premier's Award in the 2010 Awards for International Trade hosted by the Ministry of Economic Affairs.
2011.09 EMMT Systems Corp. passed the DNV TAF testing laboratory accreditation.
2011.11 Certified for the OHSAS 18001 and TOSHMS Occupational Health and Safety Management System by the Bureau of Standards, Meteorology and Inspection, Ministry of Economic Affairs.
2012.01 EMMT Systems Corp. passed the IECEX explosion-proof system certification.
2012.03 Certified for CNS 12681/ISO 9001: 2008 standards (hot-dip

galvanized 55% aluminum-zinc alloy sheet steel and rolls, painted hot-dip galvanized sheet steel and rolls) by the Bureau of Standards, Meteorology and Inspection, Ministry of Economic Affairs.
2012.12 Passed the AEO safety certification verification and received the Safety Verified Enterprise certificate from the Customs Administration, Ministry of Finance.
2013.09 The Bureau of Standards, Meteorology and Inspection, Ministry of Economic Affairs authorized the Company to use the MIT Smile Mark for the CNS certified hot-dip galvanized and painted sheet steel products and rolls.
2014.12 Kaohsiung Plant I passed Energy Management System ISO 50001: 2011 verification and received the certificate.
2014.12 Yieh Phui antibacterial plated steel passed the Industrial Bureau (MOEA) Nano Mark product verification and received the certificate.
2015.06 Selected an Outstanding Enterprise in the 12th National Brand Yushan Award.
2015.06 Yieh Phui was selected as one of the constituents of TWSE CG 100 Index.
2015.07 The Bureau of Energy, Ministry of Economic Affairs awarded the Outstanding Performance medal.
2015.12 Certified by the Kaohsiung City Environmental Protection Bureau for 2015 Kaohsiung City Pollution Reduction Excellence.
2016.03 Won the JIPM TPM Special Award 2015.
2016.11 Certified by the Industrial Development Bureau, Ministry of Economy Affairs for 2016 Industry Voluntary Greenhouse Gas Reduction Excellence.
2017.04 Yieh Phui stood at the top 6% - 20% among listed companies included in the 3rd (2016) TWSE Corporate Governance Evaluation.
2017.05 Yieh Phui won the “Independent Assurance Statement on the Sustainability Activities in Yieh Phui’s 2016 Corporate Social Responsibilities Report” certified by SGS Taiwan Ltd.

Chapter 3Corporate Governance Report

I. Organization:

1. Structure of Organization: Dec. 31, 2017

Organization of Yieh Phui Enterprise Co., Ltd.

==> picture [811 x 391] intentionally omitted <==

----- Start of picture text -----

Compensation Committee Board of Directors Audit Committee
The Auditor's Office
Chairman
Chairman's Office
Vice Chairman
Expansion Planning
Committee Office
President
Technology Planning Office
China Business Division
Steel Pipe Technology Office
Overseas Technology Office
Trade Safeguards and
Managing
Investigation Office
Vice President
Dept. of Administration and Analytics
President's Staff Office Dept. of Business Planning
Dept. of Innovation Promotion
Vice President - Global Marketing & Sales Vice President - Vice President - Technology Vice President - Planning Vice President - Engineering Vice President - Production
Finance
Assistant VP - Global Marketing & Sales Assistant VP - Technology Assistant VP - Planning Assistant VP - Production
Vice President's Vice President's Vice President's Vice Vice
Office Office Office President's President's T echnology Development
Office Office
14
Di Di
i i
Division I Marketing & Sales Domestic Division II Marketing & Sales Domestic Research Office Import and Market Sales Division I Export Marketing & Sales Division II Export Marketing & Division Development Marketing Finance Division Investing Division Division Technology Division Technical Service Division Information System Division Production Planning Division Sales Management Division Management Office Engineering Design Office Public Affairs Office TPM Development Office Purchasing Division Production Division Mechanical Construction Division Steel Structure Sales & Production Division Steel Structure Technology Division Steel Structure Production Division Pickling and R olling Production Division Galvanizing Steel Production Division Pre-Painting S teel Division Pingtung Production Utilities Divisio n i Maintenance Mechanical i Maintenance Electrical
Industrial Safety & Health
----- End of picture text -----

2. Roles and Responsibility

Department	Content of Business
The Auditor's Office	Implements the audit system andprovides advises for improvement to the management.
Expansion Planning Committee	Sets equipment standards and specifications, plans and analyzes overall expansion and manages coordination and installationprogress.
Trade Safeguards and Investigation Management Office	Handles domestic and international anti-dumping and trade remedy actions.
President's Staff Office	Carries out organizational planning and coordination, implements and manages the internal control system and standardization,tracks and analyzes corporategoals andperformance,andpromotes innovation affairs.
Division I and Division II of the Domestic Marketing & Selling Divisions Division I and Division II of the Export Marketing & SellingDivisions	Processes requests for import and export price quotes and orders, manages contacts for shipment and executes sales campaigns.
Marketing Development Division	Manages development of the domestic and international markets.
Import and Market Research Office	Carries out survey and analysis on the domestic and foreign markets and manages raw materials procurement.
Finance Division	Carries out accounting, tax filing, costing, budgeting and variance analysis, financial management, asset management and shareholder services.
InvestingDivision	Carries out studies on foreign investments and analysis on the effectiveness.
TechnologyDivision	Managesproduction technologydevelopment, qualitycontrol andproduct specifications.
Technical Service Division	Manages after-sale services and technical improvement.
Information System Division	Manages development of the Company's computerized management system, installation and maintenance of hardware equipment.
Production Planning Division	Manages production schedules based on the orders and production plan, order delivery and shipment and tracking and raw material storage and management.
Sales Management Division	Manages shipping of customer orders, vehicle dispatch and shipment verification.
Management Division	Managespersonnel, general affairs and documents and other relevant matters.
Public Affairs Office	Handlespublic relations affairs.
Industrial Safety & Health Office	Manages and implements the Company's workplace and labor safety and health related matters.
TPM Development Office	Implements TPM Management activities, including individual improvement, self-maintenance, planned maintenance, education and training, health and safety, quality management, initial flow management, planning and monitoringthe efficiencyof indirect departments.
PurchasingDivision	Managesprocurement and related matters.
Steel Structure Sales & Construction Division	Manages marketing, contracting, budgeting, cost control and work progress for engineering projects, acting to control and coordinated cross-departmental works.
Steel Structure Production Division	Manages manufacturing, installation and contractors for steel structures and coordinates related works.
Steel Structure TechnologyDivision	Manages technology planning, project quality control and construction drawings for steel structures.
Mechanical Production Division	Manages sales, production planning, design, manufacturing and installation related matters for lifting equipment and other engineering projects.
Technology Development Office	Manages improvement of production equipment and processes.
Production Divisions	Managesproduction line operations, production efficiencyandqualityimprovement.
Utilities Division	Manages operations and maintenance ofpublic and wastewater treatment facilities.
Mechanical Maintenance Division	Manages service and maintenance of on-site mechanical equipment and facilities.
Electrical Maintenance Division	Manages service and maintenance of on-site electrical facilities.
Engineering Design Office	Carries out improvement of production line equipment, design of expansion projects and review of design drawings.

II. Information on the Directors, President, Vice Presidents, Associate Managers, and Supervisors of Departments and Branch Offices:

(I) Information about directors

															April 30,2017	April 30,2017	April 30,2017	April 30,2017	April 30,2017
Title	Nationality or Place of Registration	Name	Gender	Date Elected (Resumed) Date	Term	First-time Elected Date	Shares held when elected		Shares Number of Shares Held		Shares held by spouse and underage children		Shares held in names of other persons		Summary of Experiences and Education	Current Position in the Company and/or Other Company	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship
							Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares			Title	Name	Relations hip
Chairman	Taiwan, R.O.C.	Kuo Chiao Investment & Development Co., Ltd. Representative: I. S. Lin	Male	June 22, 2016	3 years	Jun. 20,2004	55,557,334 136,959	3.23	58,890,774 152,521	3.23	49,944	0	0	0	Yieh United - Chairman of the Board Yieh Hsing - Director	Yieh Phui - Chairman of the Board Able Win International Investment Limited - chairman of the board Wei Hung Investment Co., Ltd. - Chairman of the Board	None	None	None
	Taiwan, R.O.C.	Kuo Chiao Investment & Development Co., Ltd. Representative: Lin-Maw Wu	Male	Jun.22, 2016	3 years	Sep.28, 2005	55,557,334 118,788	3.23	58,890,774 132,284	3.23	0	0	0	0	EMBA, National Sun Yat-Sen University Yieh Phui, VP Global Marketing and Sales	Yieh Phui - President Yieh Phui (China) - Chairman of the Board EMMT Systems Corp. - Chairman of the Board Shin Yang Steel Co., Ltd. - Chairman of the Board	None	None	None

Title	Nationality or Place of Registration	Name	Gender	Date Elected (Resumed) Date	Term	First-time Elected Date	Shares held when elected	Shares held when elected	Shares Number of Shares Held	Shares Number of Shares Held	Shares held by spouse and underage children	Shares held by spouse and underage children	Shares held in names of other persons	Shares held in names of other persons	Summary of Experiences and Education	Current Position in the Company and/or Other Company	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship
							Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares			Title	Name	Relations hip
Director	Taiwan, R.O.C.	Kuo Chiao Investment & Development Co., Ltd. Representative: Ping-Yong Liang	Male	Jun.22,2016	3 years	Oct.15, 2015	55,557,334 41,397	3.23	58,890,774 43,880	3.23	130,355	0	0	0	Department of Industrial and Information Management, National Cheng Kung University Deputy CEO of Yieh Lian Group Head Office, President of Yieh United Steel Corp., Senior Consultant and Special Assistant to the Chairman - Yieh United Steel Corp.	Chairman of the Group Purchasing Management Committee and Special Assistant to the Chairman of E United Group	None	None	None
	Taiwan, R.O.C.	Kuo Chiao Investment & Development Co., Ltd. Representative: Ching-Tsung Huang	Male	Jun.22,2016	3 years	Sep.28, 2005	55,557,334 0	3.23	58,890,774 0	3.23	11,440	0	0	0	Department of Accounting, Feng Chia University ~~Sil~~	Chia Yuan Investment & Development Co., Ltd - Chairman of the Board Hsing Long Investment ~~&DlC~~	None	None	None
															~~peca~~	~~eveopmento~~

Title	Nationality or Place of Registration	Name	Gender	Date Elected (Resumed) Date	Term	First-time Elected Date	Shares held when elected	Shares held when elected	Shares Number of Shares Held	Shares Number of Shares Held	Shares held by spouse and underage children	Shares held by spouse and underage children	Shares held in names of other persons	Shares held in names of other persons	Summary of Experiences and Education	Current Position in the Company and/or Other Company	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship
							Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares			Title	Name	Relations hip
	Taiwan, R.O.C.	Chin-Shu Sun	Male	Jun.22,2016	3 years	Jun.20,2013	0	0.00	0	0.00	0	0	0	0	Department of Accountancy, National Cheng Kung University CPA, Republic of China in practice for over 40 years Chairman of the Kaohsiung City Institute of Certified Public Accountant	Compensation Committee, Yieh Phui Enterprise Co., Ltd. Compensation Committee, Yieh Hsing Co., Ltd. Li Hsin Management Consultant - Director Co-Tech Development Corporation - Independent Director Chi Chiang Enterprise Co., Ltd. - Director Yieh Hsing Enterprise Co., Ltd. - Independent Director Chi Hsin Management Consultant Co., Ltd. - Director	None	None	None

Title Independent Director	Nationality or Place of Registration	Name	Gender	Date Elected (Resumed) Date	Term	First-time Elected Date	Shares held when elected	Shares held when elected	Shares Number of Shares Held	Shares Number of Shares Held	Shares held by spouse and underage children	Shares held by spouse and underage children	Shares held in names of other persons	Shares held in names of other persons	Summary of Experiences and Education	Current Position in the Company and/or Other Company	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship
							Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares			Title	Name	Relations hip
	Taiwan, R.O.C.	Ching-Hui Hsieh	Male	Jun.22,2016	3 years	Jun.20, 2013	0	0.00	0	0.00	0	0	0	0	Master of Law, National Chung Hsing University Prosecutor, Taiwan Hsinchu District Court Judge, Taiwan Kaohsiung District Court Chairman, Kaohsiung Bar Association Member of the 3rd Council of Control Yuan President, Kaohsiung and Penghu Chapter, Legal Aid Foundation	Compensation Committee, Yieh Phui Enterprise Co., Ltd. Compensation Committee, Yieh Hsing Co., Ltd. Representative, Legal Trust Law Firm Compensation Committee, Yieh Hsing Co., Ltd.	None	None	None

Title	Nationality or Place of Registration	Name	Gender	Date Elected (Resumed) Date	Term	First-time Elected Date	Shares held when elected	Shares held when elected	Shares Number of Shares Held	Shares Number of Shares Held	Shares held by spouse and underage children	Shares held by spouse and underage children	Shares held in names of other persons	Shares held in names of other persons	Summary of Experiences and Education	Current Position in the Company and/or Other Company	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship
							Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares			Title	Name	Relations hip
Independent Director	Taiwan, R.O.C.	Te-Yuan Yang	Male	Jun.22,2016	3 years	Jun.22,2016	0	0.00	0	0.00	0	0	0	0	PhD Economics, University of California, Santa Barbara Assistant Lecturer, Department of Economics, University of California, Santa Barbara Director, Department of Finance, National Kaohsiung University of	None	None	None	None
															~~S i~~ ~~d~~

Title	Nationality or Place of Registration	Name	Gender	Date Elected (Resumed) Date	Term	First-time Elected Date	Shares held when elected	Shares held when elected	Shares Number of Shares Held	Shares Number of Shares Held	Shares held by spouse and underage children	Shares held by spouse and underage children	Shares held in names of other persons	Shares held in names of other persons	Summary of Experiences and Education	Current Position in the Company and/or Other Company	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship	Any Executive Officer, Director or Supervisor Who is a Spouse or Relative within the Second Degree of Kinship
							Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares	Shares	Percentag e of Shares			Title	Name	Relations hip
Independent Director	Taiwan, R.O.C.	Wen-I Chang	Male	Jun.22,2017	3 years	Jun.22,2017	0	0.00	0	0.00	0	0	0	0	Passed the Civil Service Special Examinations Class B for Customs Officers 1976 and Civil Service Special Examinations for Tax Personnel 1976 Internal revenue agent and section head in Revenue Service Office, Kaohsiung County Revenue assessor, section ~~chief and~~	Compensation Committee, Yieh Phui Enterprise Co., Ltd. Compensation Committee, Yieh Hsing Co., Ltd. Yieh Hsing Enterprise Co., Ltd. - Independent Director	None	None	None

Note: The names of institutional directors and their representatives listed below are arranged in two adjacent upper-lower cells. Note: The Company's directors of the board were elected on Jun. 22, 2016 Note: Independent Director, Hsieh Ching-Hui, resigned on March 13, 2017. Note: Wen-I Chang assumed the office of Independent Director on June 22, 2017

Table 1: Major Shareholders of Institutional Shareholders

	March31,2018	March31,2018
Name of institutional shareholders(Note 1)	Major shareholders of institutional shareholders(Note 2)	Share Holding %
Kuo Chiao Investment & Development Co., Ltd.	Yu Hongindustrial Co.,Ltd	39.66%
	Chiao-LingLeisure Co.,Ltd.	12.55%
	Kuo-Tung Investment and Development Co., Ltd.	12.27%
	Wei Hong Investment and Development Co., Ltd.	11.43%
	Yieh HongEnterprise Co.,Ltd.	11.23%
	Shin Yang Investment and Development Co., Ltd.	3.08%
	Yu Sheng Investment and Development Co., Ltd	0.08%

Note 1: For legal person directors and supervisors, the names of the institutional shareholders shall be disclosed.

Note 2: Please declare names of the primary shareholders (top 10 shareholders) and their shareholding of the corporate shareholders. If the major shareholders are institutional shareholders, please fill out Table 2 below.

Table 2: Major shareholders of the major institutional shareholders

Table 2: Major shareholders of the major institutional shareholders	Table 2: Major shareholders of the major institutional shareholders	Table 2: Major shareholders of the major institutional shareholders
March 31,2018
Name of Institutional Shareholder (Note 1)	Major Shareholders of Institutional Shareholders(Note 2)	Share Holding %
Yu Hong Industrial Co., Ltd.	Li-Chuan Lin	10.00%
	Tsung-ChingLin	18.00%
	Tsung-ChengLin	26.00%
	Chung-Hsian Lin	18.00%
	Chih-LongLin	18.00%
	Chia Yuan Investment and Development Co.,Ltd	1.00%
	Kuo Chiao Investment and Development Co.,Ltd	4.00%
Chiao-Ling Leisure Co., Ltd.	Li-Chuan Lin	15.00%
	Tsung-ChingLin	20.00%
	Tsung-ChengLin	20.00%
	Chung-Hsian Lin	20.00%
	Shin Yang Investment and Development Co.,Ltd.	3.00%
	Chia Yuan Investment and Development Co.,Ltd	11.00%
	Yu HongIndustrial Co.,Ltd.	10.00%
Kuo-Tung Investment and Development Co., Ltd.	Wei Chiao Investment Development Co.,Ltd	30.03%
	Lian Shuo Investment Development Co.,Ltd	24.00%
	Wei HongInvestment and Development	22.21%

Name of Institutional Shareholder (Note 1)	Major Shareholders of Institutional Shareholders(Note 2)	Share Holding %
	Co.,Ltd.
	Yieh HongEnterprise Co.,Ltd.	13.80%
	Shin Yang Investment and Development Co.,Ltd.	0.18%
Wei Hong Investment and Development Co., Ltd.	Yieh HongEnterprise Co.,Ltd.	25.41%
	I. S. Lin	18.21%
	Hsing Lung Investment & Development Co.,Ltd	20.19%
	Wei Chiao Investment Development Co.,Ltd	13.40%
	Chia Yuan Investment and Development Co.,Ltd	11.39%
	Lian Shuo Investment Development Co.,Ltd	10.42%
	Chih-LongLin	0.16%
	Lin A-Kuei	0.01%
Yieh Hong Enterprise Co., Ltd.	Tsung-ChengLin	10.75%
	Chih-LongLin	12.85%
	Hsing Lung Investment & Development Co.,Ltd	19.34%
	Wei Hong Investment and Development Co.,Ltd.	18.26%
	Wei Chiao Investment Development Co.,Ltd	11.01%
	TingKu Construction Co.,Ltd.	0.50%
Shin Yang Investment and Development Co., Ltd.	Hsing Lung Investment & Development Co.,Ltd	31.33%
	Yieh HongEnterprise Co.,Ltd.	25.72%
	Lian Shuo Investment Development Co.,Ltd	22.93%
	Chung-Hsian Lin	14.46%
	Kuo Chiao Investment & Development Co.,Ltd.	0.83%
Yu Sheng Investment and Development Co., Ltd	Lian Shuo Investment Development Co.,Ltd	49.24%
	Hsing Lung Investment & Development Co.,Ltd	24.75%
	Wei Chiao Investment Development Co.,Ltd	11.16%
	Wei Hong Investment and Development Co.,Ltd.	12.46%
	I. S. Lin	0.72%

Note 1: As shown in Table 1 above, when a major shareholder is an institutional shareholder, disclose the name of the institution. Note 2: Names of substantial shareholders (ranked top 10 in terms of shareholding) in the corporate shareholders and their shareholding ratio shall be filled in this section.

Table 3: Information on Directors

March 31, 2018

	March 31,	March 31,	March 31,	2018	2018	2018	2018	2018	2018	2018	2018	2018	2018
Requirement Name (Note 1)	Do the Directors have five or more years of work experience and the following professional qualifications?			Independence (Note 2)										Currently serving as the independent director of other public companies
	Serve in lecturer roles or above in public or private college institutions in one of the following departments : business administrati on, law, finance, accounting, or another discipline relevant to the company's operations	Currently serving as ajudge, prosecutor, lawyer, accountant, or other professional practice or technician that must undergo national examinations and specialized license.	Work experienc e necessary for Business administr ation, legal affairs, finance, accountin g, or business sector of the Company	1	2	3	4	5	6	7	8	9	10
Director:I. S.Lin			v	-	-	v	v	-	-	v	v	v	v	None
Director: Ping-Yong Liang			v	-	-	v	v	-	-	v	v	v	v	None
Director:Lin-Maw Wu			v	-	-	v	v	-	-	v	v	v	v	None
Director: Ching-Tsung Huang			v	-	-	v	v	-	-	v	v	v	v	None
Independent Director: Chin-Shu Sun		v		v	v	v	v	v	v	v	v	v	v	3
Independent Director: Te-Yuan Yang	v			v	v	v	v	v	v	v	v	v	v	None
Independent Director: Wen-IChang		v		v	v	v	v	v	v	v	v	v	v	1

Note 1: Please add more rows to accommodate additional entries.
Note 2: Please “” the box under each criteria number if the director or supervisor meets the criteria two years prior to resuming the position or during the term of service. 
（ 1 ） Is not employed by the Company or its affiliated companies.
（ 2 ） Not a director or supervisor of the Company of any of its affiliates (excluding independent directors set up by the Company, its parent company or subsidiaries in compliance of the local regulations).
（ 3 ） Is not a shareholder that hold more than 1% of the Company’s total shares or rank among top-ten shareholders, this applies for the Director him/herself, spouse, minor children, or shares held under others’ name.
（ 4 ） Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs.
（ 5 ） Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings.
（ 6 ） Is not a Director, Supervisor, manager, or a shareholder that holds more than 5% of shares at a company or institution that has financial or business exchanges with the Company.
（ 7 ） Not a professional individual or owner, partner, director (member of the governing board),

supervisor (member of the supervising board), or managerial officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting, or consultation services to the company or to any affiliated business, or spouse thereof. Not a business owner, partner, director (member of the governing board), supervisor (member of the supervising board), managerial officer, or spouse of a professional, sole proprietorship, partnership, corporation or organization that receives business, legal, financial, or accounting service or consultation from the Company or affiliates.

（ 8 ） Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
（ 9 ） Not been a person of any conditions defined in Article 30 of The Company Act

Not a governmental, juridical person or its representative as defined in Article 27 of he Company Act.

(II) General Manager, Deputy General Manager, Assistant Manager, and Managerial Officer of Various Departments or Branches

March 31, 2018

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
President	Taiwan, R.O.C.	Lin-Maw Wu	Male	2002/10/22	132,284	0	0	0	0	0	Master, National Sun Yat-Sen University Yieh Phui, VP Global Marketing and Sales	Yieh Phui (China) - Chairman of the Board Supervisor - Yieh United Chairman - Yieh Hsing EMMT Systems Corp. - Chairman of the Board	None	None	None
Senior Consultant	Taiwan, R.O.C.	Tien-Chi Chang	Male	2005/08/01	154,172	0	0	0	0	0	National Chengchi University Finance Manager, Yieh Phui	Supervisor - Kuo Chiao Supervisor - Chien Huan	None	None	None
Senior Consultant	Taiwan, R.O.C.	Hsien-Tung Liu	Male	2006/09/08	197,705	0	0	0	0	0	MBA, Colorado State University, USA Chairman - Tang Eng	Chairman - Yeo Yih Steel	None	None	None
Senior Consultant	Taiwan, R.O.C.	Ching-Tsung Huang	Male	2014/05/16	0	0	11,440	0	0	0	Feng Chia University Special Assistant, Eliter International Corp.	Chia Yuan Investment & Development Co., Ltd - Chairman of the Board Hsing Long Investment & Development Co., Ltd. - Director Lien Shua Investment Development Co., Ltd. - Director	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Senior Consultant	Taiwan, R.O.C.	Cheng-Chang Wu	Male	2014/10/21	0	0	0	0	0	0	I-Shou University Kaohsiung County Councilor	E-United Group - Chairman	None	None	None
Senior Consultant	Taiwan, R.O.C.	Hsien-Yao Chang	Male	2017/09/01	0	0	0	0	0	0	PhD in Political Science, Pantheon-Sorbonne University, France Legislator at 6th and 7th legislatures Specially appointed deputy minister, Mainland Affairs Council, Executive Yuan Vice chairman and adjunct secretary, Cross-Strait Exchange Foundation	None	None	None	None
Special Assistant	Taiwan, R.O.C.	Chia-Cheng Lin	Male	2012/08/01	0	0	0	0	0	0	The Taipei College of Science and Technology VP - Planning, Yieh Phui	Executive Vice-Chairman - E-United Group Chairman - Cheng Hsin Security	None	None	None
Special Assistant	Taiwan, R.O.C.	Min-Hsun Chen	Female	2013/09/01	0	0	0	0	0	0	MBA, Peter F. Drucker and Masatoshi Ito Graduate School of Management Director - China Development Industrial Bank Chairman - Taipei Financial Center Co.,Ltd.	E-United Group - Taipei Management Center	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Special Assistant	Taiwan, R.O.C.	Chen-Wu Chang	Male	2005/08/01	61	0	0	0	0	0	National Cheng Kung University Associate Manager, Information System Division, Yieh Phui	E-United Group - Vice Chairman	None	None	None
Planning Vice President	Taiwan, R.O.C.	Wei-Cheng Chen	Male	2006/03/14	325	0	0	0	0	0	University of Oklahoma Associate Manager of Production Planning - Yieh Phui	VP Planning - Yieh Phui (China)	None	None	None
Production Vice President	Taiwan, R.O.C.	Yang-Cheng Lan	Male	2003/10/01	0	0	0	0	0	0	National Cheng Kung University Plant Manager - Pre-painting Steel Production Division	None	None	None	None
Finance Vice President	Taiwan, R.O.C.	Yung-Hsien Chen	Male	2005/04/01	41,508	0	5	0	0	0	Tamkang University Associate Manager, Finance Division, Yieh Phui	VP Finance - Yieh Phui (China) VP Finance - Yieh Hsing Supervisor - YiehUnited	None	None	None
Construction Vice President	Taiwan, R.O.C.	Yao-Hsing Chien	Male	2006/09/01	1,488	0	0	0	0	0	Chung Yuan Christian University Acting Associate Manager, Technology Division,USEC	None	None	None	None
Global Marketing & Sales Vice President	Taiwan, R.O.C.	Shih-Chi Yang	Male	2006/12/01	0	0	0	0	0	0	National Chengchi University Manager, Global Marketing & Sales, Yieh Phui	VP - Yieh Phui (China)	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Production Assistant Vice President	Taiwan, R.O.C.	Te-Jen Huang	Male	2006/03/01	0	0	0	0	0	0	National Cheng Kung University Manager, Technology Division - Yieh Phui	None	None	None	None
Technology Vice President	Taiwan, R.O.C.	Ting-Kuo Shih	Male	2004/06/01	0	0	0	0	0	0	National Cheng Kung University Manager, Technology Division - Yieh Phui	None	None	None	None
Steel Pipe Technology Office Vice President	Taiwan, R.O.C.	Chang-Hsin Ming	Male	2009/10/01	4,782	0	0	0	0	0	National Tsing Hua University Plant Manager, Pickling and Rolling Production Division, Yieh Phui	None	None	None	None
Production Assistant Vice President	Taiwan, R.O.C.	Cheng-Feng Wu	Male	2005/12/01	921	0	496	0	0	0	National Chiao Tung University Manager, Electrical Maintenance Division,Yieh Phui	None	None	None	None
Assistant VP - Planning	Taiwan, R.O.C.	Wen-Pin Lin	Male	2008/05/16	104	0	289	0	0	0	Feng Chia University Manager, Management Division	None	None	None	None
Sales Assistant Vice President	Taiwan, R.O.C.	I-Feng Yang	Male	2007/11/05	0	0	0	0	0	0	Dayeh University Associate Manager, Marketing& Sales	Associate Manager - Yieh Phui (China)	None	None	None
Technology Planning Office Vice President	Taiwan, R.O.C.	Sen-Long Chen	Male	2003/08/16	20,299	0	1,576	0	0	0	National Cheng Kung University Manager, Technical Service Division, Phieh Phui	Director - Yieh Phui (China)	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Senior Manager	Taiwan, R.O.C.	Kuo-Lin Yang	Male	2004/06/01	1,622	0	0	0	0	0	National Kaohsiung University of Applied Sciences Plant Manager, Galvanizing Steel Production Division	VP Technology - Yieh Phui (China)	None	None	None
Senior Professional Engineer	Taiwan, R.O.C.	Yung-Hua Lin	Male	2006/08/16	0	0	0	0	0	0	National Chiao Tung University Plant Manager, Hot Rolling Plant, Chun HungSteel	Assistant VP - Paralink Networks, Inc.	None	None	None
Professional Adviser	Taiwan, R.O.C.	Yung-Fang Chang	Male	1997/05/01	170,419	0	1,440	0	0	0	National Taiwan Ocean University Associate Manager, Plating Plant,Yieh Phui	Vice Chairman and President - Yieh Phui (China)	None	None	None
Senior Professional Manager	Taiwan, R.O.C.	Wen-Chih Liu	Male	2014/12/01	0	0	0	0	0	0	Master Degree, National Taiwan University Manager, US Kraft Heinz Company Taiwan Manager, British Unilever Taiwan	None	None	None	None
Senior Manager	Taiwan, R.O.C.	Chuan-Hsiang Huang	Male	2015/04/01	0	0	0	0	0	0	National Chung Hsing University	Assistant Vice Chairman - E-United Group	None	None	None
Senior Engineer	Taiwan, R.O.C.	Tai-An Kung	Male	2016/03/01	0	0	0	0	0	0	Cultural University	VP - Yieh Phui (China)	None	None	None
Professional Manager	Taiwan, R.O.C.	Jung-Chin Chuang	Male	2005/08/01	41,790	0	5,916	0	0	0	Tatung University Manager of foreign company	None	None	None	None
Professional Engineer, Office of VP	Taiwan, R.O.C.	Ming-Chih Tsai	Male	2004/06/01	0	0	0	0	0	0	National Taiwan University of Science and	None	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Technology Professional Engineer											Technology Associate Manager, Production Division, Yieh Lung
Professional Engineer	Taiwan, R.O.C.	Wen-Chao Huang	Male	2008/03/01	0	0	0	0	0	0	Institute of Metallurgical Materials, Illinois Institute of Technology Manager, Technical Management Office	VP - Yieh Phui (China)	None	None	None
Galvanizing Steel Production Division Associate Manager	Taiwan, R.O.C.	Shun-Chin Tsao	Male	2009/10/01	0	0	0	0	0	0	National Taiwan Ocean University Plant Manager, Yieh Phui Pingtung Plant	None	None	None	None
Professional Manager	Taiwan, R.O.C.	Jung-Chang Liao	Male	2009/11/01	0	0	0	0	0	0	National Chiao Tung University Manager, Production Planning Division, Yieh Phui	None	None	None	None
Mechanical Production Division Associate Manager	Taiwan, R.O.C.	Chiu-Lin Pan	Male	2010/03/01	41,722	0	0	0	0	0	National Chiayi Institute of Agricultural Plant Manager, Mechanical Production Division, Yieh Phui	None	None	None	None
Utilities Division Associate Manager	Taiwan, R.O.C.	Chung-Hsin Wu	Male	2010/09/01	5,188	0	764	0	0	0	National Chiayi University Manager, Mechanical Maintenance Division	None	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Senior Manager	Taiwan, R.O.C.	Chi-Chen Li	Male	2010/10/01	787	0	0	0	0	0	National Sun Yat-Sen University Manager, President Staff's Office	None	None	None	None
Mechanical Maintenance Division Associate Manager	Taiwan, R.O.C.	Sheng-Wei Sung	Male	2011/09/01	0	0	0	0	0	0	Chin-Yi Institute of Technology Chung Hung	None	None	None	None
Finance Division Associate Manager	Taiwan, R.O.C.	Chien-Hung Lin	Male	2012/03/05	0	0	0	0	0	0	National Chengchi University Manager, Chinfon Commercial Bank Co., Ltd. Manager, Far Eastern International Bank	None	None	None	None
Associate Manager, Division	Taiwan, R.O.C.	Wei-Cheng Chen	Male	2012/11/08	32,309	0	0	0	0	0	Provincial Pingtung Institute of Agriculture RESA Engineering Corp. Ting Ku Construction Co., Ltd.	None	None	None	None
Associate Manager, Domestic Marketing & Sales Division	Taiwan, R.O.C.	Ming-Chia Tien	Male	2014/09/01	0	0	0	0	0	0	Chung Yuan Christian University Manager, Domestic Marketing & Sales Division	None	None	None	None
Professional Manager	Taiwan, R.O.C.	Hui-Sung Chiang	Female	2015/01/05	0	0	0	0	0	0	Master of Public Relations, Stirling University, UK Associate Manager, Public Affairs Division, E-United Group Spokesperson, Kaohsiung E-Da ThemePark	Associate Manager, E-United Group	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Associate Manager, Steel Structural Sales & Construction Division	Taiwan, R.O.C.	Wei-Kung Chang	Male	2015/04/01	0	0	0	0	0	0	Cultural University Associate Manager, Steel Tube Division, Hsin Yang	None	None	None	None
Senior Associate Manager, Information System Division	Taiwan, R.O.C.	Chun-Kai Huang	Male	2015/05/01	0	0	0	0	0	0	National Kaohsiung Institute of Technology Manager, Information System Division	None	None	None	None
Associate Manager, Sales Management Division	Taiwan, R.O.C.	Yuan-Hsing Kuo	Male	2015/06/01	0	0	0	0	0	0	Feng Chia University Senior Manager, Sales Management Division	None	None	None	None
President's Staff Office Associate Manager	Taiwan, R.O.C.	Wen-Cheng Pan	Male	2015/09/01	5,477	0	0	0	0	0	Chung Yuan Christian University Senior Manager, President Staff's Office	None	None	None	None
Associate Manager, TPM Development Office	Taiwan, R.O.C.	Wen-I Weng	Male	2016/01/06	62,587	0	0	0	0	0	The Taipei College of Science and Technology	Manager, E-United Group	None	None	None
Associate Manager, Technology Division	Taiwan, R.O.C.	Ping-Lin Yang	Male	2016/03/01	0	0	0	0	0	0	I-Shou University Senior Manager, Technology Division	None	None	None	None
Technology Development Office Associate Manager	Taiwan, R.O.C.	Chung-Chan Chiang	Male	2016/03/01	125	0	0	0	0	0	Feng Chia University Senior Manager, Technology Development Office	None	None	None	None

Title	Nationality	Name	Gender	Date of Electing (Appointment)	when elected	when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in names of other persons	Shares held in names of other persons	Education and Work Experiences	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company	Managers who have spousal or second-degree family relationships within the Company
					Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares			Title	Name	Relationship
Trade Management Office Associate Manager	Taiwan, R.O.C.	Wen-Chung Tian	Male	2017/02/01	87,512	0	0	0	0	0	Feng Chia University Finance Manager	None	None	None	None
Associate Manager, Import and Market Survey Office	Taiwan, R.O.C.	Chia-En Kuo	Male	2017/02/01	0	0	0	0	0	0	Chung Yuan Christian University Manager, Import and Market Survey Office	None	None	None	None
Domestic Marketing & Sales Division I Associate Manager	Taiwan, R.O.C.	Wei-Pin Kan	Male	2017/03/01	0	0	0	0	0	0	Yung Ta Institute of Technology & Commerce Manager, Domestic Marketing & Sales Division I	None	None	None	None

III. Compensations to Directors, President and Vice Presidents:

(I) Compensations paid to Directors (including independent directors, with the aggregate method and with disclosure of individual names and their corresponding compensation range) Unit: in NT$ thousands

Title	Name				Compensation of Directors	Compensation of Directors	Compensation of Directors			Sum of items A, B, C and D to NIAT Ratio (Note 10)	Sum of items A, B, C and D to NIAT Ratio (Note 10)	Compensations Paid to Con	Compensations Paid to Con	Compensations Paid to Con	Compensations Paid to Con	current Employees	current Employees			Sum of D, E, F a Ratio	items A, B, C, nd G to NIAT (Note 10)	Compensatio ns from other non-subsidia ry companies invested by the Company (Note 11)
		Base Compensation (A) (Note 2)		Retirem	ent Pension (B)	Directors' Compensation (C) (Note 3)		Expenses from Professional Practice (D) (Note 4)				Salaries, bonuses, and special expenses (E) (Note 5)		Retirem	ent pension (F)	Employee remune		ration (G) (Note 6)
		The Company	All companies listed in this financial report (Note 7)	The Company	All companies included in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	Companies in the consolidated financial statements (Note 7)	The Company		All companies listed in this financial report (Note 7)		The Company	All companies listed in this financial report (Note 7)
																Amount of Cash	Amount of Stock	Amount of Cash	Amount of Stock
Chairman	Kuo Chiao Investment & Development Co. Ltd Representati ve: I. S. Lin (Chairman)	1,541	1,984			837	837	576	1,538	0.22	0.32	14,366	18,618	108	108	47		47		1.28	1.69	11,733
Director	Kuo Chiao Investment & Development Co., Ltd. Representati ve: Lin-Maw Wu
Director	Kuo Chiao Investment & Development Co., Ltd. Representat ive: Ping-Yong Liang
Director	Kuo Chiao Investment & Development Co., Ltd. Representat ive: Ching-Tsun gHuang
Independent Director	Chin-Shu Sun

Title	Name	Compensation of Directors	Compensation of Directors	Compensation of Directors	Compensation of Directors	Compensation of Directors	Compensation of Directors	Compensation of Directors	Compensation of Directors	Sum of items A, B, C and D to NIAT Ratio (Note 10)	Sum of items A, B, C and D to NIAT Ratio (Note 10)	Compensations Paid to Co	Compensations Paid to Co	Compensations Paid to Co	Compensations Paid to Co	ncurrent Employees	ncurrent Employees	ncurrent Employees	ncurrent Employees	Sum of items A, B, C, D, E, F and G to NIAT Ratio (Note 10)	Sum of items A, B, C, D, E, F and G to NIAT Ratio (Note 10)
		Base Compensation (A) (Note 2)		Retirement Pension (B)		Directors' Compensation (C) (Note 3)		Expenses from Professional Practice (D) (Note 4)				Salaries, bonuses, and special expenses (E) (Note 5)		Retirement pension (F)		Employee remuneration (G) (Note 6)
		The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company	All companies listed in this financial report (Note 7)	The Company		All companies listed in this financial report (Note 7)		The Company	All companies listed in this financial report (Note 7)
																Amount of Cash	Amount of Stock	Amount of Cash	Amount of Stock
Independent Director	Ching-Hu i Hsieh			1 2 1 1 5						2
Independent Director	Te-Yuan Yang
Independent Director	Wen-I Chang
*In addition to the i		nformation disclosed above,has anyof the Company's directors received compensations forprovidingservices(e.g. servingas a non-employee consultant)to any														of the companies listed in this financial report in the most recentyear:

Compensation Range


Table of Remuneration Brackets for Directors	Name of Director
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The Company (Note 8)	All companies listed in this financial report (Note 9) H	The Company (Note 8)	All invested companies (Note 9) I
Less than NT$ 2,000,000	I. S. Lin, Lin-Maw Wu, Ching-Tsung Huang, Ping-Yung Liang, Chin-Shu Sun, Ching-Hui Hsieh, Te-Yuan Yang, Wen-I Chang	I. S. Lin, Lin-Maw Wu, Ching-Tsung Huang, Ping-Yung Liang, Chin-Shu Sun, Ching-Hui Hsieh, Te-Yuan Yang, Wen-I Chang	Ping-Yung Liang, Chin-Shu Sun Ching-Hui Hsieh, Te-Yuan Yang Wen-I Chang	Ping-Yung Liang, Chin-Shu Sun Ching-Hui Hsieh, Te-Yuan Yang Wen-I Chang
From NT$ 2,000,000 to 4,999,99			I. S. Lin,	Huang Ching-Tsung
From NT$ 5,000,000 to 9,999,999			Lin-Maw Wu	I. S. Lin, Lin-Maw Wu
From NT$ 10,000,000 to 14,999,999
From NT$ 15,000,000 to 29,999,999
From NT$ 30,000,000 to 49,999,999
From NT$ 50,000,000 to 99,999,999
More than NT$ 100,000,000
Total

Note 1: The name of directors shall be listed separately (for institutional shareholders, the name of institutional shareholders and representative shall be listed separately), and the payments shall be disclosed collectively. If a director also serves as a general manager or deputy general manager, he/she should fill up this form and the (3-1) or (3-2) below.
Note 2: Remuneration of directors in 2016 (including salaries, job remuneration, severance, bonuses, and performance fees).

Note 3: Remuneration paid to directors in 2016 upon the approval of Board of Directors.

Note 4: Business expenses paid out to directors in the most recent year (including transport, special expenses, various allowances, accommodation, vehicles, and provision of physical goods and services). If housing, vehicle or other means of transportation, or personal expense is provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, please note the remuneration paid to such driver. However, such remuneration shall not be included.

Note 5: Remuneration for directors concurrently holding positions in the company (for positions that include the General Manager, Deputy General Manager, other managerial officers, or employees) shall include salaries, job remuneration, severance, bonuses, performance fees, transport fees, special expenses, various subsidies, accommodation, vehicles, and provision of physical items and services. If housing, vehicle or other means of transportation, or personal expense is provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, please note the remuneration paid to such driver. However, such remuneration shall not be included. Any compensations listed under IFRS 2 Share-Based Payment, including issuance of employee stock options, new restricted employee shares and cash capital increase by stock subscription shall also be included.
Note 6: For directors concurrently holding positions in the company in 2015 (including the General Manager, Deputy Manager, other managerial officers, or employees) and receiving the remuneration (including stock and cash), the employee's remuneration paid in 2015 upon the approval of the Board of Directors shall be disclosed. If such remuneration cannot be estimated, the remuneration to be distributed in 2015 shall be based on the proportion of the remuneration distributed last year and filled in Schedule 1-3.
Note 7: Total remuneration in various items paid out to the Company's directors by all companies (including this Company) listed in the consolidated statement shall be disclosed.
Note 8: For the total remuneration in various items paid out to the Company's directors, the name of each director shall be disclosed in the corresponding range of the remuneration.
Note 9: Total remuneration in various items paid to every director of this Company by all companies (including this Company) listed in the consolidated statement shall be disclosed. The name of the director shall also be disclosed in the proper remuneration range.
Note 10: Net profit refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, net profit refers to the after-tax net income in individual or consolidated financial reports for the most recent fiscal year.
Note 11: (a) Compensations received by the directors from other non-subsidiary companies invested by the Company shall be disclosed in this column.
(b) If the director receives remuneration from investments in other companies that are not subsidiaries of this company, the said remuneration shall be included in Column J in the remuneration range table. The name of the column shall also be changed to “All investments in other companies”.
(c) Remuneration in this case shall refer to remuneration, fees (including remuneration as a company employee, director, or supervisor), business expenses, and other related payments received by the director of this Company for being a director, supervisor, or managerial officer of other non-subsidiary companies that this company has invested in.
＊ The content of compensation disclosed in this table is derived based on a concept different from the the concept of income stipulated in the Income Tax Act. The purpose of the table is for the disclosure of information, instead of taxation.

(II) Compensations paid to president and vice president (with the aggregate method and with disclosure of individual names and their corresponding compensation range) Unit: in NT$ thousands

Title	Name	Salary (A) (Note 2)	Salary (A) (Note 2)	Retirement Pension (B)	Retirement Pension (B)	Bonuses and special fees etc (C ) (Note 3)	Bonuses and special fees etc (C ) (Note 3)	Employee Compensations (D) (Note 4)	Employee Compensations (D) (Note 4)	Employee Compensations (D) (Note 4)	Employee Compensations (D) (Note 4)	Sum of items A, B, C and D to NIAT Ratio (%) (Note 8)	Sum of items A, B, C and D to NIAT Ratio (%) (Note 8)	Whether or not the person receives remuneration from other non-subsidiary companies that this company has invested in (Note 9)
		The Company	All companies listed in this financial report (Note 5)	The Compa ny	All companies listed in this financial report (Note 5)	The Company	All companies listed in this financial report (Note 5)	The Company		listed in this financial report(note 5)		The Company	listed in this financial report (Note 5)
								Cash Amount	Stock Amount	Cash Amount	Stock Amount
President	Lin-Maw Wu	16,243	21,248	471	471	5,850	7,199	70	0	70	0	1.66	2.12	2,014
Global Marketing & Sales Vice President	Shih-Chi Yang
Production Vice President	Yang-Chen gLan
Planning Vice President	Wei-Cheng Chen
Technology Vice President	Ting-Kuo Shih
Finance Vice President	Yung-Hsien Chen
Vice President - Steel Pipe Technology	Chang-Hsin Ming
Construction Vice President	Yao-Hsing Chien

Regardless of titles, compensations of employees with positions equivalent to general manager and deputy manager (such as president, CEO, director) shall be disclosed.

Compensation Range

	Compensation Range
Compensations of Presidents and Vice Presidents by Range		Names
	Yieh Phui (Note 6)	Invested Companies (Note 7) E
Less than NT$ 2,000,000	Shih-Chi Yang, Yao-Hsing Chien	Yao-Hsing Chien
From NT$ 2,000,000 to 4,999,99	Yung-Hsien Chen, Yang-Cheng Lan, Wei-Cheng Chen, Ting-Kuo Shih, Chang-Hsin Ming	Yung-Hsien Chen, Shih-Chi Yang, Yang-Cheng Lan, Chang-Hsin Ming, Wei-Cheng Chen, Ting-Kuo Shih
From NT$ 5,000,000 to 9,999,999	Lin-Maw Wu
FromNT$10,000,000to14,999,999		Lin-Maw Wu
FromNT$15,000,000 to29,999,999
FromNT$ 30,000,000 to49,999,999
From NT$ 50,000,000 to 99,999,999
More than NT$ 100,000,000
Total

Note 1: The names of general manager and deputy general manager shall be listed separately and the payments shall be disclosed collectively. If a director also serves as a general manager or deputy general manager, he/she should fill this form and (1-1) or (1-2) above.
Note 2: General manager and deputy general manager’s compensations in 2016 (including salary, professional compensatin and severance).
Note 3: Compensations of general managers/deputy general managers concurrently holding positions in the company shall include bonuses, performance fees, transport fees, special expenses, various subsidies, accommodation, vehicles, and provision of physical items and services. If housing, vehicle or other means of transportation, or personal expense is provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, please note the remuneration paid to such driver. However, such remuneration shall not be included. Any compensations listed under IFRS 2 Share-Based Payment, including issuance of employee stock options, new restricted employee shares and cash capital increase by stock subscription shall also be included.
Note 4: Employee compensations (including shares and cash) given to general managers/deputy general managers as approved by the Board of Directors for the most recent fiscal year shall be disclosed. But in case an estimated figure cannot be derived, this year's budgeted compensations shall be calculated based on last year's actual compensations. Please fill Schedule 1-3 with related information. Net profit refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, net profit refers to the after-tax net income in individual or consolidated financial reports for the most recent fiscal year.
Note 5: Total compensations of various items paid out to this Company's General Managers and Deputy General Managers by all companies (including this

Company) listed in the consolidated statement shall be disclosed.

Note 6: Names of the Company's general managers and deputy managers shall be disclosed in the range corresponding to the total of compensations paid to them.

Note 7: Total compensation of various items paid to every general manager and deputy general manager of this Company by all companies (including this Company) listed in the consolidated statement shall be disclosed. The name of the general manager and deputy general manager shall also be disclosed in the proper compensation range.
Note 8: Net profit refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, net profit refers to the after-tax net income in individual or consolidated financial reports for the most recent fiscal year.
Note 9: (a) Compensations of the company's general manager and deputy general manager received from other non-subsidiary companies invested by this company shall be disclosed in this column.
(b) If this Company's General Managers or Deputy General Managers receive remuneration from investments in other companies that are not subsidiaries of this company, the said remuneration shall be included in the column E in the remuneration bracket table. The name of the column shall also be changed to “All investments in other companies”.
c. Compensation here refers to rewards, remuneration (including remuneration as a company employee, director or supervisor) and subsidy of expenses received by the General Managers or Deputy General Managers of this Company for being a director, supervisor, or managerial officer of other non-subsidiary companies invested by this company.
＊ The content of compensation disclosed in this table is derived based on a concept different from the the concept of income stipulated in the Income Tax Act. The purpose of the table is for the disclosure of information, instead of taxation.

(III) Names of executive officers making decisions on employees' compensations and the status of payment

			December 31,2017	December 31,2017	December 31,2017	December 31,2017
	Title (Note 1)	Name (Note 1)	Amount of Stock	Amount of Cash	Total	Percentage of total compensations to NIAT(%)
Executive Officers	President	Lin-Maw Wu	0	326	326	0.02
	Vice President - Finance	Yung-Hsien Chen
	Vice President - Global Marketing & Sales	Shih-Chi Yang
	Vice President - Production	Yang-Cheng Lan
	Vice President - Planning	Wei-Cheng Chen
	Vice President - Technology	Kuo-Lin Yang
	Vice President - Technology	Ting-Kuo Shih
	Vice President - Steel Pipe Technology	Chang-Hsin Ming
	Vice President - Engineering	Yao-Hsing Chien
	Senior Consultant	Hsien-Tung Liu
	Senior Consultant	Tien-Chi Chang
	Special Assistant	Chia-Cheng Lin
	Special Assistant	Min-Hsun Chen
	Senior Consultant	Cheng-Chang Wu
	Professional Adviser	Yung-Fang Chang
	Senior Consultant	Hsien-Yao Chang
	Special Assistant	Chen-Wu Chang
	Assistant Vice President	Te-Jen Huang
	Senior Manager	Chi-Chen Li
	Assistant Vice President	Cheng-Feng Wu
	Senior Engineer	Yung-Hua Lin
	Senior Manager	Wen-Chih Liu
	Senior Manager	Chuan-Hsian gHuang
	Senior Engineer	Tai-An Kung

	Associate Manager	Sheng-Wei Sung
	Professional Engineer	Ming-Chih Tsai
	Associate Manager	Shun-Chin Tsao
	Professional Engineer	Wen-Chao Huang
	Associate Manager	Chung-Hsin Wu
	Assistant Vice President	Wen-Pin Lin
	Associate Manager	Chun-Kai Huang
	Associate Manager	Chung-Chan Chiang
	Associate Manager	Wen-Cheng Pan
	Associate Manager	Yuan-Hsing Kuo
	Associate Manager	Ping-Lin Yang
	Assistant Vice President	I-Feng Yang
	Associate Manager	Wen-I Weng
	Associate Manager	Ming-Chia Tien
	Professional Manager	Jung-Chang Liao
	Professional Manager	Wei-Cheng Chen
	Associate Manager	Jung-Chin Chuang
	Associate Manager	Chiu-Lin Pan
	Associate Manager	Wei-Pin Kan
	Associate Manager	Chia-En Kuo
	Associate Manager	Wen-Chung Tian
	Associate Manager	Chien-Hung Lin
	Professional Manager	Hui-Sung Chiang
	Professional Manager	Kuo-Lin Yang
	Associate Manager	Wei-Kung Chang

Note 1: Individual names and titles shall be disclosed, but compensations received can be disclosed as total sum.

Note 2: Employee compensations (including shares and cash) given to managers as approved by the Board of Directors for the most recent fiscal year shall be disclosed. But in case an estimated figure cannot be derived, this year's budgeted compensations shall be calculated based on last year's actual compensations. Net

profit refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, net profit refers to the after-tax net income in individual or consolidated financial reports for the most recent fiscal year.

Note 3: The term executive refers to the positions listed below, as provided in the Financial Supervisory Commission Memorandum No. 0920001301 of March 27, 2013:
(1) General Manager and its equivalent
(2) Deputy General Manager and its equivalent
(3) Assistant Manager and its equivalent
(4) Supervisor of Finance Department
(5) Supervisor of Accounting Department
(6) Other personnel authorized to manage company operations and sign for
approval.

Note 4: If Directors, General Manager, or Deputy General Manager have received

employee compensations (including shares and cash), this form shall be filled out in addition to Table 1 Director's Compensations.

(IV) Name of employees receiving top 10 highest compensations and status of payment: See page 42 for details
(V) Compare and analyze the total compensations paid to each of this Company's Directors, Supervisors, General Managers, and Deputy General Managers in the 2 most recent years by all companies listed in this Company's individual and consolidated financial statements as a percentage of NIAT listed in the individual financial report and describe the policies, standards, and packages for payment of and the procedures for determining of such compensations and its linkage to business performance and future risk exposure.
(1) Total compensations paid to the Company’s directors, supervisors, general managers, and deputy general managers in the 2 most recent years and its proportion to NIAT.

	2016	2016	2017	2017
Title	Total compensations paid to Directors, Supervisors, General Managers, and Deputy General Managers and its proportion to NIAT.	Total compensations paid to Directors, Supervisors, General Managers, and Deputy General Managers and its proportion to NIAT by all companies included in the consolidated financial statements.	Total compensations paid to Directors, Supervisors, General Managers, and Deputy General Managers and its proportion to NIAT.	Total compensations paid to Directors, Supervisors, General Managers, and Deputy General Managers and its proportion to NIAT by all companies included in the consolidated financial statements.
Director	0.79%	1.08%	1.28%	1.69%
Supervisor	0.005%	0.005%	0	0
President and Vice Presidents	1.16%	1.38%	1.66%	2.12%

(2) Policies, standards and packages of compensations:
Monthly traffic allowance for directors, monthly remunerations for independent directors, and salaries of the Chairman are determined by the board of directors based on the standards commonly practiced in the industry and publicly-listed companies. Other payments and allowances for the Chairman are determined based on the Company’s system of compensation.
The Company’s compensation paid to managers is determined in accordance with the Company’s compensation system, overall operating performance, and the manager’s performance evaluation.
Remunerations to directors are determined in accordance with Article 30-1 of the Articles of Incorporation, where no greater than 0.1% of profits, if any, should be distributed as remuneration to directors.
The main changes in the 2017 compensations are bonus and remunerations, aside from fixed salaries, paid to the Company’s directors who also assume the job of an employee and vice president.
- (1) Bonus is distributed depending on the achievement both of the Company’s annual operating performance goals and of the personal performance goals. Net operating profit in 2017 declined by 29.22% compared to 2016, and consequently, bonuses to Directors, President and Vice Presidents declined by 29.59% in 2017 compared to 2016.
- (2) Remunerations paid to Directors in 2017 equals to 0.05% of the net income after tax. Due to the fact that the profit in 2017 shrinks by 45.35% as compared to 2016, remunerations to Directors decreases by 44.61% in 2017 as compared to 2016.
(3) Procedures for setting compensations Compensations of directors and managers are regularly assessed and a compensation structure is set by the Company’s Compensation Committee; the proposed compensations are submitted to the Board of Directors for approval and then implemented based on the structure.

IV. Implementation of Corporate Governance

(I) Operations of the Board of Directors

A total of 10 Board Meetings were held in 2017. The following lists the attendance of Directors and Supervisors to these meetings:

Title	Name (Note 1)	Actual presence (attendance)	Number of proxy attendan ce	Rate of actual presence (attendance) (%) (Note2)	Note
Chairman	Kuo Chiao Investment & Development Co., Ltd. Representative: I. S. Lin	9	1	90.00%	Joined the board on Jun. 22nd, 2016 after the election at the Shareholders' Meeting
Director a	Kuo Chiao Investment & Development Co., Ltd. Representative: Ping-Yong Liang	10	0	100.00%	Reelected on Jun., 22, 2016 at the Shareholders' Meeting.
Director c	Kuo Chiao Investment & Development Co., Ltd. Representative: Lin-Maw Wu	10	0	100.00%	Joined the board on Jun. 22, 2016 after the election at the Shareholders' Meeting
Director d	Kuo Chiao Investment & Development Co., Ltd. Representative: Ching-TsungHuang	10	0	100.00%	Joined the board on Jun. 22, 2016 after the election at the Shareholders' Meeting
Independent Director a	Chin-Shu Sun	10	0	100.00%	Reelected on Jun., 22, 2016 at the Shareholders' Meeting.
Independent Director b	Te-Yuan Yang	10	0	100.00%	Joined the board on Jun. 22, 2016 after the election at the Shareholders' Meeting (first time as an independent director)
Independent Director c	Ching-Hui Hsieh	1	1	50.00%	Resigned on March 13, 2017
Independent Director d	Wen-I Chang	5	0	100.00%	Joined the board on Jun. 22, 2017 after the election at the Shareholders' Meeting (first time as an independent director)

Other required disclosure:

I. Matters listed in Article 14-3 of the Securities and Exchange Act and other matters that were objected or reserved by the Independent Directors with records or written statements: The Company has set up an Audit Committee. Please refer to information regarding the operation of the Audit Committee.
II. When Directors abstain themselves from certain proposals due to conflict of interest, please state the names of the Directors, the content of the proposal, reasons for abstentions and the results of voting counts: The first meeting of the Board in 2017: January 17th, 2017
Proposal 3: To discuss the annual (including years of service) and performance bonuses to the Chairman as approved by the Company’s Compensation Committee. (The third proposal was related to the annual (including years of service) and performance bonuses for Chairman, I. S. Lin; therefore, the Chairman abstained from the meeting. Chairman, I. S. Lin appointed director, Lin-Maw Wu, to preside over the meeting when discussing the third proposal.) Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.
Proposal 4: To discuss the year-end compensations to directors who are also a member of the Audit Committee. (The 4th proposal was related to compensations paid to independent directors Chin-Shu Sun, Ching-Hui Hsieh, and Te-Yuan Yang, therefore, they were abstained from the meeting). Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.
Proposal 5: Discussed compensation for the members of the Compensation Committee. (The 5th proposal was related to compensations paid to independent directors who are also members of the Compensation Committee, namely, Chin-Shu Sun, Ching-Hui Hsieh, and Te-Yuan Yang, therefore, they were abstained from the meeting). Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.
Proposal 6: To discuss the annual (including years of service) and performance bonuses to the managers as approved by the Company’s Compensation Committee. (Since the 6th proposal was related to the annual (including years of service) and performance bonuses paid to President Lin-Maw Wu and the senior consultant Ching-Tsung Huang, they were abstained from the meeting.) Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.

The 8th meeting of the Board in 2017: September 27, 2017 1. Proposal 2: To discuss the adjustment to and amount of salaries paid to managers as approved by the Company’s Compensation Committee. (Since the 2nd proposal was related to compensations paid to President Lin-Maw Wu and the senior consultant Ching-Tsung Huang, they were abstained from the meeting to avoid conflict of interests. President Lin-Maw Wu designated another director, Ping-Yung Liang, to chair the proposal.) Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.

The 5th meeting of the Board in 2017: December 19, 2017 1. Proposal 4: The Company intends to adjust the compensations paid to independent directors and hence proposes for discussion. (Since the 4th proposal was related to compensations paid to independent directors Chin-Shu Sun, Te-Yuan Yang, and Wen-I Chang, they were abstained from the meeting to avoid conflict of interest.) Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.

Proposal 7: The Company intends to donate to E-Da Hospital and thus proposes for discussion. (Since the 7th proposal was related to the stakeholders, namely, Chairman I. S. Lin and Director Ching-Tsung Huang (former director of E-Da Hospital), they were abstained from the meeting to avoid conflict of interest.) Chairman I. S. Lin appointed director Lin-Maw Wu as acting chairman for the discussion of the 7th proposal.) Resolution: Except for those directors who abstained from participation, discussion, and voting at the meeting as required by law, all directors presented at the meeting did not present any objection and approved the proposal as proposed.
III. The goals (such as establishing the Audit Committee and increase information transparency, etc.) of strengthening the functionality of the Board of Directors in the current and immediately preceding fiscal years, and the evaluation of their executions: 1. The Company officially set up the Audit Committee in 2016. 2. The Company has compiled the “Corporate Social Responsibility Report” which is available on the Company’s website and is certified by a third party.
The Company’s directors and independent directors have completed the required continuing professional education (CPE) hours in 2017.
The Company has disclosed on its website the english version of its financial statements over each quarter and its Articles of Incorporation.
Starting from 2017, material information will be simultaneously announced with an English version to enhance information transparency and ensure information availability.

Note 1: For directors who are juristic persons, the name of institutional shareholders and their representatives should be disclosed.

Note 2: (1) Where directors or supervisors resign before the end of the year, the remark column shall
be annotated with the date of resignation. Actual presence (attendance) rate (%) shall be calculated using the number of Board Meetings convened and actual presence (attendance) during the term of service.
(2) Where Directors and Supervisors were re-elected before the end of the year, both the incoming and outgoing Directors and Supervisors shall be listed accordingly. The remark column shall be annotated to indicate whether the Director or Supervisor was outgoing, incoming, or re-elected as well as the date of re-election. Actual presence (attendance) rate (%) shall be calculated using the number of Board Meetings convened and actual presence (attendance) during the term of service.

(II) Operations of the Audit Committee:

Operations of the Auditing Committee

In 2017 the Audit Committee held 9 meetings (A) in which the attendance of independent directors are stated as below:

Title	Name	Number of actual attendance (B)	Number of proxy attendance	Rate of actual attendance (%) (Ｂ/Ａ) (Note)	Note
Independent Directora	Chin-Shu Sun	9	0	100.00%	Assumed office on June22,2016
Independent Directorb	Te-Yuan Yang	9	0	100.00%	Assumed office on June22,2016
Independent Directorc	Ching-Hui Hsieh	1	1	50.00%	Resigned on March 13,2017
Independent Directord	Wen-I Chang	4	0	100.00%	Assumed office on June22,2017
Other required disclosure: I. For matters enumerated in Article 14-5 of the Securities and Exchange Act, and resolutions not approved by the Audit Committee but approved by more than two thirds of all the directors: Please refer to Note 1. II. Ways in which Independent Directors have abstained from motions that pose a conflict of interest, the Independent Director’s name, the content of the motion, cause of the conflict of interest, and the circumstances of the vote shall be elaborated: None III. Communication between directors and head of internal audit and CPA (including material issues, audit methods and results relating to the Company's finances and business). (I) Communication between the Company's internal audit personnels and independent directors: 1. The internal audit manager attends the board meeting to report on the audit operations. 2. After the audit report and tracking improvement report were submitted and approved, a letter and a copy of the report are sent to each of the independent directors for review by double registered mail. The Company's independent directors have maintained optimal communication with the head of internal audit. (II) Communication between the Company's CPA and independent directors: 1. Meeting held on March 21, 2017 Elaborated Key Audit Matters for the Standalone Financial Statements of Yieh Phui Enterprise Co., Ltd. for the year ended December 31, 2016. 2. Meeting held on August 7, 2017 Conducted communication on Key Review Matters for the 2017 semi-annual financial statements as reviewed by an CPA. 3. Meeting held on December 19, 2017 Communicated with the governing body on 2017 planning phases Communications between the Company’s independent directors and CPAs are effective, where consensus over various communication matters is achieved. Please visit Yieh Phui’s websitefor the aforementioned communication matters.

Note:

Note: When (an) independent director(s) resign(s) before the end of the year, specify the date of resignation in the remark column. The actual attendance rate (%) shall be calculated using the number of the Salary and Remuneration Committee meetings and the numbers of actual attendant during the term of service.
*When election of independent directors is held before the end of the year, list the names of both the incoming and outgoing independent supervisors in the remark column with annotations specifying whether the independent directors are outgoing, incoming or re-elected, as well as the date of the election. The actual attendance rate (%) shall be calculated based on the number of meetings held during the member’s term in the compensation committee and the number of actual attendance of this member.

Note 1:

Note1:
Date of Meeting	Agenda	#14-5 of the Securities and Exchange Act	Resolutions made by the Audit Committee and how the resolutions were dealt with by the Board of Directors.
First Board Fifth Meeting Jan. 17, 2017	1. To discuss the compensation paid to CPAs for 2017, and to assess their independence. 2. Purchase of shares from associates. 3. Purchase of shares from associates of which the amount exceeding NT$ 300 million within one year. 4. Engagement in transaction of forward exchange derivatives.	v	Approved by all members presented, proposed to directors and approved by all directors presented at the meeting without any objection. (There is no resolution that is not approved by the Audit Committee but is approved by more than two thirds of all the directors)
First Board 6th Meeting Feb. 16, 2017	1. Modification of the 2017 Audit Plan. 2. Amendments to "Enforcement Rules of Internal Auditing". 3. Subscription to associates’ private placement of common shares 4. Subscription to subsidiaries’ cash offering of new shares 5. Engagement in transaction of forward exchange derivatives.	V
First Board 7th Meeting Mar. 21, 2017	1. Business Report, Standalone Financial Statements, and Consolidated Financial Statements for 2016 2. Revision of the Procedure for Lending and Guarantee. 3. Amendment to the Company's Standard Procedure for Acquisition or Disposal of Assets 4. Earnings Distribution Proposal for 2016 5. Proposal for shareholders’ dividends for 2016, wherein cash dividends and stock dividends (i.e., capitalization of earnings) are proposed. 6. The Company’s Statement of Internal Control System for 2016 7. Engagement in transaction of forward exchange derivatives.	V
First Board The 8th Meeting May 9, 2017	1. Proposal of the consolidation of The Company’s Q1 financial statements. 2. Adoption of the Earnings Distribution Proposal for 2016 3. Discussion of the proposal for shareholders’ dividends for 2016, wherein cash dividends and stock dividends (i.e., capitalization of earnings) are proposed. 4. To remove the Non-compete Clause on the Company's Directors. 5. Discussion of the Company’s 2 lending proposals. 6. Endorsements/ guarantees provided by The Company to subsidiaries. 7. The Company’s engagement in transaction of financial derivatives.	V
First Board The 9th Meeting Jun. 19, 2017	1. Discussion of amendments to the Company’s “Procedures for Self-inspection of the Internal Control System” 2. 2 Proposals for endorsements/ guarantees provided by The Company to subsidiaries. 3. The Company’s engagement in transaction of financial derivatives.	V
First Board The 10th Meeting	1. Matters respecting the Company acting as a joint guarantor for syndicated loans taken out by subsidiaries. 2.Report andreview ofthe Company’s engagementin	V

Jul.5,2017	transaction of financial derivatives. 3. The Company’s engagement in transaction of financial derivatives.
First Board The 11th Meeting Aug.7,2017	1. Proposal of the consolidation of The Company’s Q2 financial statements. 2. Discussion of revision of the Company’s “Internal Control System” 3. 2 Proposals for endorsements/ guarantees provided by The Company to subsidiaries. 4. The Company’s intention to engage in transaction of financialderivatives.	V
First Board The 12th Meeting Nov.3,2017	1. Proposal for the consolidation of The Company’s financial statements for 2017 Q3. 2.. 2. The Company’s engagement in transaction of financialderivatives.	V
First Board The 13th Meeting Dec.19,2017	1. The Company’s 2018 Audit Plan. 2. Proposal for revision of the Company’s “Accounting System”. 3. Revision of partial provisions of the “Internal Control System for Stock Affairs Units” and “General Administration”. 4. The Company stipulated its “Corporate Governance Best Practice Principles” for discussion. 5. Discussion of the Company’s intention to engage in transaction of financial derivatives. 6. Discussion of the Company’s intention to donate to E-DaHospital.	V

(III) Status of corporate governance operations, conformity with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the cause of non-conformity

Assessed items	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Y	N	Summary
I. Has the Company established and disclosed its code of practice on corporate governance based on Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?	V		Has the Company established and disclosed its code of practice on corporate governance based on the latest provisions of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?	No significant difference is found between the Company's practices and Article 1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.
II. The shareholding structure of the Company and shareholders' rights (I) Did the company establish an internal procedure for handling shareholder proposals, inquiries, disputes, and litigations? Are such matters handled according to the internal procedure? (II) Did the company maintain a register of major shareholders with controlling power as well as a register of persons exercising ultimate control over those major shareholders? (III) Did the company establish and enforce risk control and firewall systems with its affiliated businesses? (IV) (4) Did the company stipulate internal rules that prohibit company insiders from trading securities using information not disclosed to the market?	V V V	V	(I) The Company's Shareholder Service Department is a dedicated unit set up to handle suggestions from and disputes relating to shareholders. The Shareholder Service Section on the Company's website is also set up with contact information to facilitate shareholder contact and inquiry. (II) The Company has a a list of the major shareholders of the Company and the ultimate controlling party of these shareholders. (III) The Company has established appropriate risk control mechanisms and firewalls in accordance with the Procedure for Supervision and Management of Subsidiaries, the Procedure for Lending and Guarantee, the Procedure for Acquisition and Disposal of Assets and Procedure for Management of Related-Party Transactions. (IV) (4) The Company has set up the Procedure for Handling of Internal Material Information to regulate internal practices.	(I) No significant difference is found between the Company's practices and Article 13 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices. (II) No significant difference is found between the Company's practices and Article 19 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices. (III) No significant difference is found between the Company's practices and Article 14 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices. (IV) Conform to the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies

Assessed items	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Y	N	Summary
III. Organization and responsibilities of the Board of Directors (I) Has a policy of diversity been established and implemented for the composition of the board of directors? (II) In addition to Salary and Remuneration Committee and Audit Committee established according to law, has the company voluntarily established other functional committees? (III) Did the company stipulate regulations for assessing the performance of the board of directors and the process of assessment? Are these performance assessments carried out regularly every year? (IV) Does the company regularly evaluate the independence of CPAs?	V V	V V	(I) 1. Stipulated after approved by the Company’s Board of Directors on December 19, 2017 A guideline for diversification is available in the Article 20 of Chapter 3“Enhancing the Occupational Competence of the Board of Directors＂in the“Code of Conducts for Corporate Governance＂. The nomination and election of members of the Company＇s Board of Directors is conducted in accordance with regulations as stipulated in the Articles of Incorporation, wherein a candidate nomination system is adopted, the education and experience of candidates is evaluated, and practices are conducted in accordance with“Regulations Governing Election of Directors＂and“Code of Conducts for Corporate Governance＂, in order to ensure the independence and diversification of the directors. 2. The selection of the Company＇s members of the Board of Directors takes into considerations including but not limited to gender and age. Aside from talents with comprehensive professional experience, there are also accountants and professors in the finance and economics sectors. Implementation status of diversification of members of the Board of Directors: Director Name Sound business Financial & Accounting Business management Crisis management Knowledge of the An international Leadership ability Decision making I. S. Lin V V V V V V V Lin-Maw Wu V V V V V V V Ping-Yon gLiang V V V V V Ching-Ts ung Huang V V V V V V V Chin-Shu Sun V V Te-Yuan Yang V V V V Wen-I Chang V V

Assessed items	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Y	N	Summary
			(II) The Company set up functional committees in compliance with relevant regulations. (III) In the future, the Company will set up a performance evaluation system, along with viable methods and implement performance evaluation annually. (IV) (4) The Company assesses by it self the independence of CPAs once every year. The result of the assessment was reported to and approved by the Board of Directors on May 9, 2018. Carried out assessment on the independence of CPA Ling-Wen Huang and CPA Jen-Yao Hsieh of the Crowe Horwath (TW) CPAs. Assessment items include: Not taking jobs in the various companies as a director, supervisor, manager, or officer in charge of jobs having significant influence; not a stakeholder of the Company; Not having conflict of interest against the Company either directly or indirectly; Not co-investing or sharing profits with the Company; Not a shareholder having more than 1 % of Yieh Phui＇s outstanding shares, or one of the top 10 individual shareholders; Not commissioned for certification for consecutive 7 years. All the assessment items satisfy the Company＇s standards respecting independence assessment. Therefore, CPA Ling-Wen Huang and CPA Jen-Yao Hsieh are qualified for being the Company＇s CPAs, and Crowe Horwath (TW) CPAs also has issued an“Independence Statement＂.

Assessed items	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Y	N	Summary
IV. If the company is a publicly-listed company, has the company set up a dedicated (concurrent) unit or personnel to handle corporate governance related matters (including but not limited to providing directors and supervisors information needed to carry out their duties, handling matters relating to board of director and shareholders’ meeting, carrying out company registration and change of registration processes and preparing minutes of board of director and Shareholders’ Meetings.	V		Stipulated after approved by the Company＇s Board of Directors on December 19, 2017 As stated in Article 3-1 of the Corporate Governance Principles, the finance unit of the Company is an adjunct unit in charge of matters relating to corporate governance, which are executed by the Stock Affairs Section, a subordinate unit under the finance unit. The head of the finance department, who is in charge of the supervision work and has at least three years of management experience in a public company in handling finance affairs, stock affairs, and meeting affairs, is to ensure shareholders interest and enhance the occupational competence of the Board of Directors. His/Her duties include providing materials necessary for execution of business by directors, handling matters relating to Board Meetings and Shareholders＇Meetings according to law, handling corporate registration and amendment registration, and producing minutes of the board meetings and the the Shareholders＇Meetings, etc.. Status of operation and execution in 2017 is stated as follows: The status of execution was reported to the Board of Directors on March 21, 2018. 1. Helps directors＇understanding of the latest laws and regulations and thereby facilitating the compliance thereof, in order to provide a legal basis for the operation of the Board of Directors and the Shareholders＇Meeting. 2. Carried out registration of capitalization of earnings, and registration of changes of independent directors. 3. Produced 10 Board Meeting minutes and 1 Shareholders＇Meeting minutes in 2017. 4. Launched at least 6 hours of“continuing education at home＂for members of directors, aiming to assist them in understanding the latest laws and regulations and the compliance trend. 5. Adopted a Bi-directional communication means, wherein accountants and members of the Audit Committee have meetings at irregular intervals and audit personnels regularly present their audit reports to the Audit Committee, so as to fully implement the internal audit system and the internal control system. 6. Held the 2017 investors conference as one of the diversified communication channels between the Company and investors.	No significant difference is found between the Company's practices and Article 3-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices.
V. Has the company set up channels of communication for stakeholders (including but not limited to shareholders, employees,customers and suppliers),dedicated a section of	V		With stakeholders either as a correspondent bank, other creditors, an employee, consumer, supplier, community, or a company, the Company makes available clear communication channels,respects and secures their	No significant difference is found between the Company's practices and Article 51 of the Corporate

Assessed items	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Y	N	Summary
your company's website for stakeholder affairs and adequately responded to stakeholders' inquiries on significant corporate social responsibility issues?			interests guaranteed by law, sets aside on its website an investor zone with contact information of the various responsible units available, constructs questionnaires for stakeholders to understand the key issues they care about, so as to adjust the Company＇s operating policies accordingly.	Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices.
VI. Does the Company commission professional shareholder services agency to hold Shareholders' Meeting and other relevant affairs?		V	The Company＇s shareholder service unit is staffed with professionals with required certification and continuing education to ensure that the shareholder meetings are legal, effective and safe.	No significant difference is found between the Company's practices and Article 7 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices.
VII. Information Disclosure (I) Did the company establish a website to disclose information on financial operations and corporate governance? (II) (2) Did the company adopt other means of information disclosure (such as establishing an English language website, delegating a professional to collect and disclose company information, implement a spokesperson system, and disclosing the process of investor conferences on the company website)?	V V		(I) The Company has set up a website for disclosure of information relating to the Company＇s operations, financial and corporate governance practices in Chinese and English. Investors can also view the information at the Market Observation Post System (MOPS). (II) The Company has set up an English website and assigned a designated personnel to be in charge of the collection and disclosure of the Company＇s information. A spokesperson system has also been constructed as required, which is capable of disclosing information respecting the Company properly and timely. An investors conference was held in 2017, of which the video records are readily available on the Company＇s website.	(I) No significant difference is found between the Company's practices and Article 57 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices. (II) No significant difference is found between the Company's practices and Article 57 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices.
VIII. Has the Company disclosed other information to facilitate a better understanding of its corporate governance (Including but not limited to employee's rights, employee care, investor relations, supplier relations, stakeholders' rights, further studies of Directors and Supervisors, implementation of risk management policies and measurement standards, implementation of customer policies and purchase of liability insurance for the Directors and Supervisors of the Company)?	v		1. For employee rights and benefits, please refer to P. 139 2. The Company has set up an online platform with disclosure of the contact number and email of the Shareholder Service Department to facilitate shareholder communication and information transparency, providing the suppliers and stakeholders an overview of the Company＇s operations and practices. 3. The Company provides the directors updated information on laws and regulations and schedules of available opportunities for continuing education. 4. The Company at all time takes notice of and understands relevant laws and regulations as stipulated or amended bythe competent	No significant difference is found between the Company's practices and Article 39, 47, 49, 50, 51, 52 and 53 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Company's practices.

	Assessed items	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)
		Y	N	Summary
				authority, so as to minimize its potential operation risks. 5. The Company has purchased for directors a liability insurance policy, of which the extent of coverage and contents were reported to the Board of Directors on the Board Meeting held on May 9, 2018. 6. For the Company's Directors' and Supervisors' Continuing Education, please refer to the Directors' Continuing Education section in this annual report, p 58
IX.	Please specify the Company's measures to improve the items listed in the corporate governance review result by Taiwan Stock Exchange's Corporate Governance Center and the improvementplans for itemsyet to be improved.(Leave blank ifyour companywas not evaluated.) Evaluation Index Improved Did the company disclose the English annual report 7 days before the day of the AGM? The 2017 English annual report has been prepared. Does the Company file Chinese and English material information simultaneously? Material information disclosure in both Chinese and English started in January 2017. Has the reports disclosing non-financial information of the Company, such as the corporate social responsibilityreport,been certified bya third-partyagency? The 2016 Corporate Social Responsibility Report, which was compiled in 2017, has been reviewed and certified bySGS. Has the Company disclosed its stipulated Corporate Governance Principles? The Corporate Governance Principles has been stipulated and disclosed in 2017. Evaluation Index Priority improvement and actions for items not yet improved Has the Company established a/an dedicated (adjunct) unit for promoting ethical corporate management and corporate social responsibilities, and disclosed in its annual reports and company website the operation and implementation of which unit, and reported regularlyto the Board of Directors? The Company is currently developing and discussing setting up an adjunct unit and procedures and regulations for organization operation, which will be proposed for resolution by the Board of Directors after signed by the management. Has your company set up a whistle-blower mechanism for reporting of illegal (including bribery) and unethical conducts carried out by your company＇s personnel inside and outside of the companyand hasyour companydisclosed relevant information? The Company is currently developing and discussing stipulating procedures and code of conducts respecting ethical corporate management, which will be proposed for resolution bythe Board of Directors after signed bythe management.

Note: Provide a brief description in the appropriate column, regardless whether yes or no is selected.

Status of continuing education by the directors in 2017:

Title	Name	Date	Organizer	Course Name	Number of Hours
Chairman	I. S. Lin	Sep. 27	Taiwan Corporate GovernanceAssociation	Occupational competence of the Board of Directors and the performance evaluation thereof	3
		Sep. 27	Taiwan Corporate GovernanceAssociation	Talks on the principles and cases of ethical corporate management, corporate governance, and corporate social responsibility	3
Director	Lin-Maw Wu	Sep. 27	Taiwan Corporate GovernanceAssociation	Occupational competence of the Board of Directors and the performance evaluationthereof	3
		Sep. 27	Taiwan Corporate GovernanceAssociation	Talks on the principles and cases of ethical corporate management, corporate governance, and corporate social responsibility	3
Director	Ping-Yong Liang	Sep. 27	Taiwan Corporate GovernanceAssociation	Occupational competence of the Board of Directors and the performance evaluationthereof	3
		Sep. 27	Taiwan Corporate GovernanceAssociation	Talks on the principles and cases of ethical corporate management, corporate governance, and corporate social responsibility	3
Director	Ching-Tsu ng Huang	Sep. 27	Taiwan Corporate GovernanceAssociation	Occupational competence of the Board of Directors and the performance evaluation thereof	3
		Sep. 27	Taiwan Corporate GovernanceAssociation	Talks on the principles and cases of ethical corporate management, corporate governance, and corporate social responsibility	3
Independent Director	Chin-Shu Sun	Aug. 9	National Federation of CPA Associations of R.O.C.	Directors＇and supervisors＇responsibilities over misstatement of disclosed information and financial statements.	3
		Aug. 10	National Federation of CPA Associations of R.O.C.	How Directors Do Their Best Attentions	3
Independent Director	Wen-I Chang	Aug. 11	Securities & Futures Institute	Equity Transfer by Insiders of Listed Companies and Unlisted Public Companies andLegalCompliance	3
		Sep. 27	Taiwan Corporate GovernanceAssociation	Occupational competence of the Board of Directors and the performance evaluationthereof	3
		Sep. 27	Taiwan Corporate GovernanceAssociation	Talks on the principles and cases of ethical corporate management, corporate governance, and corporate social responsibility	3
		Oct. 27	Securities & Futures Institute	2017 Insider Trading and Corporate Social Responsibility Forum	3
Independent Director Independent Director	Te-Yuan Yang	Sep. 27	Taiwan Corporate GovernanceAssociation	Occupational competence of the Board of Directors and the performance evaluationthereof	3
		Sep. 27	Taiwan Corporate Governance Association	Talks on the principles and cases of ethical corporate management, corporate governance, and corporate social responsibility	3

(IV) Information on the Members of the Compensation Committee

Title (Note 1)	Requirem ent Name	Do the Directors have five or more years of work experience and the following professional qualifications?	Do the Directors have five or more years of work experience and the following professional qualifications?	Do the Directors have five or more years of work experience and the following professional qualifications?			Independence	Independence	Independence	(note 2)	(note 2)		Number of other publicly-li sted companie s concurren tly serving as a member of the compensa tion committe e
		Currently serving as an instructor or a higher post in a private or public college or university in the field of business,l aw, finance,ac counting,o r the business sector of the Company	Currently serving as a judge, prosecutor, lawyer, accountant, or other professional practice or technician that must undergo national examinations and specialized license.	Work experien ce necessar y for business administ er, legal affairs, finance, accounti ng, or business sector of the Compan y	1	2	3	4	5	6	7	8
Independen t Director	Chin-Shu Sun	-	V	-	V	V	V	V	V	V	V	V	1
Independen tDirector	Te-Yuan Yang	V	-	-	V	V	V	V	V	V	V	V	0
Independen t Director	Wen-I Chang	-	V	-	V	V	V	V	V	V	V	V	1

Note 1: For title, please identify whether the person is a Director, Independent Director or other.

Note 2: Please tick the boxes below each criterion if a member meets these conditions within two years prior to being elected and during his/her term of service. 

(1) Is not employed by the Company or its affiliated companies.
(2) Is not a Director or Supervisor at the Company or its affiliated companies. (excluding independent directors set up by the Company, its parent company or subsidiaries in compliance of the local regulations).
(3) Is not a shareholder that hold more than 1% of the Company’s total shares or rank among top-ten shareholders, this applies for the Director him/herself, spouse, minor children, or shares held under others’ names.
(4) Is not a spouse, second-degree relative, or direct, blood-related third degree relative of the personnel listed in the first three sub-paragraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings.
(6) Is not a Director, Supervisor, manager, or a shareholder that holds more than 5% of shares at a company or institution that has financial or business exchanges with the Company.
(7) Is not a professional, business owner, partner, director, supervisor, manager, or their spouse at a sole proprietor, partnership, company, or institution that offers business, finance, or accounting services or consultancy for the Company or its affiliated companies.

Not been a person of any conditions defined in Article 30 of The Company Act

Operations of the Compensation Committee

I. There are three members in the Compensation Committee of the Company.
II. Term of the Committee: June 22, 2016 to June 21, 2019. In 2017, the Compensation Committee

held 3 meetings (A), in which the qualification and attendance of the Committee members are stated as follows:

Title	Name	Number of actual attendance (B)	Number of proxy attendance	Rate of actual attendance (%) (Ｂ/Ａ) (Note)	Note
Convener	Chin-Shu Sun	3	0	100%
Member	Wen-I Chang	1	0	100%	Assumed office on May 9,2017
Member	Ching-Hui Hsieh	1	0	100%	Resigned on March 13, 2017
Member	Te-Yuan Yang	3	0	100%
Other required disclosure: I. The Compensation Committee held 3 meeting in 2017: 1. To discuss the year-end bonus and performance bonus. 2. To discuss the allocation of compensation paid to directors and managers. 3. To discuss the pay rise for managers, performance evaluation and compensation system and structures for directors and managers. All the directors of the board voted in favor of the recommendations of the Compensation Committee. II. The Compensation Committee met 3 times in 2017. No records or written statement has been issued by any of the committee members to voice out opposing opinions or reservations to theresolutions.

Note:

(1) When a member of the Compensation Committee resigns before the end of the year, the remark column shall be annotated with the date of resignation. Actual attendance rate (%) shall be calculated based on the number of meetings held by the Compensation Committee and the number of actual attendance during the term of service.

(2) When an election is held for the Compensation Committee before end of the year, members of both the new and old committee shall be listed in separate columns and noted as new, old or reelected members, along with the elected date, in the “Remark” column. The actual attendance rate (%) shall be calculated based on the number of meetings held during the member’s term in the compensation committee and the number of actual attendance of this member.

(V) The company's CSR practices, such as environmental protection, social engagement, social contribution, community service, community welfare, consumer rights, human rights, safety and health, the system and methods used to plan and organize CSR activities and the status of implementation:

Corporate Social Responsibility

Assessed items				Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N		Brief Description (Note 2)
I. Implementing corporate governance (I) Has the company stipulated corporate social responsibility (CSR) policies and systems and reviewed the effectiveness of CSR actions? (II) Has the company provided regular training on CSR topics? (III) Has the company established an exclusively (or concurrently) dedicated unit for promoting CSR? Is the unit empowered by the Board of Directors to implement CSR activities at upper management levels? Does the unit report the progress of such activities to the Board of Directors? (IV) (4) Has the company established a relevant salary and remuneration policy and combined its employee performance assessment system with CSR policies? Has the company established a clear reward and penalty system?	ˇ ˇ ˇ ˇ		I. (I)	Implementing corporate governance Modeled on the business philosophy of “innovation, growth, responsibility and sustainability” and the goal of “profit creation, pursuit of excellence and customer trust” established by the E-United Group, the Company has been dedicated to fulfillment of corporate social responsibility since founding. To fulfill our corporate social responsibility and actively respond to the issues concerning our stakeholders, including investors, competent authority, consumers, employees, suppliers and the community, we put forward the following corporate social responsibility policies: The Company issued its first CSR report in Sep. 2014 (i.e., the Corporate Social Responsibility Report for 2013, prepared in the manner as set in GRI G3.1). Thereafter, Yieh Phui presented its 2014 Corporate Social Responsibility Report in the manner as prescribed in GRI G4.0, wherein the issues concerned by stakeholders were offered with a management guideline and an implementation plan. Material issues in the 2017 Corporate Social Responsibility Report Respects Issues Economic Corporate Governance The Environment Green Operation The Environment Hazardous substance management Social Compliance of government policy and laws and regulations Social Occupational safety and health and employees health		Operations listed in the left column are referenced with Chapter 2 Exercising Corporate Governance of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (I) No significant difference is found between the Company's practices and Article 9 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.
				Respects	Issues
				Economic	Corporate Governance
				The Environment	Green Operation
				The Environment	Hazardous substance management
				Social	Compliance of government policy and laws and regulations
				Social	Occupational safety and health and employees health

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			For information on the Company’s CSR policies and effectiveness of implementation, please refer to the Company’s corporate social responsibility report. (II) Since March, 2010, staff of environmental protection section of Yieh Phui write and issue “Yieh Phui Environmental Protection Report” each month to compile information related to pollution prevention and control, important environmental knowledge and energy saving and carbon reduction to raise the concern of colleagues in Yieh Phui about the environment of the Earth and to make them take adoptable measures to be responsible for the protection of the environment on the Earth. Till 2017, 96 editions of the reports have been issued. To awake staff’s awareness of the importance of health, the Company arranges seminars as follows for staff to face their health problems: 1. Seminar for health; 2. Smoking cessation courses; 3. Weight loss programs; and 4. Influenza vaccination (publicly funded vaccination) etc. In addition, the Company from time to time designates relevant personnel to attend seminars respecting corporate social responsibility and sustainability issues. In August and November respectively, the Company invited professionals from Foundation of Taiwan Industry Service to the Company to carry out an educational training on corporate social responsibility. (III) To implement corporate social responsibility and sustainable business management, we integrate our core competencies into our social welfare activities to promote public welfare. Our achievements have been widely recognized by the society and created business opportunities and competitive for our corporation. The Company set up a Social Responsibility and Sustainable Development Committee chaired by the President as chairman. The Committee was organized with five functional taskforce and a secretariat office. Information on the functions of each taskforce and the responsible unit is further provided below:	Operations listed in the left column are referenced with Chapter 2 Exercising Corporate Governance of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (II) No significant difference is found between the Company's practice and Article 15 and 21 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. (III) No significant difference is found between the Company's practice and Article 7 and 9 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			1. The Corporate Governance Taskforce is responsible for (1) internal control system (2) accounting system (3) operational performance (4) risk management (5) communication with banks (6) compliance; the Finance Division is responsible for coordination of the operations. 2. The Green Energy-saving Taskforce is responsible for energy-saving, water-saving, carbon emission reduction, waste reduction and green process; the Production Division is responsible for coordination of the operations. 3. The Safety and Health Management Taskforce is responsible for environmental safety and health, disaster prevention and control, environmental protection, organization communication and environmental audit and improvements; The Health and Safety Division is responsible for coordination of the operations. 4. The Product Liability Taskforce is responsible for quality assurance, product environmental considerations and design, communication on product-related environmental issue, product safety, technology patents, customer satisfaction and supply chain management; The Technology Division is responsible for coordination of the operations. 5. The Employee and Social Engagement Taskforce is responsible for recruitment, employee training, labor relations, employee care, community engagement and charity events; the Planning Division is responsible for coordination of the operations. 6. The Secretariat office and President Staff’s Office act concurrently to implement CSR policies, track the progress of corporate social responsibility goals/policy implementation and compile the corporate social responsibility report, which shall be forwarded to the Board of Directors for review every year. (IV) The Company’s Compensation Committee discusses the policies for compensations of directors, supervisors and managers. Compensations of employees are set based on the Guidelines for Management of Compensations, Guidelines for Reward and Punishment, Appointment and Promotion Guidelines and Performance Evaluation Guidelines, integrating employee performance evaluation and reward/punishment into the compensation system.	Operations listed in the left column are referenced with Chapter 2 Exercising Corporate Governance of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (III) No significant difference is found between the Company's practice and Article 7 and 9 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. (IV) No significant difference is found between the Company's practice and Article 9 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
II. Developing Sustainable Environment (I) Is the company committed to improving usage efficiency of various resources and utilizing renewable resources with reduced environmental impact? (II) Has the company referred to the nature of its industry to establish a suitable environment management system (EMS)? (III) (3) Is the company concerned with changes to the global climate and how it may affect business activities? Has the company implemented greenhouse gas (GHG) inventory checks and stipulated strategies for reducing energy consumption, carbon emissions, and greenhouse gas production?	ˇ ˇ ˇ		II. Developing Sustainable Environment (I) Since its incorporation in 1988, Yieh Phui Enterprise Co., Ltd. keeps investing in equipment for control of pollution, promoting the use of clean energy, implementing manufacturing processes that prevent pollution, including: 1. RTO (Regenerative Thermal Oxidizer) 2. Waste Acid Recovery Equipment 3. Waste Management 4. Wastewater Recovery and Reuse Processes 5. Using natural gas, a clean fuel, as power source for the various manufacturing processes Yieh Phui Enterprise Co., Ltd. is committed to enhancing the utilization efficiency of the resources. Taking into consideration the impact on the ecology, the Company implements a series of operations to minimize the impact on the environment, including improving manufacturing processes to reduce the consumption of resources and energy, reducing use of hazardous substances, avoiding emission of environmental pollution and waste and handle waste properly, enhancing recyclability and reusability of raw materials and products to maximize sustainability of renewable resources, extending use life of the products to cut down the burden on the environment and upgrading the efficiency of water resources to ensure sustainability of water resources.	Operations listed in the left column are referenced with Chapter III Fostering a Sustainable Environment of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (I) No significant difference is found between Article 12 and 13 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
Y	N	Brief Description (Note 2)
		(II) The Company consumes energy and resources, such as steel, paint, zinc ingot, water, electricity and LNG, to manufacture galvanized and painted steel products, steel structures and lifting machines and facility. The wastewater and gas generated from the manufacturing process meet the effluent standards after they are processed through the wastewater and gas processing facilities. Disposal of industrial waste is commissioned to a certified waste processing company in accordance with environmental protections laws and regulations. Control of noise is conducted through shielding and insulation to achieve the factory noise control standards put forward by the Environmental Protection Administration. From choice of raw materials to control of emission and noise generated during the manufacturing process, the Company has laid out strict control standards to ensure the health of our employees and the environment. Upholding the philosophy of “We only have one Earth”, Yieh Phui Enterprise spares no effort to execute the environmental protection work, and deems itself “Citizen of the Earth” at all times. To implement its commitment that “to fulfill corporate social responsibility; and never compromising over occupational safety and environmental protection”, Yieh Phui obtained ISO 14001 certification as early as in May 1997, the first company in the steel industry in Taiwan to obtain the certification of environment management system. Yieh Phui executes an environmental audit following the ISO 14001 Environmental Management System to identify the significant environmental issues, which is then followed up by a series of environment-related meetings to draft plans and set the goals and tracking targets for environmental management.	Operations listed in the left column are referenced with Chapter III Fostering a Sustainable Environment of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (II) No significant difference is found between the Company's practice and Article 11 and 13 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.
		(III) In producing corresponding goals and target management proposals based on the energy saving policy stipulated each year, Yieh Phui continuously reduces its energy consumption and GHG emission. The goal of reducingGHG emission is achieved bylaunchingan energy	Operations listed in the left column are referenced with Chapter III Fostering a Sustainable Environment of the Corporate Social ResponsibilityBest Practice Principles for

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			management system, and various energy saving projects, including, using inverter controller to manage the ventilation equipment in the production line, replacing with high-efficiency low-power consumption air compressors, substituting with high-efficiency light fixtures, etc. It is expected that Kaohsiung Plant No.1 reduces its carbon emission by 1,527.995 tons per year. 1. In January 2009, the Company introduced the ISO 14064-1 international greenhouse gas inventory system and set up a greenhouse gas inventory and verification management structure. In August 2009, the Company received the Greenhouse Gas Inventory/Verification Statement. 2. Kaohsiung Plant I received the ISO 50001 verification certificate in 2014 and the Pingtung Plant also received the ISO 50001 verification in 2015. In launching an energy management system and setting up energy saving goals, a variety of energy saving projects have been implemented, including, using inverter controller to manage the ventilation equipment in the production line, replacing with high-efficiency low-power consumption air compressors, substituting with high-efficiency light fixtures, etc.	TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (III) No significant difference is found between the Company's practice and Article 17 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
III. Asserting Social Welfare (I) Has the company referred to relevant laws and international human rights instruments to stipulate relevant management policies and procedures? (II) Has the company established employee appeal system and channels, and are employee appeals handled appropriately? (III) Has the company provided employees with safe and healthy work environments as well as regular classes on health and safety? (IV) Has the company established a system to regularly communicate with its employees, and used appropriate means to notify employees of operation changes that may result in material impacts? (V) Has the Company established an effective competency development career training program for employees? (VI) Has the company established relevant policies and systems of appeal for consumer rights for the processes of research and development, purchasing, production, operations, and services? (VII) Is the company compliant with relevant laws and international laws governing the marketing and labeling of its products and services? (VIII) Prior to conducting business with suppliers, has the Company evaluated the suppliers in terms of past records of impacts on the environment and the society? (IX) (9) Do contracts between the company and its major suppliers include terms where the company may terminate or rescind the contract at any time if the said supplier has violated the company's corporate social responsibility policy and has caused significant impact upon the environment and society?	ˇ ˇ ˇ ˇ ˇ ˇ ˇ ˇ ˇ		III. Asserting Social Welfare (I) The Company strives to meet full compliance with labor laws and respect for fundamental principles of labor rights recognized internationally. We implement humane management, respect opinions of each individual and enforce non-discriminatory recruitment policy regardless of sex, race, age, marital and family status. We implement the compensation and employment criteria and provide equal opportunities for training and promotion, striving to build a harmonious workplace. (II) Mechanism and Channel for Lodging Complaint 1. Yieh Phui set up the Guidelines for Handling and Prevention of Sexual Harassment in 2012 and the Sexual Harassment Prevention Committee to protect employees and suppliers and visitors entering the Company for official or private business from sexual harassment in the workplace, striving to eradicate occurrence of workplace sexual harassment and safeguard gender equality. The following channels are available for lodging sexual harassment complaints: (1) E-mail: [email protected]. (2) EIP portal sexual harassment prevention area. (3) Sexual Harassment Prevention Committee and staff. There were no incidents of sexual harassment in 2017. 2. Human Rights Safeguards and Complaints: Yieh Phui observes strict adherence to the domestic and foreign labor and human rights standards, providing all employees with fair treatment and respect. No incidents of human rights violation or discrimination occurred in 2017. A "Say it Out Loud" section has been set up in the Company’s internal website, which facilitates employees to communicate or lodge complaints directly to the Company. A total of 5 complaints was received in 2017. 3. Workplace Violence The Company has set up a Workplace Violence Prevention Plan in 2017, making channels for complaint and reporting of criminal violations available through the Personnel Management Department.	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (I) No significant difference is found between Article 18 and of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. (II) No significant difference is found between the Company's practice and Article 18 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items			Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			(III) Healthy and Safe Workplace 1. Safety and Health Policy With a caring heart for the development of Taiwan, considerations for the safety and health of employees and the vision - “There is only one earth, Yieh Phui made the declaration of “Fulfillment of Social Responsibility and No Compromise on Workplace Safety and Environmental protection”. With ongoing efforts by all employees, the Company was awarded “Model of Occupational Safety and Health” from Industrial Development Bureau, MOEA in 2010, obtained OHSAS 18001 and TOSHMS certificates in 2011, and received “Premium Occupational Safety and Health Certificate” in the 2011 Announcement Conference and Seminar for Optimization of Occupational Safety and Health in Workplace. 2. Safety and Health Activities (1) Occupational Safety Management: A. Reinforcing operation safety a. Introduced the DuPont safety management concept. b. Implemented on-site safety inspection at all levels. c. provided a complete set of personal protection gears in accordance with the needs for different workplaces. d. Launched regular production lines emergency response drills. e. Implemented ergonomic engineering. d. Promoted safety observation. B. Improving equipment safety. C. Raising personnel safety awareness a. Conduct annual on-job education and training and hazard alert drills and promote safety proposal system activities. b. Promote safety culture. c. Yieh Phui Safety Day Campaign. (2) Traffic Safety Management: A. Defensive driving materials and training for motorcycle and car drivers. B. Promoting full-coverage helmets for motorcycle riders. C. Motorcycle safety inspection activities.	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (III) No significant difference is found between the Company's practice and Article 20 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			3. Health management and promotion activities: (3) There is a health science management center within the plant, together with E-Da Hospital under the E-United Group, offering elite class healthy living and overall health management planning services and post-health check-up tracking care. Two times in each week, services are provided by doctors and health management professionals stationed at the plant, or by the company providing group insurance. Health promotion seminars are held from time to time in 2017, e.g., "Tobacco Hazards Forum", "Importance of the Status, Effects, and Screening of Diabetes ", "Healthy Retirement", and “Workplace Stress Relief”, and regularly-opened smoking cessation classes, weight-loss classes and influenza vaccination (government-subsidized vaccine). In participation in the smoking-free family petition card for the "Stop Smoking for Love - One Million Happiness" campaign organized by the Kaohsiung City Health Bureau, the Company and Shin Yang, one of the subsidiaries, received a certification of appreciation from the bureau on Nov. 25, 2015. In addition, for three consecutive years (2015, 2016, 2017), the Company is selected as an outstanding unit in providing smoking cessation service through its active participation in the smoking cessation service contest held by Kaohsiung City Health Bureau. (IV) Comprehensive and Diverse Communication Channels between Employer and Employees 1. Communication platform: Yieh-Phui Enterprise Co., Ltd. holds regular management-employee meetings at least once in every quarter. All of the 9 management-employee proposals (special motions) have been responded and dealt with in 2017, with which the achievement rate is 100%. The “Unity Net”, a special section set up on the Company’s internal website, features articles written by employees in a joyful stroke about the Company’s activities, professional knowledge sharing, hobby and recreation, and inspiring stories, which enriches the reading experience for Yieh Phui staff. There were 4 editions issued during 2017. The “Say it Out Loud" section on the website provides a platform for communication between employees and the Company.	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (3) No significant difference is found between the Company's practice and Article 20 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. (4) No significant difference is found between the Company's practice and Article 22 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			2. Employee Proposal System: Management units value employees’ suggestions; therefore, the Company introduced the "innovative proposal system", which is open to innovative employee proposals and suggestions for shortening the work processes and improving production efficiency in daily operations and reducing costs or increasing profits. 3. Welfare Committee Meeting: The Welfare Committee Meetings are held 4 times each year, and a provisional meeting is held when necessary. Members of the Committee may make forward proposals or suggestions to the Company on matters relating to welfare policies, community activities and various subsidies on behalf of the employees. The proposals or suggestions are made into resolutions and decided by the members of the Committee, providing a channel for communication. 4. Public announcement of changes in the organization and operations: Any changes respecting the organization policy, operation policy, administration articles (procedures, regulations), working hours of Yieh Phui Enterprise Co., Ltd. and E-United Group can be communicated in the first place via email, internal EIP portal website, and the bulletin board. Every year, the President publishes a letter to the employees, providing information on the operations of the current year and the outlook of the coming year. 5. Occupational Safety and Health Committee Meeting: The Corporate Safety and Health Committee and subcommittees meet quarterly, attended by members of the Committee and workers’ representatives. The meeting discusses occupational safety and health policy, occupational safety and health management plans, health and safety education and training plan, workplace environment monitoring plan, monitoring results and improvement measures, health management, occupational disease prevention and health promotion issues and various health and safety proposals.	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (4) No significant difference is found between the Company's practice and Article 22 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			(V) Education, training and career development Yieh Phui expects that all employees will have maximum opportunities for development and learning, personal growth and full extension of potential in the Company. Growth of our employees means thriving and development of the Company’s soft power; therefore the Company pushes forward employee education and training and career development through the competency-specific education and training system. Yieh Phui is expecting a verification of the Talent Quality Management System (TTQS) in 2017. Contents are as follows: 1. New employee education and training targets on conveying the Company's values ??and the status of policy implementation to the new employees to facilitate quick adaptation raise awareness on personal safety. The program includes five training courses: (1) New employee management guidelines and corporate culture. (2) Introduction to labor insurance, health insurance and group insurance. (3) TPM activities and implementation status. (4) Industrial safety and health knowledge. (5) Environmental protection general education. 2. On-job professional education and training provides our employees the needed knowledge and skills to perform their work and assists them to obtaining the needed certification. The training program includes: (1) Function-specific professional training (2) product application engineer (3) Management system/certification system training	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (V) No significant difference is found between the Company's practice and Article 21 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items			Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			3. Occupational Competence Development Education and Training To enhance the competence of the Company’s employees of all levels, this program provides the necessary professional knowledge, skills, knowledge on new technology and industrial trends. Career development education and training courses include five categories: (1) Management competency (2) Professional competency (3) Common competencies (4) General training (5) Personal development Education and training courses are provided to meet the needs of the various levels. For instance, in order to enhance the competence of the various management, the training hours of management at the division level and management at the section level increased by roughly 50% in 2017 as compared to 2016. In addition, staff at the technician level were trained on selling and marketing in order to familiarize them with the value chain both of the Company and of the industry. 4. Function-specific training (VI) Yieh Phui values customers’ feedback and opinions. To safeguard the interests of our customers and fulfill our obligations of customer service, we implemented the following practices: 1. Set up a channel for customer complaint and establish a consumer litigation system or compensation claiming procedure. 2. Conduct regular customer satisfaction survey for internal assessment.	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (V) No significant difference is found between the Company's practice and Article 21 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. (VI) Different from Article 23 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, the Company only has consumer rights protection policy and procedure to lodge complaint for production, operations and service procedures.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
			3. Provide complete after-sale service, including product return, service and recycling. 4. Disclose complete product information and provide standard contract or risk report upon selling. 5. The Technical Services (customer service) Division takes the initiative to visit customers every year, inquire customer feedback, listen to customers’ suggestions, ask about product quality and usage and give customers recommendations on using the product. (VII) The Company has attached labels, large and small, to the products inside and outside the packing to provide the accurate information on the products for customers. Packing and labeling follow a set of strict standards, and the statement of specification of products complies with relevant laws and regulations, as well as international standards. (VIII) The Company has set up a "Procedure for Supplier Evaluation" to ensure that new and existing suppliers of HSF do not use harmful substances. Through implementing management of hazardous substances, Yieh Phui takes actions to prevent potential negative impact on the environment and increase the ratio of of HSF suppliers. (IX) The Company has constructed a clause by which a purchase agreement may be terminated or cancelled at any time if, at the time of procurement, any unethical conduct of the other party is found.	Operations listed in the left column are referenced with Chapter IV Preserving Public Welfare of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (VI) Different from Article 23 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, the Company only has consumer rights protection policy and procedure to lodge complaint for production, operations and service procedures. (VII) No significant difference is found between the Company's practice and Article 24 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. (VIII) Different from Article 26 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, the Company's supplier evaluation only covers impact on the economy and the environment. (IX) No significant difference is found between the Company's practice and Article 26 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.
IV. Strengthening information disclosure (I) Does the company disclose relevant and reliable information relating to CSR on its official website or the Market Observation Post System (MOPS)?	ˇ		IV. Strengthening information disclosure (I) The Company discloses information regarding corporate social responsibility, such as corporate governance, on the external website and MOPS regularly in the form of Corporate Social Responsibility Report.	Operations listed in the left column are referenced with Chapter 5 Enhancing Disclosure of Corporate Social Responsibility Information of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies. Results of actual implementation are listed below: (I) No significant difference is found between the practices of the Company and Article 9 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.
V. Where the company has stipulated its own Best Practices on CSR according to the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, please describe any gaps between the prescribed best practices and actual activities taken by the company: Yieh Phui Enterprise set up the Corporate Social Responsibility Best Practice Principles on November 3, 2016. In general, the implementation status of the Company's corporate social responsibility practices conform to the corporate social responsibility best practice principles, as disclosed in the [Status of corporate governance operations, conformity with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and the cause of nonconformity] section above.
VI. Other important information helpful in understanding CSR operation: Yieh Phui Enterprise discloses the results of implementation of corporate social responsibility practices in the annual financial reports of the respective year and updates the latest news in the Company's external website from time to time, providing an overview on the status of implementation of corporate social responsibility and results to the stakeholders.

Assessed items	Current Operation(Note 1)	Current Operation(Note 1)	Current Operation(Note 1)	Gaps with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and root causes
	Y	N	Brief Description (Note 2)
VII. The Company should specify if the Company's CSR Report has passed the relevant accreditation awarded by any validation agency: None. The Company delegates AFNOR Taiwan to verify its 2017 CSR Report by means of Type 1, Medium Level, AA 1000 AS2008 Accountability Standards.

Note 1: Provide a brief description in the appropriate column, regardless whether yes or no is selected.

Note 2: Companies who have compiled CSR reports may specify the ways to access the CSR and the page numbers of the cited content in place of the above-requested description.

(VI) Your company's corporate integrity practices and actions taken:

Ethical Corporate Management

	Ethical Corporate Management	Ethical Corporate Management	Ethical Corporate Management
Assessed items	CurrentOperation(Note1)			Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and the cause of the saidgaps
	Y	N	Summary
I. Formulating policies and plans for integrity operation (I) Has the company clearly indicated policies and activities related to ethical corporate management in its bylaws and external documents, and are the company’s directors and management actively fulfilling their commitment to corporate policies? (II) Has the company stipulated a plan to forestall unethical conduct? Has the company clearly prescribed procedures, best practices, and disciplinary and appeal systems for violations within the said plan? Is the plan implemented accordingly? (III) Has the company established preventive measures for the items prescribed in Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies or business activities with a higher risk of being involved in an unethical conduct within the company＇s scope of business?	  		I. Formulating policies and plans for integrity operation (I) The Company＇s Board of Directors approved the Yieh Phui Corporate Management Best Practice Principles on January 25, 2016, setting a policy of ethical business practices under the models of honesty, transparency and responsibility and establishing a good corporate governance and risk control mechanism to create a business environment for sustainable development. (II) The Company has set up the Employee Work Rules and Guidelines for Employee Incentives, Reward and Punishment, so as to provide a norm for employees＇ behavior in the Company. (III) Employees involving in financial operations, sales and procurement are required to submit the Employee Guarantee and update the guarantee every three years. Employees who fail to submit the Employee Guarantee or update the document every three years are required to purchase Fidelity Bond Insurance .	(I) No significant difference is found between the Company's practices and Article 5 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. (II) No significant difference is found between the Company's practices and Article 6 and 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. (III) No significant difference is found between the Company's practices and Article 17 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.

Assessed items	CurrentOperation(Note1)	CurrentOperation(Note1)	CurrentOperation(Note1)	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and the cause of the saidgaps
	Y	N	Summary
II. Implementation of ethical business operations (I) Has the company evaluated ethical records of its counterparty? Does the contract signed by the company and its trading counterparty clearly provide terms on ethical conduct? (II) Has the company established an exclusively (or concurrently) dedicated unit for promoting ethical corporate management that answer to the board of directors? Does the said unit regularly report to the board of directors on the state of its activities? (III) Has the company established policies preventing conflict of interests, provided proper channels of appeal, and enforced these policies and channels accordingly? (IV) Has the company established effective accounting systems and internal control systems for enforcing ethical corporate management? Are regular audits carried out by the company＇s internal audit unit or commissioned to a CPA? (V) (5) Does the company regularly organize internal and external training for ethical corporate management?	   		II. Implementation of ethical business operations (I) The Company's Procedure for Procurement Management specifies a clause of termination or cessation for unethical conducts in the the purchase agreement. (II) The Company＇s Ethical Corporate Management Best Practice Team is the dedicated unit (formed by the President Staff＇s Office, the Finance Division and Management Division) set up for operations and supervision of corporate management practices, including drafting, revision, implementation, interpretation, consultation, reporting and filing of ethical corporate business best practice related operating procedures and code of conducts. There were no unethical conducts in 2017. (III) The Company set up the Code of Conduct, by which the directors, supervisors and managers are bound to act in the best interest of the Company, deal with official business in an objective and effective way and refrain their spouse, parents, children or relative within the second-degree of kinship from gaining improper benefits using their positions in the Company. The directors, supervisors and managers shall follow the Procedure for the Board of Directors Meeting when discussing proposal and shall abstain from discussions and voting if found to be in conflict of interests. (IV) The Company set up an accounting system and an internal control system. In addition to audit activities conducted by the commissioned CPA, the Company＇s	(I) No significant difference is found between the Company's practices and Article 9 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. (II) No significant difference is found between the Company's practices and Article 17 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. (III) No significant difference is found between the Company's practices and Article 19 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. (I) No significant difference is found between the Company's practices and Article 20 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. (II) No significant difference is found between the Company's practices and Article 22 of the Ethical

Assessed items	CurrentOperation(Note1)	CurrentOperation(Note1)	CurrentOperation(Note1)	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and the cause of the saidgaps
	Y	N	Summary
			internal audit unit also implements regular audit plan every year. (V) The Management Division provides information on the Company＇s work rules and guidelines for rewards and punishments during new employee education and training courses. Employees involving in the Company＇s financial operations are required to to participate in the ethical business best practice related courses organized by the Taiwan Stock Exchange Corporation to meet compliance with relevant regulations.	Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.
III. Operation of whistle-blowing mechanism in the company (I) Has the company established concrete whistle-blowing and reward systems and accessible whistle-blowing channels? Does the company assign a suitable and dedicated individual for the case being exposed by the whistle-blower? (II) Has the company stipulated standard operating procedures (SOP) and relevant systems of confidentiality for investigating the case being exposed by the whistle-blower? (III) Has the company adopted protection against inappropriate disciplinary actions for the whistle-blower?	 		III. Operation of whistle-blowing mechanism in the company (I) The Company set up the whistle-blower incentive standards in the Employee Work Rules and the Guidelines for Reward and Punishment. In addition to the Company＇s internal network, any named employee and individual not working in the Company may report directly to the corporate governance unit. The corporate governance unit assigns a dedicated personnel to handle the matters. (II) The standard operating procedures (SOP) and relevant systems of confidentiality for investigating the case being exposed by the whistle-blower is under developing. (III) No incident of inappropriate actions against the whistle-blower has occurred in the Company.	Compared with Article 23 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, there is still no standard operating procedures (SOP) and relevant systems of confidentiality for investigating the case being exposed by the whistle-blower.
IV. Strengthening information disclosure (I) Has the company disclosed the contents of its best practices for ethical corporate management and the effectiveness of relevant activities upon its official website or Market Observation Post System (MOPS)?			IV. Strengthening information disclosure (I) The Company＇s Board of Directors approved the Yieh Phui Corporate Management Best Practice Principles on January 25, 2016 and published the content on the Company's public website.	Difference from Article 25 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, the Company has set up the Yieh Phui Corporate Management Best

Assessed items	CurrentOperation(Note1)	CurrentOperation(Note1)	CurrentOperation(Note1)	Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and the cause of the saidgaps
	Y	N	Summary
				Practice Principles, but quantified data arenotyet available.
V. Where the company has stipulated its own best practices on ethical corporate management according to the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe any gaps between the prescribed best practices and actual activities taken by the company: The Company has set up the Yieh Phui Corporate Management Best Practice Principles. In general, the content conforms with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.
VI. Other information helpful to understand the integrity operation of the company: (e.g., the company's amendment of its principles of integrity operation) The Company revised the content of the original work rules based on the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies to make it more completeand conform tothe principles ofethicalpractices.

Note 1: Provide a brief description in the appropriate column, regardless whether yes or no is selected.

(VII) If the Company has set up corporate governance principles and relevant rules, the Company shall disclose methods for inquiry: The Company has set up relevant corporate governance procedures and guidelines, including Rules of Procedure for Shareholders Meetings, Procedure for Board of Directors Meetings, Compensation Committee Charter, Codes of Ethical Conduct, Ethical Corporate Management Best Practice Principles and the Rules Governing the Scope of Powers of Independent Directors. The information can be found on the MOPS; please see the cover of this annual report for the web link.
(VIII) Other important information to facilitate better understanding of the Company's corporate governance activities may be disclosed here:

1. The Company has set up the "Procedures for Handling Material Inside Information," which is made available through the Company's internal website for the directors, managers and all employees.

2. For details on the Company's corporate governance operations, please refer to page 52 of this annual report or visit the MOPS; please see the cover of this annual report for the web link.

(IX) The following information relating to implementation of the internal control system shall be disclosed:

1. The Company's Internal Control Statement

Yieh Phui Enterprise Co., Ltd.
Statement of Internal Control System
Date: Mar. 21, 2018
According to the results from our self-evaluation, the Company shall make the following statements on our internal
control system in 2017:
I.
The Company acknowledges that the establishment, implementation and conservation of the
internal control system are the responsibilities of the Board of Directors and the managers of the
Company. The Company has constructed such system. The objectives of the internal control
system include achieving various objectives in business benefits and efficiency (including
profitability, performance, and protection of assets and safety); ensuring the reliability,
timeliness, transparency, and regulatory compliance of reporting; and providing reasonable
assurance.
II.
The internal control system has inherent constraints, and no matter how comprehensive its design may be, an
effective internal control system is only capable of providing adequate assurance for achieving the
above-mentioned objectives. Moreover, the effectiveness of the internal control system may be altered from
changes in the environment and under different situations. Nevertheless, the Company's internal control
system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response
to any identified deficiencies.
III.
The Company assesses for the effectiveness of the internal control system's design and practices
through the effectiveness of internal control system, as stated in the Protocols and Measures for
the Establishment of Internal Control System in Publicly Listed Companies (hereinafter referred
to as the Protocols). The criteria adopted by the Regulations identify five key components of
managerial internal control: (1) Control Environment;(2) Risk Assessment; (3) Control
Activities; (4) Information and Communication; and (5) Monitoring Activities. Each constituent
element includes a number of categories. Please refer to The Regulations for the aforementioned
categories.
IV.
The Company has evaluated the design and operating effectiveness of its internal control system
according to the aforesaid Regulations.
V.
Based on the above results, the Company believes that the design and implementation of its
internal control systems (including supervision and management of its subsidiaries), as of
December 31, 2017, and understanding the level of goal achievement in regards to operational
benefits and efficiency, as well as whether the reporting is reliable, timely and transparent and
whether it complies with the relevant laws and regulations, is effective and can reasonably assure
the accomplishment of the abovementioned goals.
VI.
This Statement will become an integral part of the Annual Report and the Prospectus of the
Company. Any false hold, concealment, or other illegality in the content made public will entail
legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act. If the
aforementioned content contains illegal matters such as any fraudulent or hidden information, the
Company will be in question of breaching Articles 20, 32, 171, and 174 in the Securities and
Exchange Act and face legal consequences.
VII. The Statement has been agreed by the Company's Board of Directors on March 21, 2018. All of
the 7 directors presented at the meeting approved the content of this statement.
Yieh Phui Enterprise Co., Ltd.
Chairman of the Board: I. S. Lin Signature
President: Lin-Maw Wu Signature

2. Any CPA commissioned to conduct a project review of the ICS shall disclose the CPA ＇ s audit report: None

(X) Any legal penalty enacted upon this Company, any penalty imposed to its personnel by the Company for violation of internal control rules, major fallacies and status of improvements in the most recent year up to the publication date of this report: None

(XI)Significant resolutions made in/by the Shareholders ＇ Meeting and the Board of Directors in the most recent fiscal year up to the date of publication of this Annual Report:

Important resolutions made by the Board of Directors, Shareholders' Meeting and Provisional Meetings in recent years:

(1) Minutes of the Shareholders Meetings: June 22, 2017
(2) Status of implementation of the Shareholders Meeting: June 22, 2017
(3) Minutes of the Board Meeting: June 19, 2017
(4) Minutes of the Board Meeting: August 7, 2017

(1) Minutes of the Shareholders Meetings: June 22, 2017

Yieh Phui Enterprise Co., Ltd.

Minutes of the 2017 Shareholders Meetings:

Time: 09:30 a.m., June 22, 2017

Location: Ziyi Community Center, No. 57, Jinxue Rd., Ziguan Dist., Kaohsiung City

Attendance: Attendance shares of shareholders presented in person totaled 1,221,969,706 shares, which accounted for 71.12% of the Company ＇ s outstanding shares of 1,718,090,576 shares, and thus constitute a quorum for the meeting.

Attendance: Director Lin-Maw Wu

Director Ching-Tsung Huang

Independent Director Sun Chin-Shu
Independent Director: Te-Yuan Yang
Member of Audit Committee Sun Chin-Shu
Member of Audit Committee Te-Yuan Yang
Member of Compensation Committee Sun Chin-Shu
Member of Compensation Committee Te-Yuan Yang

Vice President of the Finance Department Yung-Hsien Chen

Taiyang & Associates Attorneys & Counselors-at-Law Lin Ching-Yang, Lawyer Crowe Horwath (TW) CPAs: Bing-Chang Su, CPA

Chairman: Lin-Maw Wu Minutes: Huang Shu-Hui
I. Meeting commences (As of 9:30 am, the total shares represented by shareholders and proxies reached the statutory threshold).
II. Chairman's Message: The Chairman of the board of directors is unable to attend this Shareholders' Meeting. The Chairman appointed me to preside over this Shareholders' Meeting (hereinafter abbreviated).

III.Report Items

Business Report in 2016 (Page 4 of the meeting manual)
Report on Evaluation on 2016 Financial Statements by the Audit Committee (Refer to page 26 of the meeting manual)
2016 Director Compensation and Employee Bonus Report. (Page 27 of the meeting manual)

IV. Recognition

Proposal No. 1: proposed by the Board

Subject: Recognition of 2015 final accounts.

Note: I. For the Company's annual business report, individual financial statements and

consolidated financial statements, please refer to pages 4-25 of this manual.
II. The above-mentioned individual financial statements and consolidated financial statements have been audited and certified by CPAs Ling-Wen Huang and Jen-Yao Hsieh from Crowe Horwath (TW) CPAs.
III. The above-mentioned individual financial statements and consolidated financial statements have been audited by the Audit Committee.
IV. Forwarded for recognition.

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,165,575,670 voted in favor, 338,685 voted against and 56,055,351 recused from the voting.)

Proposal No. 2: proposed by the Board

Subject: Approve the 2016 Earnings Distribution.

Note: The 2016 distribution of retained earnings is shown in the table below:

Yieh Phui Enterprise Co., Ltd.

PROFIT DISTRIBUTION TABLE

2016

Unit: New Taiwan Dollars (NT$)

Item Amount

Beginning retained earning 608,641,931 Less: Remeasurement of defined benefit plans in retained earnings (76,845,020) Less: the changes in associated companies and joint ventures recognized by the equity method (11,647,538) Less: Changes in equity ownership of subsidiaries (11,205,942) Add: current net income after tax 2,502,004,855 Less: statutory reserve (250,200,486) Earnings available for distribution 2,760,747,800 Less: Distribution of Shareholder Dividends (1,718,090,580) Ending retained earning 1,042,657,220

Chairman of the Board: I. S. Lin President: Lin-Maw Wu Accounting Supervisor: Chien-Hung Lin

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,165,332,754 voted in favor, 573,517 voted against and 56,063,435 recused from the voting.)

V. Discussions

Proposal No. 1: proposed by the Board

Subject: Discussion of the proposal for shareholders ＇ dividends for 2016, wherein cash dividends and stock dividends (i.e., capitalization of earnings) are proposed.

Note: I. To distribute in accordance with the 2016 Earnings Distribution Proposal as approved by the Shareholders ＇ Meeting.

II. To distribute cash dividends totaling NT$ 687,236,230, in which NT$ 0.4 is distributed for each share in accordance with the number of shares stated on the shareholder register on the ex-dividend date; to ask authorization to set up the ex-dividend date by the Board of Directors from the Shareholders ＇ Meeting; to ask full authorization from the Shareholders ＇ Meeting to the Board of Directors in case the dividend rate changes as a result of changes in outstanding shares due to share buy back.

The cash dividends are rounded down to New Taiwan dollar. The sum of the

fraction amount less than 1 New Taiwan dollar is stated as the Company ＇ s other

revenue.

III. To distribute stock dividends of NT$ 1,030,854,350, which is then capitalized as new shares. The proposal is stated as follows:
(I) To capitalize the shareholders ＇ dividend of NT$ 1,030,854,350 into 103,085,435 shares with face value of NT$ 10. The paid-in-capital after such capitalization equals NT$ 18,211,760,110 (1,821,176,011 shares).
(II) The mount of capitalization of shareholders dividends is to be used as the funds for bank loans repayment, future plant extension, purchase of machinery and equipment, or reinvestment in other business.
(III) Every one thousand shares of the aforementioned new shares, calculated based on the number of shares on the shareholders register on the date when the shares are distributed, are awarded with an additional 60 shares unconditionally; to ask full authorization from the Shareholders ＇ Meeting to the Board of Directors in case the dividend rate changes as a result of changes in outstanding shares due to share buy back.
(IV) The sum of fractional share less than 1 share is distributed in cash based on its face value, and the Chairman of the Board is authorized to designated a party to purchase such shares at face value.
(V) Rights and obligations of the new shares are the same as those of the original shares.
(VI)After the issuance of new shares is approved by the competent authority, it is to be proposed to the Shareholders ＇ Meeting for fully authorizing the Board of Directors to determine the date of share offering.

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,164,913,496 voted in favor, 958,260 voted against and 56,097,950 recused from the voting.)

Proposal No. 2: proposed by the Board

Subject: Discussion for revision of the Procedure for Lending and Guarantee.

Note: I. To revise the Procedure for Lending and Guarantee to satisfy the Company’s business needs.

II. Referenced table stating the content of the Procedure for Lending and Guarantee before and after the revision (Please see pages 30 to 31 and pages 32 to 37 of the meeting manual).

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,165,158,577 voted in favor, 720,200 voted against and 56,090,929 recused from the voting.)

Proposal No. 3: proposed by the Board

Subject: Proposal to discuss amendment to the Company's Standard Procedure for Acquisition or Disposal of Assets

Note: I. Revision of the Company's "Procedure for Acquisition and Disposal of Assets" is proposed in response to the Company's needs and in accordance with the the Financial Supervisory Commission Directive No. 1050044504 on Nov. 11, 2016 and No. 1060001296 on Feb. 9, 2017.

II. Referenced table stating the content of the Procedure for Acquisition and Disposal of Assets before and after the revision (Please see pages 38 to 42 and pages 43 to 52 of

the meeting manual.)

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,082,842,564 voted in favor, 83,034,216 voted against and 56,092,926 recused from the voting.)

Proposal No. 4: proposed by the Board

Subject: Subject: To revise the Company's Articles of Association.

Note: I. To revise relative clauses of Articles of Association respecting supervisors in response

to the Company’s business needs and the requirement in Article 14-4 of the Securities and Exchange Act where an audit committee is required to replace the function of supervisors.
II. Referenced table stating the content of the articles before and after the revision (Please see pages 53 to 55 and pages 56 to 65 of the meeting manual).

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,165,523,311 voted in favor, 353,468 voted against and 56,092,927 recused from the voting.)

VI. Matters relating to election

Proposal No. 1: proposed by the Board

Subject: By-election for independent director

Note: I. Since there is a shortfall of 1 independent director, the by-election shall be held according to law on the date when the 2017 Shareholders’ Meeting is convened.
II. The newly elected director shall be in office during the term form June 22, 2017 to June 21, 2019.

III. The candidate list for election of the Company ＇ s independent director was

approved on May 9, 2017 by the Board of Directors. The follows state the

education, experience and shareholdings of the various candidates:

List of Directors Nominated by Shareholders

As per Article 192-1 of The Company Act, list of candidates for directors is as follows:

Serial Number	Account No.	Name	Major academic (work) experience	Number of Shares Held
1	Independent Director	Wen-I Chang	Current job: Member of Compensation Committee of Yieh United Steel Corporation Member of Importers and Exporters Association of Kaohsiung Education: Graduate of Advanced Commerce Tutorial School, FUHWA Senior High School, Kaohsiung City (Qualified from the 1974 Senior Examination for Accounting and Auditing Personnel, Passed the Civil Service Special Examinations Class B for Customs Officers 1976 and Civil Service Special Examinations for Tax Personnel 1976) Experience: Internal revenue agent and section head in Revenue Service Office, Kaohsiung County Revenue assessor, section chief, and inspector in Kaohsiung Branch National Tax Administration of Southern Taiwan Province(NTAS), Ministry of Finance Inspector and auditor in Fengshan Branch, National Taxation Bureau of Kaohsiung,Ministry of Finance	0

Results of the election:

f the election:
Title	Shareholder No.	Shareholder Name	Representative	Number of Shares Held	Number of Elected Votes
Independent Director	Non-shareholder	Wen-I Chang		0	1,160,854,069

VII. Other Agendas

Proposal No. 1: proposed by the Board

Subject: To remove the Non-compete Clause on the Company's Directors.

Note: I. According to Article 209 of the Company Act, A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.

II. To remove the "Non-compete Clause" on the Company's newly elected independent director.

Resolution: passed as proposed.

(The total number of shares with voting rights is 1,221,969,706, in which 1,073,622,780 voted in favor, 91,140,009 voted against and 57,206,917 recused from the voting.)

VIII. Special motion: None

Note: The questions raised by Yun-Hsiang Hsiung (Shareholder Account No. 74878) concern about the operating status of the Company. The Chairman and relevant personnels have fully responded to the questions on time.

IX. Meeting adjourned

(2) Status of implementation of the Shareholders Meeting: June 22, 2017

Implementation of Shareholders' Meeting:

(2)	Status of imp	lementation of the Shareholders Meeting: June 22, 2017 Implementation of Shareholders' Meeting:	lementation of the Shareholders Meeting: June 22, 2017 Implementation of Shareholders' Meeting:	lementation of the Shareholders Meeting: June 22, 2017 Implementation of Shareholders' Meeting:	lementation of the Shareholders Meeting: June 22, 2017 Implementation of Shareholders' Meeting:
Proposal	Subject	Resolution				Status of implementation
Proposal 1 Recognition	Recognition of 2015 final accounts.	(The total number of shares with voting rights is 1,221,969,706, in which 1,165,575,670 voted in favor, 338,685 voted against and 56,055,351 recused from the voting. )				To be implemented based on the content passed in the resolution and disclosed on the Company’s website.
Proposal 2	Approve the 2016 Earnings Distribution.	(The total number of shares with voting rights is 1,221,969,706, in which 1,165,332,754 voted in favor, 573,517 voted against and 56,063,435 recused from the voting.)				To be implemented based on the content passed in the resolution.
Proposal 1 Discussions	Discussion of the proposal for shareholders’ dividends for 2016, wherein cash dividends and stock dividends (i.e., capitalization of earnings) are proposed.	(The total number of shares with voting rights is 1,221,969,706, in which 1,164,913,496 voted in favor, 958,260 voted against and 56,097,950 recused from the voting. )				Cash dividend of NT$ 0.4 is distributed for each share as resolved. The base date for cash dividend distribution is Sep. 1, 2017. The amount had been distributed in full as resolved by the Shareholders’ Meeting on Sep. 29, 2017. Every 1,000 shares of stock dividends are awarded with an additional 60 shares. The changes in the number of shares outstanding had been approved by Department of Commerce of MOEA as stated in MOEA Directive No. 10601132590. The share went for public on Oct. 24,2017.
Proposal 2	Discussion for revision of the Procedure for Lending and Guarantee.	(The total number of shares with voting rights is 1,221,969,706, in which 1,165,158,577 voted in favor, 720,200 voted against and 56,090,929 recused from the voting. )				Announced on June 23, 2017 on MOPS and the Company’s website, and proceeded for implementation according to the revisedprocedures.
Proposal 3	Proposal to discuss amendment to the Company's Standard Procedure for Acquisition or Disposal of Assets	(The total number of shares with voting rights is 1,221,969,706, in which 1,082,842,564 voted in favor, 83,034,216 voted against and 56,092,926 recused from the voting. )				Announced on June 23, 2017 on MOPS and the Company’s website, and proceeded for implementation according to the revised procedures.
Proposal 4	Subject: To revise the Company's Articles of Association.	(The total number of shares with voting rights is 1,221,969,706, in which 1,082,842,564 voted in favor, 83,034,216 voted against and 56,092,926 recused from the voting. )				MOEA approved the registration on July 12, 2017 and the result was disclosed on the Company’s website.
Proposal 1 Matters relating to election	Proposal for by-election of an independent director.		Results	of the election:		MOEA approved the registration on July 12, 2017 and the result was disclosed on the Company’s website.
		Title	Shareholder No.	Shareholder Name	Representati ve
		Independent Director	Non-shareholder	Wen-I Chang	-

Proposal 1 Other Agendas	To remove the Non-compete Clause on the Company's Directors.	(The total number of shares with voting rights is 1,221,969,706, in which 1,073,622,780 voted in favor, 91,140,009 voted against and 57,206,917 recused from the voting. )				To be implemented based on the content passed in the resolution.

(3) Minutes of the Board Meeting: June 19, 2017

Yieh Phui Enterprise Co., Ltd.

The 5th Board of Directors Meeting 2017 (regular)

Time: 02:30 p.m., June 19, 2017

Location: Meeting Room, 10F of E-United Group Headquarters

Attendance: The Chairman attended the meeting in person with all 6 directors present.

Attendants: Kuo Chiao Investment & Development Co. Ltd Representative: I. S. Lin (Chairperson)

Kuo Chiao Investment & Development Co. Ltd Representative: Lin-Maw Wu (Director) Kuo Chiao Investment & Development Co. Ltd Representative: Liang Ping-Yung (Director) Kuo Chiao Investment & Development Co. Ltd Representative: Huang Ching-Tsung (Director) Independent Director: Sun Chin-Shu Independent Director: Te-Yuan Yang

Attendant: Auditing Manager: Yu-Chin Lu

Chairman: I. S. Lin Minutes taker: Yung-Hsien Chen

I. Reports:
Minutes of last meeting and implementation status. (See Appendix I for meeting minutes of the Board Meeting on May 9, 2017, and the implementation thereof.)
Significant financial report. (See Appendix II)
Internal audit report. (See Appendix III)
Other important report items:
- Between last Board Meeting and June 18, 2017, the Company hadn ＇ t engaged in any transaction of forward exchange derivatives or currency swaps.

II. Discussions:

Proposal No. 1: Propose to discuss the Company ＇ s 2017 Corporate Social

Responsibility Report

Note: I. The Financial Supervisory Commission requires listed companies to compile their Corporate Social Responsibility Report, to declare such report to it before June 30 every year, and to place the report on the Company ＇ s website. In addition, Chapter 2 of the Company ＇ s Corporate Social Responsibility Best Practice Principles aims to fully implement corporate governance, of which Article 1 states that the Board of Directors shall exercise due care of a good administrator to supervise the Company in achieving its corporate social responsibility goals, and to review and improve the performance of implementation regularly so as to ensure the implementation of its corporate social responsibility.
II. The implementation of the Company ＇ s corporate social responsibility in 2017 has been incorporated into the 2016 Corporate Social Responsibility Report. Please see appendix IV for details.

Resolution: All directors present voted in favor.

＇ “ Proposal No. 2: Discussion of amendments to the Company s Procedures for

Self-inspection of the Internal Control System ＂

Note: I. Article 22 of the Regulations Governing Establishment of Internal Control Systems by Public Companies requires: A public company shall conduct a self-assessment on its internal control system, both at general level and operation level, at least once every year, so as to assist the Board of Directors and the President in evaluating the overall effectiveness of the internal control system, and to provide a basis for the Statement of Internal Control System.
II. For 20 years since 1998, the Company has been conducting self-assessment on the

internal control system at the general level at least once a year, and at the operation level once every half year.

III. Since the internal control system and organization operation are rather stable and mature, the Company intends to conduct the operation-level self-assessment once a year, instead of once every half year, in a hope to reduce relevant costs of labor and operation.
IV. Please see appendix V for the reference table of the Procedures for Self-inspection of the Internal Control System before and after revision.
V. The proposal has been discussed and approved by the Audit Committee and forwarded to the Board for final resolution.
Resolution: All directors present voted in favor.

Proposal No. 3: The Company provides a guarantee of US$5 million for its subsidiary Yieh Phui (Hong Kong) Holdings Limited.

Note: I. Yieh Phui (Hong Kong) Holdings Limited, the subsidiary, renews with Kaohsiung Branch, Yuanta Bank its short-term general credit limit of US$ 5 million, for which the Company provides a guarantee of US$ 5 million.
II. Accumulated guarantee for Yieh Phui (Hong Kong) Holdings Limited is US$ 132 million.
III. The proposal has been discussed and approved by the Audit Committee and forwarded to the Board for final resolution.

Resolution: All directors present voted in favor.

Proposal No. 4: Proposal for the Company ＇ s guarantee of NT$ 300 million for Shin Yang Steel Co., Ltd. (Shin Yang Co. hereinafter)

Note: I. Shin Yang Co. renews with Metropolitan Branch, Mega International Commercial Bank its short term credit facilities of NT$ 300 million, for which the Company provides a guarantee of NT$ 300 million.
II. Accumulated endorsement of guarantee for Shin Yang is NT$ 1,886 million.
III. The proposal has been discussed and approved by the Audit Committee and forwarded to the Board for final resolution.

Resolution: All directors present voted in favor.

Proposal No. 5: Discussion of the Company ＇ s intention to engage in transaction of financial derivatives.

Note: I. For business purposes, the Company intends to engage in financial derivative transactions respecting forward exchange rates and currency swaps. In the coming three monthes, the Company will conduct transactions of this kind of up to US$ 60 million, and hence proposes for authorizing the Chairman of the Board to sell and purchase in installments when he/she deems exchange rate and interest rate appropriate. Such transactions shall be reported to the upcoming Board of Directors when completed.
II. The proposal has been discussed and approved by the Audit Committee and forward to the Board for final resolution.

Resolution: All directors present voted in favor.

Meeting adjourned

III. Motion: no

(4) Minutes of the Board Meeting: August 7, 2017

Yieh Phui Enterprise Co., Ltd.

Minutes of the 7th Board of Directors Meeting 2017 (regular)

Time: 11:25 a.m., August 7, 2017

Location: Meeting Room, 10F of E-United Group Headquarters

Attendance: The Chairman attended the meeting in person with all 7 directors present.

Attendants: Kuo Chiao Investment & Development Co. Ltd Representative: I. S. Lin (Chairperson)

Kuo Chiao Investment & Development Co. Ltd Representative: Lin-Maw Wu (Director) Kuo Chiao Investment & Development Co. Ltd Representative: Liang Ping-Yung (Director) Kuo Chiao Investment & Development Co. Ltd Representative: Huang Ching-Tsung (Director) Independent Director: Sun Chin-Shu Independent Director: Te-Yuan Yang Independent Director: Wen-I Chang

Attendant: Crowe Horwath (TW) CPAs Bing-Chang Su, CPA Auditing Manager: Yu-Chin Lu

Chairman: I. S. Lin Minutes taker: Yung-Hsien Chen

I. Report items:

Minutes of last meeting and implementation status. (See Appendix I for meeting minutes of the Board Meeting on July 5, 2017, and the implementation thereof.)
Significant financial report. (See Appendix II)
Internal audit report. (See Appendix III)
Other important report items:
(1) The Company has prepared its consolidated financial statements for the 2nd quarter of 2017.
- The above financial statements and the audit report verified by CPAs Ling-Wen Huang and Jen-Yao Hsieh from Crowe Horwath (TW) CPAs are attached for reference (please refer to Appendix IV). The CPAs intend to issue retain-able review reports.

The above financial statements have been approved by the Audit Committee through a discussion.

(2) Between last Board Meeting and August 6, 2017, the Company hadn’t engaged in any transaction of forward exchange derivatives or currency swaps.

II. Discussions:

Proposal No. 1: Discussing the base date for cash dividends distributed.

Note: I. Cash dividends amounting to NT$ 687,236,230 as resolved by the 2017 Shareholders’ Meeting is to be distributed in accordance with the shareholdings prescribed on the shareholder register on the dividend distribution date, with NT$ 0.4 for every share.

II. To fix the base date of dividend distribution o Sep. 1, 2017 as authorized by the Shareholders’ Meeting.
III. To set the during from August 28, 2017 to Sep.1, 2017 on which transfer of shares will be suspended.

IV. The cash dividends are expected to be distributed starting on Sep. 29, 2017.

Resolution: All directors present voted in favor.

Proposal No. 2: To discuss the base date for capital increase resulting from capitalization of stock dividends.

Note: I. Stock dividends to be distributed amounting to NT$ 103,085,435 as resolved by the 2017 Shareholders’ Meeting, representing 103,085,435 shares of which the face value is NT$

10, are to be recapitalized into issuance of new shares. Every 1,000 shares are awarded with an additional 60 shares based on the shareholdings stated on the shareholder register on the base date for stock dividends distribution. The sum of fractional share less than 1 share is distributed in cash based on its face value, and the Chairman of the Board is authorized to designated a party to purchase such shares at face value.

II. The aforementioned capitalization of earnings into new shares has been reported and effected by the Financial Supervisory Commission on July 25, 2017.
III. To fix the base date for capital increase on Sep. 1, 2017 as authorized by the Shareholders’ Meeting.
IV. To set the during from August 28, 2017 to Sep.1, 2017 on which transfer of shares will be suspended.
V. Rights and obligations of the new shares are the same as those of the original shares.
VI. According to Article 10-4 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the new shares shall be delivered by book-entry transfer in scripless form.
VII. To authorize the Chairman of the Board to be fully in charge of other matters relating to the capital increase.

Resolution: All directors present voted in favor.

Proposal No. 3: Discussion of revision of the Company’s “Internal Control System”

Note: I. The Procedure for Acquisition and Disposal of Assets and the Procedure for Lending and Guarantee as approved by the shareholders meeting on June 22, 2017, and the revision as required of the partial clauses in General Administration and Investment Circulation in the Company’s Internal Control System (see Appendix V for details).
II. The proposal has been discussed and approved by the Audit Committee and forward to the Board for final resolution.

Resolution: All directors present voted in favor.

Proposal No. 4: Proposal for the Company’s guarantee of NT$ 110 million for Shin Yang Steel Co., Ltd. (Shin Yang Co. hereinafter).
Note: I. Shin Yang Co. renews with Qixian Branch, Shin Kong Bank its short term credit facilities of NT$ 100 million, for which the Company provides a guarantee of NT$ 110 million.
II. Accumulated endorsement of guarantee for Shin Yang is NT$ 1,886 million.
III. The proposal has been discussed and approved by the Audit Committee and forwarded to the Board for final resolution.

Resolution: All directors present voted in favor.

Proposal No. 5: Proposal for the Company’s guarantee of NT$ 180 million for Shin Yang Steel Co., Ltd. (Shin Yang Co. hereinafter).

Note: I. Shin Yang Co. renews with Lingya Branch, Taishin International Bank its short term credit facilities of NT$ 180 million, for which the Company provides a guarantee of NT$ 180 million.
II. Accumulated endorsement of guarantee for Shin Yang is NT$ 1,886 million.
III. The proposal has been discussed and approved by the Audit Committee and forwarded to the Board for final resolution.

Resolution: All directors present voted in favor.

Proposal No. 6: Discussion of the Company’s intention to engage in transaction of financial derivatives.

Note: I. For business purposes, the Company intends to engage in financial derivative transactions respecting forward exchange rates and currency swaps. In the coming three monthes, the Company will conduct transactions of this kind of up to US$ 60 million, and hence proposes for authorizing the Chairman of the Board to sell and purchase in installments when he/she deems exchange rate and interest rate appropriate. Such transactions shall be reported to the upcoming Board of Directors when completed.
II. The proposal has been discussed and approved by the Audit Committee and forward to the Board for final resolution.

Resolution: All directors present voted in favor.

III. Motion: None

Meeting adjourned

(XII)Major contents of any dissenting opinions on record or stated in a written statement made by Directors or Supervisors regarding key resolutions of the Directors ＇ Meeting in the most recent year up to the publication date of this report: None
(XIII) In the most recent fiscal year and as of the date of publication of the Annual Report, a summary of the resignation and dismissal of the Company personnels including chairman, president, accounting managers, finance managers, internal auditing managers and R&D managers: None

V. Information on the CPA Expenses

Accountant Fees by Range (Please tick a range or fill in the amount)

Accounting Firm	Name	of CPA	Auditing Period	Remarks
Crowe Horwath (TW) CPAs	Ling-Wen Huang	Jen-Yao Hsieh	Jan. 1, 2017 - Dec. 31, 2017

Note: Where this Company replaces the CPA or accounting firm, please list the audit periods of the former and succeeding CPAs or firms and the reason for the replacement in the remark column.

Unit: In thousands of NT$

Category of Fees Interval of the amount	Category of Fees Interval of the amount	Audit Fees	Non-Audit Fees	Total
1	Less than 2,000 thousand NTD			578
2	2,000 thousand (including) to 4,000 thousand NTD
3	4,000 thousand (including) to 6,000 thousand NTD			4,480
4	6,000 thousand (including) to 8,000 thousand NTD
5	8,000 thousand (including) to 10,000 thousand NTD
6	Over 10,000 thousand (including)

Information on the CPA’s professional charge

Unit: In thousands of NT$

Name of Accounting Firm	Name of the accountants	Audit Fees		Non-Audit Fees	Non-Audit Fees	Non-Audit Fees		Auditing period	Remarks
			System design	Business registration	Human resource	Misc. (Note 2)	Subtotal
Crowe Horwath (TW) CPAs	Ling-Wen Huang	4,480	0	4	0	574	578	Jan 1, 2017 ~ Dec. 31, 2017	Review of Transfer Pricing Report for NT$ 400 thousand, Letter of Auditor's Opinion for NT$ 50 thousand, four major statements for NT$ 50 thousand, capitalization of earnings for NT$ 40 thousand, and other fees for NT$ 34 thousand.
	Jen-Yao Hsieh

Note 1: Where this Company replaces the CPA or accounting firm, the auditing periods of the former and successor CPA or firm shall be annotated separately with the reason for replacement noted. The accounting and non-accounting fees paid to the former and successor CPA or firm shall also be disclosed.

Note 2: Non-audit fees shall be annotated separately in various service items. If the Others column in non-audit fees reaches 25% of the total non-audit fees, the service details should be listed in the Remarks column.

VI. Information on Switching CPA: Not applicable.

VII. The Company's Chairman, President, or Managers of Finance or Accounting Who Have Worked in the Firm of the CPA(s) or Its Affiliates within the Latest Fiscal Year None

VIII. Transfer or Pledge of Shares by the Company's Directors, Executive Officers and Stockholders with More Than 10% of the Company's Shares

1. Changes in shareholdings of directors, managers and primary shareholders:

Title	Name	2017	2017	As of March 31 of the current year	As of March 31 of the current year
		Number of Shares Held Increase (decrease)	Increase (decrease) in equity pledges Increase (decrease)	Number of Shares Held Increase (decrease)	Increase (decrease) in equity pledges Increase (decrease)
Director	Kuo Chiao Investment & Development Co.,Ltd.	3,333,440	－	－	－
Chairman	I. S. Lin	8,633	－	－	－
Director	Lin-Maw Wu	7,487	－	－	－
Director	Ping-YongLiang	2,483	－	－	－
Manager	Tien-Chi Chang	8,726	－	－	－
Manager	Hsien-TungLiu	-108,810	－	－	－
Manager	Yung-FangChang	9,646	－	－	－
Manager	Sen-LongChen	1,149	－	－	－
Manager	Yung-Hsien Chen	2,349	－	－	－
Manager	Wei-ChengChen	18	－	－	－
Manager	Kuo-Lin Yang	91	－	－	－
Manager	Chen-Wu Chang	3	－	－	－
Manager	Chang-Hsin Ming	270	－	－	－
Manager	Yao-HsingChien	84	－	－	－
Manager	Wen-Pin Lin	5	－	－	－
Manager	Chi-Chen Li	44	－	－	－
Manager	Cheng-FengWu	52	－	－	－
Manager	Jung-Chin Chuang	2,365	－	－	－
Manager	Chung-Hsin Wu	293	－	－	－
Manager	Chiu-Lin Pan	2,361	－	－	－
Manager	Wei-ChengChen	1,828	－	－	－
Manager	Wen-ChengPan	310	－	－	－
Manager	Chung-Chan Chiang	7	－	－	－
Manager	Wen-ChungTian	73,096	－	－	－
Manager	Wen-I Weng	62,587	－	－	－
Manager	Ming-Chia Tien	(24,398)	－	－	－
Manager	Yang-ChengLan	(23,143)	－	－	－
Manager	Wen-Chao Huang	(39,754)	－	－	－
Major Shareholder	Wei Chiao Investment Development Co.,Ltd	11,083,669	(13,315,869)	－	6,500,000
Major Shareholder	Yieh United Steel Corporation	16,276,701	(102,000,000)	－	4,500,000
Shares held in the names of other persons	Long Yuan Investment and Development Co., Ltd.	607,217	－	－	－

Title	Name	2017	2017	As of March 31 of the current year	As of March 31 of the current year
		Number of Shares Held Increase (decrease)	Increase (decrease) in equity pledges Increase (decrease)	Number of Shares Held Increase (decrease)	Increase (decrease) in equity pledges Increase (decrease)
Shares held in the names of other persons	Rong Feng Investment and Development Co., Ltd	302,973	－	－	－
Shares held in the names of other persons	Chin Chun Investment and Development Co., Ltd	454,415	－	－	－
Shares held in the names of other persons	Chi Chang Enterprise Co., Ltd	72,998	－	－	－
Shares held in the names of other persons	Chao Ying Co., Ltd.	135,343	－	－	－
Shares held in the names of other persons	Hsin Pang Co., Ltd.	132,447	－	－	－
Shares held in the names of other persons	Li Hui Development Co., Ltd	4,281,772	(20,000,000)	－	－

Note: Increase in the number of shares held by Wen-I Weng and Wen-Chung Tien have been transferred

in from the employee share trust

Note: The share increment is the shares distributed from earnings (in which Hsien-Tung Liu, Ming-Chia Tien, Yang-Cheng Lan and Wen-Chao Huang sells a portion of Yieh Phui ＇ s shares.)

2. Equity Transfer Information: Not applicable.

3. Equity pledge information: Not applicable.

IX. Information on the Top 10 Holders of the Company's Shares Who Are Identified as Related Parties, Spouse or Relative within Second-Degree of Kinship:

Relationship information between 10 largest shareholders

Base date for ex-right and ex-dividend: September 1, 2017

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
(1) Yieh United Co., Ltd. Representative: I. S. Lin	287,555,051	15.79%	─	─	105,790,976	5.81%	Wei Chiao Investment Development Co., Ltd E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co., Ltd.	Chairman is the same person.
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its director is the Chairman of Yieh United.
							Ta Ching Motor Industrial Co. Ltd.	─

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
(2) Wei Chiao Investment Development Co., Ltd Representative: I. S. Lin	195,811,491	10.75%	─	─	─	─	Yieh United Steel Corporation E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co., Ltd.	Chairman is the same person.
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its director is the Chairman of Wei Chiao
							Ta Ching Motor Industrial Co. Ltd.	─
(3) Li Hui Development Co., Ltd. Representative: Huang-Tsai Yeh	75,644,643	4.15%	─	─	─	─	E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co., Ltd. Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd	Its chairman is a director of Li Hui
							Kuo Chiao Investment and Development Co., Ltd Ta Ching Motor Industrial Co. Ltd.	─

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
(4) E-Da Hospital Representative: I. S. Lin	60,430,377	3.32%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co., Ltd.	Chairman is the same person.
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its director is the Chairman of E-Da Hospital
							Ta Ching Motor Industrial Co. Ltd.	─
(5) Kuo Chiao Investment and Development Co., Ltd Representative: He-Hsing Lai,	58,890,774	3.23%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co.,Ltd.	Its director is the Chairman of Kuo Chiao
							Ta Ching Motor Industrial Co. Ltd.	Its chairman of the board is the supervisor of Kuo Chiao

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
							Li Hui Development Co., Ltd	─
(6) Wei Hong Investment and Development Co., Ltd. Representative: I. S. Lin	53,273,759	2.93%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co., Ltd.	Chairman is the same person.
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its director is the Chairman of Wei Hung
							Ta Ching Motor Industrial Co. Ltd.	Its director is the Chairman of Wei Hung
(7) Wei Chiao Investment Development Co., Ltd Representative: Tien-Chi Chang	49,686,440	2.73%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Lian Shuo Investment Development Co., Ltd Wei Hong Investment and Development Co., Ltd. Chi Yi Investment Co., Ltd. Hsing Lung Investment & Development Co., Ltd Li Hui Development Co., Ltd	─

100

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
							Kuo Chiao Investment and Development Co., Ltd	Its chairman of the board is the supervisor of Ta ChingMotors
(8) Hsing Lung Investment & Development Co., Ltd Representative: I. S. Lin	46,090,039	2.53%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Wei Hong Investment and Development Co., Ltd. Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co., Ltd.	Chairman is the same person.
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its directors is the Chairman of Hsing-Lung
							Ta Ching Motor Industrial Co. Ltd.	Its directors is the supervisor of HsingLung
(9) Lian Shuo Investment Development Co., Ltd Representative: I. S. Lin	44,154,024	2.42%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Chi Yi Investment Co., Ltd.	Chairman is the same person.

101

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its director is the Chairman of Lian Shuo
							Ta Ching Motor Industrial Co. Ltd.	─
(10) Chi Yi Investment Co., Ltd. Representative: I. S. Lin	40,169,818	2.21%	─	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd	Chairman is the same person.
							Kuo Chiao Investment and Development Co., Ltd Li Hui Development Co., Ltd	Its directors is the Chairman of Chi Yi
							Ta Ching Motor Industrial Co. Ltd.	Its Chairman is the director of Chi Yi

102

Name (Note 1)	Shares Held Personally when elected	Shares Held Personally when elected	Shares held under spouse or minor children's names	Shares held under spouse or minor children's names	Shares held in others' names	Shares held in others' names	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)	Alias or name and relationship of the top 10 shareholders who are defined by the Statement of Financial Accounting Standard No.6 to be related persons or spouse and relatives within the second-degree of kinship (Note 3)
	Shares	Percentage of Shares	Shares	Percentage of Shares	Shares	Percentage of Shares	Type	Relationship
(11) I. S. Lin	152,521	0.00%	49,944	─	─	─	Yieh United Steel Corporation Wei Chiao Investment Development Co., Ltd E-Da Hospital Wei Hong Investment and Development Co., Ltd. Hsing Lung Investment & Development Co., Ltd Lian Shuo Investment Development Co., Ltd Chi Yi Investment Co.,Ltd.	Chairman is the same person.
(12) Huang-Tsai Ye	134	0.00%	─	─	─	─	Li Hui Development Co., Ltd	Chairman is the sameperson.
(13) Tien-Chi Chang	154,172	0.00%	─	─	─	─	Ta Ching Motor Industrial Co. Ltd.	Chairman is the sameperson.
(14) He-Hsing Lai	0	0.00%	─	─	─	─	Kuo Chiao Investment and Development Co., Ltd	Chairman is the same person.

Note 1: Please separately identify the names of corporate shareholders and their respective representatives within substantial shareholders.

Note 2: The calculation of shareholding ratio should separately indicate percentage of shares held under the person ＇ s own identity, under spouse, minor children, and others ＇ identities.

Note 3: The relationships between the shareholders listed above, including legal persons and natural persons, shall be disclosed.

103

X. Information on the Number of Shares of the Company Invested by the Company, any of the Company’s Directors and Supervisors and Executive Officers or a Company Directly or Indirectly Controlled by the Company and Consolidated Percentage of Shareholding:

Consolidated shareholding percentage

December 31, 2017

Unit: Shares: %

					December 31, 2017 Unit: Shares: %	December 31, 2017 Unit: Shares: %
Investment (Note)	Investments by the Company		Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses		Comprehensive Investment
	Shares	Shareholding Percentage	Shares	Shareholding Percentage	Shares	Shareholding Percentage
GOOD HONOR HOLDINGS LTD.	46,400	100.00%	0	0.00%	46,400	100.00%
Yieh Phui (Hong Kong) Holdings Limited	233,500,000	100.00%	0	0.00%	233,500,000	100.00%
WORTHING HONOR HOLDINGS LTD	100,000	100.00%	0	0.00%	100,000	100.00%
Golden Developments Holdings Ltd.	100,000	100.00%	0	0.00%	100,000	100.00%
Shin PhuiSteelCo.,Ltd.:	31,246,434	100.00%	0	0.00%	31,246,434	100.00%
Shin Yang SteelCo.,Ltd.	87,000,000	100.00%	0	0.00%	87,000,000	100.00%
Sin Bang Investment & Development Co.,Ltd.	22,312,500	100.00%	0	0.00%	22,312,500	100.00%
HSING JUI INVESTMENT LIMITED	5,000	100.00%	0	0.00%	5,000	100.00%
CHAMPION LOGISTIC INC. (SAMOA)	57,000,000	97.44%	1,500,000	2.56%	58,500,000	100.00%
Gen-Wan TechnologyCorp	2,447,241	86.99%	635	0.02%	2,447,876	87.01%
EMMT Systems Corporation	28,650,599	77.54%	2,763,446	7.48%	31,414,045	85.02%
Yieh HsingEnterprise Co.,Ltd.	299,458,386	56.43%	172,600	0.03%	299,630,986	56.46%
Da Yao Engineering Consultation Co.,Ltd.	980,000	49.00%	19,900	1.00%	999,900	50.00%
E-United JapanCo.,Ltd.	470	47.00%	0	0.00%	470	47.00%
Kuo ChangEnterprise Co.,Ltd.	96,739,408	99.04%	0	0.00%	96,739,408	99.04%
United Brightening Development Corp.	144,859,883	95.56%	0	0.00%	144,859,883	95.56%
ChengShin SecurityCo.,Ltd.	1,400,000	35.00%	400,000	10.00%	1,800,000	45.00%
Eliter International Corp.	283,583,868	32.84%	199,342,504	23.09%	482,926,372	55.93%
Cheng Shin Apartment Building Management and Maintenance Co.,Ltd	319,998	32.00%	75,000	7.50%	394,998	39.50%
Synn Industrial Co.,Ltd.	45,975,000	30.00%	0	0.00%	45,975,000	30.00%
TYCOONS STEEL INTERNATIONALCO.,LTD.	14,700,000	28.27%	34,300,000	65.96%	49,000,000	94.23%
E-Da DevelopmentCo.,Ltd	186,865,605	28.44%	46,752,523	7.12%	233,618,128	35.56%
Yieh Mau Corporation	45,074,920	23.00%	6,050	0.00%	45,080,970	23.00%
ASIAZONECO.,LTD.	15,090,000	32.80%	0	0.00%	15,090,000	32.80%
E-Da Cultural and Creative Co., Ltd.	3,800,000	19.00%	0	0.00%	3,800,000	19.00%
E-Da Tour Bus Co.,Ltd.	950,000	19.00%	20,000	0.40%	970,000	19.40%
E-Da Bus Co.,Ltd.	3,608,618	17.09%	20,000	0.09%	3,628,618	17.18%
Skylark Hot Spring & Resort Corp.	1,170,000	14.63%	2,000,000	25.00%	3,170,000	39.63%

104

Investment (Note)	Investments by the Company	Investments by the Company	Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses	Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses	Comprehensive Investment	Comprehensive Investment
	Shares	Shareholding Percentage	Shares	Shareholding Percentage	Shares	Shareholding Percentage
Tang Eng Iron Works Co., Ltd.	39,553,000	11.30%	70,000,000	20.00%	109,553,000	31.30%
Hong Yuh Assets Management Co.,Ltd.	80,000,000	80.00%	0	0.00%	80,000,000	80.00%
LIANSO(H.K)CO.,LIMITED	10,160,000	80.00%	0	0.00%	10,160,000	80.00%
E-Da Leisure Co.,Ltd.	7,410,000	19.00%	0	0.00%	7,410,000	19.00%
Li Hui DevelopmentCo.,Ltd	61,001,200	44.56%	0	0.00%	61,001,200	44.56%
ChiChangEnterprise Co.,Ltd	1,008,990	45.00%	0	0.00%	1,008,990	45.00%
YiehUnited SteelCorporation	645,434,515	24.63%	131,313,077	5.01%	776,747,592	29.64%
E-DaVisual Effects Co.,Ltd.	1,470,000	49.00%	0	0.00%	1,470,000	49.00%
E-Da Health Biotechnology Co., Ltd.	380,000	19.00%	380,000	19.00%	760,000	38.00%
APPLIED WIRELESS INDENTIFICATION GROUP,INC.	0	0.00%	40,488,461	91.47%	40,488,461	91.47%
Groupco TechnologyInc.	0	0.00%	8,330,000	92.50%	8,330,000	92.50%
AWID Asia Co.,Ltd.	0	0.00%	3,030,000	100.00%	3,030,000	100.00%
AWID Sanghai Co.,Ltd.	0	0.00%	0	100.00%	0	100.00%
AWID Changshou Co.,Ltd.	0	0.00%	0	100.00%	0	100.00%
Yieh Phui (China) Technomaterial Co.,Ltd.	0	0.00%	0	100.00%	0	100.00%
Changshou ChangHuei Trading Co.	0	0.00%	0	100.00%	0	100.00%
Tianjin Lianfa Precision Steel Corporation	0	0.00%	0	100.00%	0	100.00%
I-Hwa InternationalCo.,Ltd.	0	0.00%	420,000	70.00%	420,000	70.00%
PT. E-UNITED FERRO INDONESIA(EFI)	0	0.00%	24,195,000	100.00%	24,195,000	100.00%
PT. YIEH FERRO INDONESIA(YFI)	0	0.00%	500,000	100.00%	500,000	100.00%
PT. GENBA INDO RESOURCES(GIR)	0	0.00%	0	75.00%	0	75.00%
Chao Ying Investment and DevelopmentCo.,Ltd	0	0.00%	30,400,000	100.00%	30,400,000	100.00%
Kingsgarden International Co., Ltd.	0	0.00%	215,000,000	100.00%	215,000,000	100.00%
Great Emperor Hotel CO.,LTD.	0	0.00%	210,000,000	100.00%	210,000,000	100.00%
GUANG LIAN STEEL (VIET NAM) CO.,LTD	0	0.00%	44,000,000	100.00%	44,000,000	100.00%

Note: Investee of the Company under equity method

105

Chapter 4Funding Status

I. Capital and Shares

(I) Source of Share Capital

Unit: In thousands of NT$; In thousands of shares

Year and month	Issued Price	Authorized Capital	Authorized Capital	Paid-in capital	Paid-in capital		Note	Note
		Shares	Amount	Shares	Amount	Sources of capital	Settlement of payment for shares with assets other than cash	Others
1995.05	10	600,000	6,000,000	339,422	3,394,220	Capitalization of earnings 950,227	None	May 10, 1995 TDDC (1) No. 27765
1996.04	10	600,000	6,000,000	424,278	4,242,780	Capitalization of earnings 848,556	None	Mar. 3, 1996 TDDC (1) No. 21718
1997.01	10	600,000	6,000,000	484,278	4,842,780	Issuance of common stocks 600,000	None	Oct. 22, 1996 TDDC (1) No. 59340
1997.06	10	600,000	6,000,000	508,492	5,084,920	Capitalization of earnings 242,139	None	May 30, 1997 TDDC (1) No. 43183
1998.06	10	750,000	7,500,000	584,766	5,847,660	Capitalization of earnings 762,738	None	Apr. 30, 1998 TDDC (1) No. 35445
1999.09	10	750,000	7,500,000	672,481	6,724,810	Capitalization of earnings 877,149	None	Aug. 10, 1999 TDDC (1) No. 73628
1999.11	10	750,000	7,500,000	747,481	7,474,810	Issuance of common stocks 750,000	None	Nov. 11, 1999 TDDC (1) No. 87166
2000.06	10	1,000,000	10,000,000	837,178	8,371,780	Capitalization of earnings 896,977	None	Jun.. 21, 2000 TDDC (1) No. 53713
2001.02	10	1,000,000	10,000,000	797,178	7,971,780	Capital Reduction (write-off treasury shares) 400,000	None	Nov.14, 2000 TDCC (1) No. 85102 Nov.29, 2000 TDCC (1) No. 97250 Jan. 17, 2001 TDCC No. 102095 Feb. 08, 2001 TDCC (3) No. 107419
2001.10	10	1,000,000	10,000,000	829,065	8,290,659	Capitalization of earnings 318,871	None	Jul. 14, 2001 TDCC (1) No. 144750
2001.12	10	1,000,000	10,000,000	809,065	8,090,660	Capital Reduction (write-off treasury shares) 200,000	None	Sep. 5, 2001 TDCC (3) No. 156354
2003.09	10	1,250.000	12,500,000	922,335	9,223,352	Capitalization of earnings 1,132,692	None	Aug., 12, 2003 TDCC (1) No. 0920136291

106

Year and month	Issued Price	Authorized Capital	Authorized Capital	Paid-in capital	Paid-in capital	Note	Note	Note
		Shares	Amount	Shares	Amount	Sources of capital	Settlement of payment for shares with assets other than cash	Others
2001.03	10	1,250,000	12,500,000	1,034,618	10,346,181	Domestic Corporate Bonds Conversion 400,130	None	Apr. 21, 2004 MOEA No. 09301068070
2004.09	10	1,250,000	12,500,000	1,074,722	10,747,216	Domestic and overseas Convertible bonds 401,035	None	Nov 10, 2004 MOEA No. 09301213380
2004.12	10	1,250,000	12,500,000	1,095,303	10,953,026	Domestic and overseas Corporate bond conversion 205,811	None	Feb.24, 2005 MOEA No. 09401031080
2005.03	10	1,320,000	13,200,000	1,195,303	11,953,026	Issuance of common stocks 1,000,000	None	Mar.28, 2005 MOEA No. 09401048940
2005.03	10	1,320,000	13,200,000	1,196,258	11,962,580	Domestic and overseas Corporate bond conversion 9,553	None	Apr.26, 2005 MOEA No. 09401072640
2005.08	10	1,520,000	15,200,000	1,256,071	12,560,709	Capitalization of earnings 598,129	None	Sep.19, 2005 MOEA No. 09401176700
2005.08	10	1,520,000	15,200,000	1,260,930	12,609,299	Consolidated capital increase 48,590	None	Sep.30, 2005 MOEA No. 09401184830
2006.10	10	2,000,000	20,000,000	1,349,195	13,491,950	Capitalization of earnings 882,651	None	Oct.25, 2006 MOEA No. 09501235990
2007.09	10	2,000,000	20,000,000	1,389,671	13,896,708	Capitalization of earnings 404,758	None	Oct.16, 2007 MOEA No. 09601251540
2008.10	10	2,000,000	20,000,000	1,459,154	14,591,543	Capitalization of earnings 69,483	None	Oct.21, 2008 MOEA No. 09701268630
2009.03	10	2,000,000	20,000,000	1,411,863	14,118,633	Capital Reduction (write-off treasury shares)	None	Mar.27, 2009 MOEA No. 09801060200

107

						47,291
2009.09	10	2,000,000	20,000,000	1,454,219	14,542,192	Capitalization of earnings 42,356	None	Sep.22, 2009 MOEA No. 09801218880
2010.10	10	2,000,000	20,000,000	1,526,930	15,269,302	Capitalization of earnings 72,711	None	Oct.05, 2010 MOEA No. 09901224020
2011.10	10	2,000,000	20,000,000	1,603,276	16,032,767	Capitalization of earnings 76,346	None	Oct.11, 2011 MOEA No. 10001229410
2012.10	10	2,000,000	20,000,000	1,635,342	16,353,422	Capitalization of earnings 32,065	None	Oct.03, 2012 MOEA No. 10101203790
2014.09	10	2,000,000	20,000,000	1,668,049	16,680,491	Capitalization of earnings 32,707	None	Sep. 12, 2014 MOEA No. 10301190130
2015.09	10	2,000,000	20,000,000	1,718,090	17,180,905	Capitalization of earnings 50,041	None	Sep.21, 2015 MOEA No. 10401195830
2017.09	10	2,000,000	20,000,000	1,821,176	18,211,760	Capitalization of earnings 103,085	None	Sep. 26, 2017 MOEA No. 0601132590

Note 1: The annual data shall be updated as of the publication date of this annual report.

Note 2: The effective (approval) date together with the doc. No. should be added for any capital increase. Note 3: Those that issue the stock below the par value shall indicate so in a clear manner. Note 4: Provide information on those who pledged currency debts, technology or business reputation in exchange for shares, including the type and amount of the pledges.

Note 5: Indicate shareholders invested in the Company through private funding with highlights.

108

Unit: Shares

Unit: Shares
Shares Category	Authorized Capital			Note
	Outstanding Shares (Note)	Unissued Shares	Total
Registered Shares	1,821,176,011	178,823,989	2,000,000,000	Shares of publicly-listed company

Information on the shelf registration system

Unit: In thousands of NT$;

In thousands of shares

	In thousands of shares
	Amount of scheduled	Amount issued		The purpose and	Unissued
	Types of securities issuance Total number Approved amount	Shares	Price	expected benefits of the issued shares	shares Scheduled time of issuance		Remarks
	of shares
	Not
Applicable
	(II) Structure of Shareholders:
		Shareholder Structure
			Base date for ex-rights and ex-dividend: September 1,2017
	Shareholder Structure Quantity Government Agencies Financial Institutions		Other Legal Persons	Natural Person	Foreign company or individual	Total
	Number of 1	4	121 74,111		133			74,370
	Individuals
	Shares Held 94	2,416,800	1,138,015,350 541,252,894		139,490,873	1,821,176,011
	Shareholding 0.00%	0.13%	62.49% 29.72%		7.66%			100.00%
	Percentage
	ShareholdingbyChinese Investors:	0%
Note: Companies primarily-listed on TWSE and Taipei Exchange				shall disclose the proportion of its shares				held
	by investors from Mainland China.	Investors from Mainland China refers to natural persons, legal persons,
	organizations, institutions or companies in areas other than Taiwan and Mainland China invested by persons
	of such identity as defined in Article 3 of the Regulations Governing Investment of Mainland Chinese							in
	Taiwan.

109

(III) Conditions of Share Distribution

Status of Stock dispersion

Base date for ex-rights and ex-dividend: September 1, 2017

Shareholding range	Number of shareholders	Shares Held	Share Holding %
1 to 999	37,340	7,312,245	0.40%
1,000 to 5,000	20,120	45,484,814	2.52%
5,001 to 10,000	6,567	44,549,968	2.45%
10,001 to 15,000	3,627	43,700,530	2.40%
15,001 to 20,000	1,471	24,826,902	1.36%
20,001 to 30,000	1,909	45,669,198	2.51%
30,001 to 50,000	1,390	52,273,307	2.87%
50,001 to 100,000	1,060	69,984,335	3.84%
100,001 to 200,000	477	62,208,205	3.42%
200,001 to 400,000	211	58,343,161	3.20%
400,001 to 600,000	70	34,272,862	1.88%
600,001 to 800,000	32	22,087,039	1.21%
800,001 to 1,000,000	9	8,098,109	0.44%
1,000,001 and more Create new ranges as needed	87	1,302,365,336	71.50%
Total	74,370	1,821,176,011	100%

Special shares

Per share face value NT$

Base date for ex-rights and ex-dividend: September 1, 2017

Shareholder Ownership (Unit: share)	Number of Shareholders	Number of Shares Held	Share Holding%
Create new ranges as needed	Not applicable
Total

110

(IV)List of Major Shareholders:

List of Major Shareholders

Base date for ex-rights and ex-dividend: September 1, 2017

Shares Name of Major Shareholders	Shares Held	Shareholding Percentage
Yieh United Steel Corporation	287,555,051	15.79%
Wei Chiao Investment Development Co.,Ltd	195,811,491	10.75%
Li Hui Development Co.,Ltd	75,644,643	4.15%
E-Da Hospital	60,430,377	3.32%
Kuo Chiao Investment and Development Co.,Ltd	58,890,774	3.23%
Wei Hong Investment and Development Co.,Ltd.	53,273,759	2.93%
Ta Ching Motor Industrial Co. Ltd.	49,686,440	2.73%
Hsing Lung Investment & Development Co.,Ltd	46,090,039	2.53%
Lian Shuo Investment Development Co.,Ltd	44,154,024	2.42%
Chi Yi Investment Co.,Ltd.	40,169,818	2.21%

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(V) Fair Market Value, Net Worth, Profit, Dividend per Share and Other Relevant Information for the Most Recent Two Years:

Market Value Per Share, Net Values, Earnings and Dividends

Year Item	Year Item	Year Item	2016	2017	As of M a r c h 3 1 , 2 0 1 7 (Note 8)
Market price per share (Note1)	Max		13.30	15.10	12.80
	Min		7.00	10.09	10.55
	Average		9.25	12.94	11.79
Net value per share (Note2)	Beforeissuance		16.03	15.29	-
	After issuance		14.74	14.65	-
Earnings per share	Weighted Average Shares		1,718,090 thousand shares	1,821,176 thousand shares	1,821,176 thousand shares
	Earningsper share(Note 3)		1.46	0.75	0.03
Dividend Per Share (DPS)	Cash dividend		0.4	0.2	-
	Stock Dividends	Dividends from Retained Earnings	0.6	0.3	-
		Capital Surplus Distribution			-
	Accumulated dividend not paid out(note 4)				-
Return on Investmen t	Price-earnings ratio(note 5)		6.34	17.25	-
	Price-dividend ratio(note 6)		23.13	64.7	-
	Yield on cash dividend (note 7)		0.04	0.02	-

*If any revenue or capital surplus is transferred to capital increase or common stock, further disclose

information on market prices and cash dividends retroactively adjusted based on the number of shares after distribution.

Note 1: List the highest and lowest market price of the common shares for each year, and refer to the transaction value and transaction volume to calculate average market price for each year.
Note 2: This should be filled by using the shares already issued by year-end as a basis, and also by referencing the allocation that the shareholders meeting has decided on for the subsequent year.
Note 3: If there are any retroactive adjustments needed due to stock grants, Earnings per share before and after the adjustment should be listed.
Note 4: If there are any conditions in issuing equity securities that allow for unpaid out dividend for the year to be accumulated to subsequent years in which there is profit, the Company should separately disclose the accumulated unpaid out dividend up to that year.
Note 5: P/E Ratio = Average closing price for each share for the year/earnings per share Note 6: P/D Ratio = Average closing price for each share for the year/cash dividend per share Note 7: Cash dividend yield = cash dividend per share/average closing price per share for the year Note 8: For net worth per share and net earnings per share, data from the latest quarter that has been verified by a CPA up until the date of publication of the Annual Report should be filled. For all other columns, the Company should fill the year’s information until the date of publication of the Annual Report.

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(VI)Company Dividend Policy and Implementations:

1. Dividend Policy in the Company’s Articles of Incorporation:

Article 31: The retained earning derived from the final accounting is distributed according to the following principles:
A. Dividend Policy: The life cycle of the Company's industry is in the mature period. The dividend policy is in line with the current and future development plans, taking into account the investment environment, demand for capital, domestic and foreign competitions and shareholder benefits. Each year, no less than 20% of the distributable earnings is distributed to the shareholders as dividends. However, when the accumulated distributable earning is less than 20% of the paid-in capital, dividends will not be allotted.
B. Conditions and timing of distribution:
The annual net income after the final account shall be used in the first place to settle any deficit and taxes and duties as required by law. The remaining amount, if any, should be appropriated in the following order of presentation: (1) 10% as legal reserve; (2) set aside a special reserve equal to the amount of the deductions to shareholders equity; and (3) to be distributed as revolved by the Shareholders' Meeting.
C. Types of dividends:
Cash dividends are distributed at between 20% to 100% of total dividends distributed in accordance with the actual profitability while stock dividends are distributed at between 0% to 80% of the total dividends distributed.
D. Distribution of dividends depends on the operation results. The Board of Directors plans distribution of dividends and forwards the plan to the Shareholders’ Meeting for final decision.

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2. The proposed dividend distribution of Shareholders’ Meeting this year:

The 2017 distribution of retained earnings is shown in the table below:

Yieh Phui Enterprise Co., Ltd. PROFIT DISTRIBUTION TABLE 2017

Yieh Phui Enterprise Co., Ltd. PROFIT DISTRIBUTION TABLE 2017	Yieh Phui Enterprise Co., Ltd. PROFIT DISTRIBUTION TABLE 2017
Unit: New Taiwan Dollars (NT$)
Item	Amount
Beginning retained earning	1,042,657,220
Less: Remeasurement of defined benefit	(19,139,437)
plans in retained earnings
Less: Changes in associated companies and	(1,329,517)
joint ventures recognized by the equity
method
Less: Changes in equity ownership of	(22,995,635)
subsidiaries
Add: Current net income after tax	1,367,404,267
Less: Legal reserve	(136,740,427)
Less: Special reserve	(308,897,725)
Earnings available for distribution	1,920,958,746
Less: Distribution of Shareholder Dividends	(910,588,012)
Ending retained earnings	1,010,370,734

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(VII) Effect upon Business Performance and Earnings per Share of any Stock Dividend Distribution Proposed or Adopted at the Most Recent Shareholders’ Meeting:

Unit: In NT$ thousands (earnings per share - NT$)

Year Item	Year Item	Year Item	2018: (Note 1) (Estimated)
Beginning paid-in capital			18,211,760
Distribution of dividends this year	Cash dividendper share		0.2
	Surplus to capital increase stock dividendper share		0.3
	Capital reserve to capital increase stock dividend per share		─
Changes in Operating Performance	Operatingincome		Not applicable (Note 2)
	Ratio of increase (decrease) in operating profit over the sameperiod lastyear
	Net income after tax
	Ratio of increase (decrease) in NIAT over the same period lastyear
	Earningsper share
	Ratio of increase (decrease) in EPS over the same period lastyear
	Annual average return on investment (reciprocal of average annual interest rate)
Pro forma earnings per share and P/E ratio	If the surplus to capital increase is realized through cash dividend	Pro forma per share earning	Not applicable (Note 2)
		Pro forma average annual return on investment
	If capital reserve to capital increase is not implemented	Pro forma per share earning
		Pro forma average annual return on investment
	If the capital reserve is not paid and the surplus to capital increase is paid through cash dividend	Pro forma per share earning
		Pro forma average annual return on investment

Note 1: Awaiting the resolution by the 2018 Shareholders’ Meeting.

Note 2: Note 2: According to the Regulations Governing the Publication of Financial Forecasts of Public Companies, the Company is not required to disclose financial projections for 2018.

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(VIII) Compensation to Employees and Directors:

The number or range of compensations of employees and Directors as stated in the Company’s Articles of Incorporation.
Article 30-1 of the Articles of Incorporation of the Company provides the following: If the the Company makes a profit in the year (the so-called profit refers to the before tax profit before deducting compensation of employees and directors), more than 0.2% shall be allotted for employees’ compensation and 0.1% or less for compensations of the directors. But the Company shall reserve a portion of profit to make up for accumulated losses, if any.
Accounting basis for discrepancies between the estimated and actual distributed amount of compensations in the form of shares to the Company's employees and directors in this period.
A 、 Estimation Basis: When the profit gained in this year is at the same level of the previous year, use the distribution structure for estimation of this year's distribution.
B 、 Calculation basis for compensations paid with shares: the Company pays compensations of employees, directors in cash, never with stock dividends.
C 、 Accounting practice when the amount of actual distribution is different from the estimated amount: If there is a difference between the actual distributed amount and the estimated amount, the difference shall be adjusted in the month recognized by the shareholders' meeting. The company shall pay the compensations of employees, and directors in the amount recognized by the shareholders’ meeting.
Information on approval by the Board of Directors of distribution of compensation:
(1) Compensation of employees, directors and supervisors in the forms of cash or shares. If differences are found in the estimated expenses in the year, the difference, cause and reconciliation of the difference shall be disclosed.

Unit: NTD

					Unit:
	Estimated amount for 2017	Approved amount by the Board of Directors on March 21,2018	Differences	Causes	Status
Employee compensation	3,349,570	3,349,570	0	None	None
Directors' compensation	1,674,785	837,392	837,393	The board passed a resolution to distribute 0.05 percent.	The difference was adjusted in March 2018.

(2) The percentage of employee compensation paid in shares to the NIAT of individual company or financial reporting entity and total of employee compensation Not applicable.

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Actual distribution of compensation to employees, directors and supervisors in the previous year (including number of shares, total and per-share price) and the difference to the estimated amount, stating the amount of difference, cause and reconciliation.

	Estimated amount for 2016	Approved amount on Mar. 21, 2017 by the board of directors	Amount of actual payment	Difference between estimate and actual payment	Causes	Status
Employee compensation in cash	6,043,682	6,043,632	6,043,632	0	None	None
Employee compensation in shares	0	0	0	0	None	None
Directors' compensation	3,021,816	1,510,908	1,510,908	1,510,908	The board passed a resolution to distribute 0.05 percent.	The difference was adjusted in March 2017.

(IX) Repurchase of Shares by the Company: The Company has not implemented repurchase of the Company's shares in the most recent year up to the publication date of this annual report.
II. Issuance of Corporate Bonds: The Company has not issued any corporate bonds in the most recent year up to the publication date of this annual report.
III. Issuance of Preferred Shares: The Company has not issued any preferred shares in the most recent year up to the publication date of this annual report.
IV. Issuance of Depository Receipts: The Company has not issued any depository receipts in the most recent year up to the publication date of this annual report.
V. Employee Warrants: None.
VI. Status of New Share Issuance in Connection with Mergers and Acquisitions: None
VII. Implementation of the Capital Utilization Plan: None

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Chapter 5 Operational Highlights

I. Business Content:

(I) Scope of Business:

Company's consolidated business scope:

Horticulture Basic Industrial Chemical Manufacturing Other Non-metallic Mineral Products Manufacturing Iron and Steel Refining Iron and Steel Rolls over Extends and Crowding Iron and Steel Casting Iron and Steel Rolling, Drawing, and Extruding Steel Wires and Cables Manufacturing Metal Architectural Components Manufacturing Metal line Products Manufacturing Other Fabricated Metal Products Manufacturing Not Elsewhere Classified Metal Surface Treating Machinery and Equipment Manufacturing Other Machinery Manufacturing Not Elsewhere Classified Electronic Parts and Components Manufacturing Automobiles and Parts Manufacturing Motor Vehicles and Parts Manufacturing Wholesale of Flowers Wholesaling of hardware Wholesale of Building Materials Wholesale of Machinery Wholesale of Motor Vehicle Parts and Supplies Other Wholesale Trade Retail sale of Flowers Retail Sale of Ironware Retail Sale of Building Materials Retail Sale of Machinery and Equipment Retail Sale of Motor Vehicle Parts and Supplies Retail Sale of Other Retail Trade Not Elsewhere Classified International Trade Steel Construction Leasing, selling and development of residential and commercial buildings Specialized Field Construction and Development New County and Community Construction and Investment Real Estate Commerce Real Estate Rental and Leasing

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Rental and Leasing Business Wired Communication Equipment and Apparatus Manufacturing Telecommunication Equipment and Apparatus Manufacturing Manufacture of computer and peripherals Parts Manufacturing Precision Instruments Manufacturing Medical Materials and Equipment Manufacturing Electric Appliance Installation Apparatus Installation Construction International Trade Software Design Services Electric Appliance and Audiovisual Electric Products Repair Shops Electrical Machinery, Avionics and Supplies Manufacturing

Energy technology service Industry

Surface treatment, manufacturing, processing, wholesale, retail, domestic sale and export of stainless steel wire material, carbon steel wire material, free-cutting steel wire material, alloy steel wire material, rolling door material, steel pipe, stainless steel pipe, mechanical parts, steel strip, steel strip, can, alloy steel and stainless steel.

Processing, manufacturing, trade, domestic sale and export of various types of parts and hardware for scooter and bicycles.

Delegate construction companies in building public housing, lease and sale of commercial building.

Design, processing and sale of iron plate and composite steel frame.

Design, processing, manufacturing and sale of mechanical frame.

Processing, manufacturing and sale of galvanized iron plate, coated iron plate and cold pressed steel plate.

Processing, manufacturing, domestic sale and export of rolled steel, steel, structural steel, steel wire, iron strip and iron wire.

Operation of farm, livestock farm.

Manufacture, processing, trade and import and export of various types of paper pulp, paper and their raw materials.

Design, manufacture, installation and maintenance of machinery and equipment for steel mill, power plant, petrochemical plant, incineration plant and water treatment plant, including piping, pipe support, ventilation equipment, flue pipe, dust collector, fire extinguishing system, pressure vessel, furnace, annealing tank, heating furnace, conveyor and crane. All business items that are not prohibited or restricted by the law, except those that are subject to special approval.

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Proportion of consolidated businesses

Main Products	Amount	Ratio %
Pickled steelcoil	21,402	0.03
Rolled steelcoil	11,009,100	15.47
Galvanized steel coil	27,361,112	38.45
Coated steel coil	16,776,270	23.58
Steelpipe	2,711,263	3.81
Wire	7,483,717	10.52
Construction revenue	639,635	0.90
Electronic products	475,285	0.67
Others	4,680,878	6.57
Total revenue	71,158,662	100.00

The Company's current consolidated product items include: manufacturing, processing, and trade of pickled steel coil, cold-rolled steel coil, (aluminum) zinc plated steel coil, coated steel coil, steel coil products, mechanical parts, piping engineering design, stainless steel wire, carbon steel wire, alloy steel wire and free-cutting steel wire, steel bar and straight bar, OEM/ODM, RFID products, walkie-talkie, smart monitoring system for LED street light.
Consolidated planned new product development:

Item	Goal
1. Anti-microbial plus metallic coated steel product with nanoMark	It is developed for the ducting (regular spangle) of top-class mansions located in Hong Kong and Singapore. In addition to inhibit the growth of ordinary pathogens, it showsnotableinhibitionon legionella.
2. Anti-microbial plus color coated steel product with nanoMark	Nano zinc will be added into the paint to inhibit more types of pathogens and increase its performance. To promotethenew productvia acquisitionof nanoMark.
3. Anti-microbial and anti-fingerprint treated metallic coated steel product	Develop low-temperature anti- microbial and anti-fingerprint treated metallic coated steel product so that product is equipped with self-cleaning and anti- microbial features, able to reduce contact between human body and bacteria, and improve operating environment. The product isapplicableforductingand decking.
4. HSLA steel product	Develop high-strength low-alloy (HSLA) galvanized steel sheet, reduces carbon content to avoid decrease in weldability. The product is applicable for automotive structuralparts.
5. Cold-rolled products of SEDDQ grade	Develop SEDDQ cold-rolled steel sheet for extra deep drawing, increases products' added value. The product is applicablefor automotive panel.
6. Phosphorus-added high-strength IF cold-rolled steel	Develop Phosphorus-added high-strength IF cold-rolled steel, increases products' added value, product diversification and satisfies customers' special requirements. The product is applicable for automotive panel.
7. Bake hardening cold-rolled steel product	Develop bake hardening cold-rolled steel products, increases products' added value and product diversification,and satisfies customers'special

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Item	Goal
	requirements. The product is applicable for automotive panel.
8. Duplex steel cold-rolled steel product	Develop duplex cold-rolled steels products, increases products' added value and product diversification, and satisfies customers' special requirements. The product is applicablefor automotive structuralparts.
9. Aluminum coated steel product	Develop Aluminum coated steel products, increases products' added value and product diversification, and satisfies customers' special requirements. The product is applicablefor automotive parts.
10. Tank with high precision cutting fluid filtration function	Develop tank with high precision cutting fluid filtration function, to extend cutting fluid's recycling useful life, thusreducing cost.Applicablefor rollgrindingmachines.
11. Welding wheel with self-cleaning and self-cooling functions	Develop welding wheel with self-cleaning and self-cooling function, increases efficiency of the welding machine and success rate of welding. Applicable for galvanized wire.
12. Self-lubricating steel product	Develop anti-fingerprint treated metallic coated steel product with self-lubricating function, increasing product's processing andforming performance.
13. HSLA cold-rolled steel product	Develop high-strength low-alloy (HSLA) cold-rolled steel sheets, reduces steel sheets' carbon content to avoid drop in weldability. The product is applicable for automotive structuralparts.
14. High corrosion resistant zinc-aluminum coated steel product	To cater to the requirements of materials for ABB electrical box, develops high corrosion-resistant zinc-aluminum coated steel products under salt spray testing.
15. Cut and corrosion resistant PVDF color coated steel product	Develop cut and corrosion resistant PVDF color coated steel products, satisfying customer's special requirements. The product is applicable for engineering work in harsh environment.
16. Strip simulated annealingtest equipment	Self-develop test equipment for use in simulated annealing,to reduce input and loss duringonline testing.
17. Portable metallographic testing method	Research and develop simple and fast metallographic detection methods, to be used in fast metallographic detection for advanced car steel (duplex steel, TRIP steel) manufactured
18. Pickling communication disk temperature controlsystem	Real-time monitoring of environmental temperature of electrical control room, prevent protective power outage dueto overheating.
19. A new shape of backup roll development	Change backup roll forming in existing rolling mill to prevent slanted steel sheet
20. A type of equipment with highly efficient HCL gas absorption	Use in ARP HCL recovery and reuse, to reduce loss of materials and environmental pollution

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Item	Goal
21. A type of new air knife system that reduces over galvanization at the edge	Use to improve coated products' thick edge problem
22. A type of highly efficient online testing for surface defects	Use in PLTCM for fast online examination of detect resistance on the surface, to avoid defects from entering therollingmill resultinginbreakage
23. Galvanized products for steel-plastic composite sheet	Surface and forming quality are emphasized in the development of this product. It is currently used in China and North America container body market. It has high tensile strength, is convenient and light weight, and has added values such as economical value, safety, energy-saving and environmentallyfriendly.
24. High weather resistance and self-cleaning color coated steel sheet	Develop new type of self-cleaning color coated steel sheet, with hydrophilic additives added to the coating material, giving the product surface excellent self-cleaning and stain resistant characteristics. It is applicable for outdoor building materials of high added value.
25. Cold-rolled transformation induced plasticity steel product	Develop cold-rolled transformation induced plasticity steel products, increases products' added value, product diversification and satisfies customers' special requirements. The product is applicable for automotive structuralparts.
26. Cold-rolled products for flux cored wire	Develop cold-rolled products for flux cored wire, increases products' added value, product diversification and satisfies customers'special requirements.
27. Cold-rolled products for Bundy tube	Develop cold-rolled products for Bundy tube, increase products' added value & product diversification, and satisfy customers' special requirements, applicable for freezers.
28. Cold-rolled products for rice cooker	Develop cold-rolled products for rice cooker, increases products' added value, product diversification and satisfies customers'special requirements.
29. Tungsten Carbide Coated Roll	Increase useful life of zinc pot and stability of quality

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(II) Industry Overview:

Current state and development of the industry

Steel, being a necessary raw material for social and economic development, is a key indicator to evaluate a country’s industrial production capability. Every country in the world deems its steel industry a sign of state power. To improve a nation’s competitiveness, every country, developing and developed alike, takes a proactive stance in boosting the industry.

In the earlier phase, domestic steel industry develops in line with the post-war needs for economic development, and gains a footing gradually through the period in which the government carries out its economic planning and development in several phases. Generally, development of domestic steel industry can be broken down into 5 phases: The infancy phase before 1971; the growth phase in mid-1970s after the incorporation of China Steel Corporation (CSC); the mature period in 1980s when CSC launched its expansion of phase 2 and phase 3 construction, and private investors actively participates in plant construction.

After endeavors for half a century, domestic steel industry has shifted in line with the economic development from making steel out of scraps in the early days to adopting highly-mechanized steel mills and steel mills equipped with electric furnaces. The most advanced production techniques are also introduced, providing a complete basis for Taiwan’s steel industry. Currently, domestic steel industry prossess a comprehensive system comprising upstream, midstream, and downstream suppliers. Except for ultra-special steel products, it wields the ability to produce the various steels by itself.

Iron and steel industry is a high capital and high tech-intensive industry. However, industrial development relies on the support of industrial mining, electrical machinery, civil engineering, transportation and information industry, and cooperation of downstream industries. It is the head of a country's industry, creating many job opportunities from upstream to mid and downstream industries, as well as in the related industries. It generates huge annual production value, a significant contribution to the economic growth rate, hence has a deep influence on domestic economy. Therefore, reviving iron and steel industry facilitates industrial structure improvement and enhances overall economic development.

Relationship between upstream, mid-stream and downstream companies:

From the production history of iron and steel advanced countries, plated steel has the effect of replacing hot-rolled and cold-rolled steel. The rapid growth of the demand can be seen from the continued demand growth of global plated steel materials in recent years. Also, plated steel materials such as galvanized and coated steel plate are equipped with features such as: excellent corrosion resistance, easy processing, nice exterior, long useful life, low maintenance cost, recyclable and reusable and can replace wood, etc. With global climate anomalies and increase in environmental protection awareness in recent years, it has become an ideal environmental friendly material for infrastructure.

If upstream steel mills are able to supply low cost and competitive raw materials to mid and downstream companies, and let mid and downstream companies to turn to processing, export or for domestic sale, it will effectively increase the performance of processing and export, enhance the growth of gross domestic product (GDP). In addition, if upstream steel mills are able to further provide mid and downstream companies with in-depth processing, creating raw materials with higher added values, it would be able to bring out the effect of up, mid and downstream supply chain integration. The industry's foundation will then continue

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to expand, and mid and downstream companies will be able to better obtain industrial upgrade opportunities, create cluster effect, increase investment proportion in Taiwan, and create more job opportunities.

Yieh Phui is a professional manufacturer of plated steel materials such as galvanized products, coated steel coil, etc. Before the 90s, the supply of domestic plated steel material was less than demand, and had to rely on import to satisfy the gap after the significant increase in consumption. As such, the Company strove to replace imports with self-manufactured products. Besides attaining the goal of replacing imports with domestic products, it also relieves downstream processing companies of the inconvenience of delay in delivery date, unstable quality, tying down of funds, exchange rate risk, etc., that arise due to import. It directly increases operating efficiency and improves international competitiveness.

Product competitiveness and development trend:

In recent years, global plated steel material consumption continues to see a stable growth, leading to continued increase in production capacity. Influenced by globalization trend, the change of market share accelerated. Adapting to the change and adjusting the operating strategies to adapt to the global market pose a challenge. In terms of Free Trade Agreement (FTA), Taiwan is relatively weaker than other competing countries, resulting in decrease in export competitiveness due to difference in tariff. Improvement in the short run is not expected and requires the government’s active intervention.

However, the Company will strive to maintain flexible operation, and continue to enhance our product categories, dimension combination, equipment capacity, etc. which are more superior to our peers'. We will also expand our marketing channels, providing customers with more comprehensive services and feedback on raw materials purchase. Besides actively increasing product quality and image, we will also actively develop new products, to realize the blue ocean strategy, exceed our competitors, and conform to environmental protection trend. Our product specifications are geared towards environmental friendly green products, with the aim to increase operating performance.

(III)Overview of Technology and R&D:

Consolidated research and development expenses invested in last fiscal year, up to the date of printing of this annual report:
A total of NT$ 213,419 thousand in 2017, and NT$ 57,344 thousand between Jan. and Mar. 2018.

2. Consolidated products successfully researched and developed

	Item		Date of Development		Results
Environmental SGLC product development care and mobile device		February 2016		Successfully developed SGLC products (thickness 0.2mm - 0.3mm) of good flatness, and with substrate content and process adjustment, is applicable for electronic and electrical products for shallow drawn forming and welding, to meet the requirements of lightweight andlow cost.
Environmentally friendly HSLA galvanized steel sheet		November 2016		Successfully developed HSLA galvanized products steel sheet with thickness of more than 2.0 mm and tensile strength of 410 MPa and 480 MPa, applicable for high processing and welding in motorcars and station wagon. This product complies with therequirements of EuropeanUnion'sRoHS

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		and automotive directive.
Environmental trivalent-chromium metallic coated steel product for outdoor use	June 2017	The successful development of environmental trivalent chromium metallic coated steel sheets for outdoor building materials complies with the EU Directive of not using hexavalent chromium before September 20, 2017; it was produced approximately 15,000 tons in the fourth quarter of 2017 and saved approximately NT$ 8 million of solution cost.
Environmental color coated steel product for outdoor use	August 2017	The successful development of color coated steel product for outdoor building materials complies with the relevant regulations of the EU and Japan on 2019 green chrome-free green building materials, and the development progress and product physical and chemical properties are significantly ahead of those in the domestic coating industry, increasing YP’s product competitiveness alloverthe world.
Environmental chrome-free color coated steel product for stone-coating metal tiles	October 2017	Successfully developed environmental chrome-free color coated steel product for stone-coating metal tiles in Europe. The performance evaluated by customers is better than that of European competitive steel products. This makes YP a leading player in the EU's relatively competitive market and has obtained great attention from customers of the US, Japan, Australia and NewZealand.
HSLA cold-rolled steel product	January 2016	Successfully developed HSLA cold-rolled steel of 260MPa grade tensile strength, applicable for automotive structural parts.
HSLA metallic coated steel product	March 2016	Successfully developed HSLA cold-rolled metallic coated steel sheet of 260MPa grade tensile strength, applicable for automotive structuralparts.
Pickling communication disk temperature control system	June 2016	Real-time monitoring of environmental temperature of electrical control room, prevent protective power outage due to overheating.
A new shape of backup roll development	October 2016	Change backup roll forming in existing rolling mill to prevent slanted steel sheet
Anti-microbial and anti-fingerprint treated metallic coated steel product	March 2017	Develop low-temperature anti- microbial and anti-fingerprint treated metallic coated steel product so that product is equipped with self-cleaning and anti- microbial features, able to reduce contact between human body and bacteria, and improve operating environment. The product is applicable for ductingand decking.
Aluminum coated steel product	October 2017	Develop aluminum coated steel products, increases products' added value and product diversification, and satisfies customers' special requirements. The product is applicable for automotive parts.
Self-lubricating metallic coated steel product	November 2017	Develop anti-fingerprint treated metallic coated steel product with self-lubricating function, increasing product's processing

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		and forming performance.
HSLA cold-rolled steel product	October 2017	Successfully developed HSLA cold-rolled steel of 340MPa grade tensile strength, applicable for automotive structural parts.
High corrosion resistant zinc-aluminum coated steelproducts	April 2017	To cater to the requirements of materials for ABB electrical box, develops high corrosion-resistant zinc-aluminum coated steelproducts undersaltspraytesting.
A type of equipment with highly efficient HCLgasabsorption	March 2017	Use in ARP HCL recovery and reuse, to reduce loss of materials and environmental pollution
Cold-rolled products for Bundy tube	December 2017	Develop cold-rolled products for Bundy tube, increase products' added value & product diversification, and satisfy customers' special requirements, applicable for condensers of refrigerators andfreezers.

(IV) Short and Long Term Business Development Plans

1. Long-Term Business Development Plans:

Long-term business development direction is the fundamentals of continuing to develop niche products and niche market. The Company flexibly adjusts product profile based on customer requirements, continues to develop market or products for end use, embarks on the environmental-friendly trend, to cater to the rapid market growth in Asia regions and other emerging industrial countries, as well as catering to existing sales channels.

2. Short-term Business Development Plan

Taiwan is a thin market, and the Company estimates that the domestic hot-dip galvanized market share in 2016 is about 18%, the second largest supplier in the market. In terms of domestic coating market, it has a market share of 20%, and is also the second largest supplier in the market. Although domestic sales do not make up majority of overall sales, it is the basis of sales, especially significant during violent international market condition.

The Company's short-term target is to actively expand its domestic market share, strengthen product profile, promote green products to conform to international trend, satisfy the requirements of quality improvement of domestic raw materials, and increase the Company's business scope.

II. Overview of Market, Production and Sales

(I) Market Analysis:

Product's main sales regions:

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The Company's plated and coated products continue to be marketed to the world, with sales channels in various places around the world. Besides the basic domestic market, export markets include China, Southeast Asia, Middle East, United States, Canada, E.U., Australia and other regions.

Market share and market's future supply and demand situation and growth:

According to the forecast projected by Taiwan Steel & Iron Industries Association in 2017 on the demands for steel in Taiwan from 2017 to 2022, the annual domestic demands for hot-dip galvanized steel in 2017 (including GI, GA, GF and GL) stands at 1.575 million tons, increased by 6.20% from 1.483 million tone in 2015. The drop is due to global excess capacity which brings down the steel price. However, the market effectively recovers due to China’s capacity cuts and production limits policy. Annual demands in 2017 is projected to 1.591 million tones, increased by 0.97% as compared to 2016. The industry in 2018 is expected to have bright prospects, either in the domestic market or international markets, since China is fully implementing its de-capacity policy and production limits policy for environmental purposes.

The Company will continue to take its global marketing strategy. The export sales ratio is expected to stand at 65% in 2017. This year, when the domestic market is fully satisfied, export sales ratio will be high. The Company takes a flexible strategy in arranging the orders from various customers according to the market conditions, so as to ensure operating performance.

Positive and negative factors affecting competitive niches and development prospects, as well as response strategies:

Favorable Factors:

A. With the frequent global climate anomalies, and increasing attention paid to environmental protection, galvanized and coated steel products processed from steel and iron raw materials are equipped with environmental friendly, recyclable and reusable properties, possessing high development potential in the future. According to the statistics of an internationally renowned steel journal, 2017 global plated steel plate consumption was about 1.8584 billion tons, still an increase by 3.3% (5.98 million tons) from 171.13 million tons in 2016. During the 10 years from 2007 to 2017, the average compound annual growth rate of consumption has reached 3.6%, much higher than the global economic growth rate, suggesting that plated steel sheets go alone with the economic development, and are still a dominant product in the various areas.
B. Plating and coating production volume ranks first in the industry and has the most comprehensive product portfolio. Satisfying the production condition of the scale of the economy, it is able to fully supply various types of products required by the market, and has higher cost competitiveness compared to its peers. In recent years, the Company actively develops various green eco-friendly products, and is able to increase the products' added value and fulfill the customers' various order requirements.

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C. Hot rolling raw materials are mainly from the stable domestic raw materials, which allow the Company to effectively avoid the risk of exchange rate and delivery date, thus less affected by international economic fluctuations.
D. Compared with the peers, the Company continues to implement internal management activities, which facilitates improvement of production and sales. The Company had introduced TPM (Total Productive Maintenance) as early as 1998, of which the first phase focused on equipment, the second phase focused on personnel, the third phase focused on Corporate Image and Premium Service, the fourth phase focused on Touching Service, and the fifth phase focused on Comprehensive Service, so as to make Yieh Phiu an enterprise valuing both manufacturing and services. The Company has currently committed itself to “Becoming world's best iron and steel manufacturing and service enterprise by 2020”.

Unfavorable factors

A. The Company adopts a high export ratio strategy. As international market depends on the ups and downs of the economy, it is not as stable as the domestic market, and hence has a higher risk.
B. The progress of the signing of Free Trade Agreement (FTA) between Taiwan and other countries is slow, resulting in a gradual decrease in Taiwan's foreign trade competitiveness, and making sales in the global market more difficult. Following ASEAN Plus Three, China, Japan and South Korea have higher competitiveness due to import tariff advantage in Southeast Asia market, and similar situations will gradually occur in other countries or regions, which bitterly needs government’s active intervention
C. Every since Taiwan becoming a member of WTO in 2002, import tariff on steel products has been eliminated. Along with the fact that domestic infrastructure construction slows down, domestic demands for steel are not easy to rise. Although the Company wields an advantage in quality, the competition from low-price steel imports is inevitable and poses a greater operating difficulty for the Company.

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(II) Usage and Manufacturing Processes for the Company's Main Products

Main Products:

Item
Pickled steel coil
Cold-rolled steel coil
Galvanized steel coil
Coated steel coil
Steel coil products
Building's steel structure
Plant's steel structure
Bridge's steel structure
Frame crane
Grantry container crane
Container crane
Steel pipe

Main usage

For use in electrical appliances, furniture and motor cars,
industrial machinery, etc.
For use in electrical appliances, furniture and motor cars,
industrial machinery, etc.
Raw materials for construction industry, household
appliances, hardware, automobile industry, machinery
Raw materials for construction industry, household
appliances, hardware, automobile industry, machinery
Raw materials for construction industry, household
appliances, automobile industry (scooter, bicycle),
machinery
Building structure of residential buildings, office
buildings, supermarkets, etc.
Plant structure for electronic plant, power plant, steel
mill, incineration plant, etc.
For use in roads and bridges
Bridge crane for transportation and hoisting in industrial
plants
Lifting equipment for arranging and transportation of
containers at container yard
Lifting equipment for hoisting of container at ports and
harbors
Raw materials for construction industry, furniture,
automobile industry (scooter, bicycle), machinery

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2. Manufacturing process:

Hot rolled steel coil

==> picture [488 x 590] intentionally omitted <==

----- Start of picture text -----

Pickled steel
Pickling coil
Warehouse
outbound
Cold rolled
Cold rolling
steel coil
Galvanized
Galvanization Warehouse
steel coil
inbound
Coated steel
Coating
coil
Hot-rolled/cold-rolled
steel coil
Slitting
Warehouse
outbound
Hot-rolled/cold
-rolled steel
Tubing
pipe
Warehouse
inbound
Galvanization Galvanized
steel pipe
Hot-rolled/pickled/cold-rol Warehouse
led steel coil outbound
Hot rolling/Pickling/cold
rolling
Cutting/Slitting Warehouse
Cutting steel plate, steel
inbound
strip
Finished product inspection
inspection
Finished product
inspection
Finished product
----- End of picture text -----

130

Manufacturing process

==> picture [456 x 551] intentionally omitted <==

----- Start of picture text -----

Steel plate/structural steel
Raw material production Square tube, H-beam
Product: Building's
Cold working Hoisting at site steel structure
Welding Warehouse Product: Plant's steel
inbound structure
Coating Finished Product: Bridge's
product steel structure
inspection
Steel plate/machinery/electrical
product
On-site Product: Overhead
Cold working inspection crane
Product: Grantry
Welding Hoisting
Container Crane
Machining Factory test
Product: Container
crane
Coating Assembly
----- End of picture text -----

131

(III)The Supply Status of the Major Raw Materials:

Main raw materials	Supply by domestic suppliers	Supply by foreign suppliers
Steel coil	92.73%	7.27%
Paint	100.00%	0.00%
Zinc (aluminum) ingots	0.63%	99.37%
Steel billet	77.41%	22.59%

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(IV) Information of Customers that Contribute More Than 10% of Total Purchase/Sales in the Most Recent Two Years:

List of suppliers that contribute to more than 10% of the Company's net purchase:

Information of major suppliers in the last 2 years

	2016	2016	2016		2017	2017	2017	2017	As at last quarter of 2018 (Note 2)	As at last quarter of 2018 (Note 2)	As at last quarter of 2018 (Note 2)	As at last quarter of 2018 (Note 2)
Item	Type	Amount	% of annual net purchase	Relationships with the issuer	Type	Amount	% of annual net purchase	Relationships with the issuer	Type	Amount	Percentage to net purchase in the year up to the previousquarter(%)	Relationships with the issuer
1	4017	11,731,966	27.09%	Non-related parties	4017	14,782,857	26.09%	Non-related parties	4017			Non-related parties
2	16070	5,166,866	11.93%	Related party	A00141	6,362,815	11.23%	Non-related parties	99626			Non-related parties
3	A00141	4,622,778	10.67%	Non-related parties			0.00%
4.	Others	21,789,495	50.31%		Others	35,506,552	62.68%		Others	9,048,931
	Net purchase Net	43,311,105	100.00%		Net purchases of goods	56,652,224	100.00%		Net purchase Net	14,478,698

Note 1: List the name, purchase amount and percentage of purchase, of suppliers whose purchase amount is more than 10% of the company’s total purchase in the last 2 years. If the supplier's name cannot be disclosed due to non-disclosure clauses in the contract, or the counterparty is a non-related individual, then the name maybe expressed in code.

Note 2: Until the date of publication of the annual report, a company whose stock is listed on the stock exchange or traded over the counter, shall disclose the most recent financial statement audited or attested by the CPA, if any.

Reason for increase or decrease: cater to business requirements

133

2. List of customers that contribute to more than 10% of the Company's consolidated net sales:

Information of major customers for the last 2 years

	2016	2016	2016	2016	2017	2017	2017	2017	As at last quarter of 2018 (Note 2)	As at last quarter of 2018 (Note 2)	As at last quarter of 2018 (Note 2)	As at last quarter of 2018 (Note 2)
Item	Type	Amount	% of annual net sales	Relationsh ips with the issuer	Type	Amount	% of annual net sales	Relationship s with the issuer	Type	Amount	Percentage to net sales in the year up to the previous quarter(%)	Relationsh ips with the issuer
1
2
3
4
5
6
7
8
9
10
	Others	52,847,410	100.00%		Others	71,158,662	100.00%		Others	18,820,625	100.00%
	Net Sales	52,847,410	100.00%		Net Sales	71,158,662	100.00%		Net Sales	18,820,625	100.00%

Note 1: List the name, sales amount and percentage of sales, of customers whose sales amount account for more than 10% of the company’s total sales in the last 2 years. If the customer's name cannot be disclosed due to non-disclosure clauses in the contract, or the counterparty is a non-related individual, then the name maybe expressed in code. Note 2: Until the date of publication of the annual report, a company whose stock is listed on the stock exchange or traded over the counter, shall disclose the most recent financial statement audited or attested by the CPA, if any.

134

(V) Production Volume and Value of the Last Two Years

Unit: tons; NT$ thousand

Year Production Volume and Value Main Product	2017	2017	2017		2016	2016
	Production capacity	Production volume	Production value	Production capacity	Production volume	Production value
Pickled steel coil	2,110,000	1,405,060	22,252,033	2,110,000	1,361,984	12,645,055
Rolled steel coil	1,020,000	559,846	9,668,552	1,020,000	581,162	7,849,944
Hard rolled steel coil	1,600,000	1,479,978	23,318,325	1,600,000	1,443,707	7,015,793
Cold rolled steel coil	500,000	401,260	6,799,143	500,000	302,585	1,470,433
Galvanized steel coil	1,900,000	1,839,877	36,331,418	1,900,000	1,849,310	20,451,768
Coated steel coil	710,000	536,041	13,520,248	710,000	584,418	7,920,995
Trade	-	-	-	-	-	-
OEM steel coil	-	73,657	126,975	-	76,424	182,836
Others	-	100,963	1,027,938	-	103,339	672,430
Steelpipe	300,000	270,378	4,976,529	300,000	204,562	3,246,853
Bridge crane	-	4	167,848	-	8	374,932
Steel structure	-	20,234	870,275	-	28,459	1,205,308
Wire	500,000	384,548	8,181,405	500,000	312,643	7,095,811
Total	8,640,000	7,071,845	127,240,691	8,640,000	6,848,602	70,132,159

Note 1: Production capacity refers to the volume of product that can be produced by a company using existing production

equipment and under normal operation, after taking into consideration factors such as necessary downtime, holiday, etc. Note 2: Substitutable production capacity may be included in the production capacity and be stated in the note.

135

(VI) Sales Volume and Value of the Last Two Years:

Unit: tons; NT$ thousand

Year Sales volume and amount Main products (or department)	2017	2017	2017	2017	2016	2016	2016	2016
	Domestic sales		Export		Domestic sales		Export
	Quantity	Amount	Quantity	Amount	Quantity	Amount	Quantity	Amount
Pickled steelcoil	172	1,732	1,553	19,507	60	595	680	7,475
Rolled steelcoil	3,155	36,907	230	5,058	2,298	25,387	45,409	635,012
Hard rolled steel coil	1,051	18,717	266,540	4,449,620	-	-	-	-
Cold rolled steel coil	116	2,245	380,134	6,496,687	-	-	-	-
Galvanized steel coil	307,531	6,416,767	988,305	23,510,366	295,331	6,110,908	904,874	17,623,093
Coated steelcoil	70,320	2,559,181	456,601	13,145,703	87,167	2,904,446	490,693	12,618,249
Trade	68,063	1,085,269	-	-	70,187	851,426	-	-
OEMsteelcoil	26,910	130,132	16,580	8,295	30,396	127,918	11,251	5,662
Wire	347,970	5,179,448	46,532	2,901,967	285,585	4,746,111	42,990	2,626,270
Steelpipe	64,240	1,306,639	71,524	1,615,432	64,469	1,156,435	40,009	779,971
Bridge crane	4	188,626	-	-	8	418,099	-	581
Steelstructure	20,234	890,117	-	-	28,459	1,233,755	-	-
Others	47,944	457,834	83,680	732,416	49,829	418,122	79,634	557,897
Total	957,707	18,273,613	2,311,679	52,885,049	913,787	17,993,200	1,615,540	34,854,210

136

III. Employee Information

I. Employee Information	I. Employee Information
Year		2016	2017	From the beginning of the year to March 31, 2018 (Note)
Number of employees	Male	3405	3540	3537
	Female	559	572	583
	Total	3964	4112	4120
Averageage		43.34	47.34	45.12
Average yearofservices		5.26	6.68	6.72
Education level	PhD	0.23%	0.24%	0.24%
	Master	6.38%	6.20%	6.14%
	University	55.95%	55.54%	55.19%
	Senior (Vocational) High	33.70%	34.10%	34.49%
	Below high school	3.73%	3.92%	3.93%

Note: The annual data shall be updated as of the publication date of this annual report.

IV. Environmental Expenditures:

(I) Total damages (include compensation) and punishment due to environmental pollution in last fiscal year up till 22 February 2018:

22 February2018:
Item	2014	2015	2016	2017	Feb.2,2018
Pollution (type, extent)	None	In violation of the Waste Disposal Act, storing hazardous industrial waste for one year, without requesting for extension two months prior to the due date.	None	None	None
Compensation recipient or unit imposing the punishment	None	The unit imposing the punishment is Kaohsiung City Government Environmental Protection Agency	None	None	None
Compensation amount or punishment	None	Fine of NT$ 60,000 and 2 hours of environmental educationworkshop.	None	None	None
Other damages	None	None	None	None	None

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(II) Future countermeasures and possible expenditure:
Improvement plans: (1) Implement environmental protection, abide by the various environmental protection laws
```
 - and regulations.
```
- (2) Abide by ISO 14001 system, and carry out regular checks and identification in accordance to the environmental protection laws and regulations.
- (3) Actively implement management by wandering around in the plant, and deficiency correction preventive measures.
- (4) Take part in various environmental law seminars and strengthen communication and coordination with the competent authority.

Item	2017	2018	2019	2020
Pollution control equipment to be purchase or expenditur e	1. Supplies replacement and cleaning of air pollution control equipment. 2. VOCs air pollution charges. 3. Sulfur oxides and nitrogen oxides emission charge.	1. Supplies replacement and cleaning of air pollution control equipment. 2. VOCs air pollution charges. 3. Sulfur oxides and nitrogen oxides emission charge.	1. Supplies replacement and cleaning of air pollution control equipment. 2. VOCs air pollution charges. 3. Sulfur oxides and nitrogen oxides emission charge.	1. Supplies replacement and cleaning of air pollution control equipment. 2. VOCs air pollution charges. 3. Sulfur oxides and nitrogen oxides emission charge.
Expected Improveme nts	1. Replace Raschig ring, heat storage materials and dust filter bag regularly to improve air quality (approximately NT$ 3224.5 thousand). 2. Expected to pay VOC emission charges of NT$ 357.5 thousand per year. 3. Expected to pay sulfur oxides and nitrogen oxides emission charges of NT$ 181.5 thousand peryear.	1. Replace Raschig ring, heat storage materials and dust filter bag regularly to improve air quality (approximately NT$ 3224.5 thousand). 2. Expected to pay VOC emission charges of NT$ 357.5 thousand per year. 3. 3. Expected to pay sulfur oxides and nitrogen oxides emission charges of NT$ 181.5 thousand per year.	1. Replace Raschig ring, heat storage materials and dust filter bag regularly to improve air quality (approximately NT$ 3224.5 thousand). 2. Expected to pay VOC emission charges of NT$ 357.5 thousand per year. 3. Expected to pay sulfur oxides and nitrogen oxides emission charges of NT$ 181.5 thousand peryear.	1. Replace Raschig ring, heat storage materials and dust filter bag regularly to improve air quality (approximately NT$ 3224.5 thousand). 2. Expected to pay VOC emission charges of NT$ 357.5 thousand per year. 3. Expected to pay sulfur oxides and nitrogen oxides emission charges of NT$ 181.5 thousandperyear.
Amount	Approx. NT$ 3763.5 thousand	Approx. NT$ 3763.5 thousand	Approx. NT$ 3763.5 thousand	Approx. NT$ 3763.5 thousand

Expected environmental protection capital expenditures for next three years
Impact after improvements

Item	2017	2018	2019	2020
Impact on netprofit	Low impact	Low impact	Low impact	Low impact
Impact on competitiveposition	Continue to increase environmental protection performance, promote harmonyin neighborhood,and maintaingood corporate image.

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V. Labor-management Relations:

(I) Existing important labor-management agreements and implementation situation:

The Company belongs to the iron and steel industry, our employees are competent, and we implement people-oriented management. We accept the clause in the International Human Rights Convention stating that everyone has the right to work and to free free choice of employment for making a living, therefore, we provide our employees with education and training on relevant techniques and jobs. Our employees actively participate in labor-related issues, and we adopt an open approach, creating an operation environment with harmonious labor-management relationship together with the employees. The following are the Company's labor-management agreements:

Communication and Rewards
(1) The Company spares no effort in setting up internal communication channel. GroupWise e-mail system is now widely used by the employees, reducing the overuse of paper and reports.
(2) Sets up labor-management meetings, meetings for members of occupational safety and health committee, and meetings for employee benefits committee, providing a communication platform for both labor and management respecting employees rights, benefits, and occupational safety.
(3) The Company information corner is set up in the Company's internal website to allow employees to obtain timely information of the Company's directions through diversified communication platform. The setup of employee's voice provides employees a timely and two-way communication channel, making communication more efficient.
(4) The Company has internal rewards and punishments system, rewarding employees with outstanding performance or contribution. Besides awarding great merit, merit and commendation, it may also issue award based on the employees' power and responsibilities, as a form of encouragement.
(5) To encourage the Company's employees to raise suggestions on improving operation, and attain the goal of improving performance, the Company has an innovation proposal management mechanism, where benefits and awards are calculated based on the benefits from the improvement proposals.
(6) Stipulated Procedures for Sexual Harassment Prevention and set up Sexual Harassment Prevention Committee for employees to lodge their complaints.
Welfare and Training
(1) The Company formulates clear and fair employment policy and obtains from employing child labor under the age of 18; provides fair wages and equal compensation to work without any discrimination.
(2) The Company treats its staff as one of its important assets. Besides purchasing labor and health insurance in accordance with the regulations, employees may also be protected by group insurance and travel insurance, comprising life insurance and business travel insurance, with premiums fully paid by the Company, providing employees with better security in terms of work and life.

139

(3) Besides enjoying the benefits of group insurance for themselves, employees may also purchase discounted insurances in critical illness, medical, cancer insurance and personal accident, for their immediate family members and spouse, so that both the employees and their families are well taken care of.
(4) The Company provides various kinds of subsidies and benefits, including subsidies in childbirth, marriage, travel, funeral and burial, hospitalization due to general injury or occupational injury, as well as student grants and incentives for employees' children.
(5) The Company has a well-established Staff Welfare Committee, comprising of members appointed from various departments. Besides convening regular meetings to organize staff welfare measures and activities, it also organizes various types of clubs to promote recreational activities to establish staff cohesiveness.
(6) The Company has received the “Healthy Workplace Certification - Health Promotion Mark” certified by the Health Promotion Administration.
(7) The Company has set up a health management center equipped with fitness equipment, and is guided by a coach. The Company not conducts total productive maintenance (TPM) on machinery and equipment, but also pays attention to the daily healthcare and fitness of its employees.
(8) Yearly medical checkups by E-Da Hospital are provided for each employee, serving as a preliminary health check for the employees.
(9) Cooperates with E-Da Hospital in engaging on-site doctors to provide services such as medical consultation, health consultation, talks, etc.
(10) Cooperates with E-Da Hospital in organizing "Overall health Management Planning and Services for Company's Employees". Dedicated health managers are appointed to provide services such as health management, health information, medical consultation, etc., based on the employees' yearly medical results.
(11) Cooperates with E-Da Hospital in providing discounts on medical expenditures incurred by employees’ spouse or direct blood relatives.
(12) Employees who have served more than three months may apply for Yieh Phui's stock ownership. 20% of stock ownership is set aside as awards every year, to attain the objective of long-term savings, accumulated wealth, and a stable lifestyle in the future.
(13) Cooperates with Mega International Commercial Bank in providing employees with no more than 10 times of inter-bank withdrawals, ATM transfers and internet bank transfers per month with no administrative charges.
(14) Employees may apply special leave on 2-hourly basis, so that they can strike a better balance between work and family.
(15) Employees are allowed to extend their working hours and to perform duties in exchange for days off or for overtime allowance. The flexibility in working hours enable staff to have a balance between work and life.
(16) The Group's Leisure and Entertainment Business provides the employees with exclusive discounts, means and discounts on leisure and relaxation.

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(17) The Company constructs a comprehensive plan for talent cultivation and development in line with Talent Quality Management System (TTQS).
(18) The Company communicates its value and policy to new employees on time, so to assist them in working in a safe and friendly workplace.
(19) Employees are encouraged to take continuing education respecting their professional abilities. The Company holds a variety of required courses relating to occupational competence every year, helps employees obtain professional license, and subsidies them to have a bachelor degree or master degree from I-Shou University.
(20) Employees taking certain jobs are required to attend training courses that conform to regulations governing occupational safety and health. The Company also assist them in obtaining the necessary license in order to minimize the incidents of occupational hazards.
(21) The Company has set up a knowledge platform for education trainings, and integrated the platform with digital learnings, so as to put forward a systematic operation and management.
(22) Finance personnel obtaining relevant qualifications specified by the competent authority:
- A 、 The Company's chief financial officer took and passed the Professional Certification for Accounting Manager of Public Listed Company organized by the Accounting Research and Development Foundation.
- B 、 Two audit personnel from the Company have obtained Basic Proficiency Test for Corporate Internal Control organized by the Securities and Futures Institute.
- C 、 One finance personnel from the Company has obtained "Certificate of Competency in Corporate Action" awarded by the Securities and Futures Institute.
- D 、 One finance personnel from the Company has obtained Certified Public Accountant license awarded by the Ministry of Examination.
Retirement measures and implementation:
(1) To ensure a stable lifestyle for employees after their retirement, the Company, in accordance with the Labor Standards Act, has established employees retirement mechanism. The Company's full-time employees who comply with the retirement conditions as specified in Article 53 and Article 54 of the Labor Standards Act, shall be given employees retirement fund in accordance with the law, based on their years of service in the Company.
(2) The Company, according to the Regulations for the Allocation and Management of the Workers' Retirement Reserve Funds, sets aside 6% of employees' actual salary as retirement reserve every month, fills in the Retirement Reserve Deposit Slip, and deposit into Bank of Taiwan before the 20th of the following month.
(II) List of damages due to labor-management disputes in the last two years: None

141

VI. Important Contracts:

Nature	Contracting Parties	Contract start/end date	Major Content
Surface rights contract	Shin Phui Steel Corporation	June 15, 2001- June 14, 2051	1. Royalties payment method: Payment of NT$ 120,000 thousand to be amortized over 50 years. 2. Until December 31,2017, a total of NT$ 39,700 thousand has been amortized.
Surface rights contract	Shin Yang Steel Co., Ltd.	April. 1, 2015 - March 31, 2025	1. Rental collection method: Monthly rental of NT$ 983 thousand closing at the beginning of each month. 2. Rental income recognized in 2017 was NT$ 11,796 thousand.
Construction contract	Taiwan Kumagi's International Composite Commercial Building constructionproject	Jul. 31, 2013- April 30, 2018	Contract price: NT$ 216,736 thousand
Construction contract	Sun Pao Tsun Construction's Xinban Commercial Building main construction	April 30, 2014 - March 31, 2018	Contract price: NT$ 154,930 thousand
Construction contract	6 travelling container cranes at track 40T of Pier 120 rear storage area, Kaohsiung Harbor, Port of Keelung	August 14, 2015 - January 31, 2018	Contract price: NT$ 311,100 thousand
Construction contract	New Spring Construction's E-DA Asia Plaza ground structure construction project	March 30, 2015 - December 31, 2018	Contract price: NT$ 1,820,539 thousand
Construction contract	Chung Lu YKK Taiwan's Chungli Third Factory constructionproject	June 14, 2016 - May 31, 2018	Contract price: NT$ 258,773 thousand
Construction contract	Construction and installation of 40T*42M tracked overhead container crane for China Container Transport at pier 10 and 11 of Taichung Harbor	Feb. 20, 2017 - June 30, 2018	Contract price: NT$ 202,300 thousand

142

Chapter 6Financial Conditions

I. Condensed Balance Sheet and Consolidated Income Statement for the Last Five Years

(I) Condensed balance sheet (consolidated)

Unit: in NT$ thousands

					Unit:	Unit:	Unit:	Unit:	Unit:	in NT$ thousands
Year Item					Financial Information for last 5 years					Financial Information from the beginning of the current year to March 31, 2018 (Consolidated)
					2013	2014	2015	2016	2017
	Current assets				23,353,350	23,840,021	21,294,005	24,414,242	27,335,270	26,258,547
	Property, plant and equipment				29,323,857	33,374,278	36,094,705	37,867,059	39,326,842	40,074,741

	Intangible assets				3,220	4,485	2,702	9,533	8,880	8,730
	Other assets				12,690,607	14,675,645	18,968,584	19,745,656	20,557,356	20,638,001
	Total assets				65,371,034	71,894,429	76,359,996	82,036,490	87,228,348	86,980,019
	Current liabilities			Before distribution	23,963,037	25,216,875	17,614,075	23,911,787	27,177,594	27,177,594
				After distribution	－	－	－	－	－	－
			Non-current liabilities		12,759,380	17,429,383	29,742,076	27,880,724	30,500,102	29,906,235

	Total liabilities			Before distribution	36,722,417	42,646,258	47,356,151	51,792,511	57,083,829	57,083,829
				After distribution	－	－	－	－	－	－
Equity attributable to shareholders of the parent company					25,817,865	26,990,339	25,884,541	27,537,651	27,841,691	28,078,331

		Capital			16,353,422	16,680,490	17,180,905	17,180,905	18,211,760	18,211,760
		Capital surplus			4,622,016	4,627,688	4,673,787	4,737,131	4,873,770	4,873,824
Retained earnings Earnings				Before distribution	4,726,222	5,301,159	3,384,660	5,786,966	5,510,332	5,510,332
				After distribution	－	－	－	－	－	－
		Other equity			116,205	381,002	645,189	-167,351	-636,655	-517,585
		Treasurystock			－	－	－	－	－	－
		Non-controlling interests			2,830,752	2,257,832	3,119,304	2,706,328	1,794,170	1,817,859

Equity Total				Before distribution	28,648,617	29,248,171	29,003,845	30,243,979	29,896,190	29,896,190
				After distribution	－	－	－	－	－	－

Data source: The above 2018 Q1 consolidated financial statements have been reviewed by CPAs.

143

Condensed balance sheet (Individual)

Unit: in NT$ thousands

Year Item	Year Item	Year Item	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years
			2013	2014	2015	2016	2017
	Current assets		8,114,943	6,725,377	6,291,122	8,199,957	9,254,088
	Property, plant and equipment		8,819,880	8,824,415	8,939,016	8,559,554	8,106,718

	Intangible assets		－	－	－	－	－
	Other assets		26,211,820	29,049,882	30,096,771	31,473,561	33,581,429
	Totalassets		43,146,643	44,599,674	45,326,909	48,233,072	50,942,235
Current liabilities		Before distribution	11,840,232	14,514,126	10,676,939	11,076,491	12,540,901
		After distribution	－	－	－	－	－
Non-current liabilities			5,488,546	3,095,209	8,765,429	9,618,930	10,559,643
Total liabilities		Before distribution	17,328,778	17,609,335	19,442,368	20,695,421	23,100,544
		After distribution	－	－	－	－	－
Capital			16,353,422	16,680,490	17,180,905	17,180,905	18,211,760
Capitalsurplus			4,622,016	4,627,688	4,673,787	4,737,131	4,873,770
Retained earnings Earnings		Before distribution	4,726,222	5,301,159	3,384,660	5,786,966	5,392,816
		After distribution	－	－	－	－	－
Otherequity			116,205	381,002	645,189	-167,351	-636,655
Treasurystock			－	－	－	－	－
Equity			25,817,865	26,990,339	25,884,541	27,537,651	27,841,691

144

(II) Statements of Comprehensive Income (Consolidated)

Unit: in NT$ thousands

Year Item	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial information from the beginning of the current year to March 31, 2018 (consolidated)
	2013	2014	2015	2016	2017
Operatingrevenue	54,861,313	60,567,319	49,784,834	52,847,410	71,158,662	18,820,625
Gross Profit	3,683,122	4,436,083	3,704,492	7,206,359	6,299,383	1,377,756
Operating income (loss)	1,121,041	1,442,003	861,677	3,844,037	2,211,374	304,696
Non-operating income and expenses	(506,485)	(81,685)	(2,458,392)	(471,965)	(406,009)	(216,660)
Income before tax	614,556	1,360,318	(1,596,715)	3,372,072	1,805,365	88,036
Current net income (loss) from continuing operations Net income	363,348	941,034	(1,614,837)	2,378,545	1,345,310	54,607
Loss from discontinued operations	－	－	－	－	－	－
Current net income (loss)	363,348	941,034	(1,614,837)	2,378,545	1,345,310	54,607
Other comprehensive income (loss) (Net income after tax)	227,875	276,020	190,111	(904,716)	(504,626)	56,052
Total comprehensive income (loss)	591,223	1,217,054	(1,424,726)	1,473,829	840,684	110,659
Net income attributable to owners of parent company Owners of parent company	771,983	1,238,852	(953,786)	2,502,005	1,367,405	56,730
Net income attributable to non-controlling interests	(408,365)	(297,818)	(661,051)	(123,460)	(22,095)	(2,123)
Total comprehensive income (loss) attributable to owners of parent company	822,158	1,498,222	(761,465)	1,612,620	878,961	116,518
Total comprehensive income (loss) attributable to non-controlling interests	(230,935)	(281,168)	(663,261)	(138,791)	(38,277)	(5,859)
Earningsper share	0.46	0.72	-0.56	1.46	0.75	0.03

Data source: The above 2018 Q1 consolidated financial statements have been reviewed by CPAs.

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Consolidated income statement (Individual)

Unit: in NT$ thousands

Year Item	Year Item	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years	Financial Information for last 5 years
		2013	2014	2015	2016	2017
Operatingrevenue		26,745,406	29,202,735	22,223,598	23,867,665	29,179,218
GrossProfit		2,333,017	2,221,765	1,869,039	3,857,918	3,789,635
Operating income (loss)		978,443	734,204	558,658	2,064,727	1,461,329
Non-operating income and expenses		(42,916)	675,205	(1,623,316)	948,024	208,432
Income before tax		953,527	1,409,409	(1,064,658)	3,012,751	1,669,761
Current net income (loss) from continuing operations Net income		771,983	1,238,852	(953,786)	2,502,005	1,367,405
Loss from discontinued operations		－	－	－	－	－
Current net income (loss)		771,983	1,238,852	(953,786)	2,502,005	1,367,405
Other comprehensive income (loss) (Net income after tax)		50,175	259,370	192,321	(889,385)	(488,444)

	Total comprehensive income (loss)	822,158	1,498,222	(761,465)	1,612,620	878,961

Earningsper share		0.46	0.72	-0.56	1.46	0.75

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(III) Names of CPAs for the last 5 years and audit opinions

Names of CPAs for the last 5 years and their audit opinions

Year	Name of accounting firm	Name of CPA	Auditors＇Opinions
2013	Crowe Horwath (TW) CPAs	Shu-Man Tsai, Jen-YaoHsieh	Modified unqualified opinion
2014	Crowe Horwath (TW) CPAs	Shu-Man Tsai, Jen-YaoHsieh	Modified unqualified opinion
2015	Crowe Horwath (TW) CPAs	Shu-Man Tsai, Jen-YaoHsieh	Modified unqualified opinion
2016	Crowe Horwath (TW) CPAs	Ling-Wen Huang, Jen-YaoHsieh	Unqualified opinion
2017	Crowe Horwath (TW) CPAs	Ling-Wen Huang, Jen-Yao Hsieh	Unqualified opinion

Engaged accounting firm, Horwath Chien Hsing CPAs, for attestation in 01 January 2013, which was renamed to Crowe Horwath (TW) CPAs after merging.

Change of CPA in the last five years if any: In response to the need of duties adjustment by Crowe Horwath (TW) CPAs, the Company has since 2016 Q3 financial statements attestation, changed the CPAs from Shu-Man Tsai and Jen-Yao Hsieh to CPAs Ling-Wen Huang and Jen-Yao Hsieh.

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II. Financial Analysis of the Last Five Years

Consolidated financial analysis

II. Financial Analysis	II. Financial Analysis	of the Last Five Years Consolidated financial analysis	of the Last Five Years Consolidated financial analysis	of the Last Five Years Consolidated financial analysis	of the Last Five Years Consolidated financial analysis	of the Last Five Years Consolidated financial analysis
Year (Note 1) Item analyzed (note 3)		Financial analysis of last 5 years					Financial information from the beginning of the current year to March 31,2018
		2013	2014	2015	2016	2017
Financial Structure (%)	Debt to Assets Ratio	56.18	59.32	62.02	63.13	66.02	65.63
	Long-term capital to property, plant, and equipment ratio	140.61	139.86	162.75	153.50	152.91	149.23
Solvency (%)	Current ratio	96.94	94.54	120.89	102.10	100.90	96.62
	Quick ratio	60.09	57.19	77.76	58.52	52.82	45.68
	Interest protection multiples	1.61	2.50	-0.88	5.27	2.61	1.31
Operating Ability	Receivables turnover ratio (times)	15.04	16.96	15.81	16.05	16.77	16.95
	Average collection period (days)	24.26	21.52	23.09	22.74	21.77	21.53
	Inventory turnover ratio (times)	7.23	7.53	6.95	6.50	7.11	6.93
	Accounts payables turnover ratio (times)	19.84	19.71	18.53	18.27	20.86	23.05
	Average daysforsale	50.48	48.47	52.52	56.15	51.34	52.67
	Property, plant, and equipment (PP&E) turnover ratio (times)	1.85	1.92	1.43	1.43	1.84	1.90
	Total asset turnover ratio (times)	0.82	0.88	0.67	0.67	0.84	0.86
Profitability	Return on assets(%)	1.43	2.28	-1.23	3.83	2.69	0.32
	Return on equity (%)	1.23	3.25	-5.54	8.03	4.49	0.18
	Income before tax to paid-upcapital ratio(%)	-	8.16	-9.29	19.63	9.91	0.48
	Netprofit margin(%)	0.66	1.55	-3.24	4.50	1.89	0.29
	Earningsper share(NT$)	0.47	0.74	-0.56	1.46	0.75	0.03
Cash flow	Cash flow ratio (%)	9.04	4.33	20.14	14.11	0	0
	Cash flow adequacy ratio (%)	95.03	73.72	50.31	44.44	32.72	32.87
	Cash re-investment ratio (%)	3.55	2.11	4.36	4.14	0	0
Lever age	Operating leverage	48.94	42.00	57.78	13.75	32.18	61.77
	Financial leverage	9.25	2.68	80.10	1.26	2.03	15.56

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Please state the causes of changes in each financial ratio for the preceding two fiscal years. (except when the change is less than 20%).

Decline in interest coverage ratio: The decline in interest coverage ratio is due to a decline in the Income before tax. 2. Increase in property, plant, and equipment (PP&E) turnover ratio: A result from rise in sales revenue.
Increase in total asset turnover ratio (times): Mainly due to dramatic increase in sales revenue as compared to the previous period.
Decrease in return on assets: Mainly due to decrease in net income.
Decrease in return on equity: Mainly due to decrease in net income.
Decrease in ratio of income before tax to paid-up capital: Mainly due to decrease in current net profit before tax compared to the same period last year. 7. Decrease in profit margin: Mainly due to decrease in net income.
Decrease in earnings per share (NT$): Mainly due to decrease in net income.
Decrease in Cash flow ratio: Mainly due to decrease in net operating cash flows
Decrease in Cash flow adequacy ratio: Mainly due to decrease in net operating cash flows
Decrease in Cash re-investment ratio: Mainly due to decrease in net operating cash flows
Increase in operating leverage: Mainly due to decrease in net operating income.
Increase in financial leverage: Mainly due to increase in Interest expense.
＊ Companies having produced an individual financial report shall produce an analysis report on individual financial ratios.
If the financial information under international financial reporting standards is less than 5 years, the financial information under ROC GAAP should be prepared in Table (2) below.
Note 1: Fiscal years for which reports were not CPA audited or attested shall be stated.
Note 2: Until the date of publication of the annual report, a company whose stock is listed on the stock exchange or traded over the counter shall disclose the most recent financial statement audited or attested by CPA, if any.
Note 3: The following calculation formulas shall be listed at the end of this Table in the annual report: 1. Financial Structure
(1) Debt-to-asset ratio = total liabilities / total assets.
(2) Long-term capital to property, plant and equipment ratio = (total equity + non-current liabilities)/net property, plant and equipment.
Solvency
(1) Current ratio = current assets/current liabilities.
(2) Quick ratio = (current assets – inventory – prepaid expense) / current liabilities.
(3) Interest protection multiples = net income before income tax and interest expense / current interest expense.
1. Operating Ability
(1) Receivables (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period

(2) Average collection period = 365 / receivables turnover ratio. (3) Inventory turnover ratio = cost of goods sold / average inventory amount. (4) Payable (including accounts payable and business-related notes payable) turnover ratio = cost of goods sold / average payable balance of the period (including accounts payable and business-related notes payable). (5) Average days for sale = 365 / inventory turnover rate. (6) Property, plant, and equipment (PP&E) turnover ratio = net sales/average PP&E (7) Total asset turnover ratio = net sales / average total assets. 4. Profitability (1) Return on assets = (net income + interest expense x (1– tax rate)) / average total assets. (2) Return on equity = net income after tax/ average total equity (3) Net profit margin = net income / net sales. (4) Earnings per share = (income or loss attributable to owners of parent company – dividends on preferred shares) / weighted average number of issued shares. (Note 4) 5. Cash flow

(1) Cash flow ratio = net operating cash flow / current liabilities. (2) Net cash flow adequacy ratio = net operating cash flow in last 5 years / (capital expenditures + inventory increase + cash dividend) in last 5 years.
(3) Cash re-investment ratio = (Net operating cash flow – cash dividend) / (gross property, plant and equipment + long-term investment + other non-current assets + working capital). (Note 5)

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6. Leverage:

(1) Operating leverage = (Net operating revenue - variable operating change cost and expense) / Operating income (Note 6).
(2) Financial leverage = Operating income / (operating income - interest expenses).
Note 4: The following shall be noted when using the above formula for earnings per share:
It should be based on the weighted average number of shares of common stock rather than the number of issued shares at the end of the year.
When there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.
In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the capital increase.
If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be subtracted from net profit after tax, or added to net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be subtracted from net profit after tax; no adjustment is required in case of loss.
Note 5: Special attention should be paid to the following matters when carrying out cash flow analysis:
Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.
Capital expenditures refer to the cash outflows for annual capital investment.
The increase in inventory is counted only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.
Cash dividend includes cash dividends from common stocks and preferred stocks.
Gross property, plant and equipment value refers to the total value of property, plant and equipment before subtracting accumulated depreciation.
Note 6: The issuer shall classify the operating costs and operating expenses as fixed or variable according to their nature. If it involves estimation or subjective judgment, attention should be paid to its reasonableness and consistency.
Note 7: Where company shares have no par value or where the par value per share is not NT$ 10, any calculations that involve paid-up capital ratio shall be replaced with the equity ratio attributable to the owners of the parent company as stated in the balance sheet.

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Individual financial analysis

Year (Note 1) Item analysed (Note 2)	Year (Note 1) Item analysed (Note 2)	Year (Note 1) Item analysed (Note 2)	Financial analysis of last 5 years	Financial analysis of last 5 years	Financial analysis of last 5 years	Financial analysis of last 5 years	Financial analysis of last 5 years
			2013	2014	2015	2016	2017
Financial Structure (%)	Debt to Assets Ratio		40.16	39.48	42.89	42.91	45.35
	Long-term capital to property, plant, and equipment ratio		354.95	340.94	387.63	434.09	473.70
Solvency (%)	Current ratio		68.54	46.34	58.92	74.03	73.79
	Quick ratio		38.59	25.21	36.44	38.51	38.28
	Interest protection multiples		3.87	5.64	-2.34	9.47	4.45
Operating Ability	Receivables turnover ratio (times)		18.36	16.10	11.96	16.59	19.25
	Average collection period (days)		19.88	22.67	30.52	22.00	18.96
	Inventory turnover ratio (times)		7.77	8.46	7.93	6.85	6.51
	Accounts payables turnover ratio (times)		17.41	20.81	17.22	16.25	20.25
	Average daysforsale		46.97	43.14	46.03	53.28	56.07
	Property, plant, and equipment (PP&E)turnover ratio(times)		2.96	3.31	2.50	2.73	3.50
	Total asset turnover ratio (times)		0.62	0.67	0.49	0.51	0.59
Profitability	Returnon assets (%)		2.43	3.43	-1.53	5.98	3.42
	Returnonequity (%)		3.04	4.69	-3.61	9.37	4.94
	Percentage to net Income Capital Ratio (%)	Operating income	5.98	4.40	-3.25	12.02	8.02
		Pre-tax net profit	5.72	8.45	-6.20	17.54	9.17
	Netprofit margin(%)		2.89	4.24	-4.29	10.48	4.69
	Earningsper share(NT$)		0.47	0.74	-0.56	1.46	0.75
Cash flow	Cash flow ratio (%)		14.88	0	25.07	18.09	4.28
	Cash flow adequacy ratio (%)		169.55	153.27	195.97	138.01	117.14
	Cash re-investment ratio (%)		4.11	0	5.82	4.10	1.07
Lever age	Operating leverage		27.33	39.77	39.78	11.56	19.97
	Financial leverage		1.50	1.71	2.33	1.21	1.37

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Please state the causes of changes in each financial ratio for the preceding two fiscal years. (except when the change is less than 20%). 1. Decline in interest coverage ratio: The decline in interest coverage ratio is due to a decline in the Income before tax. 2. Increase in accounts payables turnover ratio: Mainly due to increase in cost to sell. 3. Increase in property, plant, and equipment (PP&E) turnover ratio: A result from rise in sales revenue. 4. Decrease in return on assets: Mainly due to decrease in net income. 5. Decrease in return on equity: Mainly due to decrease in net income. 6. Decrease in the ratio of operating profits to paid-in-capital Mainly due to decrease in operating profits. 7. Decrease in ratio of income before tax to paid-up capital: Mainly due to decrease in current net profit before tax compared to the same period last year. 8. Decrease in profit margin: Mainly due to decrease in net income. 9. Decrease in earnings per share (NT$): Mainly due to decrease in net income. 10. Decrease in Cash flow ratio: Mainly due to decrease in net operating cash flow, and increase in current liabilities. 11. Decrease in Cash re-investment ratio: Mainly due to decrease in net operating cash flows 12. Increase in operating leverage: Mainly due to decrease in net operating income. Note 1: Fiscal years for which reports were not CPA audited or attested shall be stated. Note 2: The following calculation formulas shall be listed at the end of this Table in the annual report: 1. Financial Structure (1) Debt-to-asset ratio = total liabilities / total assets. (2) Long-term capital to fixed assets ratio = (shareholders' equity + long-term liabilities)/net fixed assets. 2. Solvency (1) Current ratio = current assets/current liabilities. (2) Quick ratio = (current assets – inventory – prepaid expense) / current liabilities. (3) Interest protection multiples = net income before income tax and interest expense / current interest expense. 3. Operating Ability (1) Receivables (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period (2) Average collection period = 365 / receivables turnover ratio. (3) Inventory turnover ratio = cost of goods sold / average inventory amount. (4) Payable (including accounts payable and business-related notes payable) turnover ratio = cost of goods sold / average payable balance of the period (including accounts payable and business-related notes payable). (5) Average days for sale = 365 / inventory turnover rate. (6) Fixed assets turnover ratio ＝ net sales / average total assets. (7) Total asset turnover ratio = net sales / average total assets. 4. Profitability (1) Return on assets = (net income + interest expense x (1– tax rate)) / average total assets. (2) Return on equity = profit and loss after tax / average shareholders' equity. (3) Net profit margin = net income / net sales. (4) Earnings per share = (net profit after tax – dividends on preferred shares) / weighted average number of issued shares. (Note 4) 5. Cash flow (1) Cash flow ratio = net operating cash flow / current liabilities. (2) Net cash flow adequacy ratio = net operating cash flow in last 5 years / (capital expenditures + inventory increase + cash dividend) in last 5 years. (3) Cash re-investment ratio = (Net cash flow from operating activities – cash dividend) / (gross fixed assets value + long-term investment + other assets + working capital). (Note 5) 6. Leverage: (1) Operating leverage = (Net operating revenue - variable operating change cost and expense) / Operating income (Note 6). (2) Financial leverage = Operating income / (operating income - interest expenses). Note 3: The following shall be noted when using the above formula for earnings per share: 1. It should be based on the weighted average number of shares of common stock rather than the number of

152

issued shares at the end of the year.

When there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.
In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the capital increase.
If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be subtracted from net profit after tax, or added to net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be subtracted from net profit after tax; no adjustment is required in case of loss.
Note 4: Special attention should be paid to the following matters when carrying out cash flow analysis:
Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.
Capital expenditures refer to the cash outflows for annual capital investment.
The increase in inventory is counted only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.
Cash dividend includes cash dividends from common stocks and preferred stocks.
Gross fixed assets refer to the total fixed assets before the deduction of accumulated depreciation.

Note 5: The issuer shall classify the operating costs and operating expenses as fixed or variable according to their nature. If it involves estimation or subjective judgment, attention should be paid to its reasonableness and consistency.

153

III. The Audit Committee ＇ s Audit Report on the Most Recent Fiscal Year:

The Board of Directors has prepared the Company's 2017 business report, consolidated financial statements (include individual financial statements)

and surplus distribution proposal, where the financial statements have been audited by Crowe Horwath (TW) CPAs, and an audit report has been issued. The aforementioned business report, financial statements and surplus distribution proposal

have been audited by the Company's Audit Committee, and deemed no incompatibility. The above reports are presented in accordance

with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

2018 Shareholders ＇ Meeting of Yieh Phui Enterprise Co., Ltd.

Audit Committee Convener: Chin-Shu Sun

March 21, 2018

154

IV. Last Fiscal Year's Consolidated Financial Statements of the Parent Company and Subsidiaries Audited and Attested by the CPA:

Yieh Phui Enterprise Co., Ltd.

Representation Letter for Combined Financial Statements

The entities that are required to be included in the combined financial statements of Yieh Phui Enterprise Co., Ltd. as of and for the year ended December 31, 2017, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No.10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements has already been covered in the consolidated financial statements. Hence, Yieh Phui Enterprise Co., Ltd. does not prepare a separate set of combined financial statements.

Represented by

Yieh Phui Enterprise Co., Ltd.

Representative: Lin, I-Shou

March 21, 2018

155

==> picture [174 x 30] intentionally omitted <==

Crowe Horwath (TW) CPAs Crowe Horwath (TW) CPAs

Member Crowe Horwath International

27F-1., No.6, Siwei 3rd Rd., Lingya Dist., 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City, Taiwan R.O.C. Tel:(07)3312133 Main line Fax:(07)3331710

Independent Auditors’ Report

To Yieh Phui Enterprise Co., Ltd.

Auditors’ Opinions

We have audited the Consolidated Balance Sheet of Yieh Phui Enterprise Co., Ltd. and its subsidiaries (hereinafter referred to as Yieh Phui Group) as of 31 December 2017 and 2016, the Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements (including Summary of Significant Accounting Policies) for the periods from January 1 to December 31, 2017 and 2016.

In our opinion, based on our audits and other auditors’ reports (please refer to other paragraphs), the afore-mentioned Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of Yieh Phui Group as of December 31, 2017 and 2016, and its consolidated financial performance and consolidated cash flows for the periods from January 1 to December 31, 2017 and 2016 in conformity with 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) to the extent endorsed and effected by the Financial Supervisory Commission.

Basis for Opinion

We planned and conducted our audits in accordance with Rules Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards in the Republic of China. Our responsibility under the above mentioned regulations will be further explained in the section titled "Accountant's Responsibility in Auditing the Consolidated Financial Statements". We have stayed independent from Yieh Phui Group as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by the norm. Based on our audits and other auditors’ reports, we believe we have obtained sufficient and appropriate audit evidence to serve as a basis for our opinion.

Key Audit Matters

Key Audit Matters refer to most vital matters in the process of auditing of 2017 Consolidated Financial Statement of Yieh Phui Group based on our professional judgment. Such matters have been dealt with in the course of of auditing and compiling the Consolidated

156

Financial Statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually. Key Audit Matters for the Yieh Phui Group’s Consolidated Financial Statements for the year ended December 31, 2017 are stated as follows:

I. Timing of Sales Revenue Recognition

Please see Note 4(29) of the Consolidated Financial Statements for accounting policies regarding revenue recognition; please see note 5(2)1 of the Consolidated Financial Statements for critical accounting estimates and assumptions regarding revenue recognition; please see note 6(31) of the Consolidated Financial Statement for details regarding revenue recognition. Description of key audit matters:

The timing of sales revenue recognition has to do with confirming the time of transfer of ownership and risk to the customer. Since the sales conditions for each major customer may differ, Yieh Phui Group determines whether to transfer the ownership and risk of goods sold to the customer according to the trading conditions of each order. As the timing of recognizing the sales revenue may have a major impact on Yieh Phui Group's financial performance, we have thus included it as one of the key audit matters.

157

Audit Process Adopted:

Our audit process included understanding and testing the effectiveness of the design and execution of internal control over the timing of sales revenue recognition; sampling and testing the trading terms between the Company and its major customers, and performing deadline test to determine the appropriateness of revenue recognition timing.

II. Inventory Valuation

Please refer to Note 4(13) of the Consolidated Financial Statements for accounting policies regarding inventory valuation; please refer to Note 5(2)5. of the Consolidated Financial Statements for critical accounting estimates and assumptions regarding inventory valuation and Note 6(7) of the Consolidated Financial Statements for details of inventory valuation.

Description of key audit matters:

Yieh Phui Group's inventory amounted to NT$ 9,993,445 thousand (net of NT$ 10,353,869 thousand of total inventory costs less NT$ 360,424 thousand of allowance for inventory valuation losses) as of 31 December 2017, which accounted for 11.46% of total assets. The inventory valuation is measured at the lower of the value of inventory cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical judgments and estimates and since inventory valuation is dependent on the influence of frequently volatile fluctuations of international metal price, we have thus included this item in the key audit matters.

Audit Process Adopted:

Our major audit process included obtaining management’s assessment information which determines the lower of the value of inventory cost and net realizable value of inventory, sampling estimated selling prices to the most recent sales records, and assessing the appropriateness of management's basis for estimating the net realizable value.

Other Matters

We do not audit the financial statements of some associates that have been included in the afore-mentioned Consolidated Financial Statements. They were audited by other auditors. Therefore, any value of such financial statements we have used to form our opinion for the afore-mentioned Consolidated Financial Statements are based on other auditors’ reports. The value of investments in the afore-mentioned associates recognized under the equity method as of December 31, 2017 and 2016 were NT$ 5,394,163 thousand and NT$ 5,358,441 thousand respectively, accounting for 6.18% and 6.53% of total assets. The share of profit (loss) of associates and joint ventures recognized under equity method in 2017 and 2016 were NT$ 82,282 thousand and NT$ 146,399 thousand respectively, accounting for 4.56% and 4.34% of income before tax.

158

Yieh Phui Enterprise Co., Ltd. has prepared its Parent Only Financial Statements, on which we have issued an unqualified audit report for reference.

Responsibility of the management and the governing body for the Consolidated Financial Statements

It is the management’s responsibility to fairly present the Consolidated Financial Statements in conformity with 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) to the extent endorsed and effected by the Financial Supervisory Commission, and to sustain internal controls respecting preparation of the Consolidated Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing the Consolidated Financial Statements, the responsibility of management includes assessing Yieh Phui Group’s ability to continue as a going concern, disclosing going concern matters, as well as adopting going concern accounting, unless the management intends to liquidate Yieh Phui Group or terminate the business, or no practicable measure other than liquidation or termination of the business can be taken.

The governing bodies of Yieh Phui Group (including the Audit Committee) have the responsibility to oversee the financial reporting process. The Accountants’ Responsibility in Auditing the Consolidated Financial Statements

159

The purpose of our audit is to provide reasonable assurance that the Consolidated Financial Statements as a whole contains no material misstatements, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. "Reasonable assurance" refers to a high level of assurance. Nevertheless, our audit, which was carried out according to GAAS, does not guarantee that a material misstatement(s) will be detected in the Consolidated Financial Statements. There may still be material misstatements due to fraud or errors. If it could have been reasonably anticipated that misstated amounts, individually or in aggregate, could have influenced the economic decisions made by the users of the Consolidated Financial Statements, it will be deemed as material.

We have exercised professional judgment and maintained professional skepticism while abiding by GAAS in our audit. The following tasks have also been performed:

Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Consolidated Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. As fraud may involve collusion, forgery, deliberate omissions, false statements, or violations of internal controls, the risk of an undetected material misstatement due to fraud is greater than that due to errors.
Acquired necessary understanding of internal controls pertaining to the audit so as to provide appropriate audit procedures under such circumstances. Nevertheless, the purpose of such an understanding is not to provide any opinion on the effectiveness of the internal controls of Yieh Phui Group.
Evaluated the appropriateness of the accounting policies adopted by management and the rationality of the accounting estimates and the relevant disclosures.
Concluded on the appropriateness of the management’s use of going concern basis of accounting, and determined whether there existed events or circumstances that might cast significant uncertainty over Yieh Phui Group’s ability to continue as a going concern. If we believe there may be factors causing significant uncertainties, we are required to remind the users of the Consolidated Financial Statements in our audit report of the relevant disclosures therein, or to amend our report if inappropriate disclosure was made. Our conclusion is based on the audit evidence obtained as of the date of the audit report. However, future events or circumstances may cause Yieh Phui Group to cease to continue as a going concern.
Evaluated the overall presentation, structure and content of the Consolidated Financial Statements (including the related notes), and determined whether the Consolidated Financial Statements present related transactions and events fairly.
Obtained adequate and appropriate audit evidence regarding financial information of

160

members of the Group so as to express opinions for the Consolidated Financial Statements. We are responsible for the direction, supervision and execution of auditing the Group, and for formation of an audit opinion.

Communications between us and the company’s governing body take account of the scope and timing of the planned audit and significant audit findings, including any significant deficiencies in the internal controls during the audit process.

We have also provided the governing body with our statement of independence in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and communicated with the governing body all relationships and other matters that may be deemed to have an influence on our independence (including safeguard measures).

161

From the matters communicated with the governing body, we determined the key audit matters for Yieh Phui Group’s Consolidated Financial Statements for the year ended in December 31, 2017. Such matters have been explicitly stated in our audit report, unless laws or regulations prevent their disclosures, or, in extremely rare cases, we decide not to communicate such matters in our audit report in consideration that the reasonably anticipated adverse impacts of such communication would be greater than the public interest it would promote.

Crowe Horwath (TW) CPAs CPA: Huang Ling-Wen

CPA: Hsieh, Jen-Yao

No. of the official approval: FSC No. 10200032833 March 21, 2018

162

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Consolidated Balance Sheets December 31, 2017, and December 31, 2016 Unit: In Thousands of New Taiwan Dollars

Code Notes Assets	December 31, 2	017	December 31,	2016:	Code Notes Liabilities and Equity	December 31, 20	17	December 31, 2016:
	Amount	％	Amount	％		Amount	％	％ Amount
1100 6(1) 1110 6(2) 1150 6(3) 1170 6(4) 1180 7 1190 6(5) 1195 6(5)、7 1200 6(6) 1220 130X 6(7) 1410 6(8) 1476 6(9) 11XX 1510 6(2) 1523 6(11) 1543 6(12) 1546 6(13) 1550 6(10) 1600 6(14) 1760 6(15) 1780 1840 6(36) 1920 1980 8 1985 6(16) 15XX 1XXX Total asset Chairperson: Lin, I-Shou Long-term prepaid rent Total non-current assets Deferred income tax assets Refundable deposits Other financial assets - non-current Property, plant and equipment Investment property, net Intangible assets Bond investments with no active market-non-current Investments accounted for using equity method Available-for-sale financial assets - non-current Financial assets carried at cost - non-current Non-current assets Financial assets at fair value through profit or loss - non-current Other financial assets - current Total current assets Current income tax assets Inventories Prepayments Construction contract receivable Construction contract receivables – related parties Other receivables Notes receivable - net Accounts receivable- Net Accounts receivable - related parties, net Cash and Cash Equivalents Financial assets at fair value through profit or loss - current	$7,704,425 49,534 1,389,916 2,511,585 759,908 175,452 192,200 277,705 12,308 9,993,445 3,032,728 1,236,064 ---------------- 27,335,270 ---------------- 9,999 44,910 551,462 554,755 17,412,043 39,326,842 988,576 8,880 609,736 69,570 63,827 252,478 ---------------- 59,893,078 ---------------- $87,228,348 ================	9 - 2 3 1 - - - - 12 3 1 ---- 31 ---- - - 1 1 20 45 1 - 1 - - - ---- 69 ---- 100	$8,133,181 119,868 730,552 2,171,582 922,244 301,108 344,415 256,374 1,611 8,249,118 2,172,408 1,011,781 ---------------- 24,414,242 ---------------- 9,999 46,575 484,126 206,305 17,060,270 37,867,059 944,835 9,533 569,580 64,492 95,928 263,546 ---------------- 57,622,248 ---------------- $82,036,490 ================ Man	10 - 1 3 1 - - - - 11 3 1 ---- 30 ---- - - 1 - 21 46 1 - 1 - - - ---- 70 ---- 100 ==== (Pl ager: Wu Lin	2100 6(17) 2110 6(18) 2120 6(2) 2150 2170 2190 6(5) 2200 6(19) 2230 2250 6(20) 2310 2320 6(21) 21XX 2540 6(23) 2570 6(36) 2630 6(25) 2640 6(24) 2645 25XX 2XXX 3110 6(26) 3200 6(27) 3310 6(28) 3320 6(28) 3350 6(28) 3400 6(29) 31XX 36XX 6(30) 3XXX 1XXX ease refer to Notes to the Financial Statements) -Mao Non-controlling interests Total equity Total liabilities and equity Legal reserve Special reserve Undistributed earnings Other equity Total equity attributable to shareholders of the parent company Capital of common shares Capital surplus Retained earnings Equity attributable to shareholders of the parent company Capital Total non-current liabilities Total liabilities Net defined benefit liability - non- current Deposits received Long-term loans Deferred income tax liabilities Long-term deferred revenue Total current liabilities Non-current liabilities Long-term liabilities - current portion Current income tax liabilities Provision - current Advance receipt Accounts payable Construction contract payable Other payables Financial liabilities at fair value through profit or loss - current Notes payable Current liabilities Short-term loan Short-term bills payable	$15,825,523 989,011 21,033 1,816,494 1,114,431 14,331 1,634,147 1,124 102,183 1,888,764 3,685,344 ---------------- 27,092,385 ---------------- 29,282,172 227,177 35,669 940,445 14,639 ---------------- 30,500,102 ---------------- 57,592,487 ---------------- 18,211,760 4,873,770 2,698,462 327,757 2,366,597 -636,655 ---------------- 27,841,691 1,794,170 ---------------- 29,635,861 ---------------- $87,228,348 ================ Ac	19 1 - 2 1 - 2 - - 2 4 ---- 31 ---- 34 - - 1 - ---- 35 ---- 66 ---- 21 6 3 - 3 -1 ---- 32 2 ---- 34 ---- 100 ==== counting Man	$10,514,507 13 679,013 1 - - 2,094,250 3 1,193,816 1 29,402 - 1,700,788 2 381,176 - 70,347 - 2,132,926 3 5,115,562 6 ---------------- ---- 23,911,787 29 ---------------- ---- 26,632,474 33 115,349 - 38,396 - 1,075,766 1 18,739 - ---------------- ---- 27,880,724 34 ---------------- ---- 51,792,511 63 ---------------- ---- 17,180,905 21 4,737,131 6 2,448,261 3 327,757 - 3,010,948 4 -167,351 - ---------------- ---- 27,537,651 34 2,706,328 3 ---------------- ---- 30,243,979 37 ---------------- ---- $82,036,490 100 ================ ==== ager: LIN,CHIEN-HUNG

163

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Consolidated Statements of Comprehensive Income January 1, 2017 ~ December 31, 2017

Unit: In Thousands of New Taiwan Dollars

Code Note Item	2017		2016
	Amount	％	％ $52,847,410 100 45,641,051 86 ----------------- ---- 7,206,359 14 2,284,023 4 976,487 2 101,812 - ----------------- ---- 3,362,322 6 ----------------- ---- 3,844,037 8 ----------------- ---- 265,050 - -177,374 - -789,831 -1 230,190 - ----------------- ---- -471,965 -1 ----------------- ---- 3,372,072 7 993,527 2 ----------------- ---- 2,378,545 5 ----------------- ---- -71,478 - -26,336 - -11,383 - -849,812 -2 -5,850 - -104,959 - -142,336 - ----------------- ---- -904,716 -2 ----------------- ---- $1,473,829 3 ================= ==== 2,502,005 5 -123,460 - ----------------- ---- $2,378,545 5 ================= ==== 1,612,620 3 -138,791 - ----------------- ---- $1,473,829 3 ================= ==== $1.37 ================= Amount
4000 6(31) 5000 6(7) 5900 6100 6200 6300 6000 6900 7010 6(32) 7020 6(33) 7050 6(34) 7060 7000 7900 7950 6(36) 8200 8311 8320 8349 8361 8362 8370 8399 8300 6(37) 8500 8610 8620 8600 8710 8720 8700 9750 6(38) Total Basic earnings per share (NTD) Basic earnings per share Total Total comprehensive income (loss) attributable to: Shareholders of the parent company (net income/loss) Non-controlling interest (net income/loss) Total comprehensive income (loss) Net income (loss) attributable to: Shareholders of the parent company (net income/loss) Non-controlling interest (net income/loss) Share of other consolidated loss (profit) of associates and joint ventures recognized under equity method Income tax expense (profit) relating to items that may be reclassified to profit or loss. Other comprehensive income (loss), net Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements Unrealized valuation gain (loss) on available- for-sale financial assets Other comprehensive income (loss), net Items that are not reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive income (loss) of associates and joint ventures recognized under equity method income tax expenses (benefits) related to items that are not subsequently reclassified Net income (loss) before tax Income tax expense (gains) Net income (loss) Other gains and losses Finance costs Share of the loss (profit) of associates and joint ventures recognized under equity method Total non-operating income and expenses Total operating expenses Operating income (loss) Non-operating income and expenses Other income Gross profit (loss) Operating expenses Selling expense Administrative expense Research and development expenses Operating revenue Operating costs	$71,158,662 64,859,279 ----------------- 6,299,383 2,895,049 1,096,333 96,627 ----------------- 4,088,009 ----------------- 2,211,374 ----------------- 287,320 263,704 -1,120,195 163,162 ----------------- -406,009 ----------------- 1,805,365 460,055 ----------------- 1,345,310 ----------------- 2,578 -30,121 -6,312 -337,699 -1,665 -229,281 -85,250 ----------------- -504,626 ----------------- $840,684 ================= 1,367,405 -22,095 ----------------- $1,345,310 ================= 878,961 -38,277 ----------------- $840,684 ================= $0.75 =================	100 91 ---- 9 3 2 - ---- 5 ---- 4 ---- - - -1 - ---- -1 ---- 3 1 ---- 2 ---- - - - - - - - ---- -1 ---- 1 ==== 2 - ---- 2 ==== 1 - ---- 1 ====

(Please refer to Notes to the Financial Statements) Chairperson: Lin, I-Shou Manager: Wu Lin-Mao Accounting Manager: LIN,CHIEN-HUNG

164

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Consolidated Statements of Changes in Equity January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Item	Capital	Capital surplus	R	etained earnings			Other EquityItems
						Exchange differences on translation of foreign financial statements	Unrealized gain (loss) of available-for-sale financial assets
	Capital of common shares		Legal reserve	Special reserve	Undistributed earnings
Chairperson: Lin, I-Shou Balance, December 31, 2017 Changes in associated companies and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Non-controlling interests Net income (loss) Other comprehensive income (loss) Total comprehensive income (loss) Earnings allocation and distribution: Legal reserve Cash dividends for common stocks Stock dividends for common stocks Total Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Non-controlling interests Balance, December 31, 2016 Other comprehensive income (loss) Total comprehensive income (loss) Changes in associated companies and joint ventures accounted for using equity method Balance, January 1, 2016 Net income (loss)	$17,180,905 - - ---------------- - ---------------- - - - - ---------------- 17,180,905 - - 1,030,855 ---------------- 1,030,855 ---------------- - - ---------------- - ---------------- - - - - ---------------- $18,211,760 ================	$4,673,787 - - ---------------- - ---------------- 9,543 45,136 8,665 - ---------------- 4,737,131 - - - ---------------- - ---------------- - - ---------------- - ---------------- 5,404 131,235 - - ---------------- $4,873,770 ================ (Please Refer	$2,448,261 - - ----------------- - ----------------- - - - - ----------------- 2,448,261 250,201 - - ----------------- 250,201 ----------------- - - ----------------- - ----------------- - - - - ----------------- $2,698,462 ================= to Notes to the C	$327,757 - - --------------- - --------------- - - - - --------------- 327,757 - - - --------------- - --------------- - - --------------- - --------------- - - - - --------------- $327,757 =============== onsolidated Fina Manager:	$608,642 2,502,005 -76,845 ---------------- 2,425,160 ---------------- -11,648 - -11,206 - ---------------- 3,010,948 -250,201 -687,236 -1,030,855 ---------------- -1,968,292 ---------------- 1,367,405 -19,140 ---------------- 1,348,265 ---------------- -1,328 - -22,996 - ---------------- $2,366,597 ================ ncial Statements) Wu Lin-Mao	$583,467 - -809,765 ---------------- -809,765 ---------------- - - - - ---------------- -226,298 - - - ---------------- - ---------------- - -471,480 ---------------- -471,480 ---------------- - - - - ---------------- $-697,778 ================	$54,642 - -7,080 ---------------- -7,080 ---------------- - - - - ---------------- 47,562 - - - ---------------- - ---------------- - 7,171 ---------------- 7,171 ---------------- - - - - ---------------- $54,733 ================

165

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Consolidated Statements of Cash Flows January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Dividend received
Interest paid
Income tax refunded (paid)
Net cash provided by (used in) operating activities
Total net changes in operating assets and liabilities
Total adjustments
Cash inflow (outflow) from operations
Interest received
Increase (decrease) in provision
Increase (decrease) in advance receipts
Increase (decrease) in defined benefit liability, net
Total net changes in operating liabilities
Net changes in operating liabilities
Increase (decrease) in notes payable
Increase (decrease) in accounts payable
Increase (decrease) in construction contract payable
Increase (decrease) in other payables
(Increase) decrease in other receivables
(Increase) decrease in inventories
(Increase) decrease in prepayments
(Increase) decrease in other financial assets
Total net changes in operating assets
Net changes in operating assets
(Increase) decrease in held-for-trading financial assets
(Increase) decrease in notes receivable
(Increase) decrease in accounts receivable
(Increase) decrease in accounts receivable - related parties
(Increase) decrease in construction contract receivables
Impairment loss on non-financial assets
Others
Total income and expense items
Changes in operating assets and liabilities:
Dividend income
Share of the loss (profit) of associates and joint ventures recognized under equity method
Loss (gain) on disposal and retirement of property, plant and equipment
Reclassification of property, plant and equipment to expense
Gain (loss) on disposal of investment
Impairment loss on financial assets
Amortization
Bad debt provision (restated as income)
Net loss (gain) from financial assets and liabilities at fair value through profit or loss
Interest expense
Interest income
Cash flows from operating activities
Net income (loss) before tax
Adjustments:
Income and expense item:
Depreciation
Item

$1,805,365
$3,372,072
1,660,759
1,474,184
23,492
1,377
-174
-
35,418
-12,682
1,120,195
789,831
-101,638
-49,136
-73,952
-8,250
-163,162
-230,190
-309,013
25,766
9,211
17,355
-15
-200
1,060
-
13,534
52,796
-217
-217
-----------------
-----------------
2,215,498
2,060,634
-----------------
-----------------
55,105
17,814
-659,449
-251,768
-339,650
-660,075
161,920
-153,344
277,871
-213,569
-17,074
-90,234
-1,744,327
-2,468,253
-860,320
-362,043
-615
2,204
-----------------
-----------------
-3,126,539
-4,179,268
-----------------
-----------------
-277,756
1,345,152
-79,385
233,856
-15,071
-1,530
-99,234
280,274
31,836
-34,173
-244,162
1,542,648
-132,743
-42,793
-----------------
-----------------
-816,515
3,323,434
-----------------
-----------------
-3,943,054
-855,834
-----------------
-----------------
-1,727,556
1,204,800
-----------------
-----------------
77,809
4,576,872
97,381
49,113
179,347
25,950
-1,126,859
-801,322
-689,738
-475,574
-----------------
-----------------
-1,462,060
3,375,039
-----------------
-----------------
2016
2017

(to be continued)

166

Cash and cash equivalents, end of the period
Item
Net cash provided by (used in) 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 period
Increase in deposits received
Decrease in deposits received
Decrease in other non-current liabilities
Cash dividends distributed
Changes in non-controlling interests
Decrease in short-term loans
Increase in short-term bills payables
Decrease in short-term bills payables
Repayment of Bonds
Increase in long-term loan
Repayment of long-term loan
Decrease in other non-current assets
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Increase in short-term loans
Disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Acquisition of intangible assets
Acquisition of investment property
Increase in other financial assets
Cash flows from investing activities:
Acquisition of Bond investments with no active market
Acquisition of financial assets measured at cost
Disposal of financial assets carried at cost
Acquisition of investment accounted for using equity method
Acquisition of subsidiaries (less the cash received)
Subscriptions returned due to capital reduction of investees accounted for using equity method
Acquisition of property, plant and equipment

-348,450
-206,305
-68,396
-21,913
15
150
-585,976
-408,132
13
-
620
1,097
-3,428,503
-4,174,303
361,381
837
-5,078
-
-
1,124
-
-8,208
-16,263
-44,067
-191,567
-396,034
11,068
8,793
-----------------
-----------------
-4,271,136
-5,246,961
-----------------
-----------------
5,311,016
-
-
-1,669,412
310,000
-
-
-85,539
-278,940
-1,237,560
9,984,035
4,284,850
-8,480,026
-979,287
-
9,011
-4,100
-
-2,727
-5,672
-687,236
-
-767,816
-231,024
-----------------
-----------------
5,384,206
85,367
-----------------
-----------------
-79,766
331,670
-----------------
-----------------
-428,756
-1,454,885
8,133,181
9,588,066
-----------------
-----------------
$7,704,425
$8,133,181
=================
=================
2017
2016

Chairperson: Lin, I-Shou

(Please Refer to Notes to the Consolidated Financial Statements) Manager: Wu Lin-Mao Accounting Manager: LIN,CHIEN-HUNG

167

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Notes to Consolidated Financial Statements

January 1 to December 31, 2017 and 2016 (Amount in Thousand NTD, Unless Otherwise Stated)

I. Company History
Yieh Phui Enterprise Co., Ltd. (hereinafter referred to as the Company) was established in April 1978, currently a listed company in Taiwan Stock Exchange (hereafter referred to as TWSE). The Company engages mainly in the processing, manufacturing marketing and import/export trading of rolled steel coils, refined steel, molded steel, steel / iron wires, galvanized / pre-painted / surface-treated metals.
The Company’s Board of Directors resolved on May 23, 2005 to merge (simplified merger) with Lien Kang Heavy Industrial Co., Ltd, with the Company as the surviving company. The record date of the merger was set on August 30, 2005.

Every 2.5 common shares of Lien Kang Heavy Industrial Co., Ltd. were converted into 1 common share of the Company. The Company issued additional 4,859 thousand common shares for this merger. Rights and obligations of 3. Lien Kang Heavy Industrial Co., Ltd., incorporated on November 23, 1989, mainly engages in manufacturing, processing and trading of the various mechanical spare parts, as well as pipe installation and engineering design / manufacture / installation.

The Company's steel pipe department, due to its business expansion, was separated from the Company, and was named as Shin Yang Steel Co. Ltd.. Relevant investment on this was approved by the Board of Directors on January 18th, 2011,and a total of 191 employees were transferred to Shin Yang Steel Co., Ltd.
For main operation activities of the Company and its subsidiaries (hereinafter referred to as “the Group”), please refer to Note 4 (3) 2.
These consolidated financial statements are presented in the Company’s functional currency, New Taiwan Dollars
II. Approval Date and Procedure of Financial Statements

The consolidated financial statements were released on March 21, 2018, after being approved by the Board of

III. Application of New and Amended Standards and Interpretations
(I) Effects of adopting newly-announced and revised IFRSs standards endorsed by Financial Supervisory Commission (“FSC”) and the amended Regulations Governing the Preparation of Financial Reports by Securities Issuers:

The Group assessed the effects of adopting the aforementioned standards and interpretations and found no significant effects on the Group’s financial position and operating results, except those stated below:

168

Amendment to IAS 36 “Recoverable Amount Disclosures for Non-financial Assets”
Disclosure of the recoverable amount is not required when a cash-generating unit includes goodwill or intangible assets with indefinite useful lives that are not impaired; disclosure of the recoverable amount is required if the impaired value of an individual asset (including goodwill) or a cash-generating unit is significant in recognition or reversal, and, if such recoverable amount is based on fair value less cost of disposal, disclosure of its fair value hierarchy and the valuation technique(s) and key assumptions used to measure the fair value is also required. After assessment, the amendment will expand the disclosure scope of the impairment recognition or reversal of Group’s non-financial assets, please refer to Note 6 (4).
Amendments to Regulations Governing the Preparation of Financial Reports by Securities Issuers: In accordance with the IFRSs endorsed and issued by FSC, the amendment adds disclosure requirements on various accounting items, impairment of non-financial assets, related party transactions, goodwill, as well as emphasizing certain requirements on recognition and measurement.
According to the amendment, where the board chairman or president of another company or institution is the same person as the board chairman or president of the Group, or is the spouse or a relative within the second degree or closer of the board chairman or president of the issuer, a party, unless it can be established that no control or significant influence exists, shall be deemed to have a substantive related party relationship. Furthermore, where the transaction amount or balance of any single related party reaches 10% of the Group's transaction amount or balance of that type of transaction, the Group shall present individually the names and relationships of each such related party.

Besides, where the acquired company has significant differences between the expected benefits and the actual benefits after the acquisition, the information shall be disclosed.

When applying the aforementioned amendment retrospectively in 2017, disclosure is required on related party transaction and goodwill impairment. Please refer to Note 7.

(II) Effects of not yet applying the newly-announced and revised IFRSs endorsed by the FSC:

The following table summarizes the new, revised, amended standards and interpretations of IFRSs endorsed by FSC and are applicable in 2018.

and are applicable in 2018.
New, revised, amended standards and interpretations	Effective Date Issued by
Amendment to IFRS2 “Classification and Measurement of Share-based Payment	January 1, 2018
Amendment to IFRS4 “Applying IFRS 9 'Financial Instruments' With IFRS 4 Insurance	January 1, 2018
IFRS9 “Financial Instruments”	January 1, 2018
Amendments to IFRS 9 and IFRS 7 in "Mandatory Effective Date and Transition	January 1, 2018
IFRS 15 "Revenue from Contracts with Customers"	January 1, 2018
Amendments to IFRS 15 ‘Clarifications of IFRS 15’	January 1, 2018
Amendments to IAS 7 in "Disclosure Initiative"	January 1, 2017
Amendments to IAS12 “Recognition of Deferred Tax Assets for Unrealized Losses”	January 1, 2017
Amendments to IAS 40 “Transfers of Investment Property”	January 1, 2018
Amendments to IFRIC22 “Foreign Currency Transactions and Advanced Consideration”	January 1, 2018
"Annual Improvements to IFRSs 2014-2016 Cycle"	(Note 2)

Note 1: The aforementioned new, revised or amended standards or interpretations are effective for annual periods beginning on or after the effective dates, unless stated otherwise.

Note 2: The amendment to IFRS 12 is applied retrospectively to annual periods beginning on and after January 1, 2017; the amendment to IAS 28 is applied retrospectively to annual periods beginning on and after January 1, 2018.

169

Except for the following, the application of the aforementioned new, amended, and revised standards and interpretations should not have any material impact on the Group's accounting policies:

IFRS9 “Financial Instruments” and related amendments
(1) Recognition and measurement of financial assets

Financial assets, originally were within the scope of IAS 39 "Financial Instruments: Recognition and Measurement", are subsequently measured at amortized cost or at fair value. IFRS 9 Requirements on Classification of Financial Assets Are Stated Below:

The Group's debt instruments, if of which the contractual cash flows come solely as payments on principles and as interests on the principle amount outstanding, are classified and measured as follows:

A. For financial assets, if they are held within a business model whose objective is to collect the contractual cash flows, they would be measured at amortized cost. Such financial assets are assessed for impairment continuously with impairment loss recognized in profit or loss, if any. Interest revenue is recognized in profit or loss by using the effective interest method;

The Group's financial assets not belong to the above classifications are measured at fair value, and the gain or loss is to be recognized in profit or loss. However, the Group may choose to designate an equity investment that is not held for trading to be measured at fair value through other comprehensive income upon initial recognition. Gains or losses of such financial assets, except for dividend income which is recognized in profit or loss, are recognized in other comprehensive income. No subsequent assessment for impairment is required, and the cumulative gain or loss in fair value previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss.

The Group and associates assessed both their financial assets held as of December 31, 2017 and the facts and circumstances on which date, and concluded that the categorization and measurement of the following financial assets would change after their application to IFRS 9.

(a) Investment on listed stocks, emerging stocks, and unquoted equity classified as available-for-sale financial assets are designated as per IFRS 9 as available-for-sale financial assets at fair value through profit or loss, of which any changes in fair value are accumulated in other equity, and are not reclassified into profit or loss upon disposal, but to be directly transferred to retained earnings. In addition, unquoted equity measured at cost is required by IFRS 9 to be measured at fair value.

(b) Investment classified as debt instrument investments with no active markets whose contractual cash flows were not solely payments of principal and interest on the principal amount outstanding upon initial recognition is required by IFRS 9 to be measured at FVTPL.

170

(2) Impairments of financial assets

After assessment, the Group thinks the simplified approach is applicable to accounts receivable, contract assets, and lease receivables, of which the loss allowance is measured at an amount equal to full lifetime expected credit losses. Before electing between the 12-month expected credit losses and full lifetime expected credit losses to measure the loss allowance of a debt instrument and a financial guarantee contract, the Group performs an assessment to determine whether the credit risks of such assets have increased significant since initial recognition.

The Group expects that application to Expected Credit Losses Model of IFRS 9 will result in an earlier recognition of loss allowance for financial assets. The Group does not restate the comparison information to 2017 when electing to apply IFRS 9 requirements respecting classification, measurement and impairment of financial assets. Cumulative effects of changes of first-time adoption is recognized on first-time adoption date. Any information regarding category changes and reconciliation as a result of application to IFRS 9 will also be disclosed

171

Retrospective application of IFRS 9 requirements respecting classification, measurement and impairment of financial assets does have some effects over assets, liabilities, and equity as of January 1, 2018, which are stated as follows:

as follows:
Effects on Assets, Liabilities and Equity Financial assets at fair value through profit or loss - current Financial Assets at Fair Value through Other Comprehensive Income - Financial assets at fair value through profit or loss - non-current Available-for-sale financial assets - non-current Financial Assets Carried at Cost - Non-current Debt instrument investments with no active market - non-current Investments accounted for using equity method Effects on Assets Effects on Liabilities Undistributed earnings Other equity Non-controlling interests Effects on Equity	December 31, 2017: Carrying Amount $49,534 - 9,999 44,910 551,462 554,755 17,412,043 $18,622,703 $- $2,366,597 (636,655) 1,794,170 $3,524,112	Adjustment to First-time Adoption $ - 662,990 585,957 (44,910) (551,462) (554,755) (23,588) $74,232 $- $51,159 19,556 3,517 $74,232	January 1, 2018 Carrying Amount after Adjustment
			$49,534 662,990 595,956 - - - 17,388,455
			$18,696,935
			$-
			$2,417,756 (617,099) 1,797,687
			$3,598,344

IFRS 15 "Revenue from Contracts with Customers"

IFRS 15, which sets up principles for recognizing revenue that apply to all contracts with customers, will supersede IAS 18 "Revenue" and IAS 11 "Construction Contracts" and other interpretations.

When applying IFRS 15, the Group recognizes revenue by applying the following steps:

(1) Identify the contract with the customer;

(2) Identify the performance obligations in the contract;

(3) Determine the transaction price;

(4) Allocate the transaction price to the performance obligations in contracts; and

(5) Recognize revenue upon satisfaction of performance obligations.

172

(1) A company’s obligation to transfer to customers the goods of which the consideration have been paid was presented as advance receipt on the balance sheet in the past reporting periods; however, IFRS 15 requires such obligation to be recognized as a contract liability.

(2) Costs are recognized as costs incurred to fulfill a contract (under other current assets) if they (a) are not applicable of IAS 2, IAS 16 “Property, Plant and Equipment, or IAS 38 “Intangible Assets”, and (b) generate resources that will be used to satisfy performance obligations in the future, and (c) are expected to be recovered. Prior to application of IFRS 15, service to be rendered was also deemed as inventory under IAS 2.

(3) Construction retainage withheld by customers in accordance with terms and conditions of a contract aims to assure that contractors satisfy their obligations. Such retainage has no significant financing component as determined by IFRS 15, and is recognized as a contract asset prior to satisfaction of contract obligations. Prior to application of IFRS15, construction retainage receivables were recognized as accounts receivable under IAS 39.

(4) Where there exists an onerous contract with customers, the Group as required will recognize either inventory impairment or provision for onerous contract. Prior to application of IFRS 15, expected losses of construction contracts were measured and adjusted to construction contract receivable (payable).

The effects of applying IFRS 15 retrospectively on assets, liabilities, and equity as of January 1, 2018 are stated as

Inventory Accounts Receivable Construction Contract Contract Assets - Current Total Current Assets Effects on Assets Construction Contract Provision for Onerous Provision - Current Advance Receipt Effects on Liabilities Effects on Equity	December 31, 2017: Carrying Amount $9,993,445 3,271,493 367,652 - - $13,632,590 $14,331 - - 1,888,764 $1,903,095 $-	Adjustment to First-time ($1,205) (31,404) (367,652) 404,926 1,205 $5,870 ($14,331) 8,345 1,900,620 (1,888,764) $5,870 $-	January 1, 2018, After Carrying Amount
			$9,992,240 3,240,089 - 404,926 1,205
			$13,638,460
			- 8,345 1,900,620 -
			$1,908,965
			$-

173

Aside from the aforesaid effects, as of the issuance date of this consolidated financial statement, the Group continuously assesses the effects of the amendments to other standards and interpretations. The result shall be disclosed when the assessment is completed.

(III) Effects of IFRSs issued by IASB but not yet endorsed by the FSC:

disclosed when the assessment is completed. (III) Effects of IFRSs issued by IASB but not yet endorsed by the FSC:
New, revised, amended standards and interpretations	Effective Date Issued by
Amendments to IFRS 9, "Prepayment Features with Negative Compensation"	January 1, 2019 (Note 2)
Amendment to IFRS10 and IAS 28 “Sales or Contributions of Assets between Its Associate/Joint Venture”	Not yet decided
IFRS 16 "Leases"	January 1, 2019 (Note 3)
IFRS17 “Insurance Contracts”	January 1, 2021
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)'	January 1, 2019
IFRIC 23 "Uncertainty over Income Tax Treatments"	January 1, 2019
Annual Improvements to IFRSs 2015 - 2017 Cycle	January 1, 2019

Note 1: The aforementioned new, revised or amended standards or interpretations are effective for annual periods beginning on or after the effective dates, unless stated otherwise.

Note 2: FSC permits companies to elect to an earlier application of such amendment beginning on or after January 1, Note 3: FSC promises to declare on December 19, 2017 that all enterprises within the territory of R.O.C. are applying

Except for the following, the application of the aforementioned new, amended, and revised standards and interpretations should not have any material impact on the Company's accounting policies:

IFRS 16 "Leases" IFRS 16, which governs the accounting standards for leases, will supersede IAS 17 "Leases" and other relevant interpretations. When IFRS 16 is applicable and the Group as lessee, the Group shall recognize in the consolidated balance sheets the right-of -use assets and lease liabilities for all leases, except for low-value and short-term leases which shall be subject to accounting standards similar to "operating leases" in IAS 17. Consolidated Statements of Comprehensive Income The consolidated statements of comprehensive income shall state clearly and respectively the depreciation expense of the right-of-use assets, the interest expense accrued on the lease liability. The interest should be calculated using the effective rate method. On the consolidated statements of cash flows, cash payments for principle of lease liabilities shall be classified in financing activities, whereas cash payments for interest of lease liabilities shall be classified in operating activities. IFRS 16 is not expected to have any material impact on the accounting of the Group as a lessor.
Upon the effectiveness of IFRS 15, the Group may elect to apply the Standard either retrospectively to each prior
reporting period presented or retrospectively recognize the cumulative effect of initial application to this Standard
IFRIC 23 "Uncertainty over Income Tax Treatments" Per IFRIC23 interpretation, when there is an uncertainty over income tax treatment, the Group shall assume that the taxation authorities shall examine all the relevant data acquired. If the Group concludes that it is probable that its tax treatment will be accepted by the taxation authorities, the Group has to determine taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment included in its income tax filings. If it’s not probable that its income tax accounting treatment will be accepted by the taxation authorities, the Group shall use the most likely amount, or expected value to determine taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates. Provided, however, that the decision should be based on which method provides better predictions of the resolution of the uncertainty. Whenever changes in facts or situation occur, the Group shall again access its judgement and estimates.
The Group may elect to apply retrospectively IFRIC 23 without using hindsight, or to recognize the cumulative effects of applying IFRIC 23 retrospectively at the initial application date.
Aside from the aforesaid effects, as of the issuance date of this consolidated financial statement, the Group continuously assesses the effects of the amendments to other standards and interpretations. The result shall be disclosed when the assessment is completed.

174

IV. Summary of Significant Accounting Policies

Accounting policies applied in preparing this consolidated financial statement are listed below.Unless otherwise stated, the policies shall be applicable to all reporting periods presented.

(I) Statement of Compliance

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the FSC endorsed scope of IFRSs [ consisting of International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC)].

(II) Preparation Basis
Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention:
(1) Financial assets and liabilities measured at fair value through profit or loss (including derivatives).
(2) Available-for-sale financial assets measured at fair value.
(3) Liabilities for cash-settled share-based payment agreement at fair value.
(4) Defined benefit liability is derived from retirement plan assets less the present value of net defined benefit
Critical accounting estimates are required when preparing financial statements based on the IFRSs endorsed by FSC. When the Group adopts the accounting policies, the management is required to exercise judgments on highly judgmental or complex items or significant assumptions and estimates with regards to this consolidated financial reports. Please refer to Note 5 for details.
(III) Consolidated Basis
Preparation Principles for Consolidated Financial Statements:
(1) The Group includes all subsidiaries as entities in the consolidated financial statements.Subsidiaries refer to entities (including structured entities) controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are included in the consolidated financial statements from the date on which the Group obtains control, and are excluded from the consolidated financial statements from the date when such control ceases.

(2) Transactions, balances and unrealized gains or losses between companies within the Group are

eliminated.Accounting policies of subsidiaries are adusted, when necessary, to remain consistent with those of the Group.

(3) The profit or loss and each component of other comprehensive income are attributed to the owners of the parent company and to the non-controlling interest. Total comprehensive income is also attributed to the owners of the parent company and non-controlling interest even if this results in the non-controlling interests having a

(4) A change in the ownership interest of a subsidiary without a lose of control (transactions with non-controlling interests) is accounted for as an equity transaction, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

(5) When the Group loses control of a subsidiary, any investment retained in the former subsidiary should be remeasured at fair value and be regarded as the fair value on initial recognition of a financial asset or, when appropriate, as the cost on initial recognition of an investment in an associate or a joint venture. difference between fair value and carrying amount should be recognized in profit or loss. All amounts recognized in other comprehensive income in relation to that subsidiary should be accounted for on the same basis as would be required if the Group had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss when it loses control

175

Subsidiaries that are consolidated into the consolidated financial statements:

Investor/subsidiary
Main businesses
1. Yieh Phui Enterprise Co., Ltd. (The Company)
GOOD HONOR
HOLDINGS LTD.
Investment
Shin Yang Steel Co.,
Ltd.
Steel products related
businesses
GOLDEN
DEVELOPMENTS
HOLDINGS LTD.
Investment
Yieh Phui (Hong Kong)
Holdings Limited
Investment
Yieh Hsing Enterprise
Co., Ltd.
Wire rods trading
Shin Phui Steel
Corporation
Trading of steel products
WORTHING HONOR
HOLDINGS LTD
Investment
Sin Bang Investment &
Development Co., Ltd.
Investment
HSING JUI
INVESTMENTS
Investment
Gen-Wan Technology
Corp.
Telecommunication
CHAMPION
LOGISTIC INC.
Investment
EMMT Systems
Corporation
Manufacturing and
marketing of military
specification printed circuit
boards
TYCOONS STEEL
INTERNATIONAL
CO., LTD.
Investment
Kuo Chang Enterprise
Co., Ltd.
Wholesaling of hardware
United Brightening
Development Corp.
Technical consultation for
steel products
manufacturing
Da Yao Engineering &
Consulting Co., Ltd.
Management service
Hong Yuh Assets
Management Co.,Ltd.
Management service
LIAN SO (H.K.) CO.,
LIMITED
Investment

Percentage of ownership or investment

December 31, 2017
December 31, 2016
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
56.43%
56.39%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
86.99%
86.99%
97.44%
97.44%
77.54%
77.54%
28.27%
28.27%
99.04%
54.04%
95.56%
79.50%
49.00%
49.00%
80.00%
67.27% (Note)
80.00%
80.00%

176

3. Hong Yuh Assets Management Co.,Ltd.

PT.E-UNITED FERRO INDONESIA	Metal manufacturing industry	100.00%	100.00%
PT. E-UNITED FERRO INDONESIA	Metal manufacturing industry	10.00%	10.00%
PT.GENBA INDO	Nickle mining	75.00%	-
RESOURCES		(Please refer to Note 4 (3) 2 (1) for details)
4. Gen-Wan Technology Corp.
	Manufacturing and
EMMT Systems Corporation	marketing of military specification printed circuit	7.48%	7.41%
	boards
5. Yieh Phui (Hong Kong) Holdings Limited
	Production and sales of
Yieh Phui (China) Technomaterial Co., Ltd.	pickled steel plates, cold rolled steel coils, galvanized steel coils, and	100.00%	100.00%
	pre-painted steel coils
6. Yieh Phui (China) Technomaterial Co., Ltd.
	Production and sale of
Tianjin Lianfa Precision Steel Corporation	steel coil plates of high class and special alloyed	100.00%	100.00%
	steels
Changshou ChangHuei Trading Co.	Trading of steel products	100.00%	100.00%
7. EMMT Systems Corporation
APPLIED WIRELESS
IDENTIFICATIONS	RFID	91.47%	91.47%
GROUP, INC.
Groupco Technology	RADIO	49.97%	49.97%

177

8. APPLIED WIRELESS IDENTIFICATIONS GROUP,INC.

AWID Asia Co., Ltd.	Telecommunications equipment wholesaling	100.00%	100.00%
9. AWID Asia Co., Ltd.
AWID Sanghai Co., Ltd.	Telecommunications equipment wholesaling	100.00%	100.00%
AWID Changshou Co., Ltd.	Telecommunications equipment wholesaling	100.00%	100.00%
			(Please refer to Note 4 (3)
10. Shin Phui Steel Corporation
Groupco Technology	RADIO	42.53%	42.53%
11. Yieh Hsing Enterprise Co., Ltd.
Great Emperor Hotel CO., LTD.	Hotel industry	100.00%	100.00%
	Leasing, sales, and
Kingsgarden International CO., LTD.	development of residential and commercial buildings,	100.00%	100.00%
	department stores
12. Kingsgarden International	CO., LTD.
	Leasing, sales, and
Yi Hua International Co., Ltd	development of residential and commercial buildings,	70.00%	70.00%
	department stores
13.CHAMPION LOGISTIC INC.
TYCOONS STEEL
INTERNATIONAL	Investment	65.38%	38.46%
CO., LTD.
14.TYCOONS STEEL INTERNATIONAL CO., LTD.
GUANG LIAN STEEL (VIETNAM) CO., LTD.	Steel products related businesses	-	100.00%
		(Please refer to Note 4 (3)
15. United Brightening Development Corp.
Chao Ying Investment Development Co., Ltd.	Investment	100.00%	100.00%
TYCOONS STEEL
INTERNATIONAL	Investment	0.58%	0.58%
CO., LTD.
Da Yao Engineering & Consulting Co., Ltd.	Management service	1.00%	1.00%
CHAMPION LOGISTIC INC.	Investment	2.56%	2.56%
16. LIAN SO(H.K)CO., LIMITED
PT. E-UNITED FERRO INDONESIA	Metal manufacturing industry	90.00%	90.00%
			(Please refer to Note 4 (3)

178

(1) Increase and decrease in consolidated subsidiaries:
PT.GENBAINDORESOURCES was invested by Hong Yuh Assets Management Co.,Ltd. holding 75% shares of it, and was consolidated into the consolidated financial statements in August 2017. Please refer to Note (39) for details. In addition, GUANG LIAN STEEL (VIETNAM) CO., LTD. was liquidated and dissolved in October, 2017.
PT.YIEHFERROINDONESIA, which was newly established in June 2016 by the Group, was co-invested by Hong Yuh Assets Management Co.,Ltd. and LIANSO(H.K.)CO.,LIMITED, with their respective shareholding percentage of 10% and 90%.

AWID Changshou Co., Ltd. , which was newly established in September 2016, was invested by AWID Asia Co., Ltd., with its shareholding percentage of 100%.

(2) The afore-mentioned 2017 financial statements of PT.GENBA INDO RESOURCES and HSING JUI INVESTMENTS LIMITED, and the 2016 financial statements of AWID Sanghai Co., Ltd. , AWID Changshou Co., Ltd. , I-Hwa International Co., Ltd., LIAN SO(H.K.)CO., LIMITED、HSING JUI INVESTMENTS LIMITED、 PT.YIEH FERRO INDONESIA and WORTHING HONOR HOLDINGS LTD. are not audited by a CPA. Nevertheless, manage of the Company believes that the unaudited financial statements of such subsidiaries won’t have any significant influence on the Consolidated Financial Statements.

Subsidiaries that are not consolidated into the consolidated financial statements: None.
Different accounting and adjustments adopted by subsidiaries in the accounting period: None.
Major restrictions:

Cash and bank deposits of NT$ 3,186,852 thousand are deposited in China and subject to the local foreign exchange control. Such foreign exchange control restricts fund remitting out from China (except for regular dividends).

Securities issued by the parent company and held by subsidiaries : None.
Information about subsidiaries with significant non-controlling interest: December 31, 2017

December 31, 2017
Name of Subsidiary Yieh Hsing Enterprise Co., Ltd. Others Total December 31, 2016: Name of Subsidiary Yieh Hsing Enterprise Co., Ltd. United Brightening Development Corp. Kuo Chang Enterprise Co., Ltd. Others Total	Share Holding % 43.57% Share Holding % 43.61% 20.50% 45.96%	Non-controlling interests
		$1,402,693 391,477
		$1,794,170
		Non-controlling interests
		$1,488,824 395,137 587,217 235,150
		$2,706,328

(1) Please refer to Table 10 and Table 11 in Note 13 for the main operation location and countries of registration of the subsidiaries listed above.

179

(2) Summary of the financial information are as follows:

A. Balance Sheets

Yieh Hsing Enterprise Co., Ltd. and its subsidiaries

Current Assets Non-current Assets Current Liabilities Non-current Liabilities Equity	December 31, 2017: December 31, 2016: $2,952,027 $2,109,591 15,128,734 13,488,475 4,373,322 2,608,034 10,487,369 9,574,703 $3,220,070 $3,415,329

December 31, 2017 None.

one.
Current Assets Non-current Assets Current Liabilities Non-current Liabilities Equity	December 31, 2016:
	United Brightening Development Corp. Kuo Chang Enterprise Co., Ltd. $7,595 $2,238 2,328,582 1,618,293 333,811 330,210 87,500 - $1,914,866 $1,290,321

Yieh Hsing Enterprise Co., Ltd. and its subsidiaries

Dividends paid to non-controlling interest Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Total comprehensive income (loss) attributable to non- controlling interests	2017 $7,993,007 ($184,748) (10,581) ($195,329) ($84,853) $ -	2016
		$7,272,512
		($256,695) (14,917)
		($271,612)
		($118,914)
		$ -

2017: None.

2017: None.
Total comprehensive income (loss) attributable to non- controlling interests Dividends paid to non-controlling interest Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss)	2016
	United Brightening Development Corp. $ - $34,692 (12,032) $22,660 $8,614 $ -	Kuo Chang Enterprise Co., Ltd.
		$ -
		$33,696 (9,797)
		$23,899
		$5,170
		$ -

18 ~~0~~

C. Statements of Cash Flows

Yieh Hsing Enterprise Co., Ltd. and its subsidiaries

Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of the period Cash and cash equivalents, end of the period

2017	2016
($899,913)	$66,170
(1,860,737)	(1,773,785)
2,551,535	1,693,864
($209,115)	($13,751)
492,625	506,376
$283,510	$492,625

2017: None.

2016	2016
United Brightening	Kuo Chang Enterprise Co.,
Development Corp.	Ltd.
($12,314)	($9,462)
(57,339)	32,874
63,000	(23,500)
($6,653)	($88)
13,870	1,416
$7,217	$1,328

(IV) Foreign Currency Translation

All items on the financial statements of each entity of the Group are measured at the currency of the principal economic environment in which the entity operates (i.e. functional currency). The Consolidated Financial Statements are presented and reported in the Company’s functional currency, New Taiwan Dollars (NT$).
When preparing the standalone financial statements of each consolidated entity, any transactions that were traded in the currency other than such entity’s functional currency (i.e. foreign currency) are translated and recognized by using the exchange rate on the trading date. Monetary items denominated in foreign currencies are re-translated at the spot exchange rate on the closing date of the reporting period; any exchange differences arising therefrom are recognized in profit or loss in the period in which such re-translation occurs. Non-monetary items measured at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined and exchange differences arising are included in profit or loss for the year. However, where the changes in fair value are recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. Non-monetary items measured at historical cost that are denominated in foreign currencies are recognized using the exchange rates as at the transaction date and are not retranslated.
In preparing the Consolidated Financial Statements, assets and liabilities of foreign operations are translated into New Taiwan Dollars by using the spot exchange rate on the closing date of the reporting period; Income and expenses items of foreign operations are translated at the average exchange rates of that period; any exchange differences arising therefrom are recognized in other comprehensive income, and cumulated in “exchange differences on translation of foreign financial statements” under equity (and where adequate, allocated to Noncontrolling interests)

181

(V) Classification of current and non-current assets and liabilities
Steel Department and other Non-heavy industry departments:
(1) Assets that meet one of the following criteria are classified as current assets:
A. Assets that are expected to be realized, or are intended to be sold or consumed within the normal
B. Assets held primarily for trading purposes;
C. Assets that are expected to be realized within 12 months after the balance sheet date;
D. Cash and cash equivalents, excluding those that are restricted, or to be exchanged or used to settle liabilities at least twelve months after the balance sheet date. Otherwise they are classified as non-current assets.
(2) Liabilities that meet one of the following criteria are classified as current liabilities:
A. Liabilities that are expected to be settled within the normal operating cycle;
B. Assets held primarily for trading purposes;
C. Liabilities that are expected to be settled within 12 months after the balance sheet date;
D. Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after balance sheet date. Settlement by the issue of equity instruments based on transaction party's choice does not Otherwise they are classified as non-current liabilities.
Heavy Industry Department

The business cycle of the majority of our construction contracts is longer than12 months. As a result, assets and liabilities related to the construction contracts are classified as current or non-current assets and liabilities according to the business cycle.

(VI) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, bank deposits and shortterm, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including time deposits with terms equal to or less than three months).
(VII) Financial Instrument Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are recognized initially at fair value. Upon initial recognition, transaction costs that are directly attributable to the acquisition or issuance of the financial assets and financial liabilities (except for financial assets and financial liabilities at fair value through profit or loss) should be added to, or subtracted from the fair value of such financial assets and financial liabilities. Transaction costs that are directly attributable to financial assets at FVTPL or financial liabilities at FVTPL are recognized immediately in profit or loss.
(VIII) Available-for-sale financial assets measured at fair value.
Financial assets at FVTPL refer to financial assets held for trading or financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedging instruments pursuant to hedge accounting. Financial assets that meet one of the following criteria are designated as at FVTPL on initial recognition:
(1) Hybrid (combined) contracts; or
(2) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(3) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.

182

On a regular way purchase or sale basis, financial assets at FVTPL are recognized and derecognized using trade 3. Financial assets at FVTPL are initially recognized at fair value. Related transaction costs are recognized in profit or loss. Such financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of such financial assets are recognized in profit or loss. For equity instrument investments that do not have quoted prices in an active market or derivatives linked to those investments that do not have quoted prices in an active market and must be settled by delivery of such unquoted equity instruments, when their fair value cannot be reliably measured, the Group would classify them as "financial assets measured at cost - non-current ".

(IX) Loans and Receivables

Accounts receivable- Net

Accounts receivables refer to trade receivables generated from goods sold or services rendered in the normal course of business. They are recognized at fair value upon initial recognition and subsequently measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables on 2. Bond investments for which no active market exists

(1) Bond investments that do not have a quoted price in an active market, have fixed or determinable amount of payments, and meet all of the following conditions:

A. Not classified as at FVTPL.
B. Not designated as available-for-sale.

C. Not for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration.

(2) On a regular way purchase or sale basis, bond investments with no active market are recognized using trade (3) Bond investments with no active market are initially measured at the sum of fair value as of the transaction date and transaction costs. They are subsequently measured at amortized cost using the effective interest method, less any impairment. Amortization of discounts or premium under the effective interest method is recognized in

(X) Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories
On a regular way purchase or sale basis, available-for-sale financial assets are recognized and de-recognized using trade date accounting.
Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. For equity instrument investments that do not have quoted prices in an active market or derivatives linked to those investments that do not have quoted prices in an active market and must be settled by delivery of such unquoted equity instruments, when their fair value cannot be reliably measured, the Group would classify them as "financial assets measured at cost ".
(XI) Impairments of Financial Assets
The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events (loss events) that has occurred after the initial recognition of the asset and that the impact from those loss events on the estimated future cash flows of the financial assets can be estimated reliably.
The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as
(1) Significant financial difficulty of the issuer or debtor;
(2) A breach of contract, such as a default or delinquency in interest or principal payments;
(3) The Group granted the borrower a concession that a lender would not otherwise consider for economic or legal reasons relating to the borrower’s financial difficulty;
(4) It becomes probable that the borrower will enter bankruptcy or other financial reorganization;
(5) The disappearance of an active market for that financial asset because of financial difficulties; or

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(6) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local unfavorable economic conditions that correlate with defaults on the assets in the group;

(7) Information about significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered;

(8) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.

When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows in accordance with the category of financial assets:
(1) Loans and Receivables

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

(2) Financial Assets Carried at Cost

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

(3) Available-for-sale Financial Assets
The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from “other comprehensive income” to “profit or loss”. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, such impairment loss is then reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss.
(XII) Derecognition of Financial Assets
The Group derecognizes a financial asset when one of the following conditions is met:
1. The contractual rights to receive cash flows from the financial asset expire
The contractual rights to receive cash flows from the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.
The company neither transfers nor retains substantially all the risks and rewards of the ownership of such financial asset, nor does it retain the control of such financial asset.

On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received or receivable and the cumulative gain or loss that had been recognized in “other equity – unrealized gain/loss of available-for-sale financial assets” under other comprehensive income is recognized in profit or loss.

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(XIII) Inventory

Inventories are stated at the lower of cost and net realizable value under the perpetual inventory system. Cost is determined using the weighted-average method. The costs of work in progress and finished goods include cost of raw materials, direct labor, other direct cost and a proportion of manufacturing overheads (based on normal operating capacity), excluding borrowing cost. The item by item approach is employed when evaluating the lower of costs and net realizable value. Net realizable value is the balance of estimated selling price in normal operating course less the estimated cost of completion and applicable variable selling expenses.

(XIV) Construction Contracts

A construction contract is defined as a contract specifically negotiated for the construction of an asset in IAS 11 "Construction contracts".

When the outcome of a construction contract can be estimated reliably and it is probable that the contract is profitable, revenue is recognized based on the proportion of work completed using the percentage of completion method during the duration of the contract. Contract costs are recognized as an expense when incurred. The stage of completion is determined based on the proportion that contract costs incurred for work performed to the end of reporting date bear to the estimated total contract costs.

When it is probable that total contract costs will exceed total contract revenues, the expected loss shall be recognized as an expense immediately. If the outcome of a construction contract cannot be estimated reliably, revenue shall be recognized only to the extent of incurred contract costs that is probable to be recovered.

Contract revenue shall comprise variations in contract work, claims and incentive payments to the extent that they are agreed on by the customer and are capable of being reliably measured. The Group should present the gross amount due from customers for contract work, i.e. when costs incurred plus recognized profits (less recognized losses) exceeds the progress billings, as an asset and recognize it as construction contract receivables. If the progress billings exceed the sum of costs incurred plus recognized profits (less recognized losses), the amount is presented as a liability and recognize it as construction contract receivables.

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(XV) Investments Accounted for under the Equity Method/Associates
Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20% or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables) the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are adjusted, when necessary, to remain consistent with those of the Group.
If the Group does not subscript to new shares issued by an associate in proportion to its shareholding percentage in the associate and results in a change in its investment percentage (while still maintains significant influence), the changes in net equity would be adjusted through “capital surplus” and “investments accounted for under the equity method”. If the Company's investment percentage in the associate is reduced, in addition to the above adjustments, the Company should also reclassify to profit or loss the proportion of the gain or loss which is previously recognized in other comprehensive income and relative to that reduction in ownership interest when such gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.
When the Group loses control of an associate, any retained investment in the former associate should be remeasured at fair value, and any difference between fair value and carrying amount should be recognized in profit or loss.
When the Group disposes its investment in an associate and loses significant influence over this associate, the accounting treatment for amounts previously recognized in other comprehensive income in relation to the associate are the same as the one required if the relevant assets or liabilities were directly disposed of. That is, if gain/loss previously recognized in other comprehensive income will be reclassified to profit or loss upon disposal of relevant assets or liabilities, such gain/loss will be reclassified from equity to profit or loss when the Group loses significant influence over the associate. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
If the Group loses significant influence over an associate upon disposal of such associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

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(XVI) Property, Plant and Equipment

Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized.All other repairs and maintenance are recognized in profit or loss when incurred.
Land is not depreciated.Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. The Group reviews each assets' residual values, useful lives and depreciation methods at the end of each financial year. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings
Main building for plants	15 ~ 56 years
The Office Main Buildings	40 ~ 55 years
Other Accessory Equipments	5 ~ 35 years
Machinery and equipment	2 ~ 36 years
Other equipment	2 ~ 20 years

Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is the difference between proceeds from disposal and carrying amount of the asset, and is recognized in profit or loss.

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(XVII) Revenue from Government Grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants to compensate the Group’s expense are recognized as profit or loss on a systematic basis when the expense occurs. Government grants related to property, plant and equipment (PP&E) are and are amortized to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(XVIII) Leased Assets / Lessee

Based on the conditions of the contract, a lease that transfers substantially all the risks and rewards incidental to ownership of an asset to the Group is classified as a finance lease.

(1) At the commencement of the lease term, a lease should be recognized as assets and liabilities at the lower of the fair value of the leased property or the present value of the minimum lease payments.

(2) In subsequent measurement, minimum lease payments is apportioned between the finance cost and the reduction of the outstanding liability. The finance cost is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(3) Property, plant and equipment acquired through a finance lease is depreciated over its useful life. If there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset shall be depreciated over the shorter of the lease term and its useful life.

Operating leases are leases other than finance leases.For operating leases, lease payments (excluding incentives from the lessor) are recognized as an expense on a straight-line basis during the lease term.

(XIX) Investment Property

Investment property is property held to earn rentals or for capital appreciation or both (including property under construction for such purpose). Investment property also includes land held for a currently undetermined future use.

An investment property is measured initially at its cost (including transaction cost) and subsequently measured at cost less accumulated depreciation and impairment loss. The Group applies the straight-line method for depreciation.

Investment property under construction is recognized at cost less accumulated impairment loss. Costs include professional service fee and borrowing costs that meet the conditions for capitalization. Depreciation on those assets begins when they reach their estimated useful conditions.

Gain or loss arising from the derecognition of an investment property, i.e. the difference between proceeds from disposal and the carrying amount of the asset, is recognized in profit or loss for the year.

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(XX) Intangible Assets

Any separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized using the straight-line method over the following estimated useful lives: software and system design costs - 2 to 5 years; patent - depends on its economic benefits or term of contract. Methods for estimating useful lives and amortization are examined by the end of the reporting period, and any changes in estimates arising therefrom are applied prospectively.

An intangible asset is derecognized upon disposal or when no future economic benefits are expected to arise from either disposal or the continued use of the asset. Gain or loss arising from the derecognition of an intangible asset are the differences between proceeds from disposal and the carrying amount of the asset, and are recognized in profit or loss for the year.

(XXI) Impairments of Non-Financial Assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized when the asset's carrying amount exceeds its recoverable amount. The recoverable amount of an asset is the greater of its 'fair value less costs to sell' and its 'value in use'. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist, the impairment loss shall be reversed to the extent of the loss previously recognized in profit or loss.

(XXII) Financial Liabilities measured at FVTPL

Financial liabilities at FVTPL refer to financial liabilities held for trading or financial liabilities designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedging instruments pursuant to hedge accounting. Financial liabilities that meet one of the following criteria are designated as at FVTPL on initial recognition:
(1) Hybrid (combined) contracts; or
(2) They eliminate or significantly reduce a measurement or recognition inconsistency; or

(3) They are managed and their performance is evaluated on a fair value basis in accordance with a documented risk management policy.

Financial liabilities at FVTPL are initially recognized at fair value. Related transaction costs are recognized in profit or loss. Such costs are subsequently remeasured, and any changes in the fair value are recognized in profit or loss.
Changes in fair value of financial liabilities designated as at FVTPL are split into the amount attributable to changes in credit risks of such liabilities, which is presented in other comprehensive income and are not transferred to profit or loss thereafter, and the remaining amount which is presented in profit or loss. Gains and losses of such liabilities are fully recognized in profit or loss only if the aforementioned accounting treatment would create or enlarge an accounting mismatch in profit or loss.

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(XXIII) Provision

Provisions (including warranty, onerous contracts, and estimates on short-term employee benefits and sales returns and allowances) are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used is a pre-tax discount rate which reflects current market assessments of the time value of money and the risks specific to the liability. The discounted amortization amount is recognized as interest expense. Provisions are not recognized for future operating losses.

(XXIV) Employee Benefits
Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid and should be recognized as expenses in the period when the employees render service.

Pensions
(1) Defined contribution plan

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

(2) Defined benefit plans

A. Net obligation under a defined benefit plan is defined as the present value of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The amount recognized is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The discount rate employed is the market yieds on government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the defined benefit

B. The remeasured amount of defined benefit plans is recognized in other comprehensive income as it arises and presented in retained earnings.

C. Expenses associated with past service costs are recognized immediately in profit or loss.

Compensation to employees and remuneration to directors and supervisors

Compensation to employees and remuneration to directors and supervisors are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. If the accrued amounts are different from the actual distributed amounts resolved by the shareholders subsequently, the differences should be accounted for as changes in accounting estimates.

4. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee's employment before the normal retirement date, or an employee's decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognizes expenses at the earlier of when it can no longer withdraw the termination contracts or when it recognizes relevant restructuring costs. Benefits due more than 12 months after balance sheet date are discounted to their present value.

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(XXV) Financial Liabilities and Equity Instruments

1. Classification of financial liabilities and equity instruments

The Group classifies its issuance of debts and financial instruments as financial liabilities or equity in accordance with the definition of financial liabilities and equity instruments, as well as the contractual substance.

2. Equity instruments

Equity instruments refer to any contracts containing an entity’s residual interest after subtracting liabilities from assets. Equity instruments issued by the Group is recognized as the net of proceeds less direct issuance costs.

3. Financial Liabilities

Financial liabilities that are not held for trading and are not designated as at FVTPL are accounted for at amortized costs at the end of subsequent accounting periods.

Derecognition of financial liabilities

The Group will derecognize a financial liability only when the obligation under the obligation is discharged, cancelled or expired When a financial liability is derecognized, the difference between the carrying value of financial liability derecognized and the consideration paid or payable (including any non-cash asset transferred or liability assumed) should be recorded into profits or losses of the current period.

Bonds payable

Overseas secured bonds issued by the Group are initially carried at the amount of fair value less transaction costs. Any differences between the carrying amount and the maturity value are recognized as premiums (discounts) on bonds payable, and listed as an addition (deduction) to bonds payable. Subsequently,such bonds payable is recognized in profit or loss at amortized cost using the effective interest method during the life of the bond as an adjustment to “Finance Cost”, expect for immaterial amounts.

(XXVI) Capital

Common shares are classified as equity.Incremental cost that can be attributed directly to the issuance of new shares or warrants is recognized as a deduction to proceeds under equity.

(XXVII) Share-based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.
For the cash-settled share-based payment arrangements, the fair value of liabilities assumed are recognized as compensation cost and liabilities over the vesting period and measured as the fair value of equity instruments granted on each balance sheet and settlement dates. Changes are recognized in profit or loss.

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(XXVIII) Income Tax

Income tax expense includes current income tax and deferred income tax.Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the shareholders resolve to retain the earnings.
Deferred income tax adopts the balance sheet approach. It is recognized as a temporary difference between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet at the reporting date. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences, unused tax losses and unused income tax credits can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
Tax incentives from acquisitions of equipment or technology, research and development expenditures, employees' training costs and equity investments are recognized in the form of tax credits.

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(XXIX) Revenue Recognition

1. Sales of goods

(1) The Group engages in the manufacture and selling of rolled steel coils, refined steel, steel pipes, electronic materials, etc. Revenue is the fair value of consideration received or receivable for goods sold to external customers during the ordinary course of business, presented as the net of netting sales returns, rebates and discounts. Revenue is recognized when the following conditions are met:

(A) Significant risks and rewards related to the ownership of goods are transferred to the customers.

(B) The Group no longer participates in management of the product nor maintains effective control.

(D) Future economic benefits related to the transaction are highly possible to be obtained by the Group.

(E) The occurred or to be occurring transaction costs can be reliably measured. When supplying material for processing, the significant risks and rewards of ownership of the processed goods have not transferred. Thus, it is not treated as sales of goods.

(2) The Group offers customers volume discounts and right of return for defective products. The Group estimates such discounts and returns based on historical experience. Provisions for such liabilities are recorded when the sales are recognized.

Revenue from services, technical services, leases, dividends and interests

(1) The sales of service occurs from services rendered in accordance with contracts and is recognized as revenue by reference to the stage of completion of the contract activity. If a specific task is far more important than the rest, the recognition of revenue should be delayed until that specific task is completed.

(2) Revenue of technical service rendered is recognized in accordance with contracts when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of revenue can be measured reliably.

(3) The rental revenue shall be recognized as revenue in the duration of the lease based on straight-line method.

(4) Dividend revenue from investments is recognized when the rights of shareholders to receive payment are established, provided that the economic profits arising from such transaction are highly probable to flow to the Group and the amount of such benefits can be reliably measured.

(5) Interest revenue is recognized based on outstanding principal and applicable effective interest according to passage of time on an accrual basis.

Construction Contracts

Please refer to Note 4(XIV) for details on the recognition of revenue from construction contracts.

(XXX) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the respective assets until the asset is ready for its intended use or sale. Income earned on the temporary investment of the borrowing specifically for the capital expenditure of a qualifying asset is deducted from borrowing cost that meets the capitalization condition. Except for the above, other borrowing costs are recognized as an expense.

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V. The Primary Sources of Uncertainties in Major Accounting Judgments, Estimates, and Assumptions

Major accounting judgments, estimates, and assumptions adopted in applying the Group’s accounting policies for the preparation of these Consolidated Financial Statements are as follows:

(I) Major judgments

Financial assets - impairment of equity investments

Pursuant to IAS 39, major judgments from the Group are required in determining whether a financial asset - equity investment is impaired. The Group evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

Financial Assets Carried at Cost

Equity instruments held by the Group with no public quotes from active markets, when recently accessible information is not sufficient to determine their fair value and thus their value cannot be reliably measured, are classified as "financial assets measured at cost"

3. Revenue Recognition

The determination of whether the Group is acting as principal or agent in a transaction is based on an evaluation of the Group’s exposure to the significant risks and rewards associated with the sale of goods in accordance with the business model and substance of the transaction. When the Company is exposed to significant risks and rewards associated with sale of products or provision of services, it is acting as a principal and the revenue is recognized as the gross amount of economic benefit receivable or received. If the Company is acting as an agent, revenue recognized equals to the net amount of transaction. The Group engages mainly in the manufacturing and selling of rolled steel coil, refined steel, steel pipes and related electronic products. As it meets the following criteria, gross amounts are recognized as revenue.

(1) The Company is primarily responsible for providing of goods or services
(2) The Company assumes inventory risk.
(3) The Company assumes customer credit risk.
(II) Critical accounting estimates and assumptions

1. Revenue Recognition

Revenue from sales of goods is principally recognized when the profits are already collected.Provisions for relevant returns and allowances are estimated based on historical experience and other known factors and recognized as a deduction item to revenue in the period when goods are sold. The Group regularly review the reasonability of such estimates. As of December 31, 2017, provisions for sales return and allowance were NT$ 20,663 thousand.

Impairment assessment of tangible and intangible assets The Group assesses impairment based on its subjective judgment and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilized and their industrial characteristics. Any changes in economic circumstances or in the estimates due to the Company’s strategy might cause material impairment on assets in the future. For the year ended December 31, 2017, the Company recognized impairment loss of NT$ 13,534

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Impairment assessment of investments accounted for using equity method

When there is an indication that an investment accounted for using equity method may be impaired and its carrying amount cannot be recovered, the Group would immediately conduct impairment assessment on the asset. The Group evaluates recoverable amount based on the discounted expected future cash flows or cash dividends from the investees and the discounted future cash flows from disposal of the investment. It also analyses the reasonability of relevant assumptions. For the year ended December 31, 2017, the Group recognized impairment loss of NT$ 0 thousand.

Realizability of deferred income tax assets

Deferred income tax assets are recognized only to the extent that it is probable that future taxable income will be available against which the deductible temporary differences can be utilized. Assessment of the realizability of deferred income tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc. Any changes in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred income tax assets. As of December 31, 2017, the Group recognized deferred income tax assets of NT$ 609,736 thousand.

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgment and estimates. The Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. As of December 31, 2017, the carrying amount of inventories was NT$ 9,993,445 thousand (less the provision for obsolete inventory and inventory valuation losses of NT$ 360,424 thousand ).

Calculation of net defined benefit liabilities

In calculating the present value of defined benefit obligations, the Group must exercise judgments and estimates in determining relevant actuarial assumptions, including the discount rate and future growth rate for salary, on the balance sheet date. Any changes in the actuarial assumptions may have caused material impacts on the Group’s defined benefit obligations. As of December 31, 2017, the carrying amount of the Group’s net defined benefit liabilities was NT$ 940,445 thousand.

Financial assets – fair value assessment on unlisted stocks with no active markets

Unlisted stocks with no active markets held by the Group are carried at cost net of impairment losses as at the balance sheet date. As the range of reasonable estimates on fair value is significant and various probabilities cannot be reasonably assessed, management of the Group deems the fair value cannot be measured reliably.

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VI. Descriptions for Major Accounting Subjects

(I) Cash and Cash Equivalents

Total Item Cash Checking deposits Demand deposits Cash equivalents Time deposits within three months	December 31, 2017: December 31, 2016: $6,554 $4,094 719,557 694,268 5,400,514 5,589,597 1,577,800 1,845,222 $7,704,425 $8,133,181

No cash or its equivalent was pledged as collateral by the Group.

(II) Financial Assets and Liabilities measured at fair value through profit or loss

Derivative financial liabilities – current Cross currency swaps Derivative financial assets – current Currency swaps Cross currency swaps Total Non-derivative financial assets – non-current Financial bonds Item Non-derivative financial assets - current Bond funds Listed stocks Assets: Liabilities:	December 31, 2017: $49,534 - - - $49,534 $9,999 $21,033	December 31, 2016:
		$102,371 1,424 7,687 8,386
		$119,868
		$9,999
		$ -

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The Group’s net income (loss) recognized in the period from January to March, 2017 and 2016 were NT$ (35,418) thousand and NT$ 12,433 thousand, respectively.
No financial asset at fair value through profit or loss was pledged by The Group as collateral.
The Group enters exchange rate swap contracts and interest and currency swap contracts with banks to hedge exchange rate risk of assets and liabilities denominated in foreign currencies. However, as The Group does not plan on adopting hedge accounting, those contracts are accounted for as financial instruments at fair value through profit or loss, of which the changes in fair value are recognized in profit or loss upon initial recognition. Outstanding contracts are as follows:
(A) Currency swaps

December 31, 2017: None

December 31, 2016:

Nominal Principal (In thousands) USD 3,000 USD 2,000	Due Date Swap Rate 2017. 3.21 USD/RMB 6.5 2017. 5. 8 USD/RMB 6.497

(B) Cross Currency Swaps

Amount (Thousands of NTD) Due Date USD 6,000 2018. 3.26 USD 3,000 2018. 3.29 USD 2,000 2018. 3. 5 USD 3,000 2018. 3. 5 USD 5,000 2018. 3. 5 USD 3,000 2018. 8.17 Amount (Thousands of NTD) Due Date USD 10,000 2017.10.18 USD 5,000 2017.10.18 December 31, 2017: December 31, 2016:	Swap Rate Collected/Paid Interest Rate USD/NTD 29.28 2.69464%/1.17% USD/RMB 6.8770 (Note 1) (Note 8) /6.40% USD/RMB 6.8920 (Note 2) (Note 9) /6.25% USD/RMB 6.8335 (Note 3) (Note 9) /6.54% USD/RMB 6.8040 (Note 4) (Note 9) /6.43% USD/RMB 6.4750 (Note 5) (Note10) /6.78% Swap Rate Collected/Paid Interest Rate USD/RMB 6.77 (Note 6) (Note 8) /5.25% USD/RMB 6.891 (Note 7) (Note 8) /5.15%

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Note 1: If on the fixing date the fixing rate between USD/RMB <7.20, on the maturity date the Company will collect USD 3,000 thousand and the bank will collect RMB 20,631 thousand.

If on the fixing date the fixing rate between USD/RMB >7.20, on the maturity date the Company will collect USD 3,000 thousand and the bank will collect RMB (3,000 thousand*(fixing rate-0.323)) dollars. The two parties will conduct a balance settlement.

Note 2: If on the fixing date the fixing rate between USD/RMB <7.10, on the maturity date the Company will collect USD 2,000 thousand and the bank will collect RMB 13,784 thousand.

If on the fixing date the fixing rate between USD/RMB >7.10, on the maturity date the Company will collect USD 2,000 thousand and the bank will collect RMB (2,000 thousand*(fixing rate-0.208)) dollars. The two parties will conduct a balance settlement.

Note 3: If on the fixing date the fixing rate between USD/RMB <7.00, on the maturity date the Company will collect USD 3,000 thousand and the bank will collect RMB 20,501 thousand.

If on the fixing date the fixing rate between USD/RMB >7.00, on the maturity date the Company will collect USD 3,000 thousand and the bank will collect RMB (3,000 thousand*(fixing rate-0.1665)) dollars. The two parties will conduct a balance settlement.

Note 4: If on the fixing date the fixing rate between USD/RMB <6.95, on the maturity date the Company will collect USD 5,000 thousand and the bank will collect RMB 34,020 thousand.

If on the fixing date the fixing rate between USD/RMB >6.95, on the maturity date the Company will collect USD 5,000 thousand and the bank will collect RMB (5,000 thousand*(fixing rate-0.146)) dollars. The two parties will conduct a balance settlement.

Note 5: If on the fixing date the fixing rate between USD/RMB <6.74, on the maturity date the Company will collect USD 3,000 thousand and the bank will collect RMB 19,425 thousand.

If on the fixing date the fixing rate between USD/RMB >6.74, on the maturity date the Company will collect USD 3,000 thousand and the bank will collect RMB (3,000 thousand*(fixing rate-0.265)) dollars. The two parties will conduct a balance settlement.

Note 6: If on the fixing date the fixing rate between USD/RMB <7.20, on the maturity date the Company will collect USD 10,000 thousand and the bank will collect RMB 67,700 thousand.

If on the fixing date the fixing rate between USD/RMB >7.20, on the maturity date the Company will collect USD 10,000 thousand and the bank will collect RMB (10,000 thousand*(fixing rate-0.43)) dollars. The two parties will conduct a balance settlement.

Note 7: If on the fixing date the fixing rate between USD/RMB <7.20, on the maturity date the Company will collect USD 5,000 thousand and the bank will collect RMB 34,455 thousand.

If on the fixing date the fixing rate between USD/RMB >7.20, on the maturity date the Company will collect USD 5,000 thousand and the bank will collect RMB (5,000 thousand*(fixing rate-0.309)) dollars. The two parties will conduct a balance settlement.

Note 8: 3 month period ((USD-LIBOR-BBA)+3.20%

Note 9: 3 month period ((USD-LIBOR-BBA)+3.35%

Note 10: 3 month period ((USD-LIBOR-BBA)+ 4.15%

198

(III) Notes receivable - net Item Notes receivables Less: Changes in allowance for doubtful accounts: Notes receivable - net	December31,2017: $1,390,005 (89) $1,389,916	December31,2016:
		$730,556 (4)
		$730,552

As of December 31, 2017 and 2016, no notes receivable was pledged as collateral by the Group.
Please refer to Note 7 (3) 3 for related party transactions.

(IV) Accounts receivable- Net Item Accounts receivable Less: Changes in allowance for doubtful accounts: Accounts receivable- Net	December 31,2017: $2,517,515 (5,930) $2,511,585	December 31,2016:
		$2,177,865 (6,283)
		$2,171,582

The Group’s accounts receivables that are not overdue nor impaired all meet the credit standards stipulated based on the counter-parties' industrial characteristics, operation scale and profitability. The average collection period for Carbon Steel Department and is 30 to 60 days, 7~26 days for the sale of steel products, and 60~90 days for other departments. The collection period for Engineering Department is based on contracts.
The Group does not have significant overdue accounts receivables or notes receivables that are not impaired.
Changes in allowance for doubtful accounts: (Including notes receivables, accounts receivables and accounts receivables - related parties)

	2017
Impairment loss by individual assessment $ - 4,659 - - - $4,659	Impairment loss by group assessment $6,885 - (4,833) - 322 $2,374	Total
		$6,885 4,659 (4,833) - 322
		$7,033

	2016
Impairment loss by individual assessment $ - - - - - $-	Impairment loss by group assessment $6,963 - - (64) (14) $6,885	Total
		$6,963 - - (64) (14)
		$6,885

199

As of December 31, 2017 and 2016, the recognized bad debt allowance in determined impaired accounts receivable were NT$ 4,659 thousand and NT$ 0 thousand respectively. The recognized impairment loss is the difference between the carrying amount of accounts receivable and the present value of expected liquidation. Aging analysis of impaired accounts receivable is stated as follows:

Not past due 0~30 days past due 31~180 days past due 181~365 days past due Over 1 year past due Total	December 31, 2017: December 31, 2016: $ - $ - - - - - 4,659 - $4,659 $ -

4. For the information about accounts receivable pledged as collateral, please see Note 8 for details

(V) Construction contract receivable (payable)

(V) Construction contract receivable (payable)
Net assets and liabilities of undergoing contracts listed as: Construction contract receivables – non-related parties Construction contract receivables – related parties Construction contract payables – non-related parties Item Total costs incurred and profits recognized Less: Allowance for price decline Less: Construction progress payment	December 31, 2017: $3,376,030 (8,345) (3,014,364) $353,321 $175,452 192,200 (14,331) $353,321	December 31, 2016:
		$2,566,305 (3,752) (1,946,432)
		$616,121
		$301,108 344,415 (29,402)
		$616,121

(VI) Other receivables

20 Item Less: Deferred gain from disposal of land Bad debt provision Net Proceeds receivable from disposal of land Purchase allowance receivable Interest receivable Insurance claims receivables Others Total Business tax refundable	~~0~~ December 31, 2017: $168,285 46,072 45,036 4,481 14,427 18,803 $297,104 (19,399) - $277,705	December 31, 2016:
		$96,602 46,072 97,612 224 17,480 17,783
		$275,773 (19,399) -
		$256,374

“Proceeds receivable from disposal of land” refers to the 30% land price arising from the disposal to related parties of 67 pieces of land reserved for the public infrastructure located in Dagang section, Sanmin District, Kaohsiung City in September, 2013. The 30% land price had been collected and the ownership of the said land had been transferred in July 2013, resulting in gain from disposal of NT$ 19,399 thousand. Since the rest portion of the land price had not been collected because the construction permits had not been obtained by the related parties who were obliged to pay the consideration for the land, such gain from disposal was recognized as “deferred gain from disposal of land” (listed as a deduction to other accounts receivables).
Insurance claims receivables are amounts to be claimed from the insurance company for the estimated loss of typhoon (flood). Please refer to Note 12 (7).
Please refer to Note 7 (3) 3 for related party transactions.

(VII) Inventory and Cost of Sales

Raw materials Supplies Subtotal Less: Allowance for inventory valuation and obsolescence loss Net Total Finished goods Other inventory Subtotal Less: Allowance for inventory valuation and obsolescence loss Net Heavy Industry Departments Item ~~Steel Department and other Non-heavy industry~~ departments: Raw materials Supplies Work in progress	December 31, 2017: December 31, 2016: $4,053,135 $3,655,361 365,764 344,868 1,675,513 1,252,021 3,945,278 3,090,894 181,037 168,126 $10,220,727 $8,511,270 (360,130) (422,286) $9,860,597 $8,088,984 $129,738 $158,000 3,404 3,456 $133,142 $161,456 (294) (1,322) $132,848 $160,134 $9,993,445 $8,249,118

201

Inventory gains (losses) recognized as cost of sales are as follows:

Item	2017	2016
Cost of inventories sold	$63,788,900	$44,496,174
Engineering costs	615,030	819,113
Processing costs	415,506	325,324
Unabsorbed manufacturing overheads	97,038	87,682
Loss on physical inventory	114	-
Inventory valuation losses and obsolescence loss (recover gain)	(58,591)	(105,774)
Insurance claims	-	(6,181)
Loss (recover gain) on irrevocable purchasing contracts	-	(822)
Effects of differences arising from foreign exchange	1,282	25,535
Total operating expenses	$64,859,279	$45,641,051

As the Group raised prices on certain products as a result of market stabilization, the net realizable value of inventories recovered. The Company recognized inventory valuation loss (recovery gain) of NT$ 58,591 thousand and NT$ 105,774 thousand for the years ended December 31, 2017 and 2016, respectively.
There is no inventory pledged as collateral by The Group.

(VIII) Prepayments

Item Total Prepaid (overpaid) sales tax Sea freight prepaid Insurance claims Prepaid land usage rights, etc. Prepaid rental Other prepayments Prepaid material purchase	December 31, 2017: December 31, 2016: $2,491,410 $1,792,300 337,124 182,482 71,594 81,524 54,292 56,781 6,674 6,576 4,174 2,409 67,460 50,336 $3,032,728 $2,172,408

202

(IX) Other Financial Assets - current

(X) Investments accounted for using equity method Eliter International Corp. E-Da Development Corp. Tangeng Iron Works Co., Ltd. Yieh United Steel Corporation Associates without significance Total Item Investee Time deposits within three months Pledged demand deposits Pledged time deposits Total Associates: Associates with significance:	December 31, 2017: $28,040 417,392 790,632 $1,236,064 December 31, 2017: $3,666,673 1,368,724 4,515,817 5,034,287 2,826,542 $17,412,043	December 31, 2016:
		$27,425 274,593 709,763
		$1,011,781
		December 31, 2016:
		$3,748,343 1,454,739 4,468,732 4,769,070 2,619,386
		$17,060,270

1. Associates:

(1) Major associates of the Group are as follows:

Company Name Eliter International Corp. E-Da Development Corp. Tangeng Iron Works Co., Ltd. Yieh United Steel Corporation	Shareholding Percentage
	December 31, 2017 December 31, 2016 43.56% 43.56% 34.38% 34.38% 31.16% 31.16% 29.32% 29.31%

Please refer to Table 10 and Table 11 in Note 13 for the nature of business, main operation location and countries of registration of the associates listed above.

203

(2) The summarized financial information in respect of the Group’s major associates is as follows:

A. Balance Sheets

A. Balance Sheets
Carrying amount of associate Non-current Assets Current Liabilities Non-current Liabilities Equity Share of net assets of associates Unrealized gain/loss from transactions with associates Non-current Liabilities Equity Share of net assets of associates Unrealized gain/loss from transactions with associates Carrying amount of associate Current Assets Share of net assets of associates Unrealized gain/loss from transactions with associates Carrying amount of associate Current Assets Non-current Assets Current Liabilities Current Assets Non-current Assets Current Liabilities Non-current Liabilities Equity	Eliter International Corp.
	December 31, 2017: December 31, 2016: $7,093,106 $7,081,451 4,696,365 4,445,457 1,712,810 1,921,210 1,514,299 855,778 $8,562,362 $8,749,920 $3,729,449 $3,811,142 (62,776) (62,799) $3,666,673 $3,748,343 E-Da Development Corp.	December 31, 2016:
		$7,081,451 4,445,457 1,921,210 855,778
		$8,749,920
		$3,811,142 (62,799)
		$3,748,343
	December 31, 2017: December 31, 2016: $459,792 $315,078 8,732,673 9,076,611 2,134,251 1,641,262 3,053,558 3,495,049 $4,004,656 $4,255,378 $1,376,965 $1,463,174 (8,241) (8,435) $1,368,724 $1,454,739 Tangeng Iron Works Co., Ltd.	December 31, 2016:
		$315,078 9,076,611 1,641,262 3,495,049
		$4,255,378
		$1,463,174 (8,435)
		$1,454,739
	December 31, 2017: $4,680,015 24,263,252 4,501,392 9,948,594 $14,493,281 $4,515,817 - $4,515,817	December 31, 2016:
		$4,408,426 24,133,403 4,188,691 10,010,973
		$14,342,165
		$4,468,732 -
		$4,468,732

204

Yieh United Steel Corporation

Unrealized gain/loss from transactions with associates Carrying amount of associates Current Assets Non-current Assets Current Liabilities Non-current Liabilities Equity Share of net assets of associates	December 31, 2017: $9,805,569 37,983,895 17,603,463 12,879,418 $17,306,583 $5,067,719 (33,432) $5,034,287	December 31, 2016:
		$7,877,307 38,915,187 20,599,883 9,917,563
		$16,275,048
		$4,769,070 -
		$4,769,070

B. Statements of Comprehensive Income

Eliter International Corp.

Total comprehensive income (loss) Dividends received from associates Operating revenue Net income Other comprehensive income (net after tax)	2017 $228,227 ($186,166) (4,392) ($190,558) $ -	2016
		$310,954
		($126,830) -
		($126,830)
		$ -

Operating revenue

Net income

Other comprehensive income (net after tax) Total comprehensive income (loss) Dividends received from associates

E-Da Development Corp.	E-Da Development Corp.
2017 $915,341 ($248,116) (2,606) ($250,722) $ -	2016
	$1,005,719
	($249,488) (3,048)
	($252,536)
	$ -

Tangeng Iron Works Co., Ltd.

Operating revenue

Net income

Other comprehensive income (net after tax)

Total comprehensive income (loss)

Dividends received from associates

2017 $18,918,149 $243,225 (87,386) $155,839 -	2016
	$13,021,328
	$503,350 (24,441)
	$478,909
	-

205

Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Dividends received from associates	Yieh United Steel Corporation	Yieh United Steel Corporation
	2017 $43,054,406 $696,226 (546,672) $149,554 $ -	2016
		$41,713,114
		$163,352 (361,465)
		($198,113)
		$ -

(3) Shares of individually insignificant associates of the Group are summarized as follows:

Share of: Net income Other comprehensive income (net after tax) Total comprehensive income (loss)	2017 2016 $86,138 $171,960 (75,594) (21,494) $10,544 $150,466

(4) Associates of the Group with quoted prices in active market (Level 1 fair value inputs) are as follows:

Yieh United Steel Corporation (Note) Tangeng Iron Works Co., Ltd. Total	December 31, 2017: December 31, 2016: $3,939,123 $3,832,736 5,125,491 5,109,133 $9,064,614 $8,941,869

(Note): The fair value information above does not include shares acquired in private placement during the period and are not allowed to be transferred freely in open markets.

(5) For Skylark Hot Spring & Resort Corp., E-Da Cultural Creative Industries Co., Ltd., E-Da Tour Bus Corporation, E-Da Bus Transportation Co., Ltd. and E-Da Entertainment Co., the Goup has significant influence over shich as a result of being a director in such entities. Consequently, those entities are accounted for using equity method.

(6) The Group participated in the private placement of Yieh United Steel Corporation in February, 2017, and December, 2015, and subscriped at NT$ 7 per share, with the total subscription amount of NT$ 204,876 thousand and NT$ 1,100,400 thousand, respectively. Pursuant to the Securities and Exchange Act, securities from private placement can only be traded freely in the open markets when they are held for three years from the delivery date and the issuer has completed the supplementary procedures of public offering.

(7) Due to cross ownership and the adoption of equity method between the Group and Yieh United Steel Corporation, an investee accounted for using equity method, investment gain/loss is recognized using the treasury stock approach.

206

(8) All investments accounted for using equity method and the Group’s share of profit or loss and other comprehensive income in the investees, except for E United Japan Co., Ltd. and PT.YIEH FERRO ORIENTAL in 2017, and E United Japan Co., Ltd. in 2015, are calculated based on audited financial statements of those investees. However, management of the Group does not think unaudited financial statements of above investees would have a significant impact on the Company.

(9) As of December 31, 2017 and 2016, the Group pledged a portion of its investments accounted for using equity method as collateral for its borrowings. Please refer to Note 8.

(XI) Available-for-sale Financial Assets - Non-current

Item Listed stocks:	December 31, 2017: December 31, 2016: $44,910 $46,575

As of December 31, 2017 and 2016, no available-for-sale financial assets were pledged as collateral by the Group.

(XII) Financial Assets Carried at Cost - Non-current

Item	December 31, 2017:	December 31, 2016:
Domestic stocks not traded in TWSE or TPEX	$549,460	$482,124
Foreign stocks not traded in stock market	2,002	2,002
Total	$551,462	$484,126

1.The investments above were classified as financial assets held at cost because no reasonable and reliable assessments were available to determine their fair values for lacking of quoted price from active market and insufficient information about other similar industries and the investee’s financial information. These investments are measured at cost minus accumulated impairment loss as of the balance sheet date.

For 2017 and 2016, the Group recognized impairment loss of NT$ 1,060 thousand and NT$ 0 thousand, respectively.
As of December 31, 2017 and 2016, no financial assets carried at cost were pledged as collateral.

207

(XIII) Bond Investments with no Active Market - Non-current

Item Net Preferred stock E-Da Development Corp. Eliter International Corp. Subtotal Less: Accumulated impairment	December 31,2017: $206,305 348,450 $554,755 - $554,755	December 31,2016:
		$206,305 -
		$206,305 -
		$206,305

1.The Group acquired preferred shares on E-Da Development Corp. (with annual yield rates of 2.5%, three years of issuance period, cumulative and non-participating, cash settled at one time upon maturity). E-Da Development Corp. engages in business of department stores and amusement parks.

2.The Group acquired preferred shares on Eliter International Corp. (with annual yield rates of 3%, three years of issuance period, cumulative and non-participating, cash settled at one time upon maturity). Eliter International Corp. mainly engages in business of development, construction, leasing, and selling of real estates.

For the years ended December 31, 2017 and 2016, the recognized impairment losses were the same amount at
As of December 31, 2017 and 2016, no bond investments with no active market were pledged as collateral by
(XIV) Property, Plant and Equipment

(XIV) Property, Plant and Equipment
	Item	December 31,2017:	December 31,2016:
Land		$6,007,639	$6,018,653
Buildings		8,602,615	8,772,193
Machinery and equipment		35,232,848	35,345,447
Other Equipment		3,218,544	3,310,380
Equipment to be inspected and construction in		10,181,218	7,894,997
Total costs		$63,242,864	$61,341,670
Less: Accumulated depreciation		(23,437,996)	(22,225,398)
Accumulated impairment		(478,026)	(1,249,213)
Total		$39,326,842	$37,867,059
1. Acquisitions during the period and adjustments for cash flows related to acquisitions of property, plant and
Item		2017	2016
Increase in property, plant and equipment		$3,471,486	$4,526,724
Transferred in (out) from inventory		-	(1,124)
Increase/decrease in payables for purchase	of equipment	(48,858)	(354,153)
Repair payment on wind disasters		5,875	2,856
Cash amount paid for procurement of property, plants and equipment		$3,428,503	$4,174,303

208

Please refer to Note 6(34) for details on the amount of capitalized borrowing costs.
Impairment losses for property, plant and equipment recognized for 2017 and 2016 were NT$ 13,534 thousand and NT$ 64,095 thousand, respectively. Among which NT$ 13,534 thousand and NT$ 44,469 thousand of impairment loss for 2017 and 2016 came from a portion of the Group’s unused production equipment of which the expected recoverable amount was less than the carrying amount. Such impairment loss had been listed under “other gains and losses” in the consolidated statements of comprehensive income. The recoverable amount of such production equipment was determined by the Group by using either its value in use (at 4.94% discount rate) or its fair value less cost of disposal. The fair value employed was determined by using the cost approach and by reference to status in use and relevant market activities, which was fair value measurement categorised within Level 3.
Impairment losses for property, plant and equipment recognized for July and September, 2016, were NT$ 19,625 thousand, among which NT$ 11,299 was claimed from the insurance company. Please refer to Note 12 (7)
For the information about property, plant and equipment pledged as collateral, please see Note 8 for details
The Group’s land amounting to NT$ 78,568 thousand and NT$ 89,582 thousand as of December 31, 2017 and 2016 is unable to be registered under the name of the Group due to regulation restriction. Accordingly, the ownership was registered under the name of an individual with a mortgage registration as safeguard measures.

(XV) Investment Property Net

(XV) Investment Property Net
Item Land Cost Balance, January 1, 2017 $950,636 Addition - Property, plant and equipment transferred in - Effects of differences arising from foreign exchange - Balance, December 31, 2017 $950,636 Accumulated depreciation and impairment Balance, January 1, 2017 $68,009 Depreciation - Effects of differences arising from foreign exchange - Balance, December 31, 2017 $68,009 Accumulated impairment Net Land Buildings Construction-in-progress Total cost Less: Accumulated depreciation	December 31,2017: $950,636 69,950 45,789 $1,066,375 (9,790) (68,009) $988,576 Buildings $70,671 - - (721) $69,950 $8,463 1,321 6 $9,790	December 31,2016:
		$950,636 70,671 -
		$1,021,307 (8,463) (68,009)
		$944,835
		construction inprogress
		$ - 16,263 29,526 -
		$45,789
		$ - - -
		$-

209

Cost Balance, January 1, 2016 Addition Disposal Balance, December 31, 2016 Accumulated depreciation ~~and impairment~~ Balance, January 1, 2016 Depreciation Recogned (Reversed) Impairment loss Balance, December 31, 2016	Land $950,636 - - $950,636 $68,009 - - $68,009	Buildings $26,604 44,067 - $70,671 $7,615 848 - $8,463	Total
			$977,240 44,067 -
			$1,021,307
			$75,624 848 -
			$76,472

Rental revenue and direct operating expenses of investment property:

Item Rental revenue from investment property: Direct operating expenses Incurred by investment property generating rental revenue in current period Direct operating expenses incurred by investment property not generating rental revenue in current period	2017 $ - $ - $15,904	2016
		$ -
		$ - $18,330

As of December 31, 2017 and 2016, the fair values of investment property held by the Group were NT$ 2,299,501 thousand, NT$ 2,022,629 thousand respectively, which were based on evaluation appraised by independent appraisers as of December 31, 2017 and 2015. Such evaluation adopted the comparative approach by reference to the market evidence similar to the real estate transaction prices. Those are Level 3 fair value inputs. Please refer to Note 12(4). The Company believes that there would not be any material fluctuation in the fair value of such investment properties after their appraisal. Appraisal will be taken place every two years on the investment
For the information about investment property pledged as collateral, please see Note 8 for details
The Group’s land amounting to NT$ 8,987 thousand as of December 31 2017 and 2016 is unable to be registered under the name of the company due to regulation restriction. Accordingly, the ownership was registered under the name of an individual with a mortgage registration as safeguard measures.

210

(XVI) ) Long-term Prepaid Rents

Item Total Land use rights Long-term prepaid rent Subtotal Less: Transfer within 12 months	December 31, 2017: December 31, 2016: $250,043 $260,507 9,109 9,615 $259,152 $270,122 (6,674) (6,576) $252,478 $263,546

The prepaid rents above are mainly from the 50-year land-use right contract entered by the Group in China. The amount was fully paid when contract was executed. For 2017 and 2016, RMB 1,356 thousand and RMB 1,306 thousand were respectively recognized as rental expenses. The Group has the right to use the land, to acquire benefits and to transfer or lease the land and is responsible for all taxes and dues arising from the land-use during the contract duration.

(XVII) Short-term Loans

Type of Loan Type of Loan Credit for material purchases Mortgage loans Total Credit loans Credit loans Credit for material purchases Mortgage loans Total	December 31, 2017
	Amount Interest Rate $7,442,724 1.07%-5.90% 7,828,799 1.50%-3.02% 554,000 2.09%-3.00% $15,825,523 December 31, 2016
	Amount Interest Rate $4,056,157 1.17%-4.79% 5,439,850 1.50%-2.88% 1,018,500 2.10%-2.96% $10,514,507

The Group pledged some financial assets, property, plant, and equipment. as collateral for some of its short-term borrowings. Please refer to Note 8 for details.

211

(XVIII) Short-term Bills Payable

yable
Item Commercial paper payable Less: Unamortized discount Net Interest Rate Range	December 31, 2017: $990,000 (989) $989,011 1.63%-2.78%	December 31, 2016:
		$680,000 (987)
		$679,013
		1.63%-2.74%

The Group pledged some of its property, plant, and equipment as collateral for some of its short-term bills payable. Please refer to Note 8 for details.

(XIX) Other Payables

Item	December 31, 2017:	December 31, 2016:
Compensations payable	$506,716	$583,703
Equipment expenses payable	494,422	445,564
Interest payable	56,934	58,007
Utility expenses payable	55,925	57,018
Consumables payable	26,687	50,903
Export and transportation expenses payable	72,934	39,658
Investment payable	-	26,605
Business tax payable	11,150	24,460
Cash dividends payable - from previous period	22,639	22,781
Repairing charges payable	21,116	21,656
Employee compensation payable and Directors’ remuneration payable	5,025	9,066
Others	360,599	361,367
Total	$1,634,147	$1,700,788

Please refer to Note 7 (3) 4 for related party transactions.

212

(XX) Provision - current

Item Employee benefits Sales return, discounts and allowances Warranty Onerous contract Total	December 31, ~~2017:~~ December 31, ~~2016:~~ $75,797 $62,232 20,663 2,806 5,723 5,309 - - $102,183 $70,347

Item January 1, 2017 Recognized in current period Written down in current period December 31, 2017: Item January 1, 2016 Recognized in current period Written down in current period December 31, 2016:	Employee benefits $62,232 13,565 - $75,797 Employee benefits $59,296 2,936 - $62,232	Sales return, discounts and allowances	Warranty $5,309 414 - $5,723 Warranty $1,527 3,782 - $5,309	Onerous contract $ - - - $ - Onerous contract $822 - (822) $ -	Total
		$2,806 17,857 -			$70,347 31,836 -
		$20,663			$102,183
		Sales return, discounts and			Total
		$42,875 - (40,069)			$104,520 6,718 (40,891)
		$2,806			$70,347

(1) Provision for employee benefits is an estimate of the short-term service leave vested to employees.

(2) Provision for sales return & discount is estimated based on historical experience, judgment from the management, and other known reasons for possible return or discount on steel coils and steel tubes, to be deducted from the sale revenue stated in the current period when the goods are sold.

(3) The Group’s “provision for warranty” is the warranty for the sales of electronic products, and is estimates based upon the historical warranty data of such products.

(4) Provision for onerous contract is the difference between the expected costs of performing the contract in and the expected profit obtained from the contract for the signed irrevocable material purchase contract.

(XXI) Long-term Loans and Current Portion of Long-term Liabilities

(XXI) Long-term Loans and Current Portion of Long-term	Liabilities
Item	December 31, ~~2017:~~ December 31, ~~2016:~~ $3,685,344 $4,837,093 - 278,469 $3,685,344 $5,115,562
Long-term loans due within one year or one operating cycle Bonds payable within one year or one operating cycle Total

213

(XXII) Corporate Bonds Payable

Item Overseas secured bonds issued by the subsidiary, GOLDEN, guaranteed by the Company with RMB 300,000 thousand, with duration for 3 years and interest paid semi-annually at 5% annual rate. However, an early repayment of RMB 240,000 thousand was made in September 2016. As of July 2017 when the bond was due, Less: unamortized issuing cost Current portion Net corporate bonds payable	December 31, 2017: December 31, 2016: $ - $278,940 - (471) - (278,469) $ - $ -

The contacts for bonds payable stipulate that the Group shall maintain a certain level of debt ratio, interest coverage ratio and net worth calculated based on both the annual consolidated financial statement certified by a public accountant, and on the 2Q consolidated financial statement reviewed by by a public accountant. As some financial ratios fail to meet the standards in 2017, interest rate shall be increased by 0.2% for the duration of the contract, an action which is not deemed as a breath of contract. However, as principle and interest of such corporate bonds were fully paid upon the due date in July, 2017, the aforesaid increased interest doesn’t have to be paid.

(XXIII) Long-term Loans

Item Long-term loans Interest Rate Range Secured loans from banks Unsecured loans from banks Other financial institution Total Less: Unamortized discount Less: Current portion Bank syndicated loan: The Company Subsidiaries Subtotal	December 31, 2017: $7,825,000 21,986,315 $29,811,315 3,057,160 163,250 46,614 $33,078,339 (110,823) (3,685,344) $29,282,172 1.79%-5.325%	December 31, 2016:
		$6,880,000 21,099,930
		$27,979,930 3,296,800 220,000 77,600
		$31,574,330 (104,763) (4,837,093)
		$26,632,474
		1.72%-9.39%

214

Please refer to Note 8 for the collateral of the above bank loans
According to syndicated loan agreements with banks, the Group needs to maintain several financial ratios, including current ratio, liability ratio and interest coverage ratio, at a certain level, calculated based on the audited annual consolidated financial statements and the reviewed semi-annual consolidated financial statements or the audited annual financial statements of subsidiaries for the duration of the contracts. Since the Group failed to meet certain financial ratios in 2017, it either needed to pay to the managing bank a compensation at 0.10% ~ 0.15% of the loan balance within agreed time, or was subject to 0.10% incremental on its interest rate. However, this is not seen as a breach of contract.

(XXIV) Pensions

Defined contribution plan
(1) The pension system based on the Labor Pension Act which is applicable to the Group’s domestic entities resided in the R.O.C. is a defined contribution plan managed by government. Companies would make monthly contribution equal to 6% of each employee's monthly salary to the employees' individual pension accounts at the Bureau of Labor Insurance. Subsidiaries outside the R.O.C. also participate in the local defined contribution plan and makes contribution to the local govervent accordingly.
(2) For 2017 and 2016 , the Group recognized pension expense of NT$ 109,244 thousand and NT$ 101,637 thousand, respectively.
Defined benefit plans
(1) The pension plan under the Labor Standards Law, which is applicable to the Group’s domestic entities, is a defined benefit pension plan managed by the government. Under the defined benefit pension plan, pension benefits are based on the average monthly salaries and wages of the last 6 months prior to retirement and the duration of employment. Those companies contributes monthly an amount equal to 4.2% ~ 6% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, under the name of the independent retirement fund committee. Before the end of year, if the balance at the retirement fund is not sufficient to cover all employees retiring next year, a lump-sum deposit should be made before March-end of the following year to cover the difference. The retirement fund is managed by the Bureau of Labor Funds, Ministry of Labor. The Group does not have rights to influence its investment management strategy.

(2) The amounts recognized by the Group in the consolidated balance sheet for obligations from defined benefit plans are as follows:

Item Present value of defined benefit obligations Fair value of planned assets Net defined benefit liabilities (assets)	December 31,2017: $1,766,808 (826,363) $940,445	December 31,2016:
		$1,799,950 (724,184)
		$1,075,766

215

(3) Changes in net defined benefit liabilities are as follows:

	2017
Present value of defined benefit obligations $1,799,950 12,690 22,088 - - $34,778 $ - 395 44,060 (48,922) ($4,467) - (63,453) $1,766,808	Fair value of planned assets ($724,184) - (9,202) - - ($9,202) $1,889 - - - $1,889 (158,123) 63,257 ($826,363) 2016	Net defined benefit liabilities
		$1,075,766 12,690 12,886 - -
		$25,576
		$1,889 395 44,060 (48,922)
		($2,578)
		(158,123) (196)
		$940,445

Present value of defined benefit obligations $1,765,166 14,060 21,913 - - $35,973 $ - 4,578 (79,043) 141,933 $67,468 - (68,657) $1,799,950	Fair value of planned assets ($718,085) - (9,044) - - ($9,044) $4,010 - - - $4,010 (67,523) 66,458 ($724,184)	Net defined benefit liabilities
		$1,047,081 14,060 12,869 - -
		$26,929
		$4,010 4,578 (79,043) 141,933
		$71,478
		(67,523) (2,199)
		$1,075,766

216

(4) Through the pension plan under the Labor Standards Law, the Group is exposed to the following risks: A. Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government's designated authorities or under the mandated management by Bureau of Labor Funds, Ministry of Labor. However, the rate of return on the Group’s planned assets shall not be less than the average interest rate on a two-year time deposit published by the local banks.

B. Interest rate risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation, however, the return on the debt investments of the plan assets will also increase. Those two will partially offset each other.

C. Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

(5) The actuarial valuations of the present value of the Group’s defined benefit obligation were carried out by qualified actuaries.The principal assumptions adopted on the valuation date were as follows:

Item Discount rate Future salary increase rate Average maturity period of defined benefit	Measurement date	Measurement date
	December31,2017: 1.00%-1.30% 1.50%-2.00% 9-10 years	December31,2016:
		1.25%-1.30%
		1.50%-2.00%
		9-11years

A. Future mortality rate is estimated based on the 2012 Taiwan Standard Ordinary Experience Mortality B. If a reasonable change in one of the principal assumptions for actuarial valuation occurred and all other assumptions were held constant, the increase (decrease) in the present value of defined benefit obligation would be as follows:

s:
Item Decrease by 0.25% Discount rate Increase by 0.25% Decrease by 0.25% Expected growth rate of Increase by 0.25%	December 31,2017: (44,506) 46,153 46,862 (45,261)	December 31,2016:
		(47,085)
		48,936
		50,605
		(48,761)

(6) The Group expects to make contributions of NT$ 182,851 thousand to the pension plans in the year ended December 31, 2018.

217

(XXV) Long-term Deferred Revenue

The subsidiary, Tianjin Lianfa Precision Steel Corporation Beneficiary, acquired in December 2014 had received a subsidy for engineering construction from the Tianjin Economic Technological Development Area of RMB 11,470 thousand in 2006. As it is a government grant associated with assets, donation income would be recognized based on percentage used for the recognition of depreciation expense. Details are set out below:

Item Deferred reve~~nue from government~~ grants: Subsidy for engineering construction Less: Accumulated revenue recognized Ending balance	December 31, 2017: December 31, 2016: $59,331 $59,331 (23,662) (20,935) $35,669 $38,396

(XXVI) Capital of Common Shares

Quantities and values of the Company’s outstanding common shares at the beginning and ending of periods were as follows:

Item Item Issuance of common stocks Capitalization of earnings December 31 January 1 Issuance of common stocks Capitalization of earnings December 31 January 1	2017	2017
	Shares (thousand shares) Amount 1,718,090 $17,180,905 - - 103,086 1,030,855 1,821,176 $18,211,760 2016	Amount
		$17,180,905 - 1,030,855
		$18,211,760
	Shares (thousand shares) Amount 1,718,090 $17,180,905 - - - - 1,718,090 $17,180,905

As of December 31, 2017 and 2016, the Company had an authorized capital of NT$20,000,000 thousand with 2,000,000 thousand shares.
The Company's shareholders' meeting held on June 22, 2017 had resolved to capitalize earnings of NT$ 1,030,855 thousand. The plan was approved by FSC on July 25, 2017 and 103,086 thousand shares of common share at the par value of NT$ 10 were issued. The base date for share capital increase is set on September 1, 2017.

218

(XXVII) Capital Surplus

Item Share premium Treasury stock transaction Difference between the price received from acquisition or disposal of a subsidiary and its book value Change in ownership interests in subsidiaries accounted for using equity method Changes in associates and joint ventures recognized under equity method Total	December 31, 2017: December 31, 2016: $4,060,366 $4,060,366 557,739 557,739 212,546 81,311 8,665 8,665 34,454 29,050 $4,873,770 $4,737,131

Under the Company Act, capital surplus arising from shares issued at premium or from donation may be used for offsetting deficit. Furthermore, if the Company has no accumulated loss, capital surplus may be used for issuing new shares or distributing cash in proportion to shareholders' original holdings. In accordance with regulations in the Securities and Exchange Act, when the above-mentioned capital surplus is used for capitalization, the total amount every year shall not exceed 10% of the paid-in capital. The Company may use capital surplus to offset loss only when the amount of earnings and reserves are insufficient to offset the loss. The capital surplus generated from investment under equity method shall not be used for any purposes.

(XXVIII) Appropriation of Earnings

A residual dividend distribution policy is adopted in accordance with the Company’s business expansion and profitability after considering the the fact that the Company is currently in its growing phase. The annual net income, if any, should be used to pay off all the taxes and duties, as well as to compensate prior deficits. The remaining amount, if any, should be appropriated in the following order of presentation: (1) 10% as legal reserve; (2) set aside or reverse a certain amount as or of special reserve according to operating needs or laws or regulations; (3) the remaining net income plus unappropriated earnings from prior years may be used as dividends or bonus for shareholders after porposed by the Board of Directors and resolved by the shareholders meeting. In principle, earnings shall be distributed in the form of stock dividends in accordance with the Company’s capital requirement for business expansion and profitability. Cash dividends are distributed at between 20% to 100% of total dividends distributed in accordance with the actual profitability while stock dividends are distributed at between 0% to 80% of the total dividends distributed.
Legal reserves may only be used for offsetting deficits and issuing new shares or distributing cash in proportion to shareholders’ original holdings. However, when new shares are issued or cash is distributed, the amount shall be limited to 25% of the reserves in excess of the paid-in capital.

219

3. Special reserve

Item Provision for debit balance of other equity Provision upon initial application of IAS Total	December 31, 2017: December 31, 2016: $ - $ - 327,757 327,757 $327,757 $327,757

(1) The Company may allocate earnings only after providing special reserve for debt balance in other equity on the date of balance sheet, and the reversal of debit balance in other equity, if any, may be stated into allocable earnings.

(2) Upon first-time adoption of IFRSs, the special reserve provided pursuant to the official letter under Jin-GuanJheng-Fa-Zih No. 1010012865 dated April 6, 2012 may be reversed to allocable retained earnings in proportion to the special reserve as provided originally, if the Company uses, disposes of or reclassifies the relevant assets in

Shareholders meeting held on June 22, 2016 resolved on proposals to offset the 2015 deficits. No bonus for sharehoders were distributed as a result of the 2015 deficit. The shareholders' meetings held on June 22nd, 2017 passed the earnings distribution and dividends per share for 2016 as follows:

Legal reserve Cash dividends for common stocks Stock dividends for common stocks Total	2016
	Earnings appropriation proposal Dividends per share (NTD) $250,201 687,236 0.4 1,030,855 0.6 $1,968,292

As of March 21, 2018, neither dividends nor the earnings appropriation proposal was approved by the Board of Directors of the Company.
Information about earnings distribution approved by the Board of Directors and resolved by the shareholders meeting is available at the Taiwan Stock Exchange Market Observation Post System website.

220

(XXIX) Other Equity Items

Item Balance, January 1, 2017 Exchange differences on translation of foreign financial statements Unrealized gain or loss for available-for-sell financial assets Share of associates and joint ventures recognized using the equity method Balance, December 31, 2017 Item Balance, January 1, 2016 Exchange differences on translation of foreign financial statements Unrealized gain or loss for available-for-sell financial assets Share of associates and joint ventures recognized using the equity method Balance, December 31, 2016	Exchange differences on translation of foreign financial statements ($226,298) (287,395) - (184,085) ($697,778) Exchange differences on translation of foreign financial statements $583,467 (707,931) - (101,834) ($226,298)	Unrealized gain or loss for available-for-sell financial assets	The effective portion of gain (loss) arising from financial instruments that are ~~designated as cash~~ $11,385 - - (4,995) $6,390 The effective portion of gain (loss) arising from financial instruments that are ~~designated as cash~~ $7,080 - - 4,305 $11,385	Total
		$47,562 - (1,665) 8,836		($167,351) (287,395) (1,665) (180,244)
		$54,733		($636,655)
		Unrealized gain or loss for available-for-sell financial assets		Total
		$54,642 - (5,850) (1,230)		$645,189 (707,931) (5,850) (98,759)
		$47,562		($167,351)

221

(XXX) Non-controlling Interest

Item	2017	2016
Beginning balance	$2,706,328	$3,119,304
Share attributable to non-controlling interest:
Net income (loss) for the current year	(22,095)	(123,460)
Other comprehensive income of the year
Remeasurement of defined benefit plans	(1,647)	(7,030)
Exchange differences on translation of foreign financial statements	(9,462)	(1,370)
Share of associates and joint ventures accounted for
using equity method
Exchange differences on translation of foreign financial statements	(4,415)	(6,638)
Unrealized valuation gain (loss) on available-for-sale financial assets	(106)	1,062
Remeasurement of defined benefit plans	(444)	(2,556)
The effective portion of gain (loss) arising from financial instruments that are designated as cash flow	(108)	1,201
Changes in associates and joint ventures recognized under equity method Increase in non-controlling interest - acquisition from mergers Increase in non-controlling interest - capital increase by cash	107 2,067 94,724	(566) - 64,630
Decrease in non-controlling interest - sale	(862,540)	(295,654)
Increase (decrease) in non-controlling interest	(108,239)	(42,595)
Ending balance	$1,794,170	$2,706,328

(XXXI) Operating Revenue

Item Total sales revenues Less: Sales return Sales discount Net operating revenue Sales revenue Construction revenue Processing revenue Realized profits from sales	2017 2016 $70,158,436 $52,001,923 639,635 835,237 479,197 375,150 217 217 $71,277,485 $53,212,527 (12,778) (16,657) (106,045) (348,460) $71,158,662 $52,847,410

222

(XXXII) Other Revenues

(XXXII) Other Revenues
Total Other revenue Income from sales of scrap material Subsidy (compensation) income Return of refundable deposits (Note) Others Subtotal Item Interest income Interest from bank deposits Other interest income Subtotal Rent revenue Dividend income	2017 $58,589 43,049 $101,638 2,937 73,952 46,648 1,773 18,825 41,547 $108,793 $287,320	2016
		$44,830 4,306
		$49,136
		1,989 8,250 46,783 136,620 - 22,272
		$205,675
		$265,050

(Note): It was recognized in full as impairment losses in the past years.

(XXXIII) Other Gains and Losses

(XXXIII) Other Gains and Losses
Total Disaster loss of property, plant and equipment Impairment loss of financial assets carried at cost Gain (loss) from disposal of property, plant and equipment Gain (loss) from disposal of financial assets (liabilities) at Valuation Gain (loss) of financial assets (liabilities) at Other Expenses Foreign exchange gain (loss) - net Gain (loss) on disposal of investments Impairment loss on property, plant, and equipment: Item	2017 $28,795 15 (13,534) - (1,060) 309,013 (6,735) (28,683) (24,107) $263,704	2016
		($81,260) 200 (44,470) (8,326) - (25,766) (1,922) 14,604 (30,434)
		($177,374)

(Note) The Group entered into a factoring contract regarding operating assets of its subsidiary, Guang Lian Steel (Vietnam) Co., Ltd., with Hoa Phat Steel in the Rong-guo Industrial Park. The total amount of such contract was VND 255,290,917 thousand ( NT$ 345,524 thousand). As the aforesaid property, plant and equipment were fully recognized as impairment loss, the book values of which were NT$ 0. As a result, the gain from disposal was NT$ 345,524 thousand.

223

(XXXIV) Financial Cost

Item	2017	2016
Interest expense	$1,571,245	$1,424,118
Less: Amount qualified for capitalization	(451,050)	(634,287)
Finance costs	$1,120,195	$789,831

(XXXV) Personnel, Depreciation, Depletion and Amortization Expenses

	2017
Operating Cost $1,411,594 133,352 98,250 324,490 1,541,450 - $3,509,136	Operating Expense $770,764 62,725 34,672 96,424 107,205 23,492 $1,095,282 2016	Total
		$2,182,358 196,077 132,922 420,914 1,648,655 23,492
		$4,604,418

Operating Cost $1,367,116 120,802 93,719 295,477 1,367,967 - $3,245,081	Operating Expense $718,767 59,169 32,641 92,819 104,331 1,377 $1,009,104	Total
		$2,085,883 179,971 126,360 388,296 1,472,298 1,377
		$4,254,185

(Note 1): excluding pension of NT$ 1,898 thousand and depreciation of NT$ 12,104 thousand on prepaid equipment.

(Note 2): excluding pension of NT$ 2,206 thousand and depreciation of NT$ 1,886 thousand on prepaid equipment.

224

According to Articles of Incorporation, the amount of compensation to employees and remuneration to directors shall neither be less than 0.2 % nor greater than 0.1% of the income before tax containing such amount. Compensation to employees and remuneration to directors for 2017 and 2016 were distributed at 0.2% and 0.1% of the net income before tax. Any changes in the amounts, if any, after the issuance date of the annual financial statement shall be accounted for using changes in accounting estimates, and should be entered the next year.
Compensation to employees and remuneration to directors for the years of 2017 and 2016 has been resolved and approved by the Board of Directors on March 21, 2018 and 2017. Relevant amounts recognized in the financial statement are as follows:

financial statement are as follows:
Resolved distributed amount Recognized amount in the annual financial report disposed Amounts of difference	2017 Employee Compensation / Directors’ Remuneratio $3,350 / $837 $3,350 /$1,675 $ - ($838)	2016
		Employee Compensation / Directors’ Remuneration
		$6,044 / $1,511 $6,044 /$3,022
		$ - ($1,511)

(1) The above-mentioned employee compensation was distributed in cash.

(2) The differences between the amount resolved for 2017 and 2016 and the amount recognized in financial statements are mainly estimate difference and has been adjusted in profit or loss for 2018 and 2017.

Information about employee compensation and remuneration to directors approved by the Board of Directors is available at the Taiwan Stock Exchange Market Observation Post System website.

(XXXVI) Income Tax

Income tax expense

(1) Components of income tax expense

1. Income tax expense (1) Components of income tax expense (XXXVI) Income Tax
2017 $247,971 161,066 45,704 5,314 $460,055 2017 ($85,250) (6,312) ($91,562) Adjustment to prior income taxes Income tax expense recognized in profit or loss (2) Income tax expense (gain) associates with other comprehensive income Item Remeasurement of defined benefit plans Total Item Current income tax expense Deferred taxes related to temporary difference and loss 10% tax on retained earnings Exchange differences on translation of foreign financial	2016
	$782,853 158,539 33 52,102
	$993,527
	2016
	($142,336) (11,383)
	($153,719)

225

A reconciliation of income before income tax and income tax expense recognized in profit or loss is as follows:

Loss carryforwards Loss (gain) on investments accounted for using equity method Other temporary differences Income tax expenses recognized in profit or loss Timing difference of revenue recognition Realized (unrealized) investment losses Other adjustments Adjustment to prior income taxes 10% tax on retained earnings Net changes of deferred income tax Item Loss (gain) on investments accounted for using equity method Income before tax Income tax expense at the statutory rate Tax effect of adjusting items: Effect of items not included in the calculation of taxable income Loss carryforwards	2017 $1,805,365 $346,315 42,299 (73,570) (7,464) (59,053) (556) 5,314 45,704 (1,330) 124,333 38,063 $460,055	2016
		$3,372,072
		$869,709 65,451 (184,575) 15,879 - 16,389 52,102 33 (2,906) 153,912 7,533
		$993,527

Entities of the Group applying the Income Tax Act of R.O.C. are subject to an income tax rate of 17%. Any taxable income generated from other jurisdictions is subject to the applicable income tax rate thereof. The Income Tax Act was modified in January 2018 by the government of R.O.C., which raised profit-seeking enterprise income tax from 17% to 20% (to be implemented from 2018 onwards), and which on the other hand lowered the tax rate on retained earnings from 10% to 5%.

226

Deferred income tax assets or liabilities from temporary difference, loss carry forwards and investment credits:

			2017
Deferred income tax	Beginning ~~balance~~	Recognized in ~~profit or loss~~	Recognized in ~~others~~		Effect of ~~Exchange Rate~~	Ending balance
assets
Temporary differences
gains (losses) of
Investments	$6,252	($140)	$	-	$ -	$6,112
accounted for using
Exchange differences
on translation of	48,883	-	82,285		-	131,168
foreign financial
Provision for
inventory valuation	60,685	9,248		-	(2,142)	67,791
loss
Loss of investments
under the cost	773	3,477		-	-	4,250
approach
Book-tax difference for depreciation	13,391	2,929		-	-	16,320
Net defined benefit liabilities	182,880	(22,194)		(811)	-	159,875
Remeasurement of defined benefit plans:	4,411	-		7,123	-	11,534
Loss carryforwards	53,813	1,330		-	-	55,143
Others	198,492	(40,923)		-	(26)	157,543
Subtotal	$569,580	($46,273)	$88,597		($2,168)	$609,736
Deferred income tax
liabilities
Temporary differences
Unrealized exchange gains	($3,808)	$3,774	$	-	$ -	($34)
Exchange differences
on translation of	(2,965)	-		2,965	-	-
foreign financial
Gain on overseas
investments using	(102,951)	(124,192)		-	-	(227,143)
equity method
Timing difference of revenue recognition	(5,625)	5,625		-	-	-
Subtotal	($115,349)	($114,793)	$2,965		$ -	($227,177)
Total	$454,231	($161,066)	$91,562		($2,168)	$382,559

227

2016

			Recognized in	Recognized in
			others
	Beginning balance	Recognized in profit or loss	comprehensive income		Effect of Exchange Rate Changes	Ending balance
Deferred income tax
assets
Temporary differences
Gains (losses) of
investments accounted	$59,934	($53,682)	$	-	$ -	$6,252
for using equity method
Exchange differences
on translation of	-	-	48,883		-	48,883
foreign financial
Provision for inventory valuation loss	100,770	(35,570)		-	(4,515)	60,685
Loss of investments under the cost approach	1,283	(510)		-	-	773
Book-tax difference for depreciation	11,500	1,891		-	-	13,391
Net defined benefit liabilities	172,491	(1,464)	11,853		-	182,880
Remeasurement of defined benefit plans:	1,693	-	(470)		3,188	4,411
Loss carryforwards	50,907	2,906		-	-	53,813
Others	165,013	33,479		-	-	198,492
Subtotal	$563,591	($52,950)	$60,266		($1,327)	$569,580
Deferred income tax
liabilities
Temporary differences
Unrealized exchange gains	($2,045)	($1,763)	$	-	$ -	($3,808)
Exchange differences
on translation of	(96,418)	-	93,453		-	(2,965)
foreign financial
Gain on overseas
investments using	(2,721)	(100,230)		-	-	(102,951)
equity method
Timing difference of revenue recognition	(2,029)	(3,596)		-	-	(5,625)
Subtotal	($103,213)	($105,589)	$93,453		$ -	($115,349)
Total	$460,378	($158,539)	$153,719		($1,327)	$454,231

228

Item 4. Items not recognized as deferred income tax assets: Loss from investment accounted for using equity	December 31, ~~2017:~~ $579,446	December 31, ~~2016:~~ $569,338
Loss of investments under the cost approach	41,224	40,451
Loss carryforwards	713,223	739,296
Others	65,723	59,076
5. Information regarding the integrated income tax is as Balance of shareholders' imputation credit Item	December 31, ~~2017:~~ (Note) follows:	December 31, ~~2016:~~ $534,140
Unappropriated earnings generated before 1997	(Note)	-
Unappropriated earnings generated after 1998	(Note)	3,010,948
Item	2017	2016
Tax creditable ratio for distribution of earnings	(Note)	22.00%
		(Actual)

Note: The integrated income tax system and relevant regulations were abolished by the amendments to Income Tax Act which was announced and effected in February 2018.

6. The profit-seeking enterprise income tax of the Company is approved by the taxation authority

(XXXVII) Other Comprehensive Income

(XXXVII) Other Comprehensive Income
The effective portion of gain (loss) arising from financial instruments that are designated as cash flow Subtotal Recognized in other comprehensive income Items that may be reclassified subsequently to profit or Unrealized valuation gain (loss) on available-for-sale financial assets Exchange differences on translation of foreign financial statements Share of associates and joint ventures accounted for using equity method Exchange differences on translation of foreign financial statements Unrealized valuation gain (loss) on available-for-sale financial assets Items that are not reclassified subsequently to profit or Remeasurement of defined benefit plans Share of associates and joint ventures accounted for Subtotal Item		2017
	Before tax $2,578 (30,121) ($27,543) ($1,665) (337,699) (232,908) 8,730 (5,103) ($568,645) ($596,188)	Income tax expense (gain) ($811) 7,123 $6,312 $ - 40,842 44,408 - - $85,250 $91,562	Net value after tax
			$1,767 (22,998)
			($21,231)
			($1,665) (296,857) (188,500) 8,730 (5,103)
			($483,395)
			($504,626)

229

	2016
Before tax ($71,478) (26,336) ($97,814) ($5,850) (849,812) (110,297) (168) 5,506 ($960,621) ($1,058,435) 2017 $1,367,405 - $1,367,405 1,821,176 1,821,176 $0.75	Income tax expense (gain) $11,853 (470) $11,383 $ - 140,511 1,825 - - $142,336 $153,719 2016 $2,502,005 - $2,502,005 1,718,090 1,821,176 $1.37	Net value after tax
		($59,625) (26,806)
		($86,431)
		($5,850) (709,301) (108,472) (168) 5,506
		($818,285)
		($904,716)

The Company's shareholders' meeting held on June 22, 2017 had resolved to capitalize earnings and issue 103,086 thousand new shares . The base date for share capital increase was set on September 1, 2017. After retrospective adjustment for 2017 and 2016, the number of such shares were 1,821,176 thousand shares.

(XXXIX) Business Combination

2017:

Acquisition of subsidiaries

Name PT.GENBA INDO RESOURCES (Abbreviated as GIR	Date of Acquisition August 1, 2017	Ownership with voting rights Consideration Transferred 75%/ - $9,371(Note)

Note: Transferred from investment prepaid.

230

Purposes and means of acquiring the aforementioned subsidiaries by the Group are stated as follows:

In consideration of long-term business development and the investment strategy of diversified management, the Group acquired from the Indonesian shareholders 75% shares of GIR corporation in 2014. However, due to the failure to obtain the permits for manufacture and management, which hindered the transfer of GIR’s major business to the Group, the Group recognized such investment as prepaid investment. In August 2017, GIR was consolidated into the Group’s financial statements due to the fact that the permits for mining and exploration had been obtained, a sign constituting control by the Group over GIR corporation.

Assets acquired and liabilities assumed upon acquisition date

Net cash outflows (inflows) Non-controlling interests Less: Fair value of obtained identifiable assets Goodwill arising out of acquisition m the acquisition of subsidiaries Consideration paid in cash Less: Balance of cash and cash equivalents acquired Current Liabilities Other payables Identifiable Net Assets of acquisition Consideration Transferred Add: Fair value of previously held equity on acquisition date Current Assets Cash and Cash Equivalents Other non-current assets	GIR corporation
	$13 22,838 (11,413)
	$11,438
	GIR corporation
	$9,371 - 2,067 (11,438)
	$ -
	GIR corporation
	$ - (13)
	($13)

Goodwill arising out of acquisition
Net cash outflows from the acquisition of subsidiaries
Between the acquisition date and the end of 2017, revenue from the aforementioned subsidiaries was NT$ 0 thousand.
If the business combination had occurred at the beginning of the year, the Group’s pro forma operating revenue would have been NT$ 71,158,662 thousand.

2016: None.

231

(XL) Transactions with Non-controlling Interests
Acquisition of additional equities in subsidiaries
- 2017:

The Group had between January and December, 2017 purchased in cash additional equities of 45%, 16.06%, 0.04%, 26.92%, and 0.07% in subsidiaries, Kuo Chang Enterprise Co., Ltd., United Brightening Development Corp., Yieh Hsing Enterprise Co., Ltd., Tycoons Steel International Co., Ltd. (TSI), and EMMT Systems Corporation with NT$ 479,467 thousand, NT$ 275,217 thousand, NT$ 1,132 thousand, NT$ 106,470 thousand, and NT$ 254 thousand, resulting in the changes in its shareholding percentage from 54.04% to 99.04%, 79.5% to 95.56%, 56.39% to 56.43%, 67.31% to 94.23%, and 84.95% to 85.02%. Since the said transaction did not change the Group’s control over the said subsidiaries, it is deemed as an equity transaction.

Carrying amount of non- controlling interests acquired Consideration paid to non-controlling interests Difference between the price received from acquisition or disposal of a subsidiary and its book value	Kuo Chang Enterprise Co., Ltd $574,790 (479,467) $95,323	United Brightening Development $309,749 (275,217) $34,532	Co., Ltd.Yieh Hsing Enterprise Co., $1,310 (1,132) $178	TSI EMMT Systems $107,673 $253 (106,470) (254) $1,203 ($1)

2016

As of the period from January to December and August, 2016, the Group acquired in cash (1) 0.55% of additional equity in the subsidiary Yieh Hsing Enterprise Co., Ltd. with NT$ 16,320 thousand, resulting a change of its shareholding percentage from 55.84% to 56.39%; and (2) 16.91% of additional equity in the subsidiary United Brightening Development Corp. with NT$ 279,335 thousand, resulting a change of its shareholding percentage from 62.59% to 79.5%. Since the said transactions did not change the Group’s control over the said subsidiaries, they are deemed as an equity transaction:

Capital surplus - difference between the share price received from acquisition or disposal of a subsidiary and its book value Carrying amount of non-controlling interests acquired Consideration paid to non-controlling interests	Yieh Hsing Enterprise Co., Ltd.. United Brightening Development $19,702 $321,089 (16,320) (279,335) $3,382 $41,754

The Group failed to subscribe to the cash offering by subsidiaries in proportion to its shareholding percentage 2017:

The Group failed to subscribe to the cash offering by the subsidiary, Hong Yuh Assets Management Co.,Ltd., in February, 2017, resulting in an increase of its shareholding percentage from 67.27% to 80%. Since the said transaction did not change the Group’s control over the said subsidiary, it is deemed as an equity transaction:

Hong Yuh

	Hong Yuh
Share of equity of subsidiaries net assets computed using relative equity changes Subscription in cash Recognized Changes in ownership interests in subsidiaries accounted for using equity method	Assets
	$327,004 (350,000)
	($22,996)

232

2016

The Group failed in February, March, and August 2016, to subscribe to new shares in the cash offering by subsidiaries, EMMT Systems Corporation, Hong Yuh Assets Management Co.,Ltd. and United Brightening Development Corp , in proportion to its shareholding percentage of such subsidiaries. Consequently, the shareholding percentage dropped from 93.86% to 84.95%, increased from 55% to 67.27%, and increased from 61.38% to 62.59%, respectively. Since the said transaction did not change the Group’s control over the said subsidiary, it is deemed as an equity transaction:

Subscription in cash Share of equity of subsidiaries net assets computed using relative Recognized Changes in ownership interests in subsidiaries accounted for using equity method	EMMT Systems ($13,995) 16,155 $2,160	Hong Yuh Assets Management Co.,Ltd. United Brightening Development Corp. ($150,000) ($45,869) 138,794 52,374 ($11,206) $6,505

VII. Related-Party Transactions

(I) The parent company and ultimate controller:

The Company is the ultimate controller of the Group.

(II) The names and relations of related parties

Name of related party	Relations with the consolidated company
Yieh United Steel Corporation	Associate
Yieh Mau Corporation	Associate
Synn Industrial Co., Ltd.	Associate
ASIAZONE CO., LTD.	Associate
Skylark Hot Spring & Resort Corp.	Associate
Cheng Shin Security Co., Ltd.	Associate
Eliter International Corp.	Associate
UniPattern Corporation	Associate
E-Da Bus Co., Ltd.	Associate
E-Da Development Co., Ltd	Associate
E United Japan Co., Ltd.	Associate
E-Da Visual Effects Company Limited.	Associate

233

Yieh Hong Enterprise Co., Ltd.

Yieh Mau Corp.

Yieh Mau Steel Materials Trading (Shanghai) Co., Ltd. Angang Hanyang (Guangzhou) Stainless Steel Corporation Angang Lianzhong (Guangzhou) Stainless Steel Corporation

Fujian Lian Wei Logistics Co., Ltd.

PT. ASIAMAX MINING INDONESIA

Skylark International Hotel Co., Ltd.

Pacific Harbor Stevedoring Corporation Royal Palace Hong Kong Style Restaurant Co., Ltd.

Jinghua Commercial Asset Management Limited

Shih-Ching Enterprise Co. Ltd. I-Hsiang-Le International Co., Ltd Yunyu Investment Co., Ltd. New Spring Construction Corp. E-Da Royal Hotel Company Ltd. E-Da Hospital E-Da Health Management Consulting Co., Ltd. I-Shou University I-Shou University Internship Center Muzee Corporation Long Hua Travel Services Co., Ltd. Yi-Shou Lin

Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

(III) Significant Transactions between Related Parties

Balance and transactions between the Company and subsidiaries (i.e., related parties) were eliminated and not disclosed when preparing such consolidated financial statements. Disclosure of related party transactions are as follows:

1. Operating revenue

Accounting subject Sales revenue Construction revenue	234 Type of related party Associates Other related party Total Associates Other related party Less: Less: sales discount Subtotal Less: construction revenue combined and eliminated Total	2017 2016 $3,303,136 $3,433,260 1,304,156 363,949 $4,607,292 $3,797,209 $2,779 $272 542,255 820,506 - (95) 545,034 820,683 (437,237) (813,190) $107,797 $7,493

(A) Selling price to the Group's related parties, including hot rolled steel coils, galvanized steel coils, scraps (bars), etc. and trading terms are the same with those to other customers. Payment periods were within one to two months.

(B) Selling price of hot rolled steel coil to related parties are set with reference to the purchase price of a nonrelated party as a trading counterpart. Payment term is 3 months.

(C) Selling price of carbon steel and steel scraps to related parties are set with reference to the purchase price of a non-related party as a trading counterpart. Payment term is monthly, and closes in 15 days.

(D) The construction contracts between the Group and above-mentioned related parties were established at prices negotiated by both parties. Contract proceeds were collected according to the collection clauses stated in these contracts. Unless agreed on by both parties, payments cannot be delayed. (E) Since the Group contracted from and sub-contracted to related parties a portion of steel construction engineering at the same time, where the construction engineering belonged to the same project, the accounting treatment of which was deemed the same as such project would have been managed and supervised by other related parties. For 2017 and 2016, the eliminated construction revenues were NT$ 437,237 thousand and NT$ 813,190 thousand respectively.

2. Purchases

Other related party Total Type of related party Associates Yieh United Steel Corporation	2017 2016 $5,448,009 $5,168,322 3,698,952 2,312,714 $9,146,961 $7,481,036

Items purchased by the Group from above related parties were mainly stainless billets and carbon steel billets. The purchase prices are similar to that offered to other suppliers. Payment term is LC at sight or T/T before shipment (not significantly different than terms to other suppliers).

Accounts receivable - related parties (excluding loans to related parties)

Accounting subject Notes receivable	Type of related party Associates Other related party Total Less: Changes in allowance for doubtful accounts: Net	December 31, 2017: December 31, 2016: $7 $7 798 218 $805 $225 - - $805 $225

235

Accounts Receivable Associates Yieh United Steel Corporation Others Other related party Total Less: Changes in allowance for doubtful Net Construction Contract Receivable Associates Other related party New Spring Construction Corp. Total Less: Changes in allowance for doubtful Net Other receivables Associates Yieh United Steel Corporation Others Other related party Yi-Shou Lin Others Total Less: Changes in allowance for doubtful Deferred gain from disposal of land Net	$203,110 242,873 314,939 $760,922 (1,014) $759,908 $2,167 190,033 $192,200 - $192,200 $17,551 725 15,697 35,487 $69,460 - (19,399) $50,061	$798,265 120,716 3,861
		$922,842 (598)
		$922,244
		$301 344,114
		$344,415 -
		$344,415
		$51,039 674 15,697 35,049
		$102,459 - (19,399)
		$83,060

For deferred gains from disposal of land, please refer to Note 6 (6).

4. Accounts payble - related party (excluding loans from related parties)

Accountingsubject Notes payable Accounts payable Other payables Advance Receipt	Type of relatedparty Associates Other related party Total Associates Other related party Total Associates Other related party Total Other related party	December 31,2017: $1,244 2,815 $4,059 $322 11,977 $12,299 $13,947 108,611 $122,558 $110	December 31,2016:
			$3,888 3,389
			$7,277
			$ - 7,572
			$7,572
			$4,294 6,796
			$11,090
			$69

236

Prepayments

Type of relatedparty Other related party Associates Total	December 31,2017: $77,217 16 $77,233	December 31,2016:
		$54,650 549
		$55,199

6.Asset transactions
(1) Property, plant and equipment acquired:

2017:

Type of related party / ~~Name~~ Associates Other related party New Spring Construction Corp. Others	Transaction target Transaction amount Construction-in-progress (Note 1) $1,222,764 Transportation equipment (Note 2) 315 Machinery equipment (Note 2) 844

(Note 1) The said transaction price was by reference to appraisal reports offered by professional institutions, and were agreed on by both parties upon negotiation. As of December 31, 2017, the unpaid portion was NT$ 71,035 (Note 2) The above-mentioned transaction price was agreed on by both parties upon negotiation with reference to appraisal reports. As of December 31, 2017, the transaction price was fully paid.

2016 Type of related party / ~~Name~~ Other related party New Spring Construction Corp. Associates	Transaction target Transactionamount Construction-in-progress (Note 1) $1,441,672 Other equipment (Note 2) 2,372

(Note 1) The above-mentioned transaction price was agreed on by both parties upon negotiation with reference to appraisal reports. As of December 31, 2016, the transaction price was fully paid.

(Note 2) The above-mentioned transaction price was agreed on by both parties upon negotiation with reference to appraisal reports. As of December 31, 2016, the unpaid amount was NT$ 267 thousand.

(2) Disposal of property, plant, and equipment:

2017:

Type of related party / ~~Name~~ Other related party	Transaction target Other equipment	Transactionamount Gains or lossfromdisposal $126 $2

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2017, all the transaction amount was fully collected.

2,016 Type of related party / ~~Name~~ Other related party	Transaction target Other equipment	Transactionamount Gains or lossfromdisposal $143 $99

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2016, all the transaction amount was fully collected.

237

(3) Acquisition of investment property: None.
(4) Disposal of investment property: None.
(5) Acquisition of financial assets: None:
(6) Disposal of financial assets: None:
(7) Acquisition of other assets:

2017: Type of related party / ~~Name~~ Associates Yieh United Steel Corporation Yieh United Steel Corporation Yieh United Steel Corporation	Transaction amount $479,467 275,217 106,470 21,843 thousand shares of United Brightening Development Corp. 14,000 thousand shares of TYCOONS STEEL INTERNATIONAL CO., LTD Transaction target 42,925 thousand shares of Kuo Chang Enterprise Co., Ltd.

The above-mentioned transaction price of shares was agreed on by both parties upon negotiation with reference to the net worth per share of the investees. As of December 31, 2017, transactions were fully paid.

2016 Type of related party / ~~Name~~ Other related party Yunyu Investment Co., Ltd. Associates Yieh United Steel Corporation	Transaction amount $39,960 279,335 Transaction target 3700 thousand shares of UniPattern Corporation 23,000 thousand shares of United Brightening Development Corp.

(8) Disposal of other assets: None:

Loan to related parties: None.
Loan from related parties: None.
Endorsements and Guarantees: None.

238

11. Others

(1) Miscellaneous income

Type of related party Associates Other related party Total	2017 2016 $25,154 $21,401 3,683 4,996 $28,837 $26,397

These are mainly technical service income, and rent income. The rent price is determined by contract and received monthly or quarterly.

(2) Miscellaneous expenses

Type of related party Associates Other related party Total	2017 2016 $63,838 $62,142 155,826 131,534 $219,664 $193,676

These are mainly service charges, export expenses, and rent expense. The rent price is determined by contract and paid monthly or quarterly.

(3) Construction contracts
(a) Unfinished construction contracts with related parties as of December 31, 2017 were as follows:

Type of related party / ~~Name~~ Associates Other related party New Spring Construction Corp.	Name of construction LED screen construction, etc. Above-ground structures construction for E-Da Asia	Construction contract receivable Total contract price Construction Contract ~~Payable~~ $3,300 $2,167 - $1,965,123 (Note) $190,033

239

(b) Unfinished construction contracts with related parties as of December 31, 2016 were as follows:

Type of related party / Name Associate Other related party New Spring Construction Corp.	Name of construction Manufacturing and installation of Above-ground structures construction	Total contract price Construction contract receivable / $770 $301 - 1,820,723 (Note) 344,114

(Note) As stated in Note 7. (3). 1. (E), where the Group contracts from and sub-contracts to related parties the same construction project, the accounting treatment of which is deemed the same as such construction project would have been commissioned to other related parties to manage and supervise.

(4) Where the Group participated in the cash offering by related parties and consequently increased its investment are disclosed as follows:

2017:

2017:
Investee Associates Yieh United Steel Corporation Eliter International Corp. Others Others Other related party Skylark International Hotel Co.,Ltd.	Shares (thousand shares) used 29,268 204,876 34,845 348,450 760 7,600 1,500 15,000 6,840 68,397 Investment Increment	Share Holding %
	Shares (thousand shares) 29,268 34,845 760 1,500 6,840	Before capital increase After capital increase 29.31% 29.08% (Note) (Note) - 38.00% 41.11% 43.33% 13.68% 13.68%

2016

2016
Investee Associates Eliter International Corp. E-Da Development Corp.	Shares (thousand shares) used 23,685 236,850 20,630 206,305 Investment Increment	Share Holding %
	Shares (thousand shares) 23,685 20,630	Before capital increase After capital increase 43.85% 43.56% (Note) (Note)

(Note) Subscription to associates’ preferred stock, listed as “debt instrument investments for which no active market exists”

240

(IV) Information about remunerations to the major management:

Item
Salary and other short-term employee benefits	$90,443	$93,182
Benefits after retirement	1,281	1,440
Other long-term employee benefits	-	-
Termination benefits	-	-
Share-based payments	-	-
Total	$91,724	$94,622

VIII. Pledged Assets

The Company provided certain assets as collateral mainly for bank loans and performance guarantee:

Total Sub-total of other financial assets - non-current Property, plant and equipment (net) Long-term prepaid rent - land-use right (including current portion) Investment property Investments accounted for using equity method Accounts Receivable Pledged demand deposits Pledged time deposits Sub-total of other financial assets - current Pledged demand deposits Pledged time deposits Item	December 31, 2017: December 31, 2016: $417,392 $274,593 790,632 709,763 $1,208,024 $984,356 $62,970 $55,071 857 40,857 $63,827 $95,928 $22,230,058 $23,843,645 65,373 68,333 865,317 866,164 1,557,457 1,538,104 132,861 - $26,122,917 $27,396,530

IX. Important Contingent Liabilities and Unrecognized Contractual Commitments

(I) As of December 31, 2017 and 2016, guarantee notes provided by the Group to banks and owners for its borrowings, purchase, performance and warranty were NT$ 49,601,183 thousand and NT$ 52,173,711 thousand respectively.

(II) Guarantee notes received for contract performance bond and purchase promise totaled NT$ 365,379 thousand and NT$ 408,434 thousand on December 31, 2017 and 2016 respectively.

(III) Unused letters of credits issued by the Group as of December 31, 2017 and 2016 were as follows:

Item L/C amount	Unit: In Thousands of NTD December 31, 2017: December 31, 2016: USD 19,998 USD 36,287 NTD 563,351 NTD 575,072 JPY 508 JPY 8,459 EUR 120 AUD 13

241

(IV) As of December 31, 2017 and 2016, guarantee provided by banks for performance and warranty of the Group amounted to NT$ 12,930 thousand, and NT$ 194,543 thousand respectively.

(V) The Company entered into raw material purchase agreements with suppliers of billets, including OUTOKUMPU, MUKAND, and Feng Hsin Steel. The price was agreed on by both parties upon negotiation. As of December 31, 2017, the unperformed portion totaled 17,996 tons, amounting to NT$ 327,890 thousand.

(VI)Material Capital Expenditure Committed but not Incurred:

amounted to NT$ 12,930 thousand, and NT$ 194,543 thousand respectively. (V) The Company entered into raw material purchase agreements with suppliers of billets, including OUTOKUMPU, MUKAND, and Feng Hsin Steel. The price was agreed on by both parties upon negotiation. As of December 31, 2017, the unperformed portion totaled 17,996 tons, amounting to NT$ 327,890 thousand. (VI)Material Capital Expenditure Committed but not Incurred:	amounted to NT$ 12,930 thousand, and NT$ 194,543 thousand respectively. (V) The Company entered into raw material purchase agreements with suppliers of billets, including OUTOKUMPU, MUKAND, and Feng Hsin Steel. The price was agreed on by both parties upon negotiation. As of December 31, 2017, the unperformed portion totaled 17,996 tons, amounting to NT$ 327,890 thousand. (VI)Material Capital Expenditure Committed but not Incurred:	amounted to NT$ 12,930 thousand, and NT$ 194,543 thousand respectively. (V) The Company entered into raw material purchase agreements with suppliers of billets, including OUTOKUMPU, MUKAND, and Feng Hsin Steel. The price was agreed on by both parties upon negotiation. As of December 31, 2017, the unperformed portion totaled 17,996 tons, amounting to NT$ 327,890 thousand. (VI)Material Capital Expenditure Committed but not Incurred:	amounted to NT$ 12,930 thousand, and NT$ 194,543 thousand respectively. (V) The Company entered into raw material purchase agreements with suppliers of billets, including OUTOKUMPU, MUKAND, and Feng Hsin Steel. The price was agreed on by both parties upon negotiation. As of December 31, 2017, the unperformed portion totaled 17,996 tons, amounting to NT$ 327,890 thousand. (VI)Material Capital Expenditure Committed but not Incurred:
Item December 31,2017: December 31,2016: $4,788,422 $3,312,405 Property, plant and equipment (VII)Establishment of important construction contracts 1. As of December 31, 2017, estimated total contract costs, contract costs paid, and expected completion dates for contracts of an amount over NT$150,000 thousand signed but not completed are summarized below:
Type of construction	Contract price Total estimated construction cost	Construction cost paid Completion %	~~Expected year of~~ completion Accumulated profit or loss recognized
Note 1: ~~Construction of~~ international multi-purpose business building with Hwa Xung Kee Tai	216,736 218,372	213,626 97.83%	2018 (1,636)
Construction and installation of 40T42M tracked overhead container crane pier 40T42M tracked overhead crane for containers Construction	202,300 208,106	112,670 54.14%	2018 (5,806)
~~Construction of plant No. 3~~ for Taiwan YKK Co., Ltd. in Jhongli District by Chung-Lu Construction ~~Co. Ltd.(Note 2)~~	258,773 255,515	246,942 96.64%	2018 3,148
~~, ~~ ~~Main structure of the~~ commercial building at Banciao by Sun Pao Tsun Construction Co., Ltd. ~~(Note 3)~~	154,930 162,395	160,166 98.63%	2018 (7,465)
~~6 40T-gantry cranes for~~ containers at No. 120 Wharf of Kaohsiung Port (Note 4)	311,100 277,668	257,168 92.62%	2018 30,964
~~Construction of BOX steel~~ pillars for Tianhui Precision Plant of Jiang Chen Industrial Co., Ltd.	220,806 224,596	53,543 23.84%	2019 (3,790)

(Note 1): Contract amount increased by NT$ 2,958 thousand and total cost increased by NT$ 1,772 thousand during the period.

(Note 2): Contract amount increased by NT$ 5,000 thousand and total cost increased by NT$ 2,913 thousand during the period.

(Note 3): Contract amount increased by NT$ 461 thousand and total cost decreased by NT$ 6,706 thousand during the period.

(Note 4): Construction cost decreased by NT$ 25,903 thousand during the period.

242

As of December 31, 2016, estimated total contract costs, contract costs paid, and expected completion dates for contracts of an amount over NT$150,000 thousand signed but not completed are summarized below:

contracts o an amount ov	er $5, tousan sg	ne ut not compete are sum	arze eow:
Type of construction	Contract price Total estimated construction cost	Construction cost paid Completion %	~~Expected year of~~ completion Accumulated profit or loss recognized
Construction of Condominium with Tunwei	159,348 171,286	168,679 98.48%	2017 (11,938)
(Note2) ~~Construction of~~ international multi-purpose business building with Hwa Xung Kee Tai	213,778 216,600	207,855 95.96%	2017 (2,822)
~~Construction of plant No. 3~~ for Taiwan YKK Co., Ltd. in Jhongli District by Chung-Lu Construction ~~Co. Ltd.~~	253,773 252,602	210,083 83.17%	2017 974
~~,~~ ~~Main structure of the~~ commercial building at Banciao by Sun Pao Tsun Construction Co., Ltd. ~~(Note 3)~~	154,469 169,101	158,101 93.50%	2017 (14,632)
6 40T-gantry cranes for containers at No. 120 Wharf of Kaohsiung Port (Note 4)	311,100 303,571	230,071 75.79%	2017 5,706

(Note 1): Contract amount increased by NT$ 1,133 thousand and total cost increased by NT$ 3,072 thousand during the period.

(Note 2): Contract amount increased by NT$ 20,808 thousand and total cost increased by NT$ 23,867 thousand during the period.

(Note 3): Contract amount increased by NT$ 8,184 thousand and total cost increased by NT$ 6,381 thousand during the period.

(Note 4): Construction cost decreased by NT$ 12,839 thousand during the period.

(VIII) Operating lease contracts:

As a lessee:

The Group has leased assets including Yulin Section (Qiaotou plant) under an operation lease agreement with a term from 1996 to 2050. The Group has the right to renew the lease upon expiration. Lease expense amounted to NT$ 24,427 thousand and NT$ 25,183 thousand were recognized for 2017 and 2016 respectively. Moreover, total future minimum lease payment payable due to irrevocable contracts is as follows:

Item No more than 1 year More than 1 year but no more than 5 years Over 5 years Total	December 31,2017: $9,706 15,577 68,482 $93,765	December 31,2016:
		$15,484 17,308 71,406
		$104,198

243

(IX) Great Emperor Hotel CO., LTD. ( the former E-Da Royal Skylark Hotel Co., Ltd.) and Kingsgarden International CO., LTD. ( the former Kaohsiung E-Da Metropolis Co., Ltd.), two subsidiaries, entered syndicated loan agreements with Land Bank of Taiwan and First Commercial Bank in August 2014. According to the contract, the Group and its related parties shall jointly hold more than 50% of Kingsgarden International CO., LTD. and Great Emperor Hotel CO., LTD.’s issued shares and gain the majority of directors' seats at all times. Yieh Hsing Enterprise Co., Ltd., a subsidiary, held 100% of Kingsgarden International CO., LTD.and Great Emperor Hotel CO., LTD., and acquire all

X. Significant Disaster Losses: None.

XI. Significant Subsequent Events: None.

XII. Others

(I) Capital risk management

As the Group needs to maintain sufficient capital to meet the needs for expansion and plant and equipment improvement, capital management of the Group focuses on ensuring there are sufficient financial resources and operating plans to meet the demands for operating capital, capital expenditure, research and development expense, loan repayment and dividend distribution in the next 12 months.

(II) Financial instruments
Fair value information of financial instruments
(1) Financial instruments not measured at fair value

Management of the Group thinks that the carrying amount of financial instruments not measured at fair value, including cash and cash equivalents, accounts receivables, other financial assets, refundable deposits, short-term loans, short-term bills payable, accounts payable, long-term loans (including current portion), deposits received, long-term payables , approximate their fair value or their fair value cannot be reliably measured (financial assets carried at cost and debt instruments investment with no active markets), except for the following:

December 31, 2017: None

244

Item		December 31, 2016	December 31, 2016
		Fair value
	Carrying Amount $278,469	Level 1: $ -	Level 2: Level 3: $278,933 $ -
Financial liabilities: Bonds payable

(2) Financial instruments measured at fair value: please refer to Note 12 (4).

(III) Financial risk management policies:

The Group’s daily operations are affected by various financial risks, e.g. market risk (including exchange rate, interest rate and price risks), credit risk and liquidity risk. The Group is devoted to identify, assess and avoid market uncertainties in order to eliminate the potential adverse effects of market changes on the financial performance.

Before engaging in significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. While the financial plan is underway, the Group shall comply with relevant financial operation procedures on the overall financial risk management and segregation of duties at all times.

The nature and degree of significant financial risks

(1) Market risk

A. Foreign exchange rate risk

(A) The Group is exposed to exchange rate risk arising from the sales, purchases and borrowings in currencies other than the Group’s functional currency, as well as from net investment of foreign operations. Functional currencies adopted by entities within the Group mainly comprise New Taiwan Dollars, with few RMB and USD. However, such transactions are denominated mainly in RMB and USD. To avoid a decrease in the value of assets dominated in foreign currency and volatility in future cash flows due to changes in exchange rates, the Group hedges the exchange rate risk with foreign-currency borrowings and derivative financial instruments (including forward exchange agreements and cross currency swaps). Those derivative financial instruments can diminish but not completely eliminate the impacts of changes in exchange rate. As net investments in foreign operations are strategic investments, the Group does not hedge for those activities.

245

(B) Exchange rate exposure and sensitivity analysis:

Foreign currency (Note) Exchange rate (Foreign currency: Functional currency) Financial assets Monetary items USD:NTD 90,760 29.760 USD:RMB 57,960 6.5079 RMB:USD 40,473 0.1536 USD:IDR 66,191,403 13,555 Investments accounted for using equity method USD:NTD 32,401 29.760 Financial liabilities Monetary items USD:NTD 10,008 29.760 USD:RMB 164,995 6.5079 Foreign currency (Note) Exchange rate (Foreign currency: Functional currency) Financial assets Monetary items USD:NTD 61,496 32.2500 USD:RMB 51,357 6.9370 RMB:USD 103,855 0.1442 Investments accounted for using equity method USD:NTD 30,367 32.2500 Financial liabilities Monetary items USD:NTD 2,686 32.2500 USD:RMB 116,374 6.9370 RMB:USD 52,889 0.1442	Foreign currency (Note)	Exchange rate		December 31, 2017
			Carrying Amount (New Taiwan Dollars)	Sensitivity Analysis
				Range of change Effects on gain or loss Effects on Equity Up 1% 27,001 - Up 1% 17,249 - Up 1% 1,851 - Up 1% 1,457 - Up 1% - 9,643 Up 1% (2,978) - Up 1% (49,102) - December 31, 2016
			2,700,101 1,724,905 185,079 145,693 964,255 297,831 4,910,239
			Carrying Amount (New Taiwan Dollars)	Sensitivity Analysis
				Range of change Effects on gain or loss Effects on Equity Up 1% 19,797 - Up 1% 16,563 - Up 1% 4,828 - Up 1% - 9,793 Up 1% (866) - Up 1% (37,531) - Up 1% (2,459) -
			1,979,698 1,656,258 482,820 979,332 86,636 3,753,068 245,880

If NTD appreciated against the abovementioned currencies, held all other variables constant, the impact generated as of December 31, 2017 and 2016 would stay the same with reverse result.

Note: Referring to non- functional currency of the respective consolidated entities denominated in foreign currency, including inter-group transaction items that have been written off, and exchange risks that can not be fully written off.

246

(C) Due to the exchange rate volatility, total exchange gains and losses (including realized and unrealized) from the Group’s monetary items amounted to NT$ 28,795 thousand and NT$ (81,260) thousand for 2017 and 2016

B. Price risk

The Group’s investment was classified in the consolidated balance sheets as available-for-sale financial assets, or financial assets measured at fair value through profit or loss. Therefore, the Group was exposed to price risks from equity instruments, bond fund, and financial bonds.

Prices of listed equity instruments and mutual funds held by the Group will be impacted by the uncertainty of future prices. If the prices of those equity instruments went up (down) by 1%, held all other variables constant, the net income after tax for 2017 and 2016 will increase by NT$ 595 thousand or decreased by NT$ 1,138 thousand respectively as a result of impact from the gains or losses from equity instruments at fair value through profit or loss; the impact on shareholders equity will increased by NT$ 449 thousand or decreased by NT$ 466 thousand respectively as a result of the gains or losses from available-for-sale equity instruments.

C. Interest rate risk

Interest rates of interest-bearing financial instruments held by the Group as of the reporting date are summarized as follows:

ows:
Item Fixed-rate instruments: Financial assets Financial liabilities Net Floating-rate instruments: Financial assets Financial liabilities Net	Carrying Amount
	December 31, 2017: $2,952,084 (989,011) $1,963,073 $5,890,875 (48,793,039) ($42,902,164)	December 31, 2016:
		$2,829,572 (957,482)
		$1,872,090
		$5,929,260 (41,984,074)
		($36,054,814)

(A) Sensitivity analysis of fixed-interest instruments:

The Group possessed no material fixed-interest assets or liabilities at fair value through profit and loss or available for sale. No derivative instruments (interest swap) qualifying as hedging tools under hedge accounting, was engaged to hedge fair value. Therefore, the fluctuation in interest rate on reporting date will not affect the income and other comprehensive income.

247

(B) Sensitivity analysis of floating-interest instruments:

The interest-fluctuate instruments possessed by the Group were floatinginterest assets (liabilities). Therefore the effective interest rate, as well as the future cash flows, changes along with the market movement. Every one percent increase (decrease) in the interest will increase (reduce) the net profit by (429,022) thousand and (360,548) thousand, respectively for 2017 and 2016.

(2) Credit risk

Credit risk refers to the risk of financial loss to the Group arising from default by counter-parties of financial instruments on the contract obligations. Credit risk of the Group mainly comes from receivables under operating activities and bank deposits and other financial instruments under investing activities. Credit risks related to operation and finance risks are managed separately. A. Credit risk related to operations:

To maintain the quality of accounts receivable, the Group has established the procedures for credit risk management with regards to its operations. Risk assessment on individual customer includes factors that could affect the customer's ability to pay, such as the customer's financial status, the Group’s internal credit ratings, historical transactions and current economic conditions. As of December 31, 2017 and 2016, the top ten clients accounted for 46.96% and 36.78% respectively of the Group’s accounts receivable. No significant credit concentration risk was shown from the remaining accounts receivables.

B. Financial credit risk

The credit risks of bank deposits and other Financial instruments are measured and monitored by the Group’s financial departments. The Group does not expect significant credit risk because the counter-parties are creditworthy and investment-graded financial institutions, companies and government agencies without any significant default concerns. C. The Group uses collaterals and other credit enhancement to avoid credit risks from financial assets:

The following table shows the maximum exposure to credit risk regarding financial assets recognized in the consolidated balance sheet, pledged collaterals, master netting arrangements and other credit enhancement held by the Group :

Decreased amount of maximum exposure to credit risks

	Decreased amount of maximum exposure to credit risks	Decreased amount of maximum exposure to credit risks	Decreased amount of maximum exposure to credit risks	ks
December 31, 2017:	Collateral Master Netting Arrangements Other Credit Enhancement Total $ - $ - $1,819,026 $1,819,026 Decreased amount of maximum exposure to credit risks			Total
Receivables (including related parties) December 31, 2016:				$1,819,026
	Collateral $ -	Master Netting Arrangements $ -	Other Credit Enhancement Total $1,306,962 $1,306,962
Receivables (including related parties)

248

(3) Liquidity risk
A. Liquidity risk management

The Group’s objecting in managing liquidity risk is to maintain a sufficient level of cash and cash equivalents, highly-liquid marketable securities and credit lines with banks for daily operations in order to ensure the financial flexibility of the Group.

B. The table below shows an analysis of the financial liabilities held by the Group with defined repayment terms based on maturity dates and undiscounted payment at maturity:

	December 31, 2017	December 31, 2017	December 31, 2017
Less than 6 months 7-12 months	1-2 years	2-5 years	Over 5 years	Contractual cash flows	Carrying Amount
$13,477,497 $2,348,026 990,000 - 1,816,199 295 1,114,431 - 1,629,122 5,025 2,272,767 1,422,726 290 -	$ - - - - - 4,352,947 -	$ - - - - - 20,629,759 12,349	$ - - - - - 4,400,140 2,000	$15,825,523 990,000 1,816,494 1,114,431 1,634,147 33,078,339 14,639	$15,825,523 989,011 1,816,494 1,114,431 1,634,147 32,967,516 14,639
$21,300,306 $3,776,072	$4,352,947	$20,642,108	$4,402,140	$54,473,573	$54,361,761
$21,033				$21,033	$21,033

	December 31, 2016	December 31, 2016	December 31, 2016
Less than 6 months 7-12 months	1-2 years	2-5 years	Over 5 years	Contractual cash flows Carrying Amount
$9,510,250 $1,004,257 - 680,000 2,093,951 299 1,193,816 - 1,691,722 9,066 - 278,940 3,027,453 1,821,211 - -	$ - - - - - - 4,525,739 -	$ - - - - - - 17,034,452 16,739	$ - - - - - - 5,165,475 2,000	$10,514,507 $10,514,507 680,000 679,013 2,094,250 2,094,250 1,193,816 1,193,816 1,700,788 1,700,788 278,940 278,469 31,574,330 31,469,567 18,739 18,739
$17,517,192 $3,793,773	$4,525,739	$17,051,191	$5,167,475	$48,055,370 $47,949,149

The Group does not expect a maturity analysis of which the cash flows timing would be significantly earlier, or the actual amount would be significantly different.

249

(IV) Fair Value Information:

For information on fair value of financial assets and financial liabilities not measured at fair value, please refer to Note 12. (2). 1.

For fair value of investment property measured at cost, please refer to Note 6 (XV). For fair value of investments in associates with quoted prices in an open market, please refer to Note 6(X)

Definition of the three levels in fair value:

Level 1:

Level 1 inputs are quoted prices in active markets for identical instruments.

An active market is a market that meets all of the conditions set below: the items traded in the market are homogeneous, willing buyers and sellers can normally be found at any time and prices are available to the public. The fair value of the Group's investments in listed stocks, beneficiary certificates, on the-run Taiwan government bonds and derivatives with quoted prices in an active market are all level 1 inputs.

Level 2:

Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group's investments in off the-run government bonds, corporate bonds, bank debentures, convertible corporate bones and the majority of derivative instruments are all Level 3:

Level 3 inputs refer to inputs used in the fair value measurement that are not observable or accessible from the market. Some derivative instruments and equity instruments with no active market held by the Group are all level 3 assets.

3. Fair value hierarchy:

The fair value hierarchy of financial instrument measured at fair value on a recurring basis is disclosed as follows: Information about the Group’s fair value hierarchy is disclosed in the following table:

	December 31, 2017	December 31, 2017
Level 1:	Level 2:	Level 3: Total $ - $59,533 - 44,910 $ - $104,443
$49,534 44,910	$9,999 -
$94,444	$9,999

250

Liabilities:

Liabilities:
Equity securities Total Assets: Recurring fair value Financial assets at fair value through profit and loss Non-derivative financial assets held for trading Derivative financial instruments Available-for-sale financial assets Item Recurring fair value Financial liabilities at fair value through profit and loss Derivative financial instruments	$ -	$21,033	$ -	$21,033
		December 31, 2016
	Level 1:	Level 2:	Level 3:	Total
	$103,795 - 46,575	$9,999 16,073 -	$ - - -	$113,794 16,073 46,575
	$150,370	$26,072	$ -	$176,442

Fair value valuation technique for instruments measured at fair value:

(1) The fair value of financial instruments with quoted prices in active markets is the quoted market prices. Market prices published by major trading centers and exchanges for on-the-run government bonds are the basis for the fair value of listed equity instruments and debt instruments with quoted prices in active markets. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. If one of the conditions fails, the market is not deemed active.In general, indications of an inactive market include a wide bid-ask spread, a significant increase in the bid-ask spread and low level of trading volume. The fair value of financial instruments with active markets held by the Group are stated by their natures and types as follows:

a. Listed stocks: closing prices

b. Open-end funds: net worth

(2) When evaluating financial instruments that are non-standard and with lower complexity, e.g. debt instruments with no active markets, interest rate swaps, foreign exchange swaps and options, the Group adopts valuation techniques that are commonly used by market participants. The parameters used in the valuation models for those financial instruments are normally observable data in the market.

(3) Valuation of derivative financial instruments adopts valuation models that are commonly used by market participants, e.g. discounted cash flows method and option pricing model.

251

(4) Outputs from the valuation models are estimates and valuation techniques may not be able to reflect all relevant factors of the financial and non-financial instruments held by the Group. Therefore, when needed, estimates from the valuation model would be adjusted based on additional parameters, e.g. model risk or liquidity risk. According to the Group's policies of fair value valuation management and relevant control procedures, the Group's management considers that valuation adjustments as being necessary and appropriate for a fair and just presentation of financial and non-financial instruments on the consolidated balance sheet. Every price data and parameters used in the valuation is reviewed thoroughly and adjusted for current market conditions.

(5) The Group incorporates the adjustment of credit risk assessment into the fair value measurement of financial and non-financial instruments to reflect the credit risk of counterparty and the credit quality of the Group.

Transfers between Level 1 and Level 2 fair value hierarchy: None
Statement of changes in Level 3 fair value hierarchy: None.
Quantitative information about the significant unobservable inputs (level 3) used in the fair value measurement : None.
Valuation process for Level 3 fair value measurement: Not applicable.
For measurement of Level 3 fair value, the sensitivity analysis of reasonably possible alternative assumptions on fair

(V) Transfer of financial assets: None.

(VI) Offsetting financial assets and financial liabilities: None.

(VII) Losses from disasters

Part of the production equipment and inventory were immersed in water due to Typhoon Nepartak and Typhoon Meranti in the 3rd season in 2016. The estimated losses are as follows:

Item ~~Estimated amount of~~ loss Estimated amount of claim Amount of deductible by the Company	Inventories $12,167 (6,181) $5,986	Total Property, plant and equipment
		$31,792 (17,480) $19,625 (11,299)
		$14,312 $8,326

The flood impaired inventory of NT$ 12,167 thousand was sold at a lower price because of its irrepairable condition (recognized under other receivables).
The flood impaired property, plant and equipment of NT$ 19,625 thousand is recognized under property, plant and equipment - accumulated impairment. The Company had to assume the minimum deductible of NT$ 8,326 thousand (recognized in other gains and losses). The rest of NT$ 11,299 thousand was claimable from the insurance company (recognized under other receivables). The Group repaired the various equipment in an active manner after the flood. For the current period, repair expense of NT$ 8,371 thousand had been written down to accumulated impairment as of December 31, 2017.

252

XIII. Additional Disclosures

(I) Information about significant transactions (before elimination in consolidation)
Loans to others: TABLE 1
Endorsements and Guarantees:TABLE 2.
Marketable securities held at the end of the period: TABLE 3.
Aggregate trading value on the same securities (including purchase and sales) reaching NT$300 million or 20 percent of the paid-in capital or more: Appendix TABLE 4.
Property acquired reaching NT$300 million or 20% of the paid-in capital or more: TABLE 5.
Disposal of Property Amounting to At Least NT$ 300 Million or Exceeding 20% of Paid-in Capital: TABLE 6.
Purchases from and Sales to Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital: TABLE 7.
Receivables from Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital: TABLE 8.
Trading activities in financial derivatives: Please refer to Note 6 (2) for details.
Relationships Between Parent Company and Subsidiaries and Significant Transactions: TABLE 9.
(II) Reinvestment Information(before elimination in consolidation): Appendix TABLE 10.
(III) Investments in Mainland China(before elimination in consolidation): TABLE 11.

253

Table 1

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Loans to Others

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

No.	Name of Creditor	Name of Borrower	Financial statement account	Whet her a relat ed party	Highest balance during the latest period	Ending balance	Actual amount used	Interest Rate Range	Nature of Loan	Amount arising from ordinary course of business	Reason for short-term financing	Allowan ce for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single entity	Limit of total loans
													Type	Value
0	Yieh Phui Enterprise Co., Ltd.	Great Emperor Hotel CO., LTD.	Other receivable - relatedparty	Y	1,050,000	700,000	380,000	2.50%	2	－	Operating capital	－	－	－	11,136,676 (Note 2)	11,136,676 (Note 1)
0	Yieh Phui Enterprise Co., Ltd.	Kingsgarden International CO., LTD.	Other receivable - relatedparty	Y	1,300,000	900,000	570,000	2.50%	2	－	Operating capital	－	－	－	11,136,676 (Note 2)	11,136,676 (Note 1)
1	EMMT Systems Corporation	AWID Asia Co., Ltd.	Other receivables	Y	8,000	2,000	2,000	2.955%	2	－	Operating capital	－	－	－	136,775 (Note 2)	136,775 (Note 1)
2	Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	Long-term receivable - related party	Y	3,736,096 (RMB 42,000) (USD 117,500)	3,606,381 (RMB 38,850) (USD 115,213)	3,606,381 (RMB 38,850) (USD 115,213)	4.08178% -9.7265%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
3	Golden Developments Holdings Ltd.	Yieh Phui (Hong Kong) Holdings Limited	Other receivable - relatedparty	Y	241,748 (RMB 52,000)	－	－	5.85%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
4	GOOD HONOR HOLDINGS LTD.	Yieh Phui (Hong Kong) Holdings Limited	Long-term liabilities - currentportion	Y	145,125 (USD 4,500)	133,920 (USD 4,500)	133,920 (USD 4,500)	2.52% -3.05%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
5	Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Long-term receivable - relatedparty	Y	204,556 (RMB 44,000)	150,906 (RMB 33,000)	150,906 (RMB 33,000)	4.00%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
6	Shin Phui Steel Corporation	EMMT Systems Corporation	Other receivable - relatedparty	Y	15,000	－	－	2.25%	2	－	Operating capital	－	－	－	15,866 (Note 4)	126,925 (Note 4)
7	Shin Yang Steel Co., Ltd.	EMMT Systems Corporation	Other receivable - relatedparty	Y	80,000	－	－	-	2	－	Operating capital	－	－	－	165,144 (Note 4)	330,287 (Note 4)

(Note 1) The maximum amount of total loans to others shall not exceed 40% of the creditor's net worth.

(Note 2) The maximum amount of loans granted to a single entity shall not exceed 40% of the creditor's net worth.

(Note 3) Total loans between foreign companies that are 100% owned directly or indirectly by the Company shall not exceed 40% of the Company’s net worth and loans to a single entity shall not exceed 40% of the Company’s net worth.

(Note 4) The maximum amount of loans granted to a party in need of short-term financing shall not exceed 40% of such party’s own net worth, and limit of loans to a single entity, except for Shin Yang Steel Co., Ltd. which shall not exceed 20% of its net worth, shall not exceed 5% of the its net worth.

(Note 5) Nature of loan is classified as follows: Entities having business relations with the Company - 1; entities with needs for short-term financing - 2.

(Note 6) Transactions between the aforesaid subsidiaries and the parent company have been written off.

254

Table 2

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Endorsements and Guarantees December 31, 2017

				Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017	Endorsements and Guarantees December 31, 2017
				Unit:Thousands ofNT Dollar/ForeignCurrency
No.	Name of the Company Providing Guarantee	Parties Being Guaranteed		Limit of Guarantee/End orsement for a Single Entity	Maximum Guarantee Amount for the Current Period	Outstanding Guarantee Amount - Ending	Actual Amount Borrowed	Guarantee Amount with Collateral Placed	Ratio of accumulated guarantee amount to latest net worth of the Company	Maximum amount of guarantee and endorsement	Endorsements/ guarantees provided by parent company to the subsidiaries	Endorsements/ guarantees provided by subsidiaries to parent company	Endorseme nts/ Guarantees Issued to Entities in Mainland China
		Company Name	Relationship
0	Yieh Phui Enterprise Co., Ltd. (Note 1)	Yieh Phui (China) Technomaterial Co., Ltd.	Investee of the Company’s Sub-subsidiary	27,841,691	6,252,905 (RMB 1,345,000)	6,150,551 (RMB 1,345,000)	5,093,644 (RMB 1,113,876)	－	22.09%	27,841,691	Y	－	Y
		EMMT Systems Corporation	Subsidiary of the Company	27,841,691	130,000	－	－	－	－	27,841,691	Y	－	－
		Shin Yang Steel Co., Ltd.	Subsidiary of the Company	27,841,691	1,886,000	1,786,000	1,134,032	336,000	6.41%	27,841,691	Y	－	－
		Yieh Phui (Hong Kong) Holdings Limited	Subsidiary of the Company	27,841,691	5,495,490 (USD 182,000)	4,225,920 (USD 142,000)	3,863,156 (USD 123,841) (RMB 38,850)	－	15.18%	27,841,691	Y	－	－
		Golden Developments Holdings Ltd.	Subsidiary of the Company	27,841,691	278,940 (RMB 60,000)	－	－	－	－	27,841,691	Y	－	－
1	Shin Phui Steel Corporation (Note 2)	Yieh Phui Enterprise Co., Ltd.	Parent company of the company	1,586,556	629,510	629,510	345,438	629,510	198.39%	1,586,556	－	Y	－
2	Kingsgarden International CO., LTD. (Note 3)	Great Emperor Hotel CO., LTD.	(Note 8)	14,529,364	7,186,000	7,186,000	3,831,000	7,186,000	346.21%	14,529,364	－	－	－
3	Great Emperor Hotel CO., LTD. (Note 4)	Kingsgarden International CO., LTD.	(Note 8)	14,290,337	7,413,000	7,413,000	4,295,000	7,413,000	363.12%	14,290,337	－	－	－
4	Yieh Phui (China) Technomaterial Co., Ltd. (Note 5)	Tianjin Lianfa Precision Steel Corporation	Subsidiary of the Company	9,954,300	79,033 (RMB 17,000)	77,739 (RMB 17,000)	77,739 (RMB 17,000)	－	0.78%	9,954,300	Y	－	Y
5	Shin Yang Steel Co., Ltd. (Note 6)	Yieh Phui Enterprise Co., Ltd.	Parent company of the company	2,477,154	900,000	900,000	700,000	900,000	109.00%	2,477,154	－	Y	－

(Note 1): The maximum amount of endorsement/guarantee provided by the Company shall not exceed the Company’s net worth. The same limit applies to endorsement/guarantee provided by the Company to a single subsidiary.

(Note 2): The maximum amount of endorsement/guarantee provided by Shin Phui shall not exceed 5 times of Shin Phui’s net worth. The same limit applies to endorsement/guarantee provided by Shin Phui to a single entity.

(Note 3): The maximum amount of endorsement/guarantee provided by Kingsgarden International CO., LTD. shall not exceed 7 times of Kingsgarden’s net worth. The same limit applies to endorsement/guarantee provided by Kingsgarden International CO., LTD. to a single entity.

(Note 4): The maximum amount of endorsement/guarantee provided by Great Emperor Hotel CO., LTD. shall not exceed 7 times of Great Emperor Hotel’s net worth. The same limit applies to endorsement/guarantee provided by Great Emperor Hotel CO., LTD. to a single entity.

(Note 5): The maximum amount of endorsement/guarantee provided by Yieh Phui (China) Technomaterial Co., Ltd. shall not exceed the net worth of Yieh Phui (China) Technomaterial Co., Ltd.. The same limit applies to endorsement/guarantee provided Yieh Phui (China) Technomaterial Co., Ltd. to a single subsidiary.

(Note 6): The maximum amount of endorsement/guarantee provided by Shin Yang shall not exceed 3 times of Shin Yang’s net worth. The same limit applies to endorsement/guarantee provided by Shin Yang to a single entity. (Note 7): The net worth referred to above is based on the latest financial statements audited or reviewed by independent auditors.

(Note 8): Mutually guaranteed companies based on the need of construction contract.

255

Table 3

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Marketable Securities Held (excluding associates, and joint ventures)

December 31, 2017

Table 3	Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Marketable Securities Held (excluding associates, and joint ventures) December 31, 2017	Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Marketable Securities Held (excluding associates, and joint ventures) December 31, 2017	Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Marketable Securities Held (excluding associates, and joint ventures) December 31, 2017
				Unit: Thousands of NT Dollar/ Foreign Currency
Holder Company	Type and Name of Marketable Securities	Relationship with the Security Issuer	Financial Statement Account	Ending				Note
				Shares or Units (in Thousands)	Carrying Amount	Share Holding %	Fair Value
Yieh Phui Enterprise Co., Ltd.	Beneficiary certificates / Paradigm Global Oil Resources Fund	None	Financial assets at fair value through profit or loss - current	516	3,128	－	3,128
	Beneficiary certificates / SinoPac RMB Bond Fund TWD Acc	None	Financial assets at fair value through profit or loss - current	300	2,838	－	2,838
	Beneficiary certificates/Paradigm 3-Year Maturity RMB EmergingMarketBondFund	None	Financial assets at fair value through profit or loss - current	900	9,156	－	9,156
	Beneficiary certificates/First Financial Holding Global Utility/InfrastructureIncomeFund	None	Financial assets at fair value through profit or loss - current	500	4,925	－	4,925
	Beneficiary certificates/Fidelity Funds - Asian High Yield Fund	None	Financial assets at fair value through profit or loss - current	500	4,985	－	4,985
	Beneficiary certificates/Yuanta iSTOXX MUTB Asia/Pacific QualityDividend100Index Fund	None	Financial assets at fair value through profit or loss - current	554	5,605	－	5,605
	Beneficiary certificates/CTBC Global iSport Fund	None	Financial assets at fair value through profit or loss-current	300	2,997	－	2,997
		Total			33,634		33,634

256

Type and Name of Marketable Securities	Relationship with the Security Issuer	Financial Statement Account	Ending	Ending	Ending	Ending	Note
			Shares (Thousand ofShares)	Carrying Amount	Share Holding %	Fair Value
Financial bonds / Bank of Panhsin Sinsing Branch – 2014 First termsubordinatedfinancialbonds	None	Financial Assets at Fair Value through Profit or Loss-Non-current	10,000	9,999	－	9,999
Stock/ TaiwanVes-Power Co., Ltd.	Related party in substance	Financial Assets Carried at Cost - Non-current	1,800	55,899	3.60%	－	Note
Stock/ New Spring Construction Corp.	Related party in substance	Financial Assets Carried at Cost - Non-current	8,549	41,833	15.49%	－	Note
Stock/ Ascentke Venture Capital Corp.	None	Financial Assets Carried at Cost - Non-current	2,352	23,520	6.42%	－	Note
Stock/ Taiwan Implant Technology Company, Ltd.	None	Financial Assets Carried at Cost - Non-current	1,891	18,913	4.20%	－	Note
Stock/ Sunny Bank	None	Financial Assets Carried at Cost - Non-current	3,923	35,482	0.18%	－	Note
Stock/ Universal Venture Capital Investment Co.,Ltd.	None	Financial Assets Carried at Cost - Non-current	1,100	9,130	0.91%	－	Note
Stock/Yieh Corporation Limited	Related party in substance	Financial Assets Carried at Cost - Non-current	200	2,002	5.48%	－	Note
Stock/Pacific Harbor Stevedoring Corporation	Director of the entity is the Company’s director	Financial Assets Carried at Cost - Non-current	150	1,650	3.00%	－	Note
Stock/ ImageDJ Software Co.,Ltd.	None	Financial Assets Carried at Cost - Non-current	24	535	0.96%	－	Note
Stock/ Chao-Feng Venture Capital Co., Ltd.	None	Financial Assets Carried at Cost - Non-current	1,000	10,000	0.79%	－	Note
Stock/ Skylark International Hotel Co.,Ltd.	Related party in substance	Financial Assets Carried at Cost - Non-current	20,528	350,357	13.68%	－	Note
	Total			549,321		－
Stock/ Asia Pacific Telecom Co., Ltd.	None	Available-for-sale financial assets - non-current	4,500	44,910	－	44,910
Preferred stock/E-Da Development Corp.	An investee accounted for using equity method	Bond investments with no active market - non-current	17,065	170,654	－	－	Note
Preferred stock/Eliter International Corp.	An investee accounted for using equity method	Bond investments with no active market - non-current	26,275	262,747	－	－	Note
	Total			433,401		－

Financial assets carried at cost and bond investments with no active market are those of which no quotes in an active market exist and the fair value can not be reliably measured.

257

Holder Company	Type and Name of Marketable Securities	Relationship with the Security Issuer	Financial Statement Account	Ending	Ending	Ending	Ending	Note
				Shares (Thousand of Shares)	Carrying Amount	Share Holding %	Market Value
WORTHING HONOR HOLDINGS LTD	Stock/ SEE Corporation	None	Financial assets at fair value through profit or loss - current	1	－	－	－	－
EMMT Systems Corporation	Stock/ Rodan (Taiwan) Ltd.	None	Financial Assets Carried at Cost - Non-current	86	491	0.73%	－	Note
Kuo Chang Enterprise Co., Ltd.	Preferred stock/Eliter International Corp.	An investee of the Parent Company under equitymethod.	Bond investments with no active market - non-current	1,997	19,974	－	－	Note
United Brightening Development Corp.	Preferred stock/Eliter International Corp.	An investee of the Parent Company under equitymethod.	Bond investments with no active market - non-current	639	6,392	－	－	Note
Yieh Hsing Enterprise Co., Ltd.	Fund/Allianz Glb Inv All Seasons Ret FOBF	None	Financial assets at fair value through profit or loss - current	195	2,994	－	2,994	－
	Fund/CTBC Global iSport Fund	None	Financial assets at fair value through profit or loss - current	300	2,997	－	2,997	－
	Fund/First Financial Holding Global Utility/Infrastructure Income Fund	None	Financial assets at fair value through profit or loss - current	300	2,955	－	2,955	－
	Total				8,946	－	8,946
	Pacific Harbor Stevedoring Corporation	Director of the entity is the Company’s chairman	Financial Assets Carried at Cost - Non-current	150	1,650	3.00%	－	Note
	Chateau Bridgetop Inc.	None	Financial Assets Carried at Cost - Non-current	2,500	－	5.00%	－	Note
	Total				1,650		－
	Preferred stock/E-Da Development Corp.	An investee accounted for using equity method	Bond investments with no active market - non-current	3,565	35,651	－	－	Note
	Preferred stock/Eliter International Corp.	An investee accounted for using equity method	Bond investments with no active market - non-current	5,934	59,337	－	－	Note
	Total				94,988	－	－
Kingsgarden International CO., LTD.	Fund/First Financial Holding Global Utility/Infrastructure Income Fund	None	Financial assets at fair value through profit or loss - current	200	1,970	－	1,970	－
	Fund/Fidelity Funds - Asian High Yield Fund	None	Financial assets at fair value through profit or loss - current	500	4,984	－	4,984
	Total				6,954	－	6,954

Financial assets carried at cost and bond investments with no active market are those of which no quotes in an active market exist and the fair value can not be reliably measured.

258

Table 4

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Aggregate trading value on the same securities (including purchase and sales) reaching NT$300 million or 20 percent of the paid-in capital or more December 31, 2017

Unit: Thousands of NT Dollars

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counter-par ty	Relationship	BeginningBalance	BeginningBalance	Acquisition	Acquisition		Disposal	Disposal		EndingBalance	EndingBalance
					Shares	Amount	Shares	Amount	Shares	Selling Price	Carrying Cost	Gain (Loss) on Disposal	Shares	Amount
Yieh Phui Enterprise Co., Ltd.	Hong Yuh Assets Management Co.,Ltd.	Investments accounted for using equity method	Capital Increase by Cash	Subsidiary of the Company	37,000	253,910	43,000	231,436 (Note 1)	－	－	－	－	80,000	485,346
	Kuo Chang Enterprise Co., Ltd.	Investments accounted for using equity method	Yieh United Steel Corporation	An investee accounted for using equity method	51,548	690,453	45,191 (Note 3)	572,680 (Note 2)	－	－	－	－	96,739	1,263,133

(Note 1): Including capital increase by cash of NT$ 430,000 thousand, share of profit/loss and other comprehensive income of investees accounted for using equity method of NT$ (175,568) thousand and accumulated earning/loss of NT$ (22,996) thousand incurred due to the failure to subscribe new shares in proportion to its shareholding percentage.

(Note 2): Including acquisition of NT$ 479,467 thousand, share of profit/loss and other comprehensive income of investees accounted for using equity method of NT$ (3,420) thousand, accumulated earning/loss recognized in proportion to the Company’s shareholding percentage of NT$ (24) thousand, capital surplus of NT$ 1,334 thousand and capital surplus of NT$ 95,323 thousand recognized due to transactions with non-controlling interests.

(Note 3): Including 2,266 thousand shares resulting from capitalization of earnings.

259

Table 5

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Acquisition of Property Amounting to At Least NT$ 300 Million or Exceeding 20% of Paid-in Capital January 1, 2017 ~ December 31, 2017

Unit: Thousands of NT Dollars

Company that Acquired the Property	Name of Property	Transaction Occurrence Date	Transaction Amount	Payment Status	Counter-party	Relation ships	Prior Transactionof Related Counter-party	Prior Transactionof Related Counter-party	Prior Transactionof Related Counter-party	Prior Transactionof Related Counter-party	Price Reference	Purpose of Acquisition and Status of Use	Other Terms
							Owner	Relationships with the issuer	Transfer Date	Amount
Kingsgarden International CO., LTD.	Construction of commercial building at E-da Asia Plaza	January 28, 2014 ~ October 2, 2017	4,533,752	2,368,135	New Spring Construction Corp., Taiwan Cement Corporation, Yieh Hsing Enterprise Co., Ltd. and Yieh Phui Enterprise Co., Ltd., etc.	Related party in substanc e, Parent company , Ultimate parent company	－	－	－	－	Determined at prices agreed on by both parties upon negotiation or through price competition with reference to appraisal reports issued by professional appraisal institutions	To build a boutique shopping mall	None
Great Emperor Hotel CO., LTD.			3,674,396	1,826,815								For development of an international hotel

Note: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

260

Table 6

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Property Disposed of Reaching NT$300 Million or 20% of the Paid-in capital or More January 1, 2017 ~ December 31, 2017

Unit: Thousands of NT Dollars/Foreign Currency

Disposed	Name of	Transaction Date/Date of	Original iii	k l	Transaction	Consideration	Gain	Counter-	Relationship ih h	Purpose of	Price	Other
Company	Property	Occurrence of theEvent	Acquston Date	Boo Vaue	Amount	Received	(Loss) on Disposal	party	wt te Company	Disposal	Reference	Agreement Terms
GUANG LIAN STEEL (VIETNAM) CO., LTD.	Operating assets (Including buildings and equipment)	February 13, 2017	July 3, 1997 - December 31, 2016	－ (Note 1)	345,524 (VND 255,290,917)	345,524 (VND 255,290,917)	345,524 (Note 2)	Hoa Phat Steel in Rong-guo Industrial Park	－	To terminate the investment in Vietnam	Mutual negotiation	None

(Note 1): Including buildings, undergoing constructions, and equipment of NT$ 794,839 thousand, which were all recognized as accumulated impairment, resulting in the book value of NT$ 0. (Note 2): Since the disposal target was recognized as impairment and the book value was NT$ 0, the gain arising from the disposal price was NT$ 345,524 thousand.

261

Table 7

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Purchases from and Sales to Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital January 1, 2017 ~ December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Purchaser/ Seller	Counter- party	Relationship with counterparty		Transaction Status	Transaction Status	Transaction Status	Reasons for and status of differences in transaction terms compared to arms-lengthtransaction	Reasons for and status of differences in transaction terms compared to arms-lengthtransaction	Notes or accounts receivable (payable)	Notes or accounts receivable (payable)	Note
			Purchases (sales)	Amount	Percentag e of total purchases (sales)	Payment terms	Unit price	Payment terms	Balance	Percentage of total notes and accounts receivable (payable)
Yieh Phui Enterprise Co., Ltd.	Yieh Hong Enterprise Co., Ltd.	Related party in substance	Purchases	2,512,976	11.09%	T/T or Sight L/C before goods acceptance.	－	－	－	－	－
	Yieh Mau Corp.	Related party in substance	Sales	773,806	2.65%	1-2 months	－	－	－	－	－
	ASIAZONE CO., LIMITED	An investee accounted for using equity method	Sales	1,246,218	4.27%	1-2 months	－	－	213,953	15.21%	Accounts receivable
	New Spring ConstructionCorp.	Related party in substance	Sales	542,255	1.86%	Pursuant to the agreement	－	－	798	0.06%	Accounts receivable
	Shin Phui Steel Corporation	Subsidiary of the Company	Sales	294,061	1.01%	1-2 months	－	－	50,329	3.58%	Accounts receivable
	Shin Yang Steel Co., Ltd.	Subsidiary of the Company	Sales	783,472	2.69%	1-2 months	－	－	45,012	3.20%	Accounts receivable
	Yieh United Steel Corporation	An investee accounted for using equity method	Sales	228,328	0.78%	1-2 month for galvanized steel coils, monthly closing at 15 days for carbon steel and scraps ofsteel.	－	－	20,010	1.42%	Accounts receivable
Shin Yang Steel Co., Ltd.	Yieh Hong Enterprise Co., Ltd.	Related party in substance	Purchases	154,040	6.50%	T/T or Sight L/C before goods acceptance.	－	－	－	－	－

262

Purchaser/ Seller	Counter- party	Relationship with counterparty		Transaction Status	Transaction Status	Transaction Status	Reasons for and status of differences in transaction terms compared to arms-lengthtransaction	Reasons for and status of differences in transaction terms compared to arms-lengthtransaction	Notes or accounts receivable (payable)	Notes or accounts receivable (payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Payment terms	Unit price	Payment terms	Balance	Percentage of total notes and accounts receivable (payable)
Yieh Phui (Hong Kong) Holdings Limited	Yieh United Steel Corporation	An investee of the Parent Company under equity method.	Sales	1,373,131 (USD 45,096)	77.70%	3 months	－	－	173,105 (USD 5,817)	35.72%	Accounts receivable
	Fujian Lian Wei Logistics Co.,Ltd.	Related party in substance	Sales	394,077 (USD 12,942)	22.30%	3 months	－	－	311,465 (USD 10,466)	64.28%	Accounts receivable
	Angang Lianzhong (Guangzhou) Stainless SteelCorporation	Related Party in Substance	Purchases	660,644 (RMB 21,697)	100%	T/T in advance	－	－	－	－	－
Yieh Phui (China) Technomateri al Co., Ltd.	Tianjin Lianfa Precision SteelCorporation	Parent company	Sales	1,281,795 (RMB 284,120)	4.32%	1-2 months	－	－	237,175 (RMB51,865)	10.34%	Accounts receivable
	ASIAZONE CO., LIMITED	An investee of the Parent Company under equity method.	Sales	349,086 (USD 11,522)	1.18%	1-2 months	－	－	27,909 (USD 978)	1.22%	Accounts receivable
Yieh Hsing Enterprise Co., Ltd.	Yieh United Steel Corporation	An investee accounted for using equity method	Purchases	5,392,366	75.52%	T/T or Sight L/C before goods acceptance.	－	－	－	－	－
Tianjin Lianfa Precision Steel Corporation	Angang Hanyang (Guangzhou) Stainless SteelCorporation	Related Party in Substance	Purchases	232,040 (RMB 51,434)	15.31%	T/T in advance	－	－	1,337 (RMB 292)	－	Accounts payable
	Angang Lianzhong (Guangzhou) Stainless SteelCorporation	Related Party in Substance	Purchases	130,089 (RMB 28,835)	8.58%	T/T in advance	－	－	－	－	－

Note: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

263

Table 8

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Receivables from Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Company Name	Counter- party	Relationship	Ending balance - related party	Turnove r Days	Overdue	Overdue	Amounts Received in Subsequent Period (Note2)	Allowan ce for doubtful accounts
					Amount	Action Taken
Yieh Phui Enterprise Co., Ltd.	ASIAZONE CO., LIMITED	An investee accounted for using equity method	213,953	7.85	－	－	162,813	－
	Great Emperor Hotel CO.,LTD.	Parent company	380,000	(Note 1)	－	－	－	－
	Kingsgarden International CO., LTD.	Parent company	570,000	(Note 1)	－	－	－	－
Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	Parent company	3,606,381 (RMB 38,850) (USD 115,213)	(Note 1)	－	－	－	－
	Yieh United Steel Corporation	An investee of the Parent Company under equity method.	173,105 (USD 5,817)	3.04	－	－	USD 5,817	－
	Fujian Lian Wei Logistics Co., Ltd.	Related party in substance	311,465 (USD 10,466)	2.47	－	－	USD 3,050	－
GOOD HONOR HOLDINGSLTD.	Yieh Phui (Hong Kong) HoldingsLimited	Same ultimate parent company as the Company	133,920 (USD 4,500)	(Note 1)	－	－	－	－
Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Parent company	150,906 (RMB 33,000)	(Note 1)	－	－	－	－
			237,175 (RMB51,865)	8.48	－	－	RMB 39,000	－

(Note 1): These are accounts receivable financing, on which the calculation of turnover doesn’t apply.

(Note 2): Amounts received as of March 21, 2018.

(Note 3): Transactions between the aforesaid subsidiaries and the parent company have been written off.

264

Table 9

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Relationships Between Parent Company and Subsidiaries and Significant Transactions

December 31, 2017

Individual transactions not exceeding NT$50,000 thousand are not disclosed. Transactions disclosed in assets or revenue will not be disclosed in the opposite transaction.

Unit: Thousands of NT Dollars

				Unit: Thousands of NT Dollars	Unit: Thousands of NT Dollars	Unit: Thousands of NT Dollars	Unit: Thousands of NT Dollars
No. (Note 1)	Company name	Counter-party	Nature of relationship (Note 2)	Transactiondetails
				Financial statement account	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
0	Yieh Phui Enterprise Co., Ltd.	Shin Phui Steel Corporation	1	Sales revenue	294,061	－	0.41%
				Accounts receivable	50,329	－	0.06%
				Long-term prepaid rent	77,900	－	0.09%
		Shin YangSteel Co.,Ltd.	1	Sales revenue	785,771	－	1.10%
		Great Emperor Hotel CO., LTD.	1	Other receivable - related party	380,000	－	0.44%
		Kingsgarden International CO., LTD.	1	Other receivable - related party	570,000	－	0.65%
1	Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	1	Long-term receivables	3,606,381 (RMB 38,850) (USD 115,213)	－	4.13%
2	GOOD HONOR HOLDINGS LTD.	Yieh Phui (Hong Kong) Holdings Limited	3	Long-term receivables	133,920 (USD 4,500)	－	0.15%
3	Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	1	Sales revenue	1,281,795 (RMB 284,120)	－	1.80%
				Accounts receivable	237,175 (RMB 51,865)	－	0.27%
				Long-term receivables	150,906 (RMB 33,000)	－	0.17%
4	Yieh Hsing Enterprise Co., Ltd.	Great Emperor Hotel CO., LTD.	1	Sales revenue	69,114	－	0.10%

265

5	Kingsgarden International CO., LTD.	Yieh Hsing Enterprise Co., Ltd.	2	Land	2,522,985	Note 4	2.89%
6	Great Emperor Hotel CO., LTD.	Yieh Hsing Enterprise Co., Ltd.	2	Land	2,445,476	Note 4	2.80%

Note 1: Transactions between parent company and subsidiaries should be marked in code in the column in accordance with the rules set forth below:
Parent company as 0.
Subsidiaries start from 1.
Note 2: Two out of three types of relationships with the counterparty as set forth below shall be marked in code:
Parent company to subsidiary
Subsidiary to parent company
Subsidiary to subsidiary
Note 3: For the calculation of Percentage of Consolidated Net Revenue or Total Assets, balance sheet accounts use ending balance as calculation base; profit/loss accounts use accumulated amount as calculation base.
Note 4: Gain from disposal of NT$ 4,968,461 thousand is derived from the proceeds of sale of NT$ 7,633,283 thousand less land value increment tax of NT$ 20,491 thousand and book value of NT$ 2,644,331 thousand. However, as it is unrealized gain from downstream transactions between the parent company and its subsidiary, this amount was eliminated.
Note 5: Transactions between the aforesaid subsidiaries and the parent company have been written off.

266

Table 10

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries

Reinvestment Information

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Name of Investor	Name of Investee	Location	Main Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
Yieh Phui Enterprise Co., Ltd.	Yieh Phui (Hong Kong) Holdings Limited	Hong Kong	Investment	7,455,887	7,455,887	233,500	100%	9,952,223	290,986	290,986
	CHAMPIONLOGISTICINC.	Samoa	Investment	1,913,111	1,913,111	57,000	97.44%	1,709,343	148,478	144,671
	Eliter International Corp.	Kaohsiung City	Construction of buildings	2,833,595	2,833,595	283,584	32.84%	2,764,614	(183,166)	(60,158)
	Yieh Hsing Enterprise Co., Ltd.	Kaohsiung City	Wire rods trading	2,238,883	2,237,751	299,458	56.43%	1,481,220	(184,153)	(90,277)
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	1,453,572	1,453,572	39,553	11.30%	1,374,311	243,225	27,487
	E-Da Development Corp.	Kaohsiung City	Leisure development	1,868,658	1,868,658	186,866	28.44%	1,130,773	(248,116)	(70,570)
	United Brightening Development Corp.	Kaohsiung City	Technical consultation for steel products manufacturing	1,836,383	1,561,166	144,860	95.56%	1,869,190	33,105	31,105
	Shin Yang Steel Co., Ltd.	Kaohsiung City	Steel products related businesses	870,000	870,000	87,000	100%	825,718	62,641	62,641
	Synn Industrial Co., Ltd.	Kaohsiung City	Steel products related businesses	294,000	294,000	45,975	30%	571,760	177,982	53,395
	Yieh Mau Corp.	Kaohsiung City	Trading & manufacturing	422,605	422,605	45,075	23%	560,722	171,882	39,524
	Kuo Chang Enterprise Co., Ltd.	Kaohsiung City	Wholesaling of hardware	1,256,726	777,259	96,739	99.04%	1,263,133	13,391	13,424
	ASIAZONECO.,LIMITED	HongKong	Steel trading	595,424	595,424	15,090	32.80%	610,037	101,421	33,270
	Shin Phui Steel Corporation	Kaohsiung City	Trading of steel products	295,736	295,736	31,246	100%	318,954	2,012	1,224
	Sin Bang Investment & Development Co.,Ltd.	Kaohsiung City	Investment	295,809	295,809	22,313	100%	283,898	4,939	4,939
	TYCOONS STEEL INTERNATIONALCO.,LTD.	Cayman Island	Investment	427,629	427,629	14,700	28.27%	109,745	325,662	92,062

267

Name of Investee	Location	Main Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
			End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
HSING JUI INVESTMENTS LIMITED	Samoa	Investment	4,603	4,603	5	100%	1,917	4	4
EMMT Systems Corporation	Taichung City	Manufacturing and marketing of military specification printed circuit boards	306,158	306,158	28,651	77.54%	265,137	(17,423)	(13,509)
GOOD HONOR HOLDINGS LTD.	British Virgin Islands	Investment	14,723	14,723	46	100%	151,205	3,538	3,538
Gen-Wan Technology Corp.	Kaohsiung City	Telecommunication	148,609	148,609	2,447	86.99%	23,348	(1,432)	(1,246)
Cheng Shin Security Co., Ltd.	Kaohsiung City	Security	14,000	14,000	1,400	35%	14,853	(839)	(294)
Da Yao Engineering & Consulting Co.,Ltd.	Kaohsiung City	Management service	9,800	9,800	980	49%	10,954	269	132
E-Da Bus Transportation Co., Ltd.	Kaohsiung City	Bus transportation	36,086	36,086	3,609	17.09%	11,552	(32,509)	(5,555)
E-DA Tour Bus Co., Ltd.	Kaohsiung City	Bus transportation	9,500	9,500	950	19%	3,420	(6,590)	(1,252)
Golden Developments Holdings Ltd.	Hong Kong	Investment	2,928	2,928	100	100%	7,266	331	331
E-Da Cultural Creative Industry Co.,Ltd.	Kaohsiung City	Cultural creativity	38,000	38,000	3,800	19%	15,535	(417)	(79)
WORTHING HONOR HOLDINGSLTD	British Virgin Islands	Investment	6,672	6,672	100	100%	2,722	5	5
Cheng Hsin Building Managemt and Maintanance Co., Ltd. (the former Cheng Hsin House Management Co.)	Kaohsiung City	Maintenance and management of utilities, air condition and parking space in buildings.	3,915	3,915	320	32%	1,962	(158)	(50)
E United Japan Co.,Ltd.	Japan	Steel trading	8,027	8,027	－	47%	4,419	2,196	1,032
Skylark Hot Spring & Resort Corp.	Kaohsiung City	Hotel industry	11,700	11,700	1,170	14.63%	165	(1,655)	(242)
Eda Entertainment CO., LTD	Kaohsiung City	Entertainment industry	74,100	74,100	7,410	19%	47,448	(4,306)	(818)
Li Hui Development CO., LTD	Kaohsiung City	Investment	321,216	321,216	61,001	44.56%	312,373	(3,466)	(1,544)	Note 1
Ji Chang Enterprise CO., LTD	Kaohsiung City	Investment	5,050	5,050	1,009	45%	4,917	359	(61)	Note 1

268

Name of Investee	Location	Main Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
			End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	4,826,777	4,579,423	645,435	24.63%	4,229,446	696,226	139,798	Note 1
Hong Yuh Assets Management Co.,Ltd.	Kaohsiung City	Management service	768,000	338,000	80,000	80%	485,346	(206,048)	(164,134)
E-Da Visual Effects Company Limited.	Kaohsiung City	Entertainment industry	10,393	10,393	1,470	49%	1,807	(1,075)	(527)
LIAN SO(H.K)CO.,LIMITED	HongKong	Investment	311,110	15,766	10,160	80%	288,308	(16,809)	(13,447)
E-Da Health Biotechnology Co., Ltd.	Kaohsiung City	Manufacturer of food additives	3,800	－	380	19%	3,729	(375)	(71)
Total			30,993,185	29,260,871	－	－	30,713,470	1,370,115	515,734

Note 1: Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation and its subsidiaries, Li Hui Development Co., Ltd. and Ji Chang Enterprise Co., Ltd., investment gain/loss is accounted for using the treasury stock approach. Thus, the income/loss of investee for the period excludes gain/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company

269

Name of Investor	Name of Investee	Location	Main Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
Shin Phui Steel Corporation	Groupco Technology	Taichung City	RADIO	37,492	37,492	3,830	42.53%	4,478	326	139
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	24,562	24,562	3,178	0.12%	20,807	696,226	685	Note 2)
Gen-Wan Technology Corp.	EMMT Systems Corporation	Taichung City	Manufacturing and marketing of military specification printed circuit boards	27,630	27,376	2,763	7.48%	25,573	(17,423)	(1,304)
EMMT Systems Corporation	Groupco Technology	Taichung City	RADIO	45,000	45,000	4,500	49.97%	5,261	326	163
	APPLIED WIRELESS IDENTIFICATIONS GROUP, INC.	San Francisco, US	RFID	242,545	242,545	40,488	91.47%	123,317	24,015	21,967
	UniPattern Corporation	Taipei City	Manufacture of computer and peripherals	54,960	39,960	5,200	43.33%	50,682	(18,167)	(7,623)
APPLIED WIRELESS IDENTIFICATIONS GROUP,INC.	AWID Asia Co., Ltd.	Kaohsiung City	Telecommunicatio ns equipment wholesaling	74,668 (USD 2,509)	80,915 (USD 2,509)	3,030	100%	18,488 (USD 612)	(345) (USD 11)	(345) (USD 11)
CHAMPION LOGISTIC INC.	TYCOONS STEEL INTERNATIONAL CO.,LTD.	Cayman Island	Investment	699,360 (USD 23,500)	645,000 (USD 20,000)	34,000	65.38%	253,831 (USD 8,529)	325,662 (USD 10,695)	124,369 (USD 4,084)
TYCOONS STEEL INTERNATIONAL CO., LTD.	GUANG LIAN STEEL (VIETNAM) CO., LTD.VIETNAM	Vietnam	Steel products related businesses	-	1,415,775 (USD 43,900)	-	-	-	350,958 (USD 11,526)	350,958 (USD 11,526)
Shin Yang Steel Co., Ltd.	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	17,385	17,385	2,195	0.08%	14,373	696,226	473	Note 1
Sin Bang Investment & Development Co., Ltd.	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	265,482	265,482	7,224	2.06%	251,006	243,225	5,020
Kuo Chang Enterprise Co., Ltd.	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	439,197	439,197	56,817	2.17%	372,220	696,226	12,300	Note 1
	Eliter International Corp.	Kaohsiung City	Construction of buildings	219,977	219,977	21,558	2.50%	210,214	(183,166)	(4,573)
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	786,714	786,714	21,328	6.09%	1,039,434	243,225	14,821

270

Name of Investor	Name of Investee	Location	Main Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
United Brightening Development Corp.	Chao Ying Investment DevelopmentCo.,Ltd.	Kaohsiung City	Investment	341,992	341,992	30,400	100%	311,378	5,817	5,817
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	449,508	449,508	58,151	2.22%	380,792	696,226	12,528	Note 1
	CHAMPIONLOGISTICINC.	Samoa	Investment	49,376	49,376	1,500	2.56%	44,983	148,478	3,807
	Da Yao Engineering & Consulting Co.,Ltd.	Kaohsiung City	Management service	199	199	20	1.00%	222	269	3
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	1,177,838	1,177,838	32,050	9.16%	1,541,896	243,225	22,272
	TYCOONS STEEL INTERNATIONAL CO., LTD.	Cayman Island	Investment	9,374	9,374	300	0.58%	2,240	325,662	1,879
	Eliter International Corp.	Kaohsiung City	Construction of buildings	70,393	70,393	6,898	0.8%	67,276	(183,166)	(1,463)
Chao Ying Investment Development Co.,Ltd.	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	336,957	336,957	8,898	2.55%	309,170	243,225	6,184
Hong Yuh Assets Management Co., Ltd.	PT.YIEH FERRO ORIENTAL	Indonesia	Trading business	9,265	9,265	400	40%	3,605	25	10
	PT. E-UNITED FERROINDONESIA	Indonesia	Metal manufacturing industry	93,462	93,462	250	100%	45,735	(12,136)	(12,136)
	Prepaid subscriptions - PT. E-UNITED FERRO INDONESIA	Indonesia	Metal manufacturing industry	184,257	-	-	-	-	-	-
	PT.YIEH FERROINDONESIA	Indonesia	Metal manufacturing industry	1,633	1,633	50	10%	1,063	(3,203)	(320)
	PT.GENBA MULTI MINERAL	Indonesia	Nickle mining	295,632	273,875	9,765	49%	268,309	(15,555)	(26,772)
	PT. GENBA INDO RESOURCES	Indonesia	Nickle mining	9,371	-	-	75%	(7,844)	(19,141)	(17,304)
	Prepaid subscriptions - PT. GENBA INDORESOURCES	Indonesia	Nickle mining	-	9,371	-	-	-	-	-
LIAN SO(H.K)CO., LIMITED	PT. YIEH FERROINDONESIA	Indonesia	Metal manufacturing industry	13,392 (USD 450)	14,112 (USD 450)	450	90%	9,563 (USD321)	(3,203) (USD 105)	(2,883) (USD95)
	Subscription Prepaid PT. E-UNITED FERROINDONESIA	Indonesia	Metal manufacturing industry	266,352 (USD 8,950)	-	-	-	-	-	-

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Name of Investor	Name of Investee	Location	Main Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
PT. E-UNITED FERRO INDONESIA	Prepaid subscriptions - PT.GENBA MULTI MINERAL	Indonesia	Nickle mining	231,367 (USD 7,886)	-	-	-	231,367 (USD 7,886)	-	-
	Prepaid Dividends - PT. GENBA INDO RESOURCES	Indonesia	Nickle mining	17,143 (USD 580)	-	-	-	17,143 (USD 580)	-	-
Yieh Hsing Enterprise Co., Ltd.	Great Emperor Hotel CO., LTD.	Kaohsiung City	Hotel industry	2,100,000	2,100,000	210,000	100%	-(Note 2)	(14,102)	(24,519)	(Not e 3)
	Kingsgarden International CO., LTD.	Kaohsiung City	Leasing, sales, and development of residential and commercial buildings, department stores	2,150,000	2,150,000	215,000	100%	-(Note 2)	(26,652)	(35,609)	(Not e 3)
	UNITED WINNER METALSL.P	Virginia, US	Scrap steel recycling	108,752	109,371	-	33.75%	82,304	11,740	3,962
	Cheng Shin Security Co., Ltd.	Kaohsiung City	Security	4,000	4,000	400	10%	4,244	(839)	(84)
	Cheng Hsin Building Managemt and Maintanance Co., Ltd. ( the former Cheng Hsin House Management Co.)	Kaohsiung City	Maintenance and management of utilities, air condition and parking space in buildings.	750	750	75	7.50%	460	(158)	(12)
	Eliter International Corp.	Kaohsiung City	Construction of buildings	639,772	639,772	64,043	7.42%	624,569	(183,166)	(13,585)
	E-Da Development Corp.	Kaohsiung City	Leisure development	390,380	390,380	39,038	5.94%	237,951	(248,116)	(14,743)
	Yieh United Steel Corporation	Kaohsiung City	Steel products related business	20,204	20,204	2,542	0.10%	16,649	696,226	548	Note 1
	E-Da Health Biotechnology Co.,Ltd.	Kaohsiung City	Manufacturer of food additives	3,800	-	380	19%	3,729	(375)	(71)

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Kingsgarden International CO., LTD.	Yi Hua International Co., Ltd	Kaohsiung City	Leasing, selling and development of residential and commercialbuildings	4,200	4,200	420	70%	1,177	(1,982)	(1,387)

Note 1: Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation, investment gain/loss is accounted for using the treasury stock

approach. Thus, the income/loss of investee for the period excludes gain/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company. Note 2: The Group sold land lot no. 16, 17 and 18 at Long Dong Section, Gushan District, Kaohsiung City to subsidiaries, Great Emperor Hotel CO., LTD. and Kingsgarden International CO., LTD., in December 2012. The unrealized gain from the sale of land was about NT$ 4,968,461 thousand. After deducting the investments accounted for using equity method, the credit balance of investment of NT$ 1,008,213 thousand was reclassified to “other non-current liabilities – others”.

Note 3: The internal gains under the consolidation basis are eliminated. Note 4: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

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Table 11

Yieh Phui Enterprise Co., Ltd. and Its Subsidiaries Information on Investment in Mainland China January 1, 2017 ~ December 31, 2017

								Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency	Unit: Thousands of NT Dollar/ Foreign Currency
Name of Investor	Investee in Mainland China	Main Activities		Paid-in Capital	Means of investment (Note 1)		Accumulated investment balance - beginning of current period	Wire-in or wire-out amount investment amount			Accumulated investment balance-end of current period	Net Income (Losses) of the Investee	Direct and indirect percentage of ownership		Investment gain or loss recognized in the current period (Note 2)	Carrying amount at the Book Value	Accumula ted investmen t income received by the end ofperiod
								Remitted	Received
Yieh Phui Enterprise Co., Ltd.	Yieh Phui (China) Technomaterial Co., Ltd.	Manufacturing and marketing of pickled, cold rolled, galvanized and pre-painted steel coils		7,029,312 (USD 236,200) (Note 6)	(II) 1		6,948,960 (USD 233,500)	－		－	6,948,960 (USD 233,500)	307,780		100%	307,780 (2). 2	9,954,300	－
	Changshou ChangHuei TradingCo.	Trading of steel products		45,729 (RMB 10,000)	(II) 1 (Note 4)		－	－		－	－	391		100%	391 (2). 2	47,066	－
	Tianjin Lianfa Precision Steel Corporation	Manufacturing and marketing of special high grade alloy		401,760 (USD 13,500)	(II) 1 (Note 5)		－	－		－	－	(59,637)		100%	(59,637) (2). 2	(46,312)	－
AWID Asia Co., Ltd.	AWID Sanghai Co., Ltd.	Telecommunicati ons equipment wholesaling		20,832 (USD 700)	(I)		20,832 (USD 700)	－		－	20,832 (USD 700)	(373)		100%	(373) (2). 2	4,235	－
	AWID Changshou Co., Ltd.	Telecommunicati ons equipment wholesaling		8,928 (USD 300)	(I)		8,928 (USD 300)	－		－	8,928 (USD 300)	(1,891)		100%	(1,891) (2). 2	6,325	－
														Ceiling on investment in Mainland China imposed by the Investment Commission of the Ministry of EconomicAffairs 16,705,015 80,000 80,000
	Investor		Investee in Mainland China			Accumulated remitted investment balance - end of current period				Approval through Investment Committee of the Ministry of Economic Affairs				Ceiling on investment in Mainland China imposed by the Investment Commission of the Ministry of EconomicAffairs
Yieh Phui Enterprise Co., Ltd.			Yieh Phui (China) Technomaterial Co.,Ltd.			6,948,960 (USD 233,500)				7,029,312 (USD 236,200)				16,705,015
AWID Asia Co., Ltd.			AWID Sanghai Co.,Ltd.			20,832(USD 700)				20,832(USD 700)				80,000
			AWID Changshou Co.,Ltd.			8,928(USD 300)				8,928(USD 300)				80,000

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Note 1: Investment is handled in one of the three methods below, please specify the chosen investment method:

(I) Engaged in direct investment in Mainland China.
(II) Reinvested in China through a third area (please specify the investment companies in the third area).
Yieh Phui (Hong Kong) Holdings Limited

(III) Others

Note 2: Investment gain or loss recognized in the current period:
- (I) Please specify if it is in the preparation stage without any investment profit or loss generated.
- (II) Recognition basis of investment profit or loss is categorized into three types, which shall be identified.
  1. Financial statements audited and certified by the international CPA firms that cooperates with ROC CPA firms.
  2. Financial statements reviewed, or audited and certified by the CPA firm of the parent company in Taiwan.
  3. Others
Note 3: The figures in the Table shall be expressed in New Taiwan Dollars. Carrying amount at the end of the period is converted using the exchange rate on the reporting date (USD: NTD 1:29.76; RMB: NTD 1:4.5729). Investment gain or loss recognized in the current period is converted using the average exchange rate in from January 1 to December 31, 2017 (USD: NTD 1:30.4492; RMB: NTD 1:4.5121 ).
Note 4: Yieh Phui (China) Technomaterial Co., Ltd. invests in Changshou ChangHuei Trading Co. with equity funds of RMB 10 million. As of December 31, 2017, accumulated investment amounted to RMB 10 million.
Note 5: The Company originally holds 100% of Tianjin Lianfa Precision Steel Corporation Beneficiary (paid-in capital equals USD 13,500 thousand) through its holding in Hsing Jui Investments Limited. It transfered its ownership to Yieh Phui (China) Technomaterial Co., Ltd.at RMB 20,000 thousand in July 2015. The said proceed, net of tax, of RMB 19,990 thousand (equivalent to USD 3,213 thousand) has been transferred back to the Company’s account in Taiwan.
Note 6. Yieh Phui (China) Technomaterial Co., Ltd. recapitalized its retained earnings of USD 2,700 thousand in April, 2017.
Note 7: Investment in Changshu Chief Leading Edge Construction Materials Co., Ltd. was completely sold in February, 2013. Investment amount and earnings were received. Investment in Jiangsu J & Y Engineering Co., Ltd. was liquidated in 2012. Thus:
- (1) Accumulated investment in China investees that were disposed: NT$ 498,539 thousand.
- (2) Investment gains received from China investees that were disposed: NT$ 69,518 thousand.
(II) Significant transactions between the Company and investees in Mainland China during January 1 and December 31, 2017 directly or indirectly through the third area are as follows:
Significant transactions between the Company and investees in China: Note 13, Table 7 ~ Table 8.
Financing between the Company and investees in China: Note 13, Table 1.
Endorsement and guarantee provided by the Company for investees in China: Note 13, Table 2.

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XIV. Segment Information

(I) General Information:

For the purpose of management, the Group’s operational decision makers divided the business group into the following operational units, or reporting segments shown as follows:
A. Yieh Phui segment: Mainly engages in the production and sales of coated steel, and the production and installation of overhead cranes.
B. Yieh Hsing Segment: Mainly engages in the production and sales of wire rods.
C. Yieh Phui (China, including Yieh Phui Hong Kong) segment: Mainly engages in the production and sales of coated
D. Other segments: Mainly engage in the production and sales of steel-related products, army supplies, wholesale of telecommunication appliances, and investment activities.
(II) Preparation Basis

The decision maker of the consolidated entities monitors the operation results of the operation units and make decisions on resource allocation and performance evaluation. The segment's performance is evaluated by its operation income (loss) and measured in consistent with the principles used in preparing consolidated financial statements. The Group does not include assets and liabilities in management report, so the measurement amounts for segment assets and liabilities are zero. The accounting policy of segment reporting is the same as that described in Note 2 of the consolidated financial statements

(III)Segment Financial Information:

2017:

2017:
Item	Yieh Phui Segment:	Yieh Hsing Segment Yieh Phui (China) $7,904,601 $30,554,389 88,406 1,281,795	D. Other Segments:	Adjustment and Elimination	Total
Revenue Revenue from external customers Revenue from inter-segment sales Total revenue Segment income (loss) Non-operating income and Income before tax Income tax expense (gains) Net income after tax Total assets: Total liabilities 2016 Item	$28,089,554 1,089,664		$5,047,355 154,565	($437,237) (2,614,430)	$71,158,662 -
	$29,179,218	$7,993,007 $31,836,184	$5,201,920	($3,051,667)	$71,158,662
	$1,461,328	$12,929 $857,775	($158,863)	$38,205	$2,211,374 (406,009)
	Yieh Phui Segment:	Yieh Hsing Segment Yieh Phui (China) $7,172,643 $19,027,254 99,869 848,513	D. Other Segments:	Adjustment and Elimination
					$1,805,365 460,055
					$1,345,310
					$87,228,348
					$57,592,487
					Total
Revenue Revenue from external customers Revenue from inter-segment sales Total revenue Segment income (loss) Non-operating income and Income before tax Income tax expense (gains) Net income after tax Total assets: Total liabilities	$23,544,241 323,424		$3,916,462 76,634	($813,190) (1,348,440)	$52,847,410 -
	$23,867,665	$7,272,512 $19,875,767	$3,993,096	($2,161,630)	$52,847,410
	$2,064,727	($37,278) $1,766,217	$16,548	$33,823	$3,844,037 (471,965)
		276
					$3,372,072 993,527
					$2,378,545
					$82,036,490
					$51,792,511

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(IV) Information on Product and Service:

Revenue derived from main goods and services provided by the Company’s continuing operations are classified by business segment. Please refer to disclosure of revenue by business segment.

(V) Geographical Information:

Revenue from external customers (Revenue was categorized based on countries where customers are located.)

Region Taiwan Americas Asia Europe Other regions Total	2017 2016 $18,273,613 $17,993,200 11,298,368 7,267,810 36,058,080 24,302,802 4,940,907 2,137,112 587,694 1,146,486 $71,158,662 $52,847,410

2. Non-current assets:

Region Taiwan Mainland China Other regions Total	December 31, 2017: December 31, 2016: $41,630,823 $40,360,055 15,999,749 15,735,071 358,247 50,117 $57,988,819 $56,145,243

(VI) Major customers: No customer has reached the disclosure standards.

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V. Individual Financial Statement for Last Fiscal Year:

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==> picture [172 x 30] intentionally omitted <==

Crowe Horwath (TW) CPAs Crowe Horwath (TW) CPAs

Member Crowe Horwath International

27F. No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung, TaiwanR.O.C. Tel:(07)3312133 Main line Fax:(07)3331710

Independent Auditors’ Report

To Yieh Phui Enterprise Co., Ltd.

Auditors’ Opinions

We have audited the Standalone Balance Sheet of Yieh Phui Enterprise Co., Ltd. as of 31 December 2017 and 2016, the Standalone Statements of Comprehensive Income, Standalone Statements of Changes in Equity, Standalone Statements of Cash Flows, and Notes to Standalone Financial Statements (including Summary of Significant Accounting Policies) for the periods from January 1 to December 31, 2017 and 2016.

In our opinion, based on our audits and other auditors’ reports (please refer to other paragraphs), the afore-mentioned Standalone Financial Statements present fairly, in all material respects, the standalone financial position of Yieh Phui Enterprise Co., Ltd. as of December 31, 2017 and 2016, and its standalone financial performance and standalone cash flows for the periods from January 1 to December 31, 2017 and 2016 in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We planned and conducted our audits in accordance with Rules Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards in the Republic of China. Our responsibility under the above mentioned regulations will be further explained in the section titled "Accountant's Responsibility in Auditing the Standalone Financial Statements". We have stayed independent from Yieh Phui Enterprise Co., Ltd. as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by the norm. Based on our audits and other auditors’ reports, we believe we have obtained sufficient and appropriate audit evidence to serve as a basis for our opinion.

Key Audit Matters

Key Audit Matters refer to most vital matters in the process of auditing of 2017 Standalone

279

Financial Statement of Yieh Phui Enterprise Co., Ltd. based on our professional judgment. Such matters have been dealt with in the course of of auditing and compiling the Standalone Financial Statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually. Key Audit Matters for the Standalone Financial Statements of Yieh Phui Enterprise Co., Ltd. for the year ended December 31, 2017 are stated as follows: Timing of Sales Revenue Recognition

Please see Note 4(25) of the Standalone Financial Statements for accounting policies regarding revenue recognition; please see note 5(2)1 of the Standalone Financial Statements for critical accounting estimates and assumptions regarding revenue recognition; please see note 6(26) of the Standalone Financial Statement for details regarding revenue recognition.

280

Description of key audit matters:

The timing of sales revenue recognition has to do with confirming the time of transfer of ownership and risk to the customer. Since the sales conditions for each major customer may differ, Yieh Phui Enterprise Co., Ltd. determines whether to transfer the ownership and risk of goods sold to the customer according to the trading conditions of each order. As the timing of recognizing the sales revenue may have a major impact on the financial performance of Yieh Phui Enterprise Co., Ltd., we have thus included it as one of the key audit matters. Audit Process Adopted:

Our audit process included understanding and testing the effectiveness of the design and execution of internal control over the timing of sales revenue recognition; sampling and testing the trading terms between the Company and its major customers, and performing cut off test to determine the appropriateness of revenue recognition timing.

II. Inventory Valuation

Please refer to Note 4(12) of the Standalone Financial Statements for accounting policies regarding inventory valuation; please refer to Note 5(2)5. of the Standalone Financial Statements for critical accounting estimates and assumptions regarding inventory valuation and Note 6(7) of the Standalone Financial Statements for details of inventory valuation. Description of key audit matters:

Inventory of Yieh Phui Enterprise Co., Ltd. amounted to NT$ 4,145,137 thousand (net of NT$ 4,146,681 thousand of total inventory costs less NT$ 1,544 thousand of allowance for inventory valuation losses) as of 31 December 2017, which accounted for 8.14% of total assets. The inventory valuation is measured at the lower of the value of inventory cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical judgments and estimates and since inventory valuation is dependent on the influence of frequently volatile fluctuations of international metal price, we have thus included this item in the key audit matters.

Audit Process Adopted:

Other Matters

We do not audit the financial statements of some associates that have been included in the afore-mentioned Standalone Financial Statements. They were audited by other auditors.

281

Therefore, any value of such financial statements we have used to form our opinion for the afore-mentioned Standalone Financial Statements are based on other auditors’ reports. The value of investments in the afore-mentioned associates recognized under the equity method as of December 31, 2017 and 2016 were NT$ 5,248,378 thousand and NT$ 4,422,752 thousand respectively, accounting for 10.30% and 9.17% of total assets. The share of profit (loss) of associates and joint ventures recognized under equity method in 2017 and 2016 were NT$ 86,232 thousand and NT$ 123,277 thousand respectively, accounting for 5.16% and 4.09% of income before tax.

Responsibility of the management and the governing body for the Standalone Financial Statements

It is the management’s responsibility to fairly present the Standalone Financial Statements in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers, and to sustain internal controls respecting preparation of the Standalone Financial Statements so as to avoid material misstatements due to fraud or errors therein.

282

In preparing the Standalone Financial Statements, the responsibility of management includes assessing the ability of Yieh Phui Enterprise Co., Ltd. to continue as a going concern, disclosing going concern matters, as well as adopting going concern accounting, unless the management intends to liquidate Yieh Phui Enterprise Co., Ltd. or terminate the business, or no practicable measure other than liquidation or termination of the business can be taken.

The governing bodies of Yieh Phui Enterprise Co., Ltd. (including the Audit Committee) have the responsibility to oversee the financial reporting process.

The Accountants’ Responsibility in Auditing the Standalone Financial Statements

The purpose of our audit is to provide reasonable assurance that the Standalone Financial Statements as a whole contains no material misstatements, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. "Reasonable assurance" refers to a high level of assurance. Nevertheless, our audit, which was carried out according to GAAS, does not guarantee that a material misstatement(s) will be detected in the Standalone Financial Statements. There may still be material misstatements due to fraud or errors. If it could have been reasonably anticipated that misstated amounts, individually or in aggregate, could have influenced the economic decisions made by the users of the Standalone Financial Statements, it would be deemed as material.

We have exercised professional judgment and maintained professional skepticism while abiding by GAAS in our audit. The following tasks have also been performed:

Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Standalone Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. As fraud may involve collusion, forgery, deliberate omissions, false statements, or violations of internal controls, the risk of an undetected material misstatement due to fraud is greater than that due to errors.
Acquired necessary understanding of internal controls pertaining to the audit so as to provide appropriate audit procedures under such circumstances. Nevertheless, the purpose of such an understanding is not to provide any opinion on the effectiveness of the internal controls of Yieh Phui Enterprise Co., Ltd.
Evaluated the appropriateness of the accounting policies adopted by management and the rationality of the accounting estimates and the relevant disclosures.
Concluded on the appropriateness of the management’s use of going concern basis of accounting, and determined whether there existed events or circumstances that might cast

283

significant uncertainty over the ability of Yieh Phui Enterprise Co., Ltd. to continue as a going concern. If we believe there may be factors causing significant uncertainties, we are required to remind the users of the Standalone Financial Statements in our audit report of the relevant disclosures therein, or to amend our report if inappropriate disclosure was made. Our conclusion is based on the audit evidence obtained as of the date of the audit report. However, future events or circumstances may cause Yieh Phui Enterprise Co., Ltd. to cease to continue as a going concern.

Evaluated the overall presentation, structure and content of the Standalone Financial Statements (including the related notes), and determined whether the Standalone Financial Statements present related transactions and events fairly.
Obtained adequate and appropriate audit evidence regarding financial information of entities within the Company so as to express opinions for the Standalone Financial Statements. We are responsible for the direction, supervision and execution of auditing Yieh Phui Enterprise Co., Ltd., and for formation of an audit opinion.

Communications between us and the Company’s governing body take account of the scope and timing of the planned audit and significant audit findings, including any significant deficiencies in the internal controls during the audit process.

284

From the matters communicated with the governing body, we determined the key audit matters for Standalone Financial Statements of Yieh Phui Enterprise Co., Ltd. for the year ended in December 31, 2017. Such matters have been explicitly stated in our audit report, unless laws or regulations prevent their disclosures, or, in extremely rare cases, we decide not to communicate such matters in our audit report in consideration that the reasonably anticipated adverse impacts of such communication would be greater than the public interest it would promote.

Crowe Horwath (TW) CPAs CPA: Huang Ling-Wen

CPA: Hsieh, Jen-Yao

No. of the official approval: FSC No. 10200032833 March 21, 2018

285

Yieh Phui Enterprise Co., Ltd. Balance Sheets December 31, 2017, and December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Code Notes Assets	December 31, 20	17	December 31, 2016:	Code Notes Liabilities and Equity	December 31, 2017	December 31, 2016:
	Amount	％
1100 Cash and Cash Equivalents 6(1) 1110 6(2) 1150 6(3) 1170 6(4) 1180 7 1190 6(5) 1195 6(5)7 1200 6(6) 1210 Other receivable - related party 7 1220 Current income tax assets 130X 6(7) 1410 6(8) 1476 8 11XX 1510 6(2) 1523 6(10) 1543 6(11) 1546 6(12) 1550 6(9) 1600 6(13) 1760 6(14) 1840 6(31) 1920 1980 8 1985 Long-term prepaid rent 6(15) 15XX Total non-current assets 1XXX Total asset Current assets Financial assets at fair value through profit or loss - current Notes receivable - net Accounts receivable- Net Accounts receivable - related parties, net Construction contract receivable Construction contract receivables – related parties Other receivables Inventories Prepayments Other financial assets - current Total current assets Non-current assets Financial assets at fair value through profit or loss - non- current Available-for-sale financial assets - non-current Financial assets carried at cost - non-current Bond investments with no active market - non-current Investments accounted for using equity method Property, plant and equipment Investment property, net Deferred income tax assets Refundable deposits Other financial assets - non-current Chairperson: Lin, I-Shou	---------------- ---------------- ================ $1,469,705 33,634 20,494 1,253,935 328,289 175,452 194,461 171,214 966,250 6,508 4,145,137 308,860 180,149 ---------------- 9,254,088 ---------------- 9,999 44,910 549,321 433,401 30,713,470 8,106,718 1,332,100 366,936 43,932 857 86,503 41,688,147 $50,942,235	3 - - 2 1 - - - 2 - 9 1 - ---- 18 ---- - - 1 1 60 16 3 1 - - - ---- 82 ---- 100 ====

286

Yieh Phui Enterprise Co., Ltd. Statements of Comprehensive Income January 1, 2017 ~ December 31, 2017

Unit: In Thousands of New Taiwan Dollars

Code Note 4000 6(26) 5000 6(7) 5900 6100 6200 6000 6900 7010 6(27) 7020 6(28) 7050 6(30) 7070 7000 7900 7950 Income tax expense (gains) 6(31) 8200 8311 8330 8349 8362 8380 8399 8300 6(32) 8500 == 9750 6(33) == Item Operating revenue Operating costs Gross profit (loss) Operating expenses Selling expense Administrative expense Total operating expenses Operating income (loss) Non-operating income and expenses Other income Other gains and losses Finance costs Share of loss (profit) of subsidiaries, associates and joint ventures accounted for using equity method Total non-operating income and expenses Net income (loss) before tax Net income (loss) Other comprehensive income (loss), net Items that are not reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method income tax expenses (gains) related to items that are not reclassified subsequently to profit or loss: Items that may be reclassified subsequently to profit or loss: Unrealized valuation gain (loss) on available- for-sale financial assets Share of other comprehensive income of subsidiaries, associates and joint ventures recognized under equity method Income tax expense (gains) relating to items that may be reclassified to profit or loss. Other comprehensive income (loss), net Total comprehensive income (loss) Basic earnings per share (NTD) Basic earnings per share	2017	％ 100 87 ---- 13 7 1 ---- 8 ---- 5 ---- 1 - -1 1 ---- 1 ---- 6 1 ---- 5 ---- - - - - -2 - ---- -2 ---- 3 ====== ===	2016
	$29,179,218 25,389,583 ----------------- 3,789,635 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- =============== =============== Amount 1,944,199 384,107 2,328,306 1,461,329 210,426 -121,104 -396,624 515,734 208,432 1,669,761 302,356 1,367,405 9,353 -34,051 -5,558 -1,665 -552,889 -85,250 -488,444 $878,961 $0.75		％ $23,867,665 100 84 ----------------- ---- 16 5 2 ----------------- ---- 7 ----------------- ---- 9 ----------------- ---- - - -1 5 ----------------- ---- 4 ----------------- ---- 13 2 ----------------- ---- 11 ----------------- ---- - - - - -3 -1 ----------------- ---- -4 ----------------- ---- 7 ============== ==== ============== Amount 20,009,747 3,857,918 1,396,827 396,364 1,793,191 2,064,727 113,804 -20,049 -355,796 1,210,065 948,024 3,012,751 510,746 2,502,005 -51,013 -37,215 -11,383 -5,850 -949,026 -142,336 -889,385 $1,612,620 $1.37

(Please refer to Notes to Standalone Financial Statements)

Chairperson: Lin, I-Shou

Manager: Wu Lin-Mao Accounting Manager:

287

Yieh Phui Enterprise Co., Ltd. Statements of Changes in Equity January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Yieh Phui Enterprise Co., Ltd. Statements of Changes in Equity January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016	Unit: In Thousands of New Taiwan Dollars
Item	Capital Capital of comm Capital surplus Legal reserve Special reserve Undistributed ear Retained earnings	n Total Equity Exchange differences on translation of foreign financial statements Unrealized gain or loss for available- for-sale financial assets ~~The effective~~ portion of gains and losses of financial instruments designated as cash ~~flow hed~~ges
==== Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Balance, December 31, 2017 Balance, January 1, 2016 Net income (loss) Earnings allocation and distribution: Legal reserve Cash dividends for common stocks Stock dividends for common stocks Total Other comprehensive income (loss) Total comprehensive income (loss) Net income (loss) Other comprehensive income (loss) Total comprehensive income (loss) Changes in associates and joint ventures accounted for using equity method Changes in associates and joint ventures accounted for using equity method Difference between the price received from acquisition or disposal of interest in subsidiaries and book value Changes in ownership interests in subsidiaries Balance, December 31, 2016	$17,180,905 $4,673,787 $2,448,261 $327,757 $608,642 $583,467 $54,642 $7,080 $25,884,541 - - - - 2,502,005 - - - 2,502,005 - - - - -76,845 -809,765 -7,080 4,305 -889,385 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - 2,425,160 -809,765 -7,080 4,305 1,612,620 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - 9,543 - - -11,648 - - - -2,105 - 45,136 - - - - - - 45,136 - 8,665 - - -11,206 - - - -2,541 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 17,180,905 4,737,131 2,448,261 327,757 3,010,948 -226,298 47,562 11,385 27,537,651 - - 250,201 - -250,201 - - - - - - - -687,236 - - - -687,236 1,030,855 - - - -1,030,855 - - - - ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 1,030,855 - 250,201 - -1,968,292 - - - -687,236 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - 1,367,405 - - - 1,367,405 - - - - -19,140 -471,480 7,171 -4,995 -488,444 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - - - - 1,348,265 -471,480 7,171 -4,995 878,961 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- - 5,404 - - -1,328 - - - 4,076 - 131,235 - - - - - - 131,235 - - - - -22,996 - - - -22,996 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $18,211,760 $4,873,770 $327,757 $2,366,597 $-697,778 $54,733 $6,390 $27,841,691 ============ ================================================================================================= =============

Chairperson: Lin, I-Shou

Manager: Wu Lin-Mao

Accounting Manager: LIN,CHIEN-HUNG

288

Yieh Phui Enterprise Co., Ltd. Statements of Cash Flows January 1, 2017 ~ December 31, 2017 January 1, 2016 ~ December 31, 2016

Unit: In Thousands of New Taiwan Dollars

Item	2017		2016
Cash flows from operating activities
Net income (loss) before tax	$1,669,761		$3,012,751
Adjustments:
Income and expense item:
Depreciation	555,656		528,387
Net loss (gain) from financial assets and liabilities at fair value through profit
or loss	912		2,118
Interest expense	396,624		355,796
Interest income	-31,238		-3,696
Dividend income	-73,652		-7,906
Share of loss (gains) of subsidiaries, associates and joint ventures accounted
for using equity method	-515,734		-1,210,065
Loss (gain) on disposal and retirement of property, plant and equipment	27,786		18,408
Reclassification of property, plant and equipment to expense	8,539		15,848
Gain (loss) on disposal of investment	-15		-150
Impairment loss on financial assets	1,060
Impairment loss on non-financial assets			2,564
Others	19,995		52,192
	-----------------		-----------------
Total income and expense items	389,933		-246,504
	-----------------		-----------------
Changes in operating assets and liabilities:
Net changes in operating assets
(Increase) decrease in held-for-trading financial assets	58,988		6,206
(Increase) decrease in notes receivable	-19,714		47,801
(Increase) decrease in accounts receivable	-7,385		-296,416
(Increase) decrease in accounts receivable - related parties	-146,545		268,590
(Increase) decrease in construction contract receivables	277,083		-198,384
(Increase) decrease in other receivables	-37,716		-62,151
(Increase) decrease in inventories	-495,122		-1,460,500
(Increase) decrease in prepayments	-24,559		-77,572
	-----------------		-----------------
Total net changes in operating assets	-394,970		-1,772,426
	-----------------		-----------------
Net changes in operating liabilities
Increase (decrease) in notes payable	-6,365		37,215
Increase (decrease) in accounts payable	-170,702		184,523
Increase (decrease) in construction contract payable	-15,068		-1,467
Increase (decrease) in other payables	-42,864		110,841
Increase (decrease) in provision	27,619		-35,580
Increase (decrease) in advance receipts	-232,972		1,150,161
Increase (decrease) in defined benefit liability, net	-48,044		-22,657
	-----------------		-----------------
Total net changes in operating liabilities	-488,396		1,423,036
	-----------------		-----------------
Total net changes in operating assets and liabilities	-883,366		-349,390
	-----------------		-----------------
Total adjustments	-493,433		-595,894
	-----------------		-----------------
Cash inflow (outflow) from operations	1,176,328		2,416,857
Interest received	29,540		3,298
Dividend received	179,047		25,606
Interest paid	-401,853		-354,151
Income tax refunded (paid)	-445,746		-87,723
	-----------------		-----------------
Net cash provided by (used in) operating activities	537,316		2,003,887
		-----------------		-------

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Cash flows from investing activities:
Acquisition of Bond investments with no active market	-262,747	-170,654
Acquisition of financial assets measured at cost	-68,397	-21,913
Disposal of financial assets carried at cost	15	150
Acquisition of investment accounted for using equity method	-1,751,426	-976,981
Acquisition of property, plant and equipment	-178,732	-181,034
Disposal of property, plant and equipment	-	76
Increase in refundable deposits	-40,088	-
Decrease in refundable deposits	-	1,871
Increase in other receivable - related party	-640,000	-310,000
Acquisition of investment property	-16,263	-
Increase in other financial assets	-46,332	-32,186
Increase in other non-current assets	-	-6,709
Decrease in other non-current assets	2,906	-
	-----------------	-----------------
Net cash provided by (used in) investing activities	-3,001,064	-1,697,380
	-----------------	-----------------
Cash flows from financing activities:
Increase in short-term loans	1,994,908	-
Decrease in short-term loans	-	-1,723,197
Increase in short-term bills payables	310,000	-
Decrease in short-term bills payables	-	-100,000
Increase in long-term loan	4,600,000	1,600,000
Repayment of long-term loan	-3,830,140	-291,200
Cash dividends distributed	-687,236	-
	-----------------	-----------------
Net cash provided by (used in) financing activities	2,387,532	-514,397
	-----------------	-----------------
Net increase (decrease) in cash and cash equivalents	-76,216	-207,890
Cash and cash equivalents, beginning of the period	1,545,921	1,753,811
	-----------------	-----------------
Cash and cash equivalents, end of the period	$1,469,705	$1,545,921
	==============	=================

(Please refer to Notes to Standalone Financial Statements)

Chairperson: Lin, I-Shou

Accounting Manager: LIN,CHIEN-HUNG

290

Yieh Phui Enterprise Co., Ltd. Notes to Standalone Financial Statements

January 1 to December 31, 2017 and 2016

(Amount in Thousand NTD, Unless Otherwise Stated)

I. Company History

Yieh Phui Enterprise Co., Ltd. (hereinafter referred to as the Company) was established in April 1978, currently a listed company in Taiwan Stock Exchange (hereafter referred to as TWSE). The Company engages mainly in the processing, manufacturing marketing and import/export trading of rolled steel coils, refined steel, molded steel, steel / iron wires, galvanized / pre-painted / surface-treated metals.
The Company’s Board of Directors resolved on May 23, 2005 to merge (simplified merger) with Lien Kang Heavy Industrial Co., Ltd, with the Company as the surviving company. The record date of the merger was set on August 30 2005 3. Every 2.5 common shares of Lien Kang Heavy Industrial Co., Ltd. were converted into 1 common share of the Company. The Company issued additional 4,859 thousand common shares for this merger. Rights and obligations of holders of the newly issued shares were the same as those of the Company’s original shareholders.
Lien Kang Heavy Industrial Co., Ltd., incorporated on November 23, 1989, mainly engages in manufacturing, processing and trading of the various mechanical spare parts, as well as pipe installation and engineering design / manufacture / installation.
The Company's steel pipe department, due to its business expansion, was separated from the Company, and was named as Shin Yang Steel Co. Ltd.. Relevant investment on this was approved by the Board of Directors on January 18th, 2011,and a total of 191 employees were transferred to Shin Yang Steel Co., Ltd.
New Taiwan Dollars (NTD) shall be the functional currency of the Company, and the presentation currency of the Company’s financial statements.
II. Approval Date and Procedure of Financial Statements
The Standalone Financial Statements were released on March 21, 2018 after being approved by the Board of
III. Application of New and Amended Standards and Interpretations
(I) Effects of adopting newly-announced and revised IFRSs standards endorsed by Financial Supervisory Commission (“FSC”) and the amended Regulations Governing the Preparation of Financial Reports by Securities Issuers: The Company assessed the effects of adopting the aforementioned standards and interpretations and found no significant effects on the Company’s financial position and operating results, except those stated below:
1.Amendment to IAS 36 “Recoverable Amount Disclosures for Non-financial Assets”
Disclosure of the recoverable amount is not required when a cash-generating unit includes goodwill or intangible assets with indefinite useful lives that are not impaired; disclosure of the recoverable amount is required if the impaired value of an individual asset (including goodwill) or a cash-generating unit is significant in recognition or reversal, and, if such recoverable amount is based on fair value less cost of disposal, disclosure of its fair value hierarchy and the valuation technique(s) and key assumptions used to measure the fair value is also required.After assessment, the amendment will expand the disclosure scope of the impairment recognition or reversal of Company’s non-financial assets.
2.Amendments to Regulations Governing the Preparation of Financial Reports by Securities Issuers: In accordance with the IFRSs endorsed and issued by FSC, the amendment adds disclosure requirements on various accounting items, impairment of non-financial assets, related party transactions, goodwill, as well as emphasizing certain requirements on recognition and measurement.According to the amendment, where the board chairman or president of another company or institution is the same person as the board chairman or president of the Company, or is the spouse or a relative within the second degree or closer of the board chairman or president of the issuer, a party, unless it can be established that no control or significant influence exists, shall be deemed to Furthermore, where the transaction amount or balance of any single related party reaches 10% of the Company's transaction amount or balance of that type of transaction, the Company shall present individually the names and relationships of each such related party.Besides, where the acquired company has significant differences between the expected benefits and the actual benefits after the acquisition, the information shall be disclosed.

When applying the aforementioned amendment retrospectively in 2017, disclosure is required on related party transaction. Please refer to Note 7.

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(II) Effects of not yet applying the newly-announced and revised IFRSs endorsed by the FSC:

The following table summarizes the new, revised, amended standards and interpretations of IFRSs endorsed by

New, revised, amended standards and interpretations	Effective Date Issued by IASB(Note 1)
Amendment to IFRS2 “Classification and Measurement of Share-based Payment	January 1, 2018
Amendment to IFRS4 “Applying IFRS 9 'Financial Instruments' With IFRS 4 Insurance	January 1, 2018
IFRS9 “Financial Instruments”	January 1, 2018
Amendments to IFRS 9 and IFRS 7 in "Mandatory Effective Date and Transition	January 1, 2018
IFRS 15 "Revenue from Contracts with Customers"	January 1, 2018
Amendments to IFRS 15 ‘Clarifications of IFRS 15’	January 1, 2018
Amendments to IAS 7 in "Disclosure Initiative"	January 1, 2017
Amendments to IAS12 “Recognition of Deferred Tax Assets for Unrealized Losses”	January 1, 2017
Amendments to IAS 40 “Transfers of Investment Property”	January 1, 2018
Amendments to IFRIC22 “Foreign Currency Transactions and Advanced Consideration”	January 1, 2018
"Annual Improvements to IFRSs 2014-2016 Cycle"	(Note 2)

Note 1: The aforementioned new, revised or amended standards or interpretations are effective for annual periods beginning on or after the effective dates, unless stated otherwise.

Note 2: The amendment to IFRS 12 is applied retrospectively to annual periods beginning on or after January 1, 2017; the amendment to IAS 28 is applied retrospectively to annual periods beginning on or after January 1, 2018.

Except for the following, the application of the aforementioned new, amended, and revised standards and interpretations 1.IFRS9 “Financial Instruments” and related amendments

(1) Recognition and measurement of financial assets

Financial assets, originally were within the scope of IAS 39 "Financial Instruments: Recognition and Measurement", are subsequently measured at amortized cost or at fair value.

IFRS 9 Requirements on Classification of Financial Assets Are Stated Below:

The Company's debt instruments, if of which the contractual cash flows come solely as payments on principles and as interests on the principle amount outstanding, are classified and measured as follows:

B. For financial assets held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, the financial assets are measured at fair value through other comprehensive income. Interest revenue of such financial assets is recognized in profit or loss by using the effective rate method. Impairment of such financial assets is continuously assessed, and the gains or losses of impairment, or gains or losses of exchange, shall be recognized in profit or loss, while changes in fair value are recognized in other comprehensive income. Upon derecognition or reclassification of this kind of financial assets, the accumulated fair value gains and losses originally recognized in other comprehensive income shall be reclassified from equity to profit or loss. The Company's financial assets not belong to the above classifications are measured at fair value; any changes in fair values are to be recognized in profit or loss.However, the Company may choose to designate an equity investment that is not held for trading to be measured at fair value through other comprehensive income upon initial recognition.Gains or losses of such financial assets, except for dividend income which is recognized in profit or loss, are recognized in other comprehensive income. No subsequent assessment for impairment is required, and the cumulative gain or loss in fair value previously recognized in other comprehensive income cannot be reclassified from equity to profit

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The Company and associates assessed both their financial assets held as of December 31, 2017 and the facts and circumstances on which date, and concluded that the categorization and measurement of the following financial assets would change after their application to IFRS 9:

(a) Investment on listed stocks, emerging stocks, and unquoted equity classified as available-for-sale financial assets are designated as per IFRS 9 to be measured at fair value through profit or loss, and any changes in fair value are recognized in profit or loss.

In addition, unquoted equity measured at cost is required by IFRS 9 to be measured at fair value.

(b) With regard to bond investments that are measured at amortized cost and classified as debt instrument investment with no active market, if their contractual cash flows upon initial recognition come solely from payments of principal and interest on the principal amount outstanding, and their business model objectives are fulfilled by both collecting the contractual cash flows and selling financial assets, they are designated as per IFRS 9 to be measured at fair value through other comprehensive income (FVTOCI).

(2) Impairments of financial assets

IFRS 9 requires that impairment loss on financial assets is recognized by using the “Expected Credit Losses Model”. A loss allowance is required for financial assets measured at amortized cost, bond investments measured at FVTOCI, lease receivables, contract assets arising from IFRS 15 "Revenue from Contracts with Customer", written loan commitments and financial guarantee contracts. A loss allowance for the 12-month expected credit losses is required for a financial asset if its credit risk has not increased significantly since initial recognition. A loss allowance for full lifetime expected credit losses is required for a financial asset, provided its credit risk has increased significantly since initial recognition. However, a loss allowance for full lifetime expected credit losses is required for accounts receivable consisting no material financial component. Besides, for original credit-impaired financial assets, the Company takes into account the expected credit losses on initial recognition in calculating the credit-adjusted effective interest rate. The subsequent loss allowance is measured upon the cumulative expected credit loss. After assessment, the Company thinks the simplified approach is applicable to accounts receivable, contract assets, and lease receivables, of which the loss allowance is measured at an amount equal to full lifetime expected credit losses. Before electing between the 12-month expected credit losses and full lifetime expected credit losses to measure the loss allowance of a debt instrument and a financial guarantee contract, the Company performs an assessment to determine whether the credit risks of such assets have increased significant since initial recognition. The Company expects that application to Expected Credit Losses Model of IFRS 9 will result in an earlier recognition of loss allowance for financial assets. The Company does not restate the comparison information to 2017 when electing to apply IFRS 9 requirements respecting classification, measurement and impairment of financial assets. Cumulative effects of changes of first-time adoption is recognized on first-time adoption date. Any information regarding category changes and reconciliation as a result of application to IFRS 9 will also be disclosed.

293

as follows:
Effects on Assets, Liabilities and Equity Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - non-current Available-for-sale financial assets - non-current Financial Assets Carried at Cost - Non-current Bond investments with no active market - non-current Investments accounted for using equity method Effects on Assets Effects on Liabilities Undistributed earnings Effects on Other Equity Effects on Equity	December 31, 2017: CarryingAmount $33,634 - 9,999 44,910 549,321 433,401 30,713,470 $31,784,735 $- $2,366,597 (636,655) $1,729,942	January 1, 2018 Adjustment toFirst-timeAdopCarryingAmountafter Adju $ - $33,634 657,798 657,798 457,780 467,779 (44,910) - (549,321) - (433,401) - (17,231) 30,696,239 $70,715 $31,855,450 $- $- $51,159 2,417,756 19,556 (617,099) $70,715 $1,800,657
			$33,634 657,798 467,779 - - - 30,696,239
			$31,855,450
			$-
			2,417,756 (617,099)
			$1,800,657

2.IFRS 15 "Revenue from Contracts with Customers"

IFRS 15, which sets up principles for recognizing revenue that apply to all contracts with customers, will supersede IAS 18 "Revenue" and IAS 11 "Construction Contracts" and other interpretations.

When applying IFRS 15, the Company recognizes revenue by applying the following steps:

(1) Identify the contract with the customer;

(2) Identify the performance obligations in the contract;

(3) Determine the transaction price;

(4) Allocate the transaction price to the performance obligations in contracts; and

(5) Recognize revenue upon satisfaction of performance obligations.

Because of application of related requirements of IFRS 15, the Company modifies the presentation of certain accounting items in the balance sheet as follows:

294

(2) Construction retainage withheld by customers in accordance with terms and conditions of a contract aims to assure that contractors satisfy their obligations. Such retainage has no significant financing component as determined by IFRS 15, and is recognized as a contract asset prior to satisfaction of contract obligations. Prior to application of IFRS15, construction retainage receivables were recognized as accounts receivable under IAS 39.

(3) Where there exists an onerous contract with customers, the Company as required will recognize either inventory impairment or provision for onerous contract. Prior to application of IFRS 15, expected losses of construction contracts were measured and adjusted to construction contract receivable (payable).

The effects of applying IFRS 15 retrospectively on assets, liabilities, and equity as of January 1, 2018 are stated as follows:

as follows:
	December 31, 2017		January 1, 2018, After Adjustment
	Carrying Amount	Adjustment to First-time Adoption	Carrying Amount
Accounts receivable	$1,582,224	($31,404)	$1,550,820
Construction Contract Receivable	369,913	(365,675)	4,238
Contract Assets - Current	-	402,949	402,949
Effects on Assets	$1,952,137	$5,870	$1,958,007
Construction contract payable	$14,397	($14,397)	-
Provision for Onerous Contract	-	8,345	8,345
Provision - Current	-	1,287,264	1,287,264
Advance receipt	1,275,342	(1,275,342)	-
Effects on Liabilities	$1,289,739	$5,870	$1,295,609
Effects on Equity	$ -	$ -	$ -

Aside from the aforesaid effects, as of the issuance date of the Standalone Financial StatementS, the Company continuously assesses the effects of the amendments to other standards and interpretations. The result shall be disclosed when the assessment is completed.

295

(III) Effects of IFRSs issued by IASB but not yet endorsed by the FSC:

(III) Effects of IFRSs issued by IASB but not yet endorsed by the FSC:
New, revised, amended standards and interpretations	Effective Date Issued by IASB(Note 1)
Amendments to IFRS 9, "Prepayment Features with Negative Compensation"	January 1, 2019 (Note 2)
Amendment to IFRS10 and IAS 28 “Sales or Contributions of Assets between Its
Associate/Joint Venture”	Not yet decided
IFRS 16 "Leases"	January 1, 2019 (Note 3)
IFRS17 “Insurance Contracts”	January 1, 2021
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)'	January 1, 2019
IFRIC 23 "Uncertainty over Income Tax Treatments"	January 1, 2019
Annual Improvements to IFRSs 2015 - 2017 Cycle	January 1, 2019

Note 1: The aforementioned new, revised or amended standards or interpretations are effective for annual periods beginning on or after the effective dates, unless stated otherwise.

Note 2: FSC permits companies to elect to an earlier application of such amendment beginning on or after January 1, 2018.

Note 3: FSC promises to declare on December 19, 2017 that all enterprises within the territory of R.O.C. are applying IFRS 16 beginning on or after January 1, 2019.

Except for the following, the application of the aforementioned new, amended, and revised standards and interpretations should not have any material impact on the Company’s accounting policies:

1.IFRS 16 "Leases"

IFRS 16, which governs the accounting standards for leases, will supersede IAS 17 "Leases" and other relevant interpretations.When IFRS 16 is applicable and the Company as lessee, the Company shall recognize in the standalone balance sheets the right-of -use assets and lease liabilities for all leases, except for low-value and shortterm leases which shall be subject to accounting standards similar to "operating leases" in IAS 17.The standalone statements of comprehensive income shall state clearly and respectively the depreciation expense of the right-ofuse assets, the interest expense accrued on the lease liability. The interest should be calculated using the effective rate method.In the standalone statement of cash flows, cash payments for principle of lease liabilities shall be classified in financing activities, whereas cash payments for interest of lease liabilities shall be classified in operating activities.IFRS 16 is not expected to have any material impact on the accounting of the Company as lessor.

Upon the effectiveness of IFRS 15, the Company may elect to apply the Standard either retrospectively to each prior reporting period presented or retrospectively recognize the cumulative effect of initial application to this Standard at the date of "initial application".

2.IFRIC 23 "Uncertainty over Income Tax Treatments"

Per IFRIC23 interpretation, when there is an uncertainty over income tax treatment, the Company shall assume that the taxation authorities shall examine all the relevant data acquired. If the Company concludes that it is probable that its tax treatment will be accepted by the taxation authorities, the Company has to determine taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment included in its income tax filings.If it’s not probable that its income tax accounting treatment will be accepted by the taxation authorities, the Company shall use the most likely amount, or expected value to determine taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates. Provided, however, that the decision should be based on which method provides better predictions of the resolution of the uncertainty.Whenever changes in facts or situation occur, the Company shall again access its judgment and estimates.The Company may elect to apply retrospectively IFRIC 23 without using hindsight, or to recognize the cumulative effects of applying IFRIC 23 retrospectively at the initial application date.Aside from the aforesaid effects, as of the issuance date of the Standalone Financial StatementS, the Company continuously assesses the effects of the amendments to other standards and interpretations. The result shall be disclosed when the assessment is completed.

296

IV. Summary of Significant Accounting Policies

Accounting policies applied in preparing the standalone financial statements are listed below.Unless otherwise stated, the policies shall be applicable to all reporting periods presented.

(I) Statement of Compliance

The standalone financial statement has been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers

(II) Preparation Basis
Except for the following significant items, the standalone financial statements have been prepared under the historical cost convention:
(1) Financial assets and liabilities measured at fair value through profit or loss (including derivatives).
(2) Available-for-sale financial assets measured at fair value.
(3) Liabilities for cash-settled share-based payment agreement at fair value.
(4) Defined benefit liability is derived from retirement plan assets less the present value of net defined benefit obligation.
Critical accounting estimates are required when preparing financial statements based on the IFRSs endorsed by FSC. When the Company adopts the accounting policies, the management is required to exercise judgments on highly judgmental or complex items or significant assumptions and estimates with regards to the standalone financial statements. Please refer to Note 5 for details. 3. In preparing the standalone financial statement, subsidiaries, associates and joint ventures are accounted for using equity method. To assure consistency between the standalone financial statement and the consolidated financial statement on the current profit or loss, other comprehensive income, and equity , any accounting differences arising from the standalone preparation basis and the conolidated preparation basis are to be adjusted by adusting “Investments Accounted for Using Equity Method”, “Share of Profit (Loss) of Subsidiaries, Associates and Joint Ventures Accounted for Using Equity Method ”, “Share of Other Comprehensive Income of Subsidiaries, Associates and Joint Ventures Accounted for Using Equity Method” and other equity items.
(III) Foreign Currency Translation
Foreign Currency Transaction and Balance

(1) Foreign currency transaction is translated to the functional currency by using the spot exchange rate on the trade date or measurement date. Any translation differences incurred are to be recognized in the current profit or loss.

(2) Balances of monetary assets and liabilities denominated in foreign currencies are adjusted at the spot exchange rates prevailing at the balance sheet date. Exchange gains or losses arsing from such adjustments are recognized in profit or loss

(3) Non-monetary items measured at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined and exchange differences arising are included in profit or loss for the year. However, where the changes in fair value are recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. Nonmonetary items measured at historical cost that are denominated in foreign currencies are recognized using the exchange rates as at the transaction date and are not retranslated.

Translation from Foreign Operations
(1) The operating results and financial position of all subsidiaries and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
A. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the end of the financial reporting period;
B. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

C. All resulting exchange differences are recognized in other comprehensive income.

(2) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale.In addition, if the Company still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

(3) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, if the Company still retains partial interests in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in these foreign operations.297

(IV) Classification of Current and Non-current Assets and Liabilities
1.Rolled Steel (Product) Department
(1) Assets that meet one of the following criteria are classified as current assets:
- A. Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
- B. Assets held primarily for trading purposes;
- C. Assets that are expected to be realized within 12 months after the balance sheet date;
- D. Cash and cash equivalents, excluding those that are restricted, or to be exchanged or used to settle liabilities at least twelve months after the balance sheet date.

Otherwise they are classified as non-current assets.

(2) Liabilities that meet one of the following criteria are classified as current liabilities:
A. Liabilities that are expected to be settled within the normal operating cycle;
B. Assets held primarily for trading purposes;
C. Liabilities that are expected to be settled within 12 months after the balance sheet date;

D. Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Otherwise they are classified as non-current liabilities

2.Heavy Industry Department

(V) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank deposits and shortterm, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including time deposits with terms equal to or less than three months).

(VI) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.Financial assets and financial liabilities are recognized initially at fair value.Upon initial recognition, transaction costs that are directly attributable to the acquisition or issuance of the financial assets and financial liabilities (except for financial assets and financial liabilities at fair value through profit or loss) should be added to, or subtracted from the fair value of such financial assets and financial liabilities.Transaction costs that are directly attributable to financial assets at FVTPL or financial liabilities at FVTPL are recognized immediately in profit or loss.

(VII) Available-for-sale financial assets measured at fair value.

Financial assets at FVTPL refer to financial assets held for trading or financial assets designated upon initial recognition at fair value through profit or loss.Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term.Derivatives are also categorized as financial assets held for trading unless they are designated as hedging instruments pursuant to hedge accounting. Financial assets that meet one of the following criteria are designated as at FVTPL on initial recognition:

(1) Hybrid (combined) contracts; or

(2) They eliminate or significantly reduce a measurement or recognition inconsistency; or

(3) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.

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On a regular way purchase or sale basis, financial assets at FVTPL are recognized and derecognized using trade date accounting by the Company.
Financial assets at FVTPL are initially recognized at fair value. Related transaction costs are recognized in profit or loss. Such financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of such financial assets are recognized in profit or loss. For equity instrument investments that do not have quoted prices in an active market or derivatives linked to those investments that do not have quoted prices in an active market and must be settled by delivery of such unquoted equity instruments, when their fair value cannot be reliably measured, the Company would classify them as "financial assets measured at cost ".

(VIII) Loans and Receivables

Accounts receivable- Net

Bond investments with no active market

(1) This refers to bond investments that do not have quoted prices in an active market but have fixed or determinable payments and meet the following criteria:

A. Not classified as at FVTPL.

B. Not designated as available-for-sale.

C. Not for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration.

(2) On a regular way purchase or sale basis, bond investments with no active market are recognized using trade date accounting.

(3) Bond investments with no active market are recognized at fair value as of the transaction date plus transaction cost upon initial recognition. They are subsequently measured at amortized cost using the effective interest method, less any impairment. Amortization of discounts or premium under the effective interest method is recognized in profit or loss.

(IX) Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories
On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting.
Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. For equity instrument investments that do not have quoted prices in an active market or derivatives linked to those investments that do not have quoted prices in an active market and must be settled by delivery of such unquoted equity instruments, when their fair value cannot be reliably measured, the Company would classify them as "financial assets measured at cost ".

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(X) Impairments of Financial Assets

The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as (1) Significant financial difficulty of the issuer or debtor;
(2) A breach of contract, such as a default or delinquency in interest or principal payments;
(3) The Company granted the borrower a concession that a lender would not otherwise consider for economic or legal reasons relating to the borrower’s financial difficulty;
(4) It becomes probable that the borrower will enter bankruptcy or other financial reorganization;

(5) The disappearance of an active market for that financial asset because of financial difficulties; or (6) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local unfavorable economic conditions that correlate with defaults on the assets in the group;

(7) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or

(8) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows in accordance with the category of financial assets:
(1) Loans and Receivables

(2) Financial Assets Carried at Cost

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

(3) Available-for-sale Financial Assets

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

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(XI) Derecognition of Financial Assets

The Company derecognizes a financial asset when one of the following conditions is met:

The contractual rights to receive cash flows from the financial asset expire
The contractual rights to receive cash flows from the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.
To transfer the contractual rights to receive cash flows of ownership of the financial asset but the Company has not retained the control of financial asset. On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received or receivable and the cumulative gain or loss that had been recognized in “other equity – unrealized gain/loss of available-for-sale financial assets” under other comprehensive income is recognized in profit or loss.

(XII) Inventory

(XIII) Construction Contracts

A construction contract is defined as a contract specifically negotiated for the construction of an asset in IAS 11 "Construction contracts". When the outcome of a construction contract can be estimated reliably and it is probable that the contract is profitable, revenue is recognized based on the proportion of work completed using the percentage of completion method during the duration of the contract. Contract costs are recognized as an expense when incurred. The stage of completion is determined based on the proportion that contract costs incurred for work performed to the end of reporting date bear to the estimated total contract costs. When it is probable that total contract costs will exceed total contract revenues, the expected loss shall be recognized as an expense immediately. If the outcome of a construction contract cannot be estimated reliably, revenue shall be recognized only to the extent of incurred contract costs that is probable to be recovered.
Contract revenue shall comprise variations in contract work, claims and incentive payments to the extent that they are agreed on by the customer and are capable of being reliably measured. The Company should present the gross amount due from customers for contract work, i.e. when costs incurred plus recognized profits (less recognized losses) exceeds the progress billings, as an asset and recognize it as constrction contract receivables. If the progress billings exceed the sum of costs incurred plus recognized profits (less recognized losses), the amount is presented as a liability and recognize it as construction contract receivables.

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(XIV) Investments Accounted for under the Equity Method - Subsidiaries /Associates
Subsidiaries refer to entities (including structured entities) controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Unrealized gains or losses aring from the transactions between the Company and its subsidiaries have been eliminated.Accounting policies of subsidiaries are adjusted, when necessary, to remain consistent with those of the Company.
After acquisition, the Company’s share of its subsidiary’s profits or losses is recognized in profit or loss, and its share of other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in an subsidiary equals or exceeds its interest in the subsidiary, the Company shall continue to recognize losses in proportion to its shareholding percentage in such subsidiary.
A change in the ownership interest of a subsidiary without a lose of control (transactions with non-controlling interests) is accounted for as an equity transaction, i.e. transactions with owners in their capacity as owners.Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
When the Company loses control of a subsidiary, any investment retained in the former subsidiary should be remeasured at fair value and be regarded as the fair value on initial recognition of a financial asset or, when appropriate, as the cost on initial recognition of an investment in an associate or a joint venture. difference between fair value and carrying amount should be recognized in profit or loss.All amounts recognized in other comprehensive income in relation to that subsidiary should be accounted for on the same basis as would be required if the Company had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to profit or loss when it loses 6. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20% or more of the voting power of the investee.Investments in associates are accounted for using the equity method and are initially
The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income.When the Company’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables) the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.Accounting policies of associates are adjusted, when necessary, to remain consistent with those of the Company.
If the Company does not subscript to new shares issued by an associate in proportion to its shareholding percentage in the associate and results in a change in its investment percentage (while still maintains significant influence), the changes in net equity would be adjusted through “capital surplus” and “investments accounted for under the equity method”.If the Company's investment percentage in the associate is reduced, in addition to the above adjustments, the Company should also reclassify to profit or loss the proportion of the gain or loss which is previously recognized in other comprehensive income and relative to that reduction in ownership interest when such gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. 10. When the Company disposes its investment in an associate and loses significant influence over this associate, the accounting treatment for amounts previously recognized in other comprehensive income in relation to the associate are the same as the one required if the relevant assets or liabilities were directly disposed of. That is, if gain/loss previously recognized in other comprehensive income will be reclassified to profit or loss upon disposal of relevant assets or liabilities, such gain/loss will be reclassified from equity to profit or loss when the Company loses significant influence over the associate.If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach. 11. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the profit or loss for the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss for the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis.

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(XV) Property, Plant and Equipment

Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.The carrying amount of the replaced part is derecognized.All other repairs and maintenance are recognized in profit or loss when incurred.
Land is not depreciated.Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives.The Company reviews each assets' residual values, useful lives and depreciation methods at the end of each financial year. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings
Main building for plants The Office Main Buildings Building ancillary	40 ~ 55 years 40 ~ 60 years 8 ~ 35 years
Machinery and equipment	2 ~ 35 years
Other equipment	3 ~ 27 years

Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is the difference between proceeds from disposal and carrying amount of the asset, and is recognized in profit or loss.
(XVI) Leased Assets / Lessee
Based on the conditions of the contract, a lease that transfers substantially all the risks and rewards incidental to ownership of an asset to the Company is classified as a finance lease.

(3) Property, plant and equipment acquired through a finance lease is depreciated over its useful life.If there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset shall be depreciated over the shorter of the lease term and its useful life.

Operating leases are leases other than finance leases.

For operating leases, lease payments (excluding incentives from the lessor) are recognized as an expense on a straight-line basis during the lease term.

(XVII) Investment Property

Investment property is property held to earn rentals or for capital appreciation or both (including property under construction for such purpose).It also includes land held for a currently undetermined future use.An investment property is measured initially at its cost (including transaction cost) and subsequently measured at cost less accumulated depreciation and impairment loss.The Company applies the straight-line method for depreciation.Investment property under construction is recognized at cost less accumulated impairment loss. Costs include professional service fee and borrowing costs that meet the conditions for

capitalization.Depreciation on those assets begins when they reach their estimated useful conditions.Gain or loss arising from the derecognition of an investment property, i.e. the difference between proceeds from disposal and the carrying amount of the asset, is recognized in profit or loss for the year.

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(XVIII) Impairments of Non-Financial Assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized when the asset's carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an asset's fair value less costs to sell or value in use.When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist, the impairment loss shall be reversed to the extent of the loss previously recognized in profit or loss.

(XIX) Provision

Provisions (including estimates on short-term employee benefits and sales returns and allowances)are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated.Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used is a pre-tax discount rate which reflects current market assessments of the time value of money and the risks specific to the liability. The discounted amortization amount is recognized as interest expense.Provisions are not recognized for future operating losses.

(XX) Employee Benefits

1. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid and should be recognized as expenses in the period when the employees render service.

Pensions
(1) Defined contribution plan

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

(2) Defined benefit plans

A. Net obligation under a defined benefit plan is defined as the present value of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The amount recognized is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets.The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method.The discount rate employed is the market yieds on government bonds (at the balance sheet date) of a currency and term consistent with the currency

B. The remeasurement amount of defined benefit plans is recognized in other comprehensive income as it arises and presented in retained earnings.

C. Expenses associated with past service costs are recognized immediately in profit or loss.
Compensation to employees and remuneration to directors and supervisors

Compensation to employees and remuneration to directors and supervisors are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated.If the accrued amounts are different from the actual distributed amounts resolved by the shareholders subsequently, the differences should be accounted for as changes in accounting estimates.

Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee's employment before the normal retirement date, or an employee's decision to accept an offer of redundancy benefits in exchange for the termination of employment.The Company recognizes expenses at the earlier of when it can no longer withdraw the termination contracts or when it recognizes relevant restructuring costs.Benefits due more than 12 months after balance sheet date are discounted to their present value.

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(XXI) Financial Liabilities and Equity Instruments

Classification of financial liabilities and equity instruments
The Company classifies its issuance of debts and financial instruments as financial liabilities or equity in accordance with the definition of financial liabilities and equity instruments, as well as the contractual substance

2. Equity instruments

Equity instruments refer to any contracts containing an entity’s residual interest after subtracting liabilities from assets.Equity instruments issued by the Company is recognized as the net of proceeds less direct issuance costs.

3. Financial Liabilities

Financial liabilities that are not held for trading and are not designated as at FVTPL are accounted for at amortized costs at the end of subsequent accounting periods.

4. Derecognition of financial liabilities

The Company will derecognize a financial liability only when the obligation under the obligation is discharged, cancelled or expired.When a financial liability is derecognized, the difference between the carrying value of financial liability derecognized and the consideration paid or payable (including any non-cash asset transferred or liability assumed) should be recorded into profits or losses of the current period.

(XXII) Capital

Common shares are classified as equity.Incremental cost that can be attributed directly to the issuance of new shares or warrants is recognized as a deduction to proceeds under equity.

(XXIII) Share-based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity.The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions.Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.
For the cash-settled share-based payment arrangements, the fair value of liabilities assumed are recognized as compensation cost and liabilities over the vesting period and measured as the fair value of equity instruments granted on each balance sheet and settlement dates. Changes are recognized in profit or loss.
(XXIV) Income tax
Income tax expense includes current income tax and deferred income tax.Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

2.The current income tax expense is calculated by using the Company’s taxab le income from operation and the tax rates enacted or substantively enacted at the balance sheet date.Management periodically evaluates positions taken in tax returns in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. Undistributed earnings. According to Income Tax Act, any undistributed surplus earnings should bear an additional 10% income tax, which is recognized as “income tax expense on undistributed earnings” in accordance with the actual undistributed amount in the year in which the shareholders meeting approves the earnings distribution proposal.

Deferred income tax adopts the balance sheet approach. It is recognized as a temporary difference between the tax bases of assets and liabilities and their carrying amounts in the standalone balance sheet at the reporting date.However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is

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Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences, unused tax losses and unused income tax credits can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed. 5. Current income tax assets and liabilities are offset when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
Tax incentives from acquisitions of equipment or technology, research and development expenditures, employees' training costs and equity investments are recognized in the form of tax credits.
(XXV) Revenue Recognition
Sales of goods

(1) The Company engages mainly in the processing, manufacturing of galvanized / pre-painted / surfacetreated rolled steel coils.Revenue is measured at the fair value of the consideration received or receivable, taking into account sales returns, rebates and discounts, for the sale of goods to external customers in the ordinary course of the Company’s activities. Revenue is recognized when the following conditions are met:

(A) Significant risks and rewards related to the ownership of goods are transferred to the customers. (B) The Company no longer participates in management of the product nor maintains effective control. (C) Revenue amount can be reliably measured.
(D) Future economic benefits related to the transaction are highly possible to be obtained by the Company.

(2) The Company offers customers volume discounts and right of return for defective products. The Company estimates such discounts and returns based on historical experience. Provisions for such liabilities are recorded when the sales are recognized.
Revenue from services, technical services, leases, dividends and interests
(1) The sales of service occurs from services rendered in accordance with contracts and is recognized as revenue by reference to the stage of completion of the contract activity. If a specific task is far more important than the rest, the recognition of revenue should be delayed until that specific task is completed. (2) Revenue of technical service rendered is recognized in accordance with contracts when it is probable that the economic benefits associated with the transaction will flow to the Company and the amount of revenue can be measured reliably.

(3) The rental revenue shall be recognized as revenue in the duration of the lease based on straight-line (4) Dividend revenue from investments is recognized when the rights of shareholders to receive payment are established, provided that the economic profits arising from such transaction are highly probable to flow to the Company and the amount of such benefits can be reliably measured.

(5) Interest revenue is recognized based on outstanding principal and applicable effective interest according to passage of time on an accrual basis.

Construction Contracts

Please refer to Note 4 (13) for details on the recognition of revenue from construction contracts.

(XXVI) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the respective assets until the asset is ready for its intended use or sale.Income earned on the temporary investment of the borrowing specifically for the capital expenditure of a qualifying asset is deducted from borrowing cost that meets the capitalization condition.Except for the above, other borrowing costs are recognized as an expense.

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V. The Primary Sources of Uncertainties in Major Accounting Judgments, Estimates, and Assumptions
Major accounting judgments, estimates, and assumptions adopted in applying the Company’s accounting policies for the preparation of this standalone financial statement are as follows:
(I) Major judgments
Financial assets - impairment of equity investments Pursuant to IAS 39, major judgements from the Company are required in determining whether a financial asset - equity investment is impaired.The Company evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.
Financial Assets Carried at Cost

Equity instruments held by the Company with no public quotes from active markets, when recently accessible information is not sufficient to determine their fair value and thus their value cannot be reliably measured, are classified as "financial assets measured at cost"

Revenue Recognition
The determination of whether the Company is acting as principal or agent in a transaction is based on an evaluation of the Company’s exposure to the significant risks and rewards associated with the sale of goods in accordance with the business model and substance of the transaction. When the Company is exposed to significant risks and rewards associated with sale of products or provision of services, it is acting as a principal and the revenue is recognized as the gross amount of economic benefit receivable or received. If the Company is acting as an agent, revenue recognized equals to the net amount of transaction. The Company engages mainly in the processing, manufacturing of galvanized / pre-painted / surface-treated rolled steel coils. As it meets the following criteria, gross amounts are recognized as revenue.
(1) The Company is primarily responsible for providing of goods or services
(2) The Company assumes inventory risk.
(3) The Company assumes customer credit risk.
(II) Critical accounting estimates and assumptions
Revenue Recognition

Revenue from sales of goods is principally recognized when the profits are already collected.Provisions for relevant returns and allowances are estimated based on historical experience and other known factors and recognized as a deduction item to revenue in the period when goods are sold. The Company regularly review the reasonability of such estimates. As of December 31, 2017, provisions for sales return and allowance were NT$ 20,655 thousand.

Impairment assessment of tangible and intangible assets
The Company assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilized and industrial characteristics. Any changes in economic circumstances or in the estimates due to the Company’s strategy might cause material impairment on assets in the future. For the year ended December 31, 2017, the Company recognized impairment loss of NT$ 0 thousand.
Impairment assessment of investments accounted for using equity method

When there is an indication that an investment accounted for using equity method may be impaired and its carrying amount cannot be recovered, the Company would immediately conduct impairment assessment on the asset. The Company evaluates recoverable amount based on the discounted expected future cash flows or cash dividends from the investees and the discounted future cash flows from disposal of the investment. It also analyses the reasonability of relevant assumptions. For the year ended December 31, 2017, the Company recognized impairment loss of NT$ 0 thousand.

Realizability of deferred income tax assets

Deferred income tax assets are recognized only to the extent that it is probable that future taxable income will be available against which the deductible temporary differences can be utilized. Assessment of the realizability of deferred income tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc. Any changes in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred income tax assets. As of December 31, 2017, the Company recognized deferred income tax assets of NT$ 366,936 thousand.

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Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgement and estimates. The Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. As of December 31, 2017, the carrying amount of the Company’s inventory was NT$ 4,145,137 thousand. (less NT$ 1,544 thousand of allowance for inventory valuation and obsolescence loss)

Calculation of net defined benefit liabilities

In calculating the present value of defined benefit obligations, the Company must exercise judgements and estimates in determining relevant actuarial assumptions, including the discount rate and future growth rate for salary, on the balance sheet date. Any hanges in the actuarial assumptions may have caused material impacts on the Company’s defined benefit obligations. As of December 31, 2017, the carrying amount of the Company’s net defined benefit liabilities was NT$ 647,450 thousand.

Financial assets – fair value assessment on unlisted stocks with no active markets

Unlisted stocks with no active markets held by the Company are carried at cost net of impairment losses as at the balance sheet date. As the range of reasonable estimates on fair value is significant and various probabilities cannot be reasonably assessed, management of the Company deems the fair value cannot be measured reliably. VI. Descriptions for Major Accounting Subjects

(I) Cash and Cash Equivalents

VI. Descriptions for Major Accounting Subjects (I) Cash and Cash Equivalents
Item Cash Checking deposits Demand deposits Cash equivalents Time deposits within three months Total	December 31,2017: $1,940 233,957 1,204,048 29,760 $1,469,705	December 31,2016:
		$1,890 240,190 1,239,341 64,500
		$1,545,921

No cash or its equivalent was pledged as collateral by the Company.

(II) Financial Assets and Liabilities measured at fair value through profit or loss

Item Assets: Non-derivative financial assets - current Bond funds Non-derivative financial assets – non-current Financial bonds Liabilities: Derivative financial liabilities – current Cross currency swap contracts	December 31,2017: $33,634 $9,999 $1,751	December 31,2016:
		$91,783
		$9,999
		$-

The Company’s net income (loss) recognized for 2017 and 2016 were NT$ (912) thousand and NT$ (2,367) thousand, respectively.
No financial asset at fair value through profit or loss was pledged by the Company as collateral.
The Company enters cross currency swaps contracts with banks to hedge exchange rate risk of assets denominated in foreign currencies. However, as the Company does not plan on adopting hedge accounting, those contracts are accounted for as financial instruments at fair value through profit or loss upon initial recognition. Outstanding contracts are as follows:

December 31, 2017

Amount (Thousands of NTD) USD 6,000 December 31, 2016: None	Due Date 107. 3.26	Swap Rate Collected/Paid Interest Rate USD/NTD 29.98 2.69464%/1.17%

308

(III) Notes receivable - net Item Notes receivables Less: Changes in allowance for doubtful accounts: Notes receivable - net	December 31,2017: December 31,2016: $20,583 $869 (89) (4) $20,494 $865

1.As of December 31, 2017 and 2016, no notes receivable was pledged as collateral by the Company.

2.Please refer to Note 7 (3) 3 for related party transactions.

(IV) Accounts receivable- Net Item Accounts receivable Less: Changes in allowance for doubtful accounts: Accounts receivable- Net	December 31,2017: $1,259,389 (5,454) $1,253,935	December 31,2016:
		$1,252,004 (5,955)
		$1,246,049

The Company’s accounts receivables that are not overdue nor impaired all meet the credit standards stipulated based on the counterparties' industrial characteristics, operation scale and profitability. The average collection period for Carbon Steel Department and is 30 to 60 days. The collection period for Engineering Department is based on contracts.
The Company does not have significant overdue accounts receivables or notes receivables that are not impaired.
Changes in allowance for doubtful accounts: (Including notes receivables, accounts receivables and accounts receivables - related parties)

	2017
Impairment loss by individual assessment $ - 4,659 - - $4,659	Impairment loss by group assessment $6,557 (4,659) - - $1,898 2016	Total
		$6,557 - - -
		$6,557

Impairment loss by individual assessment $ - - - - $-	Impairment loss by group assessment $6,557 - - - $6,557	Total
		$6,557 - - -
		$6,557

309

As of December 31, 2017 and 2016, the recognized bad debt allowance in determined impaired accounts receivable Aging analysis of impaired accounts receivable is stated as follows:

Not past due 0~30 days past due 31~180 days past due 181~365 days past due Over 1 year past due Total	December31,2017: $ - - - 4,659 $4,659	December31,2016:
		$ - - - -
		$-

As of December 31, 2017 and 2016, no accounts receivable was pledged as collateral by the Company.

(V) Construction contract receivable (payable)

(V) Construction contract receivable (payable)
Less: Changes in allowance for doubtful accounts: Item Total costs incurred and profits recognized Less: Allowance for price decline Less: Construction progress payment Net assets and liabilities of undergoing contracts listed as: Construction contract receivables – non-related parties Construction contract receivables – related parties Construction contract payables – non-related parties Construction contract payables – related parties (VI) Other receivables Item Business tax refundable Purchase allowance receivable Insurance claims receivables Interest receivable Others Total Net	December 31,2017: $3,378,225 (8,345) (3,014,364) $355,516 $175,452 194,461 (14,330) (67) $355,516 December 31,2017: $136,500 29,146 4,965 264 339 $171,214 - $171,214	December 31,2016:
		$2,567,715 (3,752) (1,946,432)
		$617,531
		$301,108 345,888 (29,402) (63)
		$617,531
		December 31,2016:
		$78,000 47,999 8,018 192 41
		$134,250 -
		$134,250

Insurance claims receivables are amounts to be claimed from the insurance company for the estimated loss of typhoon

(VII) Inventory and Cost of Sales

Item Rolled Steel (Product) Department Raw materials Supplies Work in progress Finished goods By-products and scraps Subtotal Less: allowance for inventory valuation and Net Total Net Heavy Industry Departments Raw materials Supplies Subtotal Less: allowance for inventory valuation and	December 31,2017: December 31,2016: $1,014,337 $857,320 15,541 14,575 743,493 610,016 2,173,086 1,953,614 67,082 55,372 $4,013,539 $3,490,897 (1,250) (1,016) $4,012,289 $3,489,881 $129,738 $158,000 3,404 3,456 $133,142 $161,456 (294) (1,322) $132,848 $160,134 $4,145,137 $3,650,015

310

Inventory gains (losses) in 2017 and 2016 recognized as cost of sales are as follows:

Unabsorbed manufacturing overheads Item Cost of inventories sold Engineering costs Processing costs Inventory valuation losses and obsolescence loss (recover gain) Insurance claims Total operating expenses	2017 $24,177,362 1,028,647 116,747 63,028 3,799 - $25,389,583	2016
		$18,316,892 1,594,832 109,853 18,796 (27,958) (2,668)
		$20,009,747

The Company recognized inventory valuation loss (recovery gain) of NT$ 3,799 thousand and NT$ (27,958) thousand for 2017 and 2016, respectively. The amounts recognized are results either of the recovery of net realizable value because the Company raised prices for certain products due to market stabilization, or of the write-down of inventory to net realizable value.
There is no inventory pledged as collateral by the Company.

(VIII) Prepayments

(VIII) Prepayments
Item Prepaid material purchase Sea freight prepaid Insurance claims Prepaid rental Prepaid royalty Other prepayments Total E-Da Development Corp. Associates without significance Subtotal Total Subtotal Associates Associates with significance: Yieh United Steel Corporation Eliter International Corp. Tangeng Iron Works Co., Ltd. Yieh Phui (Hong Kong) Holdings Limited CHAMPION LOGISTIC INC. Yieh Hsing Enterprise Co., Ltd. Kuo Chang Enterprise Co., Ltd. United Brightening Development Corp. Others (IX) Investments accounted for using equity method Investee Subsidiaries:	December 31,2017: $195,718 57,145 27,083 4,365 2,906 21,643 $308,860 December 31,2017: $9,952,223 1,709,343 1,481,220 1,263,133 1,869,190 2,774,518 $19,049,627 $4,229,446 2,764,614 1,374,311 1,130,773 2,164,699 $11,663,843 $30,713,470	December 31,2016:
		$170,362 57,342 28,228 5,494 2,906 19,969
		$284,301
		December 31,2016:
		$9,818,285 1,697,847 1,596,329 690,453 1,532,379 2,148,251
		$17,483,544
		$3,969,169 2,826,191 1,357,233 1,201,890 2,208,298
		$11,562,781
		$29,046,325

311

Subsidiaries:
(1) For information of the Company’s subsidiaries , please refer to Note 4 (3) of the 2017 consolidated financial statements.
(2) Investments accounted for using equity method and the Company’s share of profit or loss and share of other comprehensive income in them are calculated based on financial statements audited by a certified public accountant, except for HSING JUI INVESTMENTS LIMITED in 2017 and HSING JUI INVESTMENTS LIMITED 、 LIAN SO(H.K.)CO., LIMITED and WORTHING HONOR HOLDINGS LTD. in 2016. However, management of the Company does not think there would be a material adjustment if financial statements of the afore-mentioned subsidiaries had been audited by a certified public accountant.
Associates:
(1) Major associates of the Company are as follows:

Company Name Yieh United Steel Corporation Eliter International Corp. Tangeng Iron Works Co., Ltd. E-Da Development Corp.	ShareholdingPercentage
	December31,2017 December31,2016: 24.63% 24.39% 32.84% 32.84% 11.30% 11.30% 28.44% 28.44%

Please refer to Table 9 and Table 10 in Note 13 for the nature of business, main operation location and countries of registration of the associates listed above.

(2)The summarized financial information in respect of the Company’s major associates is as follows: A. Balance Sheets

A. Balance Sheets
Equity Share of net assets of associates Unrealized gain/loss from transactions with associates Carrying amount of associate Carrying amount of associate Current assets Non-current Assets Current Liabilities Non-current liabilities Non-current Assets Current Liabilities Non-current liabilities Equity Share of net assets of associates Unrealized gain/loss from transactions with associates Current assets	Yieh United Steel Corporation
	December 31,2017 December 31,2016: $9,805,569 $7,877,307 37,983,895 38,915,187 17,603,463 20,599,883 12,879,418 9,917,563 $17,306,583 $16,275,048 $4,262,878 $3,969,169 (33,432) - $4,229,446 $3,969,169 Eliter International Corp.	December 31,2016:
		$7,877,307 38,915,187 20,599,883 9,917,563
		$16,275,048
		$3,969,169 -
		$3,969,169
	December 31,2017 $7,093,106 4,696,365 1,712,810 1,514,299 $8,562,362 $2,812,179 (47,565) $2,764,614	December 31,2016:
		$7,081,451 4,445,457 1,921,210 855,778
		$8,749,920
		$2,873,779 (47,588)
		$2,826,191

312

Tangeng Iron Works Co., Ltd.

	December 31, 2017	December	31, 2016:
Current assets	$4,680,015		$4,408,426
Non-current Assets	24,263,252		24,133,403
Current Liabilities	4,501,392		4,188,691
Non-current liabilities	9,948,594		10,010,973
Equity	$14,493,281		$14,342,165
Share of net assets of associates	$1,374,311		$1,357,233
Unrealized gain/loss from transactions with associates	-		-
Carrying amount of associate	$1,374,311		$1,357,233
	E-Da Development Corp.
	December 31, 2017	December	31, 2016:
Current assets	$459,792		$315,078
Non-current Assets	8,732,673		9,076,611
Current Liabilities	2,134,251		1,641,262
Non-current liabilities	3,053,558		3,495,049
Equity	$4,004,656		$4,255,378
Share of net assets of associates	$1,139,014		$1,210,325
Unrealized gain/loss from transactions with associates	(8,241)		(8,435)
Carrying amount of associate	$1,130,773		$1,201,890

B. Statements of Comprehensive Income

Yieh United Steel Corporation

Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Dividends received from associates	2017 $43,054,406 $696,226 (546,672) $149,554 - $	2016
		$41,713,114
		$163,352 (361,465)
		($198,113)
		- $

313

Eliter International Corp.

Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Dividends received from associates	2017 $228,227 ($186,166) (4,392) ($190,558) - $	2016
		$310,954
		($126,830) -
		($126,830)
		- $

Tangeng Iron Works Co., Ltd.

Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Dividends received from associates	2017 $18,918,149 $243,225 (87,386) $155,839 - $	2016
		$13,021,328
		$503,350 (24,441)
		$478,909
		- $

E-Da Development Corp.

Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Dividends received from associates	2017 $915,341 ($248,116) (2,606) ($250,722) - $	2016
		$1,005,719
		($249,488) (3,048)
		($252,536)
		- $

(3) Shares of individually insignificant associates of the Company are summarized as follows:


Share of:
Net income	$116,728	$176,574
Other comprehensive income (net after tax)	(58,613)	(19,787)
Total comprehensive income (loss)	$58,115	$156,787

314

(4) Associates of the Company with quoted prices in active market (Level 1 fair value inputs) are as follow:

Yieh United Steel Corporation (Note) Tangeng Iron Works Co., Ltd. Total	December 31, 2017 December 31, 2016: $3,107,203 $3,014,333 1,858,991 1,853,058 $4,966,194 $4,867,391

(Note): The fair value information above does not include shares acquired in private placement during the period and are not allowed to be transferred freely in open markets.

(5) For Skylark Hot Spring & Resort Corp., E-Da Cultural Creative Industries Co., Ltd., E-Da Tour Bus Corporation, E-Da Bus Transportation Co., Ltd., E-Da Entertainment Co. and E-Da Health Biotech Co., Ltd, the Company has significant influence either as a result of holding more than 20% of their respective shares with its subsidairies, or being a director in such entities. Consequently, those entities are accounted for using equity method.

(6) The Company participated in the private placement of Yieh United Steel Corporation in February, 2017, and December, 2015, and subscribed at NT$ 7 per share, with the total subscription amount of NT$ 204,876 thousand and NT$ 1,100,400 thousand, respectively. Pursuant to the Securities and Exchange Act, securities from private placement can only be traded freely in the open markets when they are held for three years from the delivery date and the issuer has completed the supplementary procedures of public offering.

(7) Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation, an investee accounted for using equity method, investment gain/loss is recognized using the treasury stock approach.

(8) Except for E United Japan Co., Ltd., investments accounted for using equity method and the Company’s share of profit or loss and other comprehensive income are calculated based on audited financial statements of those investees. However, management of the management does not think unaudited financial statements of above investees would have a significant impact on the Company.

(9) As of December 31, 2017 and 2016, no investments under equity method were pledged as collateral by the Company.

(X)Available-for-sale financial assets - non-current

ial assets - non-current
Item	December	31,	2017	December	31,	2016:
Listed stocks:			$44,910			$46,575

As of December 31, 2017 and 2016, no available-for-sale financial asset was pledged as collateral.

315

Item Domestic stocks not traded in TWSE or TPEX Foreign stocks not traded in stock market Total	December 31, 2017 December 31, 2016: $547,319 $479,982 2,002 2,002 $549,321 $481,984

1.The investments above were classified by the Company as financial assets held at cost because no reasonable and reliable assessments were available to determine their fair values for lacking of quoted price from active market and insufficient information about other similar industries and the investee’s financial information. These investments are measured at cost minus accumulated impairment loss as of the balance sheet date.

For 2017 and 2016, the Company recognized impairment loss of NT$ 1,060 thousand and NT$ 0 thousand, respectively.
As of December 31, 2017 and 2016, no financial assets carried at cost were pledged as collateral.

(XII) Bond investments with no active market - non-current

	December 31, 2017	December 31, 2016:
Preferred stock
E-Da Development Corp.	$170,654	$170,654
Eliter International Corp.	262,747	-
Subtotal	$433,401	$170,654
Less: Accumulated impairment	-	-
Net	$433,401	$170,654

1.The Company acquired preferred shares on E-Da Development Corp. (with annual yield rates of 2.5%, three years of issuance period, cumulative and non-participating, cash settled at one time upon maturity). E-Da Development Corp. engages in business of department stores and amusement parks.

2.The Company acquired preferred shares on Eliter International Corp. (with annual yield rates of 3%, three years of issuance period, cumulative and non-participating, cash settled at one time upon maturity). Eliter International Corp. mainly engages in business of development, construction, leasing, and selling of real estates.

For the years ended December 31, 2017 and 2016, the recognized impairment losses were the same amount at NT$ 0 .
As of December 31, 2017 and 2016, no bond investments with no active market were pledged as collateral by the Company.

316

(XIII) Property, Plant and Equipment

(XIII) Property, Plant and Equipment
Item	December 31,2017	December 31,2016:
Total Machinery and equipment Other equipment Equipment to be inspected and Total cost Less: Accumulated depreciation Accumulated impairment Land Buildings	$1,506,714 3,679,410 13,497,416 1,174,019 262,042	$1,506,714 3,679,482 13,527,047 1,264,348 305,546
	$20,119,601 (11,787,681) (225,202)	$20,283,137 (11,493,088) (230,495)
	$8,106,718	$8,559,554

Cost	Land	Buildings	Machinery and equipment	Other Equipment	Equipment to be inspected and construction in progress $305,546 88,855 - (94,294) (29,526) (8,539)	Total
	$1,506,714 - - - - -	$3,679,482 1,617 (4,573) 2,884 - -	$13,527,047 59,389 (109,721) 20,701 - -	$1,264,348 16,061 (177,099) 70,709 - -		$20,283,137 165,922 (291,393) - (29,526) (8,539)
Balance, January 1, 2017 Addition Disposal Reclassification Transferred to Investment property Transferred to expenses Balance, December 31, 2017 Accumulated depreciation and impairment
	$1,506,714	$3,679,410	$13,497,416	$1,174,019	$262,042	$20,119,601
	$ - - - -	$1,845,431 110,742 (3,750) (1,902)	$8,668,745 365,888 (84,413) -	$986,291 78,179 (175,444) -	$223,116 - - -	$11,723,583 554,809 (263,607) (1,902)
Balance, January 1, 2017 Depreciation Disposal Repair expenses offset against accumulated impairment Balance, December 31, 2017
	$ -	$1,950,521	$8,950,220	$889,026	$223,116	$12,012,883

317

Cost	Land	Buildings	Machinery and equipment	Other Equipment	Equipment to be inspected and construction in progress $964,279 144,582 - (788,636) 1,169 (15,848)	Total
	$1,506,714 - - - - -	$3,679,337 523 (8,270) 7,537 355 -	$12,797,887 30,222 (65,764) 764,702 - -	$1,303,735 12,937 (68,721) 16,397 - -		$20,251,952 188,264 (142,755) - 1,524 (15,848)
Balance, January 1, 2016 Addition Disposal Reclassification Inventory transferred in Transferred to expenses Balance, December 31, 2016 Accumulated depreciation and impairment
	$1,506,714	$3,679,482	$13,527,047	$1,264,348	$305,546	$20,283,137
	- $ - - - -	$1,738,430 109,858 (6,135) 3,596 (318)	$8,377,523 337,552 (50,431) 4,318 (217)	$973,867 80,129 (67,705) - -	$223,116 - - - -	$11,312,936 527,539 (124,271) 7,914 (535)
Balance, January 1, 2016 Depreciation Disposal Impairment loss Repair expenses offset against accumulated impairment Balance, December
	- $	$1,845,431	$8,668,745	$986,291	$223,116	$11,723,583

1. Acquisitions during the period and adjustments for cash flows related to	1. Acquisitions during the period and adjustments for cash flows related to	acquisitions of property, plant and equipment:
Item	2017	2016
Increase in property, plant and equipment	$165,922	$188,264
Repair payment on wind disasters	1,902	535
Increase/decrease in payables for purchase of	10,908	(7,765)
Cash amount paid for procurement of property, plants and equipment	$178,732	$181,034

Please refer to Note 6 (30) for details on the amount of capitalized borrowing costs.
Impairment losses for property, plant and equipment recognized for 2017 and 2016 were NT$ 0 thousand and NT$ 7,914 thousand, respectively.
Impairment losses for property, plant and equipment recognized for July and September, 2016, were NT$ 7,914 thousand, among which NT$ 5,350 was claimed from the insurance company. Please refer to Note 12 (7)
The accumulated impairment losses , which were provided for painting equipment and other equipment in Pingnan plant due to the termination of expansion of such plant, were NT$ 223,116 thousand as of December 31, 2017 and 2016.
For the information about property, plant and equipment pledged as collateral, please see Note 8 for details
The Company’s land amounting to NT$ 8,516 thousand as of December 31 2017 and 2016 is unable to be registered under the name of the Company due to regulation restriction. Accordingly, the ownership was registered under the name of an individual with a mortgage registration as safeguard measures.

318

(XIV) Investment property net value

Cost Balance, January 1, 2017 Addition Property, Plant and Equipment transferred in Balance, December 31, 2017 Accumulated depreciation and ~~impairment~~ Balance, January 1, 2017 Depreciation Recogned (Reversed) Impairment loss Balance, December 31, 2017 Cost Balance, January 1, 2016 Addition Disposal Balance, December 31, 2016 Accumulated depreciation and ~~impairment~~ Balance, January 1, 2016 Depreciation Recogned (Reversed) Impairment loss Balance, December 31, 2016	Item Land Buildings Construction in progress Total cost Less: Accumulated depreciation Net Land $1,269,017 - - $1,269,017 - $ - - - $ Land $1,269,017 - - $1,269,017 - $ - - - $	December 31,2017 $1,269,017 26,604 45,789 $1,341,410 (9,310) $1,332,100 Buildings $26,604 - - $26,604 $8,463 847 - $9,310 Buildings $26,604 - - $26,604 $7,615 848 - $8,463	December 31,2016: $1,269,017 26,604 - $1,295,621 (8,463) $1,287,158 Construction in progress - $ 16,263 29,526 $45,789 - $ - - - $ Total $1,295,621 - - $1,295,621 $7,615 848 - $8,463	Total
				$1,295,621 16,263 29,526
				$1,341,410
				$8,463 847 -
				$9,310

319

Rental revenue and direct operating expenses of investment property:

Item Rental revenue from investment property: Direct operating expenses incurred by investment property generating rental revenue in current period Direct operating expenses incurred by investment property not generating rental revenue in current period	2017 $11,796 $1,749 $15,651	2016
		$11,796
		$1,749 $18,073

As of December 31, 2017 and 2016, the fair values of investment property held by the Company were NT$ 2,874,627 thousand and NT$ 2,584,556 thousand respectively, which were based on evaluation appraised by independent appraisers as of December 31, 2017 and 2015. Such evaluation adopted the comparative approach by reference to the market evidence similar to the real estate transaction prices. Those are Level 3 fair value inputs. Please refer to Note 12(4). The Company believes that there would not be any material fluctuation in the fair value of such investment properties after their appraisal. Appraisal will be taken place every two years on the investment properties.

(XV) ) Long-term prepaid rents

Item	December 31, 2017	December 31, 2016:
Long-term prepaid rent	$89,409	$92,315
Less: Transfer within 12 months	(2,906)	(2,906)
Total	$86,503	$89,409

For long-term prepaid rent with subsidiaries, please refer to Note 7 (3) 11.

(XVI) Short-term borrowing

g
Type of Loan Credit for material purchases Total Credit loans	December 31, 2017
	Amount Interest Rate $4,174,216 1.54%-2.88% 4,006,560 1.07%-2.70% $8,180,776

Type of Loan Credit for material purchases Credit loans Total	December 31, 2016
	Amount Interest Rate $3,195,868 1.53%-2.25% 2,990,000 1.39%-2.25% $6,185,868

Short-term loans are pledged as loan collaterals for some of financial assets, the property, plant, and equipment. Please refer to Note 8 for details.

320

(XVII) Short-term Bills Payable

(XVII) Short-term Bills Payable
Item (XVIII) Other Payables Item Commercial paper payable Less: Unamortized discount Net Interest Rate Range Compensations payable Export and transportation expenses payable Utility expenses payable Equipment expenses payable Cash dividends payable - from previous period Interest payable Repairing charges payable Consumables payable Employee compensation payable and Directors’ remuneration payable Pensions payables - under Labor Pension Act Others Total	December 31, 2017 $650,000 (384) $649,616 1.63%-1.80% December 31, 2017	December 31, 2016:
		$340,000 (223)
		$339,777
		1.637%-1.738%
		December 31, 2016:
	$252,675 68,402 35,525 25,526 22,639 18,009 16,735 6,654 5,025 7,764 55,358 $514,312	$327,734 26,767 36,675 36,434 22,781 17,682 19,086 7,447 9,066 7,885 56,200
		$567,757

Please refer to Note 7 (3) 4 for related party transactions.

(XIX) Provision - current Item Employee benefits Total Sales return, discounts and allowances	December 31, 2017 December 31, 2016: $47,235 $37,672 20,655 2,599 $67,890 $40,271

321

Item January 1, 2017 Recognized in current period Written down in current period December 31, 2017 Item January 1, 2016 Recognized in current period Written down in current period December 31, 2016:	Employee benefits $37,672 47,235 (37,672) $47,235 Employee benefits $35,819 37,672 (35,819) $37,672	Sales return, discounts and allowances $2,599 20,655 (2,599) $20,655 Sales return, discounts and allowances $40,032 2,599 (40,032) $2,599	Total
			$40,271 67,890 (40,271)
			$67,890
			Total
			$75,851 40,271 (75,851)
			$40,271

Provision for employee benefits is an estimate of the short-term service leave vested to employees. 2 Provision for sales return & discount is estimated based on historical experience, judgement from the management, and other known reasons for possible return or discount on steel coils and steel tubes, to be deducted from the sale revenue stated in the current period when the goods are sold.

(XX) Long-term Loans and Current Portion of Long-term Liabilities

Item Bank syndicated loan: Secured loans from banks Unsecured loans from banks Total Less: Unamortized discount Less: Current portion Long-term loans Interest Rate Range	December 31,2017: $7,825,000 2,509,660 40,000 $10,374,660 (19,835) (671,777) $9,683,048 1.79%-2.325%	December 31,2016:
		$6,880,000 2,624,800 100,000
		$9,604,800 (14,440) (787,147)
		$8,803,213
		1.72%-2.325%

Please refer to Note 8 for the collateral of the above bank loans
According to syndicated loan agreements with banks, the Company needs to maintain several financial ratios, including current ratio, liability ratio and interest coverage ratio, at a certain level, calculated based on the annual consolidated financial statements certified by a CPA and the semi-annual consolidated financial statements reviewed by a CPA for the duration of the contracts. The Company do meet the ratio stipulated in the loan agreements in 2017 in all respects except for liability ratio. Therefore, the Company needs to pay a penalty at 0.15% of the loan balance within time agreed to the managing bank. However, this is not seen as a breach of

(XXI) Pensions

1. Defined contribution plan

(1) The pension system based on the Labor Pension Act which is applicable to the Company’s domestic entities is a defined contribution plan managed by government. Companies would make monthly contribution equal to 6% of each employee's monthly salary to the employees' individual pension accounts at the Bureau of Labor (2) Contributions based on the percentage stipulated in the defined contribution pension plans of the Company and recognized as expenses in the consolidated statement of comprehensive income were NT$ 48,821 thousand and NT$ 45,072 thousand for the years ended December 31, 2017 and 2016, respectively.

322

Defined benefit plans
(1) The pension plan under the Labor Standards Law, which is applicable to the Company’s domestic entities, is a defined benefit pension plan managed by the government. Under the defined benefit pension plan, pension benefits are based on the average monthly salaries and wages of the last 6 months prior to retirement and the duration of employment. Those companies contributes monthly an amount equal to 10% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, under the name of the independent retirement fund committee. Before the end of year, if the balance at the retirement fund is not sufficient to cover all employees retiring next year, a lump-sum deposit should be made before March-end of the following year to cover the difference. The retirement fund is managed by the Bureau of Labor Funds, Ministry of Labor. The Company does not have rights to influence its investment management strategy.
(2) The amounts recognized in the consolidated balance sheet for obligations from defined benefit plans are as

Item December 31,2017 $1,358,578 (711,128) $647,450 Item Present value of defined benefit obligations Fair value of planned assets Balance as of January 1 $1,392,240 ($687,393) Cost of service Current service cost 8,647 - Interest expense (income) 17,049 (8,488) Recogniz d in profit and loss $25,696 ($8,488) Remeasurement Return on planned assets ( not including amounts included in net interest ) $ - $1,703 Actuarial (gain) loss - Changes in the demographic assumptions 394 - Changes in financial assumptions 35,058 - Experience adjustment (46,508) - Recognized in other comprehensive income ($11,056) $1,703 Contribution from employer - (65,251) Benefits paid (48,302) 48,301 Balance as of December 31 $1,358,578 ($711,128) 2017 Present value of defined benefit obligations Fair value of planned assets Net defined benefit liabilities (3) Changes in net defined benefit liabilities are as follows:	Item December 31,2017 $1,358,578 (711,128) $647,450 Item Present value of defined benefit obligations Fair value of planned assets Balance as of January 1 $1,392,240 ($687,393) Cost of service Current service cost 8,647 - Interest expense (income) 17,049 (8,488) Recogniz d in profit and loss $25,696 ($8,488) Remeasurement Return on planned assets ( not including amounts included in net interest ) $ - $1,703 Actuarial (gain) loss - Changes in the demographic assumptions 394 - Changes in financial assumptions 35,058 - Experience adjustment (46,508) - Recognized in other comprehensive income ($11,056) $1,703 Contribution from employer - (65,251) Benefits paid (48,302) 48,301 Balance as of December 31 $1,358,578 ($711,128) 2017 Present value of defined benefit obligations Fair value of planned assets Net defined benefit liabilities (3) Changes in net defined benefit liabilities are as follows:	December 31,2016:
		$1,392,240 (687,393)
		$704,847

Present value of defined benefit obligations $1,392,240 8,647 17,049 $25,696 $ - 394 35,058 (46,508) ($11,056) - (48,302) $1,358,578	Fair value of planned assets ($687,393) - (8,488) ($8,488) $1,703 - - - $1,703 (65,251) 48,301 ($711,128)	Net defined benefit liabilities
		$704,847 8,647 8,561
		$17,208
		$1,703 394 35,058 (46,508)
		($9,353)
		(65,251) (1)
		$647,450

323

2016
Present value of defined benefit obligations $1,366,450 9,941 16,922 $26,863 $ - 4,525 (77,371) 120,019 $47,173 - (48,246) $1,392,240	Fair value of planned assets ($689,959) - (8,695) ($8,695) $3,840 - - - $3,840 (40,825) 48,246 ($687,393)	Net defined benefit liabilities
		$676,491 9,941 8,227
		$18,168
		$3,840 4,525 (77,371) 120,019
		$51,013
		(40,825) -
		$704,847

(4) Through the pension plan under the Labor Standards Law, the Company is exposed to the following risks: A. Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government's designated authorities or under the mandated management by Bureau of Labor Funds, Ministry of Labor. However, the rate of return on the Company’ s planned assets shall not be less than the average interest rate on a two-year time deposit published by the local banks.

B. Interest rate risk

C. Salary risk

(5) The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries.The principal assumptions adopted on the valuation date were as follows:

Item Future salary increase rate Average maturity period of defined benefit obligations Discount rate	Measurement date
	December 31,2017 1.00% 2.00% 10years	December 31,2016:
		1.25%
		2.00%
		10years

324

Item	December 31, 2017	December 31, 2016:
Discount rate
Increase by 0.25%	(35,074)	(37,133)
Decrease by 0.25%	36,416	38,611
Expected growth rate of salaries
Increase by 0.25%	35,962	38,226
Decrease by 0.25%	(34,821)	(36,955)

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. (6) The Company expects to make contributions of NT$ 63,670 thousand to the pension plans in the year ended December 31, 2018.

(XXII) Capital of Common Shares

Quantities and values of the Company’s outstanding common shares at the beginning and ending of periods were as follows:

were as follows:
January 1 Issuance of common stocks Capitalization of earnings December 31 January 1 Issuance of common stocks Capitalization of earnings December 31	Item Item	2017
		Shares (thousand shares) 1,718,090 - 103,086 1,821,176 2016	Amount
			$17,180,905 - 1,030,855
			$18,211,760

		Shares (thousand shares) 1,718,090 - - 1,718,090	Amount
			$17,180,905 - -
			$17,180,905

As of December 31, 2017 and 2016, the Company had an authorized capital of NT$20,000,000 thousand with 2,000,000 thousand shares.
The Company's shareholders' meeting held on June 22, 2017 had resolved to capitalize earnings of NT$ 1,030,855 thousand. The plan was approved by FSC on July 25, 2017 and 103,086 thousand shares of common share at the par value of NT$ 10 were issued. The base date for share capital increase is set on September 1, 2017.

325

Changes in associates and joint ventures recognized under equity method Total Item (XXIII) Capital Surplus Share premium Treasury stock transaction Difference between the price received from acquisition or disposal of a subsidiary and its book value Change in ownership interests in subsidiaries accounted for using equity method	December 31,2017 $4,060,366 557,739 212,546 8,665 34,454 $4,873,770	December 31,2016:
		$4,060,366 557,739 81,311 8,665 29,050
		$4,737,131

(XXIV) Appropriation of Earnings

A residual dividend distribution policy is adopted in accordance with the Company’s business expansion and profitability after considering the the fact that the Company is currently in its growing phase. The annual net income, if any, should be used to pay off all the taxes and duties, as well as to compensate prior deficits. The remaining amount, if any, should be appropriated in the following order of presentation: (1) 10% as legal reserve; (2) set aside or reverse a certain amount as or of special reserve according to operating needs or laws or regulations; (3) the remaining net income plus unappropriated earnings from prior years may be used as dividends or bonus for shareholders after proposed by the Board of Directors and resolved by the shareholders meeting. In principle, earnings shall be distributed in the form of stock dividends in accordance with the Company’s capital requirement for business expansion and profitability. Cash dividends are distributed at between 20% to 100% of total dividends distributed in accordance with the actual profitability while stock dividends are distributed at between 0% to 80% of the total dividends distributed.
Legal reserves may only be used for offsetting deficits and issuing new shares or distributing cash in proportion to shareholders’ original holdings. However, when new shares are issued or cash is distributed, the amount shall be limited to 25% of the reserves in excess of the paid-in capital. 3. Special reserve

3. Special reserve
Total Provision for debit balance of other equity Provision upon initial application of IAS Item	December31,2017 $ - 327,757 $327,757	December31,2016:
		$ - 327,757
		$327,757

(2) Upon first-time adoption of IFRSs, the special reserve provided pursuant to the official letter under JinGuan-Jheng-Fa-Zih No. 1010012865 dated April 6, 2012 may be reversed to allocable retained earnings in proportion to the special reserve as provided originally, if the Company uses, disposes of or reclassifies the

326

Shareholders meeting held on June 22, 2016 resolved on proposals to offset the 2015 deficits. No bonus for sharehoders were distributed as a result of the 2015 deficit. The shareholders' meetings held on June 22nd, 2017 passed the earnings distribution and dividends per share for 2016 as follows:

Legal reserve Cash dividends for common stocks Stock dividends for common stocks Total	2016
	Earnings appropriation proposal Dividends per share (NTD) $250,201 687,236 0.4 1,030,855 0.6 $1,968,292

As of March 21, 2018, neither dividends nor the earnings appropriation proposal was approved by the Board of Directors of the Company.
Information about earnings distribution approved by the Board of Directors and resolved by the shareholders meeting is available at the Taiwan Stock Exchange Market Observation Post System website.

327

(XXV) Other Equity Items

(XXV) Other Equity Items
Item Exchange differences on translation of foreign financial statements Balance, January 1, 2017 ($226,298) Unrealized gains or losses for available-for- sale financial assets - Share of subsidiaries, associates and joint ventures accounted for using equity method (471,480) Balance, December 31, 2017 ($697,778) Item Exchange differences on translation of foreign financial statements Balance, January 1, 2016 $583,467 Unrealized gains or losses for available-for- sale financial assets - Share of subsidiaries, associates and joint ventures accounted for using equity method (809,765) Balance, December 31, 2016 ($226,298)	Unrealized valuation gains (losses) of available-for-sale financial assets $47,562 (1,665) 8,836 $54,733 Unrealized valuation gains (losses) of available-for-sale financial assets $54,642 (5,850) (1,230) $47,562	The effective portion of gains and losses of financial instruments designated as cash flow hedges $11,385 - (4,995) $6,390 The effective portion of gains and losses of financial instruments designated as cash flow hedges $7,080 - 4,305 $11,385	Total
			($167,351) (1,665) (467,639)
			($636,655)
			Total
			$645,189 (5,850) (806,690)
			($167,351)

(XXVI) Operating Revenues

s
Processing revenue Realized (unrealized) profits from sales Total sales revenues Less: Sales return Sales discount Net operating revenue Item Sales revenue Construction revenue	2017 $28,111,635 1,078,743 130,132 (19,995) $29,300,515 - (121,297) $29,179,218	2016
		$22,448,350 1,652,434 127,928 (52,192)
		$24,176,520 (316) (308,539)
		$23,867,665

328

(XXVII) Other Revenues

(XXVII) Other Revenues
Item	2017		2016
Interest income
Interest from bank deposits		$5,203		$2,517
Limit of		16,339		807
Other interest income		9,696		372
Subtotal		$31,238		$3,696
Rent revenue		$14,104		$13,432
Dividend income		73,652		7,906
Other revenue
Income from sales of scrap material		33,676		34,417
Guaranteed fee income		30,722		31,831
Others		27,034		22,522
Total		$210,426		$113,804
(XXVIII) Other gains and losses
Item	2017		2016
Foreign exchange gain (loss) - net		($73,939)		$23,039
Reversal of gain from (impairment loss on) property, plant and equipment		-		(2,564)
Gain (loss) from disposal of property, plant and equipment		(27,786)		(18,408)
Valuation Gain (loss) of financial assets at FVTPL		5,614		(295)
Gains from disposal of financial assets at fair value through profit or loss		(6,526)		(1,823)
Gain (loss) on disposal of investments		15		150
Impairment loss of financial assets carried at cost		(1,060)		-
Other Expenses		(17,422)		(20,148)
Total		($121,104)		($20,049)

329

(XIX) Personnel, depreciation, depletion and amortization expenses

2017

	2017
Nature Employee benefits Salary and Wages Labor and health insurance premiums Pension cost (Note 1) Other employee benefits Depreciation (Note 2) Total Nature Employee benefits Salary and Wages Labor and health insurance premiums Pension cost (Note 3) Other employee benefits Depreciation (Note 4) Total	Operating Cost $704,887 72,175 45,661 125,939 525,481 $1,474,143 2016	OperatingExpense $361,178 31,279 20,200 35,342 29,328 $477,327	Total
			$1,066,065 103,454 65,861 161,281 554,809
			$1,951,470

	Operating Cost $733,375 64,655 43,447 135,909 511,042 $1,488,428	OperatingExpense $381,005 28,178 19,282 36,512 16,497 $481,474	Total
			$1,114,380 92,833 62,729 172,421 527,539
			$1,969,902

(Notet 1) Excluding pension of NT$ 168 thousand listed as equipment prepayments. (Note 2) Excluding depreciation of NT$ 847 thousand listed as other gains and losses. (Notet 3) Excluding pension of NT$ 511 thousand listed as equipment prepayments.

(Note 4) Excluding depreciation of NT$ 848 thousand listed as other gains and losses.

Numbers of employees were 1,370 and 1,380 persons for the years ended December 31, 2017 and 2016,
According to Articles of Incorporation, compensation to employees and remuneration to directors shall neither be less than 0.2 % nor greater than 0.1% of the net income before tax before which the compensation to employees and remuneration to directors are deducted from. Compensation to employees and remuneration to directors for 2017 and 2016 were distributed at 0.2% and 0.1% of the net income before tax. Any changes in the amounts, if any, after the issuance date of the annual financial statement shall be accounted for using changes in accounting estimates, and should be enterred the next year.

3.. Compensation to employees and remuneration to directors for the years of 2017 and 2016 has been resolved and approved by the Board of Directors on March 21, 2018 and 2017. Relevant amounts recognized in the financial statement are as follows:

2017 2016

	2017 2016	2017 2016
Resolved distributed amount Recognized amount in the annual financial report disposed Amounts of difference	Employee Compensation / Directors’ Remuneration Employee Compensation / Directors’ Remuneration $3,350 / $837 $6,044 / $1,511 3,350 / 1,675 6,044 / 3,022 $ - ($838) $ - ($1,511)
		$ - ($1,511)

(1) The above-mentioned employee compensation was distributed in cash.

Information about employee compensation and remuneration to directors approved by the Board of Directors is available at the Taiwan Stock Exchange Market Observation Post System website.

330

(XXX) Financial Cost

Item Interest expense Less: Amount qualified for capitalization Finance costs	2017 2016 $397,988 $369,018 (1,364) (13,222) $396,624 $355,796

(XXXI) Income Tax

Income tax expense
(1) Components of income tax expense

2017 $112,422 138,903 45,687 5,344 $302,356 2017 ($85,250) (7,148) 1,590 ($90,808) Item Current income tax expense Deferred taxes related to temporary difference and loss deduction 10% tax on retained earnings Adjustment to prior income taxes Income tax expense recognized in profit or loss (2) Income tax expense (gain) associates with other comprehensive income Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method Exchange differences on translation of foreign financial statements Remeasurement of defined benefit plans Remeasurement of defined benefit plans Total Item	2016
	$319,409 140,680 - 50,657
	$510,746
	2016
	($142,336) (2,711) (8,672)
	($153,719)

331

A reconciliation of income before income tax and income tax expense recognized in profit or loss is as follows:

Item Other adjustments Income before tax Income tax expense at the statutory rate Tax effect of adjusting items: Effect of items not included in the calculation of taxable income Loss (gain) on investments accounted for using equity method Timing difference of revenue recognition Book-tax difference for depreciation Temporary differences Income tax expenses recognized in profit or loss Realized (unrealized) investment losses Adjustment to prior income taxes 10% tax on retained earnings Net changes of deferred income tax Difference in depreciation period Loss (gain) on investments accounted for using equity method	2017 $1,669,761 $283,859 (87,675) (21,838) 2,722 (59,053) (5,593) 5,344 45,687 (2,722) 124,194 17,431 $302,356	2016
		$3,012,751
		$512,168 (205,711) 19,569 1,671 - (8,288) 50,657 - (1,671) 154,031 (11,680)
		$510,746

A tax rate of 17% is applicable to the Company.

The Income Tax Act was modified in January 2018 by the government of R.O.C., which raised profit-seeking enterprise income tax from 17% to 20% (to be implemented from 2018 onwards), and which on the other hand lowered the tax rate on retained earnings from 10% to 5%.

332

Deferred income tax assets or liabilities from temporary difference, loss carry forwards and investment credits:

Deferred income tax assets Temporary differences Exchange differences on translation of foreign financial statements Provision for inventory valuation loss Loss of investments under the cost approach Impairment losses from property, plant and equipment Provision for sales return & discount Book-tax difference for depreciation Compensation to unused annual leave Net defined benefit liabilities Remeasurement of defined benefit plans Timing differences in recognition of cost and sales revenue Unrealized exchange losses Others Subtotal Deferred income tax liabilities Temporary differences Unrealized exchange gains Exchange differences on translation of foreign financial statements Gains (losses) of investments accounted for using equity method Subtotal Total			2017
	Beginning balance $48,883 1,035 773 38,366 442 10,716 6,404 119,824 4,385 48,478 - 17,450 $296,756 ($2,953) (2,966) (102,951) ($108,870) $187,886	Recognized in profit or loss $ - 646 (773) (58) 3,069 2,722 1,626 (8,167) - (21,838) 1,844 3,267 ($17,662) $2,953 - (124,194) ($121,241) ($138,903)	Recognized in other comprehensive income $82,284 - - - - - - (1,590) 7,148 - - - $87,842 $ - 2,966 - $2,966 $90,808	Effect of Exchange Rate Changes Ending balance $ - $131,167 - 1,681 - - - 38,308 - 3,511 - 13,438 - 8,030 - 110,067 - 11,533 - 26,640 - 1,844 - 20,717 $ - $366,936 $ - $ - - - - (227,145) $ - ($227,145) $ - $139,791

333

2016

Beginning balance Recognized in profit or loss Deferred income tax assets Temporary differences Gains (losses) of investments accounted for using equity method $53,801 ($53,801) Exchange differences on translation of foreign financial statements - - Provision for inventory valuation loss 5,788 (4,753) Loss of investments under the cost approach 1,283 (510) Impairment losses from property, plant and equipment 37,930 436 Provision for sales return & discount 6,805 (6,363) Book-tax difference for depreciation 9,045 1,671 Compensation to unused annual leave 6,089 315 Net defined benefit liabilities 115,004 (3,852) Remeasurement of defined benefit plans 1,674 - Timing differences in recognition of cost and sales revenue 28,909 19,569 Others 9,183 8,267 Subtotal $275,511 ($39,021) Deferred income tax liabilities Temporary differences Unrealized exchange gains ($1,524) ($1,429) Exchange differences on translation of foreign financial statements (96,419) - Gains (losses) of investments accounted for using equity method (2,721) (100,230) Subtotal ($100,664) ($101,659) Total $174,847 ($140,680) Item Loss from investment accounted for using equity method Loss of investments under the cost approach Others 4. Items not recognized as deferred income tax assets: 41,224 18,448 December 31,2017 $404,645	Recognized in other comprehensive income Effect of Exchange Rate Changes $ - $ - 48,883 - - - - - - - - - - - - - 8,672 - 2,711 - - - - - $60,266 $- $ - $ - 93,453 - - - $93,453 $- $153,719 $- 40,451 10,413 December 31,2016: $403,430	Ending balance
		$ - 48,883 1,035 773 38,366 442 10,716 6,404 119,824 4,385 48,478 17,450
		$296,756
		($2,953) (2,966) (102,951)
		($108,870)
		$187,886

334

Information regarding the integrated income tax is as follows:

Item Item Balance of shareholders' imputation credit accounts Unappropriated earnings generated before 1997 Unappropriated earnings generated after 1998 Tax creditable ratio for distribution of earnings	December 31, 2017 December 31, 2016: (Note) $534,140 (Note) - (Note) 3,010,948 2017 2016 (Note) 22.00% (Actual)

Note: The integrated income tax system and relevant regulations were abolished by the amendments to Income Tax Act which was announced and effected in February 2018.

6. The profit-seeking enterprise income tax of the Company is approved by the taxation authority till 2015.

(XXXII) Other Comprehensive Income

		2017
Item	Before tax	Income tax expense (gain)		Net value after tax
Items that are not reclassified subsequently to profit or
loss:
Remeasurement of defined benefit plans	$9,353	($1,590)		$7,763
Share of subsidiaries, associates and joint ventures accounted for using equity method	(34,051)		7,148	(26,903)
Subtotal	($24,698)		$5,558	($19,140)
Items that may be reclassified subsequently to profit or
loss:
Unrealized valuation gain (loss) on available-for-sale financial assets	($1,665)	$	-	($1,665)
Share of subsidiaries, associates and joint ventures
accounted for using equity method
Exchange differences on translation of foreign financial statements	(556,730)		85,250	(471,480)
Unrealized valuation gain (loss) on available-for- sale financial assets	8,836		-	8,836
The effective portion of gains (losses) on financial instruments designated as cash flow hedges	(4,995)		-	(4,995)
Subtotal	($552,889)		$85,250	($469,304)
Recognized in other comprehensive income	($577,587)		$90,808	($488,444)

335

		2016
Item	Before tax	Income tax expense (gain)		Net value after tax
Items that are not reclassified subsequently to profit or
loss:
Remeasurement of defined benefit plans	($51,013)		$8,672	($42,341)
Share of subsidiaries, associates and joint ventures accounted for using equity method	(37,215)		2,711	(34,504)
Net
Subtotal	($88,228)		$11,383	($76,845)
Items that may be reclassified subsequently to profit or
loss:
Unrealized valuation gain (loss) on available-for-sale financial assets	($5,850)	$	-	($5,850)
Share of subsidiaries, associates and joint ventures
accounted for using equity method
Exchange differences on translation of foreign financial statements	(952,101)		142,336	(809,765)
Unrealized valuation gain (loss) on available-for- sale financial assets	(1,230)		-	(1,230)
The effective portion of gains (losses) on financial instruments designated as cash flow hedges	4,305		-	4,305
Subtotal	($949,026)	$142,336		($812,540)
Recognized in other comprehensive income	($1,037,254)	$153,719		($889,385)

(XXXIII) Earning Per Common Share

Weighted average number of shares outstanding after retrospective adjustment (shares in thousands) (B) Item Basic earnings per share (after tax) (NT$)(A)/(B) Net income Less: Dividends for preferred shares Net income attributable to shareholders of common stocks (A) Weighted average number of outstanding shares (thousand shares)	2017 2016 $1,367,405 $2,502,005 - - $1,367,405 $2,502,005 1,821,176 1,718,090 1,821,176 1,821,176 $0.75 $1.37

VII. Related-Party Transactions

(I) The parent company and ultimate controller:

The Company is the ultimate controller of the Group.

336

(II). The names and relations of related parties Name of related party Relationship with the Company Shin Yang Steel Co., Ltd. Subsidiaries Shin Phui Steel Corporation Subsidiaries Yieh Hsing Enterprise Co., Ltd. Subsidiaries Great Emperor Hotel CO., LTD. Subsidiaries Kingsgarden International CO., LTD. Subsidiaries Yieh Phui (Hong Kong) Holdings Limited Subsidiaries Yieh Phui (China) Technomaterial Co., Ltd. Subsidiaries Tianjin Lianfa Precision Steel Corporation Subsidiaries Kuo Chang Enterprise Co., Ltd. Subsidiaries United Brightening Development Corp. Subsidiaries Gen-Wan Technology Corp. Subsidiaries Hong Yuh Assets Management Co.,Ltd. Subsidiaries LIAN SO(H.K)CO., LIMITED Subsidiaries EMMT Systems Corporation Subsidiaries APPLIED WIRELESS IDENTIFICATIONS GROUP,INC. Subsidiaries Golden Developments Holdings Ltd. Subsidiaries Yieh United Steel Corporation Associate Yieh Mau Corporation Associate Synn Industrial Co., Ltd. Associate ASIAZONE CO., LTD. Associate Cheng Shin Security Co., Ltd. Associate Eliter International Corp. Associate E-Da Development Co., Ltd Associate E United Japan Co., Ltd. Associate E-Da Bus Co., Ltd. Associate E-DA Tour Bus Co., Ltd. Associate Eda Entertainment CO., LTD Associate E-Da Cultural Creative Industry Co., Ltd. Associate E-Da Visual Effects Company Limited. Associate E-Da Health Biotechnology Co., Ltd. Associate Yieh Hong Enterprise Co., Ltd. Other related parties YIEH CORPORATION LIMITED Other related parties Pacific Harbor Stevedoring Corporation Other related parties New Spring Construction Corp. Other related parties UniPattern Corporation Other related parties Skylark International Hotel Co., Ltd. Other related parties LI-SIN Business Co., Ltd. Other related parties YI-GAO Biotech Co., Ltd Other related parties E-Da Earl Apartment Building Management and Other related parties Maintenance Co., Ltd Royal Palace Hong Kong Style Restaurant Co., Ltd. Other related parties E-Da Royal Hotel Company Ltd. Other related parties E-Da Hospital Other related parties E-Da Health Management Consulting Co., Ltd. Other related parties E-Da Professional Baseball Enterprise Co., Ltd Other related parties I-Shou University Other related parties I-Shou University Internship Center Other related parties Muzee Corporation Other related parties Long Hua Travel Services Co., Ltd. Other related parties CHEN,YUNG-HSIEN Other related parties CHANG,WEI-KUNG Other related parties

337

(III) Significant Transactions between Related Parties

The Company's transactions with related parties are disclosed as follows:

1. Operating revenue

Accounting subject	Type of related party / ~~Name~~
Sales revenue	Subsidiaries	$1,085,498	$319,416
	Associates	1,474,759	1,702,018
	Other related party	773,806	238,651
	Total	$3,334,063	$2,260,085
Construction revenue	Subsidiaries	$1,870	$4,007
	Associates	611	272
	Other related party	544,423	820,412
	Total	$546,904	$824,691

(A) Selling price to the Company's related parties, including hot rolled coil, galvanized coils, scrap (bar), etc. and trading terms are the same with those to other customers. Payment period was within one to two months.

(B) Selling price of carbon steel and steel scraps to related parties are set with reference to the purchase price of a non-related party as a trading counterpart. Payment term is monthly, and closes in 15 days.

(C) The construction contracts between the Company and above-mentioned related parties were established at prices negotiated by both parties. Contract proceeds were collected according to the collection clauses stated in these contracts. Unless agreed on by both parties, payments cannot be delayed.

2. Purchases

Type of related party/Name Subsidiaries Associates Other related party Yieh Hong Enterprise Co., Ltd. Others Total	2017 2016 $40,167 $1,119 55,147 108,892 2,512,976 1,602,814 9,162 98 $2,617,452 $1,712,923

338

3. Accounts receivable - related parties (excluding loans to related parties)

3. Accounts receivable - related parties (excluding loans to related parties)
Accountingsubject Type of related party / ~~Name~~ December 31,2017 Notes receivable Other related party $798 Less: Changes in allowance for doubtful accounts: - Net $798 Accounts receivable Subsidiaries $95,341 Associates ASIAZONE CO., LTD. 213,953 Others 20,009 Other related party - Total $329,303 Less: Changes in allowance for doubtful accounts: (1,014) Net $328,289 Construction contract receivable Subsidiaries $2,261 Associates - Other related party New Spring Construction Corp. 190,033 Others 2,167 Total $194,461 Less: Changes in allowance for doubtful accounts: - Net $194,461 Other receivables Subsidiaries $11,834 Associates 2,604 Other related party 1,812 Total $16,250 Less: Changes in allowance for doubtful accounts: - Net $16,250 Accountingsubject Type of related party / ~~Name~~ December 31,2017 Notes payable Subsidiaries $5 Associates - Other related party 786 Total $791 Accounts payable Subsidiaries $128 Associates 322 Other related party 9,620 Total $10,070 Construction contract payable Subsidiaries $67 Other related party - Total $67 Other payables Subsidiaries $1,340 Associates 2,259 Other related party 32,282 Total $35,881 4. Accounts payble - related party (excluding loans from related parties)	December 31,2016:
	$218 -
	$218
	$57,007 103,422 20,326 2,003
	$182,758 (598)
	$182,160
	$1,473 301 344,114 -
	$345,888 -
	$345,888
	$10,360 3,163 277
	$13,800 -
	$13,800
	December 31,2016:
	$ - 2,174 1,538
	$3,712
	$ - - -
	$-
	$63 -
	$63
	$1,095 890 2,179
	$4,164

339

5. Prepayments

Type of related party December 31, 2017 December 31, 2016: / Name Other related party $69,890 $70,444

6.Asset transactions
(1) Property, plant and equipment acquired:

2017:

Type of related party Transaction target Transaction amount / Name Transportation Subsidiaries $356 equipment Construction of transportation Other related party 765 equipment and monitoring system

The above-mentioned transaction price was agreed on by both parties upon negotiation with reference to appraisal reports or market prices. As of December 31, 2017, the amount outstanding equaled NT$ 0 thousand.

2016

Type of related party Transaction target Transaction amount / Name Computer equipment, Other related party $600 etc.

The above-mentioned transaction price was agreed on by both parties upon negotiation with reference to appraisal reports or market prices. As of December 31, 2016, the transaction price was fully paid.

(2) Disposal of property, plant, and equipment:

2017: None.

2016 Type of related party / Name Other related party	Transaction target Transportation equipment	Transaction amount Gains or loss from disposal $76 $38

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2015, all the transaction amount was fully paid.

(3) Acquisition of investment property: None.
(4) Disposal of investment property: None.
(5) Acquisition of financial assets: None:
(6) Disposal of financial assets: None:

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(7) Acquisition of other assets:

2017: Type of related party / ~~Name~~ Associates Yieh United Steel Corporation Yieh United Steel Corporation	Transaction amount $479,467 275,217 Transaction target 42,925 thousand shares of Kuo Chang Enterprise Co., Ltd. 21,843 thousand shares of United Brightening Development Corp.

2016 Type of related party / ~~Name~~ Subsidiaries Shin Yang Steel Co., Ltd. Associate Yieh United Steel Corporation	Transaction amount $128,000 279,335 Transaction target 23,000 thousand shares of United Brightening Development Corp. 16,000 thousand shares of Hong Yuh Assets Management Co.,Ltd.

The above-mentioned transaction price of shares was agreed on by both parties upon negotiation with reference to the net worth per share of the investees. As of December 31, 2016, transactions were fully paid.

(8) Disposal of other assets: None:

7. Loan to related parties:

(1) Other receivables

7. Loan to related parties: (1) Other receivables
Great Emperor Hotel CO., LTD. Type of relatedparty/ Name Total Subsidiaries Subsidiaries Type of relatedparty/ Name (2) Interest income Kingsgarden International CO., LTD. Subsidiaries Great Emperor Hotel CO., LTD. Kingsgarden International CO., LTD. Total Interest Rate Range Type of relatedparty/ Name Great Emperor Hotel CO., LTD. Kingsgarden International CO., LTD. Total	2017
	Endingbalance $380,000 570,000 $950,000 2016	The highest balance
		$520,000 670,000
		$1,190,000

	Endingbalance $110,000 200,000 $310,000 2017 $6,684 9,655 $16,339 2.50%	The highest balance
		$110,000 200,000
		$310,000
		2016
		$256 551
		$807
		2.50%

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Loan from related parties: None.

9. Endorsements and Guarantees

The Company borrowed for related parties from banks and details of endorsement are as follows:

Unit: In Thousands of

NTD

	Unit: In Thousands of NTD
Type of relatedparty Subsidiaries Type of relatedparty Subsidiaries	December 31,2017
	Currency Amount USD 142,000 CNY 1,345,000 NTD 1,786,000 December 31,2016:
	Currency Amount USD 132,000 CNY 1,405,000 NTD 2,016,000

(2) Land provided by subsidiaries as collateral for bank loans amounted to the same amount at NT$ 1,529,510 as of December 31, 2017 and 2016.

10. Others

(1) Miscellaneous income

of December 31, 2017 and 2016. 10. Others (1) Miscellaneous income
Yieh Phui (Hong Kong) Holdings Limited Subsidiaries Shin Yang Steel Co., Ltd. Yieh Phui (China) Technomaterial Co., Ltd. Others Type of relatedparty/ Name Associates Yieh United Steel Corporation Others Other related party Total	2017 $13,885 10,507 15,149 2,878 19,485 3,198 3,325 $68,427	2016
		$11,624 8,287 16,167 5,424 16,453 2,314 2,117
		$62,386

These are mainly guarantee fee, technical service income, and a few rent income. The rent price is determined by contract and received monthly or quarterly.

(2) Miscellaneous expenses

penses
Type of related party / Name Subsidiaries Associates Other related party Total	2017 $10,538 38,363 108,827 $157,728	2016
		$8,559 37,711 110,025
		$156,295

These are mainly service charges, guarantee fee, export expenses, and a few rent expenses. The rent price is determined by contract and paid monthly or quarterly.

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(3) Construction contracts
(a) Unfinished construction contracts with related parties as of December 31, 2017 were as follows:

Type of related party /
Name
Name of construction
Subsidiaries
Installation of overhead
cranes, etc.
Other related party
New Spring Construction
Corp.
Construction of
commercial buildings, etc.
Others
LED screen construction
Type of related party /
Name
Name of construction
Subsidiaries
Installation of overhead
cranes, etc.
Associates
Cantilever crane service
Other related party
New Spring Construction
Corp.
Above-ground structures
construction for E-Da Asia
Commercial Plaza, etc.

(b) Unfinished construction contracts with related

Construction contract
receivable
Total contract price
Construction contract
payable
$3,100
$2,261
67
1,965,123
190,033
-
3,300
2,167
-
Total contract price
Construction contract
receivable/Construction
contract payable
$3,875
$1,473
63
770
301
1,820,723
344,114

parties as of December 31, 2016 were as follows:

To expand the plants, The Company signed a contract with Shin Phui Steel Corporation and acquired right of use on the lands. Contract content is as follows:
(1) Leased object: Land No. 163, Sinping section, Pingtung City.
(2) Contracted period: 50 years from June 15, 2001 to June 14, 2051.
(3) Rental and payment: monthly rental of NT$ 500 thousand closing at the beginning of each month.
(4) Royalty payment method: A lump-sum payment of NT$120,000 thousand, amortized over 50 years.
(5) Until December 31, 2017, a total of NT$ 39,700 thousand has been amortized.

(6) As of December 31, 2017 and 2016, the current portion of lease payments prepaid to Shin Phui Steel Corporation for the Pingtung factory site totaled NT$ 2,400 thousand for both respective years and were recognized in prepayments; Lease payments for periods beyond 12 months totaled NT$ 77,900 thousand and NT$ 80,300 thousand, respectively and were included in long-term rental prepayments.

(7). For the years ended December 31, 2017 and 2016, the recognized rent expenses were the same amount at NT$ 8,400 thousand.

Shin Yang Steel Co., Ltd. entered into an agreement with the Company to obtain the right to use the Company
’s steel pipe plant for plant expansion. Details of the agreement were as follows:
(1) Leased object: Lands located at Yuliao Rd., Qiaotou Dist and Ding-Yen-Tien Section in Kaohsiung City, with a total area of 13,849 Pings.
(2) Contract period: 10 years from April 1, 2015 to April 30, 2025

(3) Rental and payment: monthly rental of NT$ 983 thousand collected at the beginning of each month.

(4) For the years ended December 31, 2017 and 2016, the recognized rental revenue were the same amount at NT$ 11,796 thousand.

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The Company s participation in the cash offering of related parties with an increase in investment are as follows: 2017:

2017:
Investee Subsidiary/LIAN SO (H.K.) LIMITED Subsidiary/ United Brightening Development Corp. Subsidiary/Hong Yuh Assets Management Co Ltd Associate/Yieh United Steel Corporation Associate/Eliter International Corp. Associate/E-Da Health Biotech Co., Ltd Other related party/Skylark International Hotel Co., Ltd.	Investment	Amount $295,344 19,112 430,000 204,876 262,747 3,800 68,397 Increment	ShareholdingPercentage
	Shares (thousand shares) 9,680 1,911 43,000 29,268 26,275 380 6,840		Before Offering After Offering 80.00% 80.00% 95.56% 95.56% 67.27% 80.00% 24.39% 24.39% (Note) (Note) - 19.00% 13.68% 13.68%

2016 Investee ~~Subsidiary/Hong Yuh~~ Assets Management Co Ltd Subsidiary/Kuo Chang Enterprise Co., Ltd. Subsidiary/EMMT Systems Corporation Subsidiary/ United Brightening Development Corp. Associate/Eliter International Corp. Associate/E-Da Development Corp.	Investment	Amount $150,000 21,616 13,995 58,759 218,928 170,654 Increment	ShareholdingPercentage
	Shares (thousand shares) 15,000 2,162 1,400 5,876 21,893 17,065		Before Offering After Offering 15.00% 38.18% 54.04% 54.04% 85.29% 77.54% 61.38% 62.59% 32.57% 32.84% (Note) (Note)

(Note) Subscription to associates＇ preferred stock, listed as “debt instrument investments for which no active market exists＂:

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(III) Information about remunerations to the major management:

Item Salary and other short-term employee benefits Benefits after retirement Other long-term employee benefits Termination benefits Share-based payments Total	2017 2016 $30,947 $35,241 471 616 - - - - - - $31,418 $35,857

VIII. Pledged Assets

The Company provided certain assets as collateral mainly for bank loans and performance guarantee:

Item Pledged demand deposits Pledged time deposits Sub-total of other financial assets - current Pledged time deposits Sub-total of other financial assets - non-current Property, plant and equipment (net) Investment property Total	December 31,2017 $55,157 124,992 $180,149 $857 $857 $7,606,915 1,286,311 $9,074,232	December 31,2016:
		$55,117 38,700
		$93,817
		$40,857
		$40,857
		$8,004,351 1,287,158
		$9,426,183

IX. Important Contingent Liabilities and Unrecognized Contractual Commitments

(I) Guarantee notes issued to banks for loans, purchases, contract performance, and warranty totaled NT$ 25,859,252 thousand and NT$ 25,043,617 thousand as at December 31, 2017 and 2016 respectively.

(II) The Company’s guarantee notes received for contract performance bond and purchase promise totaled NT$ 331,719 thousand and NT$ 375,382 thousand on December 31, 2017 and 2016 respectively.

(III) Unused letters of credits as of December 31, 2017 and 2016 , were as follows:

Unit: In Thousands of

	,	Unit: In Thousands of ,
December 31,2017	SecurityDeposit - - - - -	NTD December 31,2016:
L/C amount NTD 441,313 USD 5,259 JPY 508 AUD 13 EUR 120		L/C amount SecurityDeposit NTD 467,644 - USD 13,052 - JPY 7,979 -

(IV) For the Company s endorsement for others as of the years ended December 31, 2017 and 2016, please refer to Note 7 (3) 9

(V) As of December 31, 2017 and 2016, guarantee provided by banks for performance and warranty of the Company amounted to NT$ 12,930 thousand, and NT$ 194,543 thousand respectively.

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(VI) Establishment of important construction contracts

As of December 31, 2017, estimated total contract costs, contract costs paid, and expected completion dates for contracts of an amount over NT$150,000 thousand signed but not completed are summarized below:

Type of construction	Contract price Total estimated construction cost	Construction cost paid Completion %	Expected year of completion Accumulated profit or loss recognized
Above-ground structures construction for E-Da Asia Commercial Plaza	1,820,539 1,739,116	1,525,281 87.70%	2018 71,411
~~Construction of~~ international multi-purpose business building with Hwa Xung Kee Ta (Note ~~1)~~	216,736 218,372	213,626 97.83%	2018 (1,636)
Construction and installation of 40T42M tracked overhead container crane pier 40T42M tracked overhead crane for containers Construction	202,300 208,106	112,670 54.14%	2018 (5,806)
~~Construction of plant No. 3~~ for Taiwan YKK Co., Ltd. in Jhongli District by Chung-Lu Construction ~~Co. Ltd.(Note 2)~~	258,773 255,515	246,942 96.64%	2018 3,148
~~, ~~ ~~Main structure of th~~ commercial building at Banciao by Sun Pao Tsun Construction Co., Ltd. ~~(Note 3)~~	154,930 162,395	160,166 98.63%	2018 (7,465)
~~6 40T-gantry cranes for~~ containers at No. 120 Wharf of Kaohsiung Port ~~(Note 4)~~	311,100 277,668	257,168 92.62%	2018 30,964
Construction of BOX steel pillars for Tianhui Precision Plant of Jiang Chen Industrial Co., Ltd.	220,806 224,596	53,543 23.84%	2019 (3,790)
~~(Note 1): Contract amount increased by NT$ 2,958 thousand and total cost increased by NT$ 1,772 thousand during the~~ period. (Note 2): Contract amount increased by NT$ 5,000 thousand and total cost increased by NT$ 2,913 thousand during the period. (Note 3): Contract amount increased by NT$ 461 thousand and total cost decreased by NT$ 6,706 thousand during the period.

(Note 4): Construction cost decreased by NT$ 25,903 thousand during the period.

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As of December 31, 2016, estimated total contract costs, contract costs paid, and expected completion dates for contracts of an amount over NT$150,000 thousand signed but not completed are summarized below:

Type of construction	Contract price Total estimated construction cost	Construction cost paid Completion %	Expected year of completion Accumulated profit or loss recognized
Above-ground structures construction for E-Da Asia Commercial Plaza	1,820,539 1,739,116	1,107,599 63.69%	2018 51,856
Construction of Condominium with Tunwei Chin Pin	159,348 171,286	168,679 98.48%	2017 (11,938)
~~Construction of~~ international multi-purpose business building with Hwa Xung Kee Ta (Note ~~2)~~	213,778 216,600	207,855 95.96%	2017 (2,822)
~~Construction of plant No. 3~~ for Taiwan YKK Co., Ltd. in Jhongli District by Chung-Lu Construction ~~Co. Ltd.~~	253,773 252,602	210,083 83.17%	2017 974
~~,~~ ~~Main structure of th~~ commercial building at Banciao by Sun Pao Tsun Construction Co., Ltd. ~~(Note 3)~~	154,469 169,101	158,101 93.50%	2017 (14,632)
6 40T-gantry cranes for containers at No. 120 Wharf of Kaohsiung Port (Note 4)	311,100 303,571	230,071 75.79%	2017 5,706

(Note 1): Contract amount increased by NT$ 1,133 thousand and total cost increased by NT$ 3,072 thousand during the period.

(Note 2): Contract amount increased by NT$ 20,808 thousand and total cost increased by NT$ 23,867 thousand during the period.

(Note 3): Contract amount increased by NT$ 8,184 thousand and total cost increased by NT$ 6,381 thousand during the period.

(Note 4): Construction cost decreased by NT$ 12,839 thousand during the period.

(VIII)Operating lease contracts:

The Company as lessee:

The Company has leased assets including Yulin Section (Qiaotou plant) under an operation lease agreement with a term from 1996 to 2050. The Company has the right to renew the lease upon expiration. Lease expense amounted to NT$ 31,708 thousand and NT$ 33,724 thousand were recognized for 2017 and 2016 respectively. Moreover, total future minimum lease payment payable due to irrevocable contracts is as follows:

No more than 1 year More than 1 year but no more More than 5 years Total	Item than 5 years	December 31,2017 $18,377 80,176 305,137 $403,690	December 31,2016:
			$24,587 81,490 320,985
			$427,062

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(IX) Great Emperor Hotel CO., LTD. ( the former E-Da Royal Skylark Hotel Co., Ltd.) and Kingsgarden International CO., LTD. ( the former Kaohsiung E-Da Metropolis Co., Ltd.), two subsidiaries, entered syndicated loan agreements with Land Bank of Taiwan and First Commercial Bank in August 2014. According to the contract, the Company and its related parties shall jointly hold more than 50% of Kingsgarden International CO., LTD. and Great Emperor Hotel CO., LTD.’s issued shares and gain the majority of directors' seats at all times. Yieh Hsing Enterprise Co., Ltd., a subsidiary, held 100% of Kingsgarden International CO., LTD.and Great Emperor Hotel CO., LTD., and acquire all

X. Significant Disaster Losses: None.

XI. Significant Subsequent Events: None.

XII. Others

(I) Capital risk management

As the Company needs to maintain sufficient capital to meet the needs for expansion and plant and equipment improvement, capital management of the Company focuses on ensuring there are sufficient financial resources and operating plans to meet the demands for operating capital, capital expenditure, research and development expense, loan repayment and dividend distribution in the next 12 months.

(II) Financial instruments
Fair value information of financial instruments
(1) Financial instruments not measured at fair value

Management of the Group thinks that the carrying amount of financial instruments not measured at fair value, including cash and cash equivalents, accounts receivables, other financial assets, refundable deposits, shortterm loans, short-term bills payable, accounts payable, long-term loans (including current portion), deposits received and longterm payables, approximate their fair value or their fair value cannot be reliably measured (financial assets carried at cost and investment in debt instrument with no active markets).

(2) Financial instruments measured at fair value: please refer to Note 12 (4).

348

( III.) Financial risk management policies:

The Company’s daily operations are affected by various financial risks, e.g. market risk (including exchange rate, interest rate and price risks), credit risk and liquidity risk. The Company is devoted to identify, assess and avoid market uncertainties in order to eliminate the potential adverse effects of market changes on the financial performance. Before engaging in significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. While the financial plan is underway, the Company shall comply with relevant financial operation procedures on the overall financial risk management and segregation of duties at all times.

The nature and degree of significant financial risks
(1) Market risk

A. Foreign exchange rate risk

The Company is exposed to exchange rate risk arising from the sales, purchases and borrowings in currencies other than the Company’s functional currency. The functional currency for entities within the Company is mainly New Taiwan Dollars. Such transactions are denominated mainly in USD. To avoid a decrease in the value of assets dominated in foreign currency and volatility in future cash flows due to changes in exchange rates, the Company hedges the exchange rate risk with foreign-currency borrowings and derivative financial instruments . Those derivative financial instruments can diminish but not completely eliminate the impacts of changes in exchange rate. As net investments in foreign operations

B. Exchange rate exposure and sensitivity analysis:

Foreign currency Financial assets Monetaryitems USD:NTD 72,329 Long-term investment accounted for using USD:NTD 430,964 Financial liabilities Monetaryitems USD:NTD 8,915 Foreign currency (Foreign currency: Functional currency) Financial assets Monetaryitems USD:NTD 47,634 USD:NTD 382,730 Financial liabilities Monetaryitems USD:NTD 2,149 (Foreign currency: Fun~~ctional~~ currency) Long-term investment accounted for using equity method	Exchange rates 29.76 29.76 29.76 Exchange rates 32.25 32.25 32.25		December 31,2017	December 31,2017
		Carrying Amount (New Taiwan Dollars) 2,152,511 12,825,500 265,298 (New Taiwan Dollars) 1,536,188 12,343,034 69,306	SensitivityAnalysis
			Range of change Up 1% Up 1% Up 1% Range of change Up 1% Up 1% Up 1%	Effects on gain or loss Effects on Equity 21,525 - - 128,255 (2,653) - Effects on gain or loss Effects on Equity 15,362 - - 123,430 (693) -

349

If NTD appreciated against the above-mentioned currencies, held all other variables constant, the impact generated as of December 31, 2017 and 2016 would stay the same with reverse result.

(C) The monetary items of the Company are deemed to be significant due to the fluctuation of exchange rates. Exchange gains and losses (including realized and unrealized) amounted to NT$ (73,939) thousand and NT$ 23,039 thousand for 2017 and 2016 respectively.

B. Price risk

The Company’s investment was classified in the standalone balance sheets as available-for-sale financial assets, or financial assets measured at fair value through profit or loss. Therefore, the Company was exposed to price risks from equity instruments, bond fund, and financial bonds. The Company primarily invests in domestic listed equity instruments and mutual funds, of which the prices are prone to impacts from the uncertain future prices of their investment targets. For the years ended December 31, 2017 and 2016, if the prices of those financial instruments went up or down by 1%, held all other variables constant, net income after tax from would increase or decrease by NT$ 436 thousand and NT$ 1,018 thousand respective as a result of the incurred gains and losses on financial instruments at FVTPL ; and share holders’ equity would increase or decrease by NT$ 449 thousand and NT$ 466 thousand due to the incurred gains and losses on available-for-sale equity instruments.

350

C. Interest rate risk

Interest rates of interest-bearing financial instruments held by the Company as of the reporting date are summa

Item Fixed-rate instruments: Financial assets Financial liabilities Net Floating-rate instruments: Financial assets Financial liabilities Net	CarryingAmount
	December 31,2017 $1,539,010 (649,616) $889,394 $1,269,204 (18,535,601) ($17,266,397)	December 31,2016:
		$624,711 (339,777)
		$284,934
		$1,304,457 (15,776,228)
		($14,471,771)

(A) Sensitivity analysis of fixed-interest instruments:

The Company possessed no material fixed-interest assets or liabilities at fair value through profit and loss or available for sale. No derivative instruments (interest swap) qualifying as hedging tools under hedge accounting, was engaged to hedge fair value. Therefore, the fluctuation in interest rate on reporting date will not affect the income and other comprehensive income.

(B) Sensitivity analysis of interest-fluctuate instruments:

The interest-fluctuate instruments possessed by the Company were floating-interest assets (liabilities). Therefore, every 1% increase (decrease) in the market interest rate would result in Every one percent increase (decrease) in the interest will increase (reduce) the net profit by (172,664) thousand and (144,718) thousand, respectively for 2017 and 2016.

(2) Credit risk

Credit risk refers to the risk of financial loss to the Company arising from default by counterparties of financial instruments on the contract obligations. Credit risk of the Company mainly comes from receivables under operating activities and bank deposits and other financial instruments under investing activities. Credit risks related to operation and finance risks are managed separately.

A. Credit risk related to operations:

To maintain the quality of accounts receivable, the Company has established the procedures for credit risk management with regards to its operations.

351

Risk assessment on individual customer includes factors that could affect the customer's ability to pay, such as the customer's financial status, the Company’s internal credit ratings, historical transactions and current economic conditions. As of December 31, 2017 and 2016, the top ten clients accounted for 74.41% and 69.41% respectively of the Company’s accounts receivable. No significant credit concentration risk was shown from the remaining accounts receivables.

B. Financial credit risk

The credit risks of bank deposits and other Financial instruments are measured and monitored by the Company’s financial departments. The Company does not expect significant credit risk because the counter-parties are creditworthy and investment-graded financial institutions, companies and government agencies without any significant default concerns.

C. The Company uses collaterals and other credit enhancement to avoid credit risks from financial assets:

The following table shows the maximum exposure to credit risk regarding financial assets recognized in the standalone balance sheet, pledged collaterals, master netting arrangements and other credit enhancement held by the Company :

Decreased amount of maximum exposure to credit risks	Decreased amount of maximum exposure to credit risks	Decreased amount of maximum exposure to credit risks	Decreased amount of maximum exposure to credit risks
Collateral Master Netting Arrangements Other Credit Enhancement Total $ - $ - $1,098,861 $1,098,861 Decreased amount of maximum exposure to credit risks			Total
			$1,098,861
Collateral $ -	Master Netting Arrangements $ -	Other Credit Enhancement $952,532	Total
			$952,532

(3) Liquidity risk
A. Liquidity risk management

The Company’s objective in managing liquidity risk is to maintain a sufficient level of cash and cash equivalents, highly-liquid marketable securities and credit lines with banks for daily operations in order to ensure the financial flexibility of the Company.

352

B. The table below shows an analysis of the financial liabilities held by the Company with defined repayment terms based on maturity dates and undiscounted payment at maturity:

		December 31,2017	December 31,2017	December 31,2017
Less than 6 months	7-12 months	1-2 years	2-5 years	Over 5 years	Contractual cash flows	Carrying Amount
$7,402,776 650,000 635,683 529,357 509,287 312,570 -	$778,000 - - - 5,025 360,070 -	$ - - - - - 1,372,640 -	$ - - - - - 7,930,040 -	$ - - - - - 399,340 2,000	$8,180,776 650,000 635,683 529,357 514,312 10,374,660 2,000	$8,180,776 649,616 635,683 529,357 514,312 10,354,825 2,000
$10,039,673	$1,143,095	$1,372,640	$7,930,040	$401,340	$20,886,788	$20,866,569
$1,751	- $	- $	- $	- $	$1,751	$1,751

Less than 6 months	7-12 months	1-2 years	2-5 years	Over 5 years	Contractual cash flows	Carrying Amount
$5,555,868 340,000 642,048 700,059 558,691 306,570 -	$630,000 - - - 9,066 481,570 -	$ - - - - - 1,179,640 -	$ - - - - - 6,907,920 -	$ - - - - - 729,100 2,000	6,185,868 340,000 642,048 700,059 567,757 9,604,800 2,000	$6,185,868 339,777 642,048 700,059 567,757 9,590,360 2,000
$8,103,236	$1,120,636	$1,179,640	$6,907,920	$731,100	$18,042,532	$18,027,869

The Company does not expect a maturity analysis of which the cash flows timing would be significantly earlier, or the actual amount would be significantly different.

(IV) Fair Value Information:

For information on fair value of financial assets and financial liabilities not measured at fair value, please refer to Note 12. (2). 1.

For fair value of investment property measured at cost, please refer to Note 6 (14). For fair value of investments in associates with quoted prices in an open market, please refer to Note 6(9)

Definition of the three levels in fair value:
Level 1:

Level 1 inputs are quoted prices in active markets for identical instruments.

An active market is a market that meets all of the conditions set below: the items traded in the market are homogeneous, willing buyers and sellers can normally be found at any time and prices are available to the public.The fair value of the Company’s investments in listed stocks, beneficiary certificates, on the-run Taiwan ~~government bonds and derivatives with quoted prices in an active market are all level 1 inputs.~~ 353

Level 2:

Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectlyThe fair value of the Company’s investments in off the-run government bonds, corporate bonds, bank debentures, convertible corporate bones and the majority of derivative instruments are all Level 3:

Level 3 inputs refer to inputs used in the fair value measurement that are not observable or accessible from the market.Some derivative instruments and equity instruments with no active market held by the Company are all level 3 assets

Fair value hierarchy:

The fair value hierarchy of financial instrument measured at fair value on a recurring basis is disclosed as follows:Information about The Company’s fair value hierarchy is as follows:

	December	31,2017
Level 1: $33,634 44,910 $78,544 - $	Level 2: $9,999 - $9,999 $1,751 December	Level 3: $ - - $- $- 31,2016	Total
			$43,633 44,910
			$88,543
			$1,751

Level 1: $91,783 46,575 $138,358	Level 2: $9,999 - $9,999	Level 3: $ - - $-	Total
			$101,782 46,575
			$148,357

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Fair value valuation technique for instruments measured at fair value:

(1) The fair value of financial instruments with quoted prices in active markets is the quoted market prices. Market prices published by major trading centers and exchanges for on-the-run government bonds are the basis for the fair value of listed equity instruments and debt instruments with quoted prices in active markets. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. If one of the conditions fails, the market is not deemed active.In general, indications of an inactive market include a wide bid-ask spread, a significant increase in the bid-ask spread and low level of trading volume. The fair value of financial instruments with active markets held by the Company are stated by their types and natures as follows:

a. Listed stocks: closing prices
b. Open-end funds: net worth

(2) When evaluating financial instruments that are non-standard and with lower complexity, e.g. debt instruments with no active markets, interest rate swaps, foreign exchange swaps and options, the Company adopts valuation techniques that are commonly used by market participants. The parameters used in the valuation models for those financial instruments are normally observable data in the market.

(3) Valuation of derivative financial instruments adopts valuation models that are commonly used by market participants, e.g. discounted cash flows method and option pricing model.

(4) Outputs from the valuation models are estimates and valuation techniques may not be able to reflect all relevant factors of the financial and non-financial instruments held by the Company. Therefore, when needed, estimates from the valuation model would be adjusted based on additional parameters, e.g. model risk or liquidity risk. According to the Company’s policies of fair value valuation management and relevant control procedures, the Company’s management considers that valuation adjustments are necessary and appropriate for a fair and just presentation of financial and non-financial instruments on the consolidated balance sheet. Every price data and parameters used in the valuation is reviewed thoroughly and adjusted for current market conditions.

(5) The Company incorporates the adjustment of credit risk assessment into the fair value calculation of financial and non-financial instruments to reflect the credit risk of counterparty and the credit quality of the Company.

Transfers between Level 1 and Level 2 fair value hierarchy: None
Statement of changes in Level 3 fair value hierarchy: None.
Quantitative information about the significant unobservable inputs (level 3) used in the fair value measurement : None.
Valuation process for Level 3 fair value measurement: Not applicable.
For measurement of Level 3 fair value, the sensitivity analysis of reasonably possible alternative assumptions on fair value: Not applicable.

(V) Transfer of financial assets: None.

(VI) Offsetting financial assets and financial liabilities: None.

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(VII) Losses from disasters

Due to strikes from Typhoon Nepartak and Typhoon Meranti, part of the production equipment and inventories were immersed in water. Estimates on incurred losses are as follows:

Item Estimated amount of loss Estimated amount of claim Amount of deductible by the Company	Inventories $5,252 (2,668) $2,584	Impairment losses from property, plant and equipment Total $7,914 $13,166 (5,350) (8,018) $2,564 $5,148

The flood impaired inventory of NT$ 5,252 thousand was sold at a lower price because of its irrepairable condition (recognized under other receivables). Insurance claims receivables at the amount of NT$ 2,668 thousand were expected from the insurance company (recognized under other receivables).
The flood impaired property, plant and equipment of NT$ 7,914 thousand is recognized under property, plant and equipment - accumulated impairment. The Company had to assume the minimum deductible of NT$ 2,564 thousand (recognized in other gains and losses for 2016). The rest of NT$ 5,350 thousand was claimable from the insurance company (recognized under other receivables). The Group repaired the various equipment in an active manner after the flood. For the current period, repairment expense of NT$ 2,437 thousand had been written down to accumulated impairment as of December 31, 2017.

XIII. Additional Disclosures

(I) Information about significant transactions:
Loans to others: TABLE 1
Endorsements and Guarantees:TABLE 2.
Marketable securities held at the end of the period: TABLE 3.
Aggregate trading value on the same securities (including purchase and sales) reaching NT$300 million or 20 percent of the paid-in capital or more: Appendix TABLE 4.
Property acquired reaching NT$300 million or 20% of the paid-in capital or more: TABLE 5.
Disposal of Property Amounting to At Least NT$ 300 Million or Exceeding 20% of Paid-in Capital: TABLE 6.
Purchases from and Sales to Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paidin Capital: TABLE 7.
Receivables from Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital: TABLE 8.
Trading activities in financial derivatives: Please refer to Note 6 (2) for details.
(II) Reinvestment Information: TABLE 9.
(III) Investments in Mainland China: TABLE 10.

356

Table 1

Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017

Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017	Table 1 Yieh Phui Enterprise Co., Ltd. Loans to Others December 31, 2017
Unit: Thousands of NT Dollar/ Foreign Currency No. Name of Creditor Name of Borrower Financial Statement Account Whether a Related Party Highest Balance for the Current Period Ending Balance Actual Amount Borrowed Interest Rate Range Nature of Loan Amount Arising from Ordinary Course of Business Reason for Short-Term Financing Allowance for Doubtful Accounts Collateral Limit on Loans Granted to a Single Party Limit of Total Loans Type Value 0 Yieh Phui Enterprise Co., Ltd. Great Emperor Hotel CO.,LTD. Other receivable - relatedparty Y 1,050,000 700,000 380,000 2.50% 2 － Operating capital －－－ 11,136,676 (Note 2) 11,136,676 (Note 1) 0 Yieh Phui Enterprise Co., Ltd. Kingsgarden International CO., LTD. Other receivable - related party Y 1,300,000 900,000 570,000 2.50% 2 － Operating capital －－－ 11,136,676 (Note 2) 11,136,676 (Note 1) 1 EMMT Systems Corporation AWID Asia Co., Ltd. Other receivables Y 8,000 2,000 2,000 2.955% 2 － Operating capital －－－ 136,775 (Note 2) 136,775 (Note 1) 2 1. Yieh Phui (Hong Kong) Holdings Limited Yieh Phui (China) Technomaterial Co., Ltd. Long-term receivable - related party Y 3,736,096 (RMB 42,000) (USD 117,500) 3,606,381 (RMB 38,850) (USD 115,213) 3,606,381 (RMB 38,850) (USD 115,213) 4.08178 % -9.7265% 2 － Operating capital －－－ 11,136,676 (Note 3) 11,136,676 (Note 3) 3 Golden Developments Holdings Ltd. 1. Yieh Phui (Hong Kong) Holdings Limited Other receivable - related party Y 241,748 (RMB 52,000) －－ 5.85% 2 － Operating capital －－－ 11,136,676 (Note 3) 11,136,676 (Note 3) 4 GOOD HONOR HOLDINGS LTD. 1. Yieh Phui (Hong Kong) Holdings Limited Long-term liabilities - current portion Y 145,125 (USD 4,500) 133,920 (USD 4,500) 133,920 (USD 4,500) 2.52% -3.05% 2 － Operating capital －－－ 11,136,676 (Note 3) 11,136,676 (Note 3) 5 Yieh Phui (China) Technomaterial Co., Ltd. Tianjin Lianfa Precision Steel Corporation Long-term receivable - relatedparty Y 204,556 (RMB 44,000) 150,906 (RMB 33,000) 150,906 (RMB 33,000) 4.00% 2 － Operating capital －－－ 11,136,676 (Note 3) 11,136,676 (Note 3) 6 Shin Phui Steel Corporation EMMT Systems Corporation Other receivable - relatedparty Y 15,000 －－ 2.25% 2 － Operating capital －－－ 15,866 (Note 4) 126,925 (Note 4) 7 Shin Yang Steel Co., Ltd. EMMT Systems Corporation Other receivable - relatedparty Y 80,000 －－ - 2 － Operating capital －－－ 165,144 (Note 4) 330,287 (Note 4)
No.	Name of Creditor	Name of Borrower	Financial Statement Account	Whether a Related Party	Highest Balance for the Current Period	Ending Balance	Actual Amount Borrowed	Interest Rate Range	Nature of Loan	Amount Arising from Ordinary Course of Business	Reason for Short-Term Financing	Allowance for Doubtful Accounts	Collateral		Limit on Loans Granted to a Single Party	Limit of Total Loans
													Type	Value
0	Yieh Phui Enterprise Co., Ltd.	Great Emperor Hotel CO.,LTD.	Other receivable - relatedparty	Y	1,050,000	700,000	380,000	2.50%	2	－	Operating capital	－	－	－	11,136,676 (Note 2)	11,136,676 (Note 1)
0	Yieh Phui Enterprise Co., Ltd.	Kingsgarden International CO., LTD.	Other receivable - related party	Y	1,300,000	900,000	570,000	2.50%	2	－	Operating capital	－	－	－	11,136,676 (Note 2)	11,136,676 (Note 1)
1	EMMT Systems Corporation	AWID Asia Co., Ltd.	Other receivables	Y	8,000	2,000	2,000	2.955%	2	－	Operating capital	－	－	－	136,775 (Note 2)	136,775 (Note 1)
2	1. Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	Long-term receivable - related party	Y	3,736,096 (RMB 42,000) (USD 117,500)	3,606,381 (RMB 38,850) (USD 115,213)	3,606,381 (RMB 38,850) (USD 115,213)	4.08178 % -9.7265%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
3	Golden Developments Holdings Ltd.	1. Yieh Phui (Hong Kong) Holdings Limited	Other receivable - related party	Y	241,748 (RMB 52,000)	－	－	5.85%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
4	GOOD HONOR HOLDINGS LTD.	1. Yieh Phui (Hong Kong) Holdings Limited	Long-term liabilities - current portion	Y	145,125 (USD 4,500)	133,920 (USD 4,500)	133,920 (USD 4,500)	2.52% -3.05%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
5	Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Long-term receivable - relatedparty	Y	204,556 (RMB 44,000)	150,906 (RMB 33,000)	150,906 (RMB 33,000)	4.00%	2	－	Operating capital	－	－	－	11,136,676 (Note 3)	11,136,676 (Note 3)
6	Shin Phui Steel Corporation	EMMT Systems Corporation	Other receivable - relatedparty	Y	15,000	－	－	2.25%	2	－	Operating capital	－	－	－	15,866 (Note 4)	126,925 (Note 4)
7	Shin Yang Steel Co., Ltd.	EMMT Systems Corporation	Other receivable - relatedparty	Y	80,000	－	－	-	2	－	Operating capital	－	－	－	165,144 (Note 4)	330,287 (Note 4)

(Note 1) The maximum amount of total loans to others shall not exceed 40% of the creditor's net worth.

(Note 2) The maximum amount of loans granted to a single entity shall not exceed 40% of the creditor's net worth.

(Note 3) Total loans granted by foreign companies that are 100% owned directly or indirectly by the Company shall not exceed 40% of the Company’s net worth and loans to a single entity shall not exceed 40% of the Company’s net worth.

(Note 4) The maximum amount of loans granted to a party by an entity in need of short-term financing shall not exceed 40% of such entity’s own net worth, and limit of loans granted to a single party by such entity, except for Shin Yang Steel Co., Ltd. which is capped at 20% of its net worth, shall not exceed 5% of such entity’s net worth.

(Note 5) Nature of loan is classified as follows: Entities having business relations with the Company - 1; entities in need of short-term financing - 2.

357

Table 2

Yieh Phui Enterprise Co., Ltd. Endorsements and Guarantees December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

No.	Name of the Company Providing Guarantee	Parties Being Guaranteed	Parties Being Guaranteed	Limits on Endorsement/Gu arantee Amount Provided to a Single Party	Maximum Guarantee Amount for the Current Period	Outstanding Guarantee Amount - Ending	Actual Amount Borrowed	Guarantee Amount with Collateral Placed	Ratio of accumulated guarantee amount to latest net worth of the Company	Limits of guarantee and endorsement	Endorsements/ guarantees provided by parent company to subsidiaries	Endorsements/guara ntees provided by subsidiaries to parent company	Endorsements/ Guarantees Issued to Entities in Mainland China
		Company Name	Relationship
0	Yieh Phui Enterprise Co., Ltd. (Note 1)	Yieh Phui (China) Technomaterial Co., Ltd.	Investee of the Company’s Sub-subsidiary	27,841,691	6,252,905 (RMB 1,345,000)	6,150,551 (RMB 1,345,000)	5,093,644 (RMB 1,113,876)	－	22.09%	27,841,691	Y	－	Y
		EMMT Systems Corporation	Subsidiary of the Company	27,841,691	130,000	－	－	－	－	27,841,691	Y	－	－
		Shin Yang Steel Co., Ltd.	Subsidiary of the Company	27,841,691	1,886,000	1,786,000	1,134,032	336,000	6.41%	27,841,691	Y	－	－
		1. Yieh Phui (Hong Kong) Holdings Limited	Subsidiary of the Company	27,841,691	5,495,490 (USD 182,000)	4,225,920 (USD 142,000)	3,863,156 (USD 123,841) (RMB 38,850)	－	15.18%	27,841,691	Y	－	－
		Golden Developments Holdings Ltd.	Subsidiary of the Company	27,841,691	278,940 (RMB 60,000)	－	－	－	－	27,841,691	Y	－	－
1	Shin Phui Steel Corporation (Note 2)	Yieh Phui Enterprise Co.,Ltd.	Parent company of the company	1,586,556	629,510	629,510	345,438	629,510	198.39%	1,586,556	－	Y	－
2	Kingsgarden International CO., LTD. (Note 3)	Great Emperor Hotel CO., LTD.	(Note 8)	14,529,364	7,186,000	7,186,000	3,831,000	7,186,000	346.21%	14,529,364	－	－	－
3	Great Emperor Hotel CO., LTD. (Note 4)	Kingsgarden International CO., LTD.	(Note 8)	14,290,337	7,413,000	7,413,000	4,295,000	7,413,000	363.12%	14,290,337	－	－	－
4	Yieh Phui (China) Technomaterial Co., Ltd. (Note 5)	Tianjin Lianfa Precision Steel Corporation	Subsidiary of the Company	9,954,300	79,033 (RMB 17,000)	77,739 (RMB 17,000)	77,739 (RMB 17,000)	－	0.78%	9,954,300	Y	－	Y
5	Shin Yang Steel Co., Ltd. (Note 6)	Yieh Phui Enterprise Co., Ltd.	Parent company of the company	2,477,154	900,000	900,000	700,000	900,000	109.00%	2,477,154	－	Y	－

(Note 8): Mutually guaranteed companies based on the need of construction contract.

358

Table 3

Yieh Phui Enterprise Co., Ltd.

Marketable Securities Held (excluding associates, and joint ventures)

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Holder Company	Type and Name of Marketable Securities	Relationship with the Security Issuer	Financial Statement Account		Ending	Ending	Ending
				Shares or Units (in Thousands)	Carrying Amount	Share Holding %	Fair Value
Yieh Phui Enterprise Co., Ltd.	Beneficiary certificates / Paradigm Global Oil Resources Fund	None	Financial assets at fair value through profit or loss - current	516	3,128	－	3,128
	Beneficiary certificates / SinoPac RMB Bond Fund TWD Acc	None	Financial assets at fair value through profit or loss - current	300	2,838	－	2,838
	Beneficiary certificates/Paradigm 3-Year Maturity RMB Emerging Market Bond Fund	None	Financial assets at fair value through profit or loss - current	900	9,156	－	9,156
	Beneficiary certificates/First Financial Holding Global Utility/Infrastructure Income Fund	None	Financial assets at fair value through profit or loss - current	500	4,925	－	4,925
	Beneficiary certificates/Fidelity Funds - Asian High Yield Fund	None	Financial assets at fair value through profit or loss - current	500	4,985	－	4,985
	Beneficiary certificates/Yuanta iSTOXX MUTB Asia/Pacific Quality Dividend 100 Index Fund	None	Financial assets at fair value through profit or loss - current	554	5,605	－	5,605
	Beneficiary certificates/CTBC Global iSport Fund	None	Financial assets at fair value through profit or loss - current	300	2,997	－	2,997
		Total			33,634		33,634

359

Type and Name of Marketable Securities	Relationship with the Security Issuer	Financial Statement Account	Ending	Ending	Ending	Ending	Note
			Shares (Thousand of Shares)	Carrying Amount	Share Holding %	Fair Value
Financial bonds / Bank of Panhsin Sinsing Branch – 2014 First term subordinated financial bonds	None	Financial Assets at Fair Value through Profit or Loss - Non-current	10,000	9,999	－	9,999
Stock/ TaiwanVes-Power Co., Ltd.	Related party in substance	Financial Assets Carried at Cost - Non-current	1,800	55,899	3.60%	－	Note
Stock/ New Spring Construction Corp.	Related party in substance	Financial Assets Carried at Cost - Non-current	8,549	41,833	15.49%	－	Note:
Stock/ Ascentke Venture Capital Corp.	None	Financial Assets Carried at Cost - Non-current	2,352	23,520	6.42%	－	Note:
Stock/ Taiwan Implant Technology Company, Ltd.	None	Financial Assets Carried at Cost - Non-current	1,891	18,913	4.20%	－	Note:
Stock/ Sunny Bank	None	Financial Assets Carried at Cost - Non-current	3,923	35,482	0.18%	－	Note:
Stock/ Universal Venture Capital Investment Co., Ltd.	None	Financial Assets Carried at Cost - Non-current	1,100	9,130	0.91%	－	Note:
Stock/Yieh Corporation Limited	Related party in substance	Financial Assets Carried at Cost - Non-current	200	2,002	5.48%	－	Note:
Stock/Pacific Harbor Stevedoring Corporation	Director of the entity is the Company’s director	Financial Assets Carried at Cost - Non-current	150	1,650	3.00%	－	Note:
Stock/ ImageDJ Software Co., Ltd.	None	Financial Assets Carried at Cost - Non-current	24	535	0.96%	－	Note:
Stock/ Chao-Feng Venture Capital Co., Ltd.	None	Financial Assets Carried at Cost - Non-current	1,000	10,000	0.79%	－	Note:
Stock/ Skylark International Hotel Co.,Ltd.	Related party in substance	Financial Assets Carried at Cost - Non-current	20,528	350,357	13.68%	－	Note:
	Total			549,321		－
Stock/ Asia Pacific Telecom Co., Ltd.	None	Available-for-sale financial assets - non-current	4,500	44,910	－	44,910
Preferred stock/E-Da Development Corp.	An investee accounted for using equitymethod	Bond investments with no active market - non-current	17,065	170,654	－	－	Note:
Preferred stock/Eliter International Corp.	An investee accounted for using equitymethod	Bond investments with no active market - non-current	26,275	262,747	－	－	Note:
	Total			433,401		－

Note: Financial assets carried at cost and bond investments with no active market are those of which no quotes in an active market exist and the fair value can not be reliably measured.

360

Holder Company	Type and Name of Marketable Securities	Relationship with the Security Issuer	Financial Statement Account		Ending	Ending	Ending	Note
				Shares (Thousand of Shares)	Carrying Amount	Share Holding %	Market Value
WORTHING HONOR HOLDINGS LTD	Stock/ SEE Corporation	None	Financial assets at fair value through profit or loss - current	1	－	－	－	－
EMMT Systems Corporation	Stock/ Rodan (Taiwan) Ltd.	None	Financial Assets Carried at Cost - Non-current	86	491	0.73%	－	Note:
Kuo Chang Enterprise Co., Ltd.	Preferred stock/Eliter International Corp.	An investee of the Parent Company under equity method.	Bond investments with no active market - non-current	1,997	19,974	－	－	Note:
United Brightening Development Corp.	Preferred stock/Eliter International Corp.	An investee of the Parent Company under equity method.	Bond investments with no active market - non-current	639	6,392	－	－	Note:
Yieh Hsing Enterprise Co., Ltd.	Fund/Allianz Glb Inv All Seasons Ret FOBF	None	Financial assets at fair value through profit or loss - current	195	2,994	－	2,994	－
	Fund/CTBC Global iSport Fund	None	Financial assets at fair value throughprofit or loss - current	300	2,997	－	2,997	－
	Fund/First Financial Holding Global Utility/Infrastructure Income Fund	None	Financial assets at fair value through profit or loss - current	300	2,955	－	2,955	－
	Total				8,946	－	8,946
	Pacific Harbor Stevedoring Corporation	Director of the entity is the Company’s chairman	Financial Assets Carried at Cost - Non-current	150	1,650	3.00%	－	Note:
	Chateau Bridgetop Inc.	None	Financial Assets Carried at Cost - Non-current	2,500	－	5.00%	－	Note:
	Total				1,650		－
	Preferred stock/E-Da Development Corp.	An investee accounted for using equity method	Bond investments with no active market - non-current	3,565	35,651	－	－	Note:
	Preferred stock/Eliter International Corp.	An investee accounted for using equity method	Bond investments with no active market - non-current	5,934	59,337	－	－	Note:
	Total				94,988	－	－
Kingsgarden International CO., LTD.	Fund/First Financial Holding Global Utility/Infrastructure Income Fund	None	Financial assets at fair value through profit or loss - current	200	1,970	－	1,970	－
	Fund/FidelityFunds - Asian High Yield Fund	None	Financial assets at fair value throughprofit or loss - current	500	4,984	－	4,984
	Total				6,954	－	6,954

Note: Financial assets carried at cost and bond investments with no active market are those of which no quotes in an active market exist and the fair value can not be reliably measured.

361

Table 4

Yieh Phui Enterprise Co., Ltd.

Aggregate trading value on the same securities (including purchase and sales) reaching NT$300 million or 20 percent of the paid-in capital or more December 31, 2017

Unit: Thousands of NT Dollars

Purchaser/S eller	Type and Name of Marketable Securities	Financial Statement Account	Counter-party	Relationshi p	BeginningBalance	BeginningBalance	Acquisition	Acquisition			Disposal		EndingBalance	EndingBalance
					Shares	Amount	Shares	Amount	Shares	Selling Price	Carrying Cost	Gain (Loss) on Disposal	Shares	Amount
Yieh Phui Enterprise Co., Ltd.	Hong Yuh Assets Management Co.,Ltd.	Investments accounted for using equity method	Capital Increase by Cash	Subsidiary of the Company	37,000	253,910	43,000	231,436 (Note 1)	－	－	－	－	80,000	485,346
	Kuo Chang Enterprise Co., Ltd.	Investments accounted for using equity method	Yieh United Steel Corporation	An investee accounted for using equity method	51,548	690,453	45,191 (Note 3)	572,680 (Note 2)	－	－	－	－	96,739	1,263,133

(Note 1): Including capital increase by cash of NT$ 430,000 thousand, share of profit/loss and other comprehensive income of investees accounted for using equity method of NT$ (175,568) thousand and accumulated earning/loss of NT$ ( 22,996 ) thousand incurred due to the failure to subscribe new shares in proportion to its shareholding percentage.

(Note 2): : Including acquisition of NT$ 479,467 thousand, share of profit/loss and other comprehensive income of investees accounted for using equity method of NT$ (3,420) thousand, accumulated earning/loss recognized in proportion to the Company’s shareholding percentage of NT$ (24) thousand, capital surplus of NT$ 1,334 thousand and capital surplus of NT$ 95,323 thousand recognized due to transactions with non-controlling interests.

(Note 3): Including 2,266 thousand shares resulting from capitalization of earnings.

362

Table 5

Yieh Phui Enterprise Co., Ltd.

Acquisition of Property Amounting to At Least NT$ 300 Million or Exceeding 20% of Paid-in Capital

January 1, 2017 ~ December 31, 2017

Unit: Thousands of NT Dollars

Company that Acquired the Property	Name of Property	Transaction Date	Transaction Amount	Payment Status	Counter-party	Nature of Relationshi ps	Prior Transaction of	Prior Transaction of	Related Counter-party	Related Counter-party	Price Reference	Purpose of Acquisition and Status in Use	Other Agreement Terms
							Owner	Relationships with the issuer	Transfer Date	Amount
Kingsgarden International CO., LTD.	Construction of commercial building at E-da Asia Plaza	January 28, 2014~ October 2, 2017	4,533,752	2,368,135	New Spring Construction Corp., Taiwan Cement Corporation, Yieh Hsing Enterprise Co., Ltd. and Yieh Phui Enterprise Co., Ltd., etc.	Related party in substance, Parent company, Ultimate parent company	－	－	－	－	Determined at prices agreed on by both parties upon negotiation or through price competition with reference to appraisal reports issued by professional appraisal institutions	To build a boutique shopping mall	None
Great Emperor Hotel CO., LTD.			3,674,396	1,826,815								For development of an international hotel

363

Table 6

Yieh Phui Enterprise Co., Ltd.

Property Disposed of Reaching NT$300 Million or 20% of the Paid-in capital or More January 1, 2017 ~ December 31, 2017

Unit: Thousands of NT Dollars/Foreign Currency

Name of Company Being	Name of	Transaction Date/Date of	Original Aiiti	Bk Vl	Transaction	Proceeds Collected	Gain (Loss)	Counter-party	Relationship with	Purpose of	Price Reference	Other At
Disposed of	Property	Occurrence of the Event	cquson Date	oo aue	Amount		on Disposal		the Company	Disposal		greemen Terms
GUANG LIAN STEEL (VIETNAM) CO., LTD.	Operating assets (Including buildings and equipment)	February 13, 2017	July 3, 2007- December 31, 2016	－ (Note 1)	345,524 (VND 255,290,917)	345,524 (VND 255,290,917)	345,524 (Note 2)	Hoa Phat Steel in Rong-guo Industrial Park	－	To terminate the investment in Vietnam	Mutual negotiation	None

364

Table 7

Yieh Phui Enterprise Co., Ltd.

Purchases from and Sales to Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital January 1, 2017 ~ December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Purchaser/ Seller	Counter- party	Nature of Relationships		Transaction Status	Transaction Status	Transaction Status	Reasons for and status of differences in transaction terms compared to arms-length transaction	Reasons for and status of differences in transaction terms compared to arms-length transaction	Notes or accounts receivable (payable)	Notes or accounts receivable (payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Payment Terms	Unit price	Payment Terms	Balance	Percentage of total notes and accounts receivable (payable)
Yieh Phui Enterprise Co., Ltd.	Yieh Hong Enterprise Co., Ltd.	Related party in substance	Purchases	2,512,976	11.09%	T/T or Sight L/C before goods acceptance.	－	－	－	－	－
	Yieh Mau Corp.	Related party in substance	Sales	773,806	2.65%	1-2 months	－	－	－	－	－
	ASIAZONE CO., LIMITED	An investee accounted for using equity method	Sales	1,246,218	4.27%	1-2 months	－	－	213,953	15.21%	Accounts receivable
	New Spring Construction Corp.	Related party in substance	Sales	542,255	1.86%	Pursuant to the agreement	－	－	798	0.06%	Accounts receivable
	Shin Phui Steel Corporation	Subsidiary of the Company	Sales	294,061	1.01%	1-2 months	－	－	50,329	3.58%	Accounts receivable
	Shin Yang Steel Co., Ltd.	Subsidiary of the Company	Sales	783,475	2.69%	1-2 months	－	－	45,012	3.20%	Accounts receivable
	Yieh United Steel Corporation	An investee accounted for using equity method	Sales	228,328	0.78%	1-2 month for galvanized steel coils, monthly closing at 15 days for carbon steel and scraps of steel.	－	－	20,010	1.42%	Accounts receivable
Shin Yang Steel Co., Ltd.	Yieh Hong Enterprise Co., Ltd.	Related party in substance	Purchases	154,040	6.50%	T/T or Sight L/C before goods acceptance.	－	－	－	－	－

365

Purchaser/ Seller	Counter- party	Nature of Relationships		Transaction Status	Transaction Status	Transaction Status	Reasons for and status of differences in transaction terms compared to arms-length transaction	Reasons for and status of differences in transaction terms compared to arms-length transaction	Notes or accounts receivable (payable)	Notes or accounts receivable (payable)	Note
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Payment Terms	Unit price	Payment Terms	Balance	Percentage of total notes and accounts receivable (payable)
1. Yieh Phui (Hong Kong) Holdings Limited	Yieh United Steel Corporation	An investee of the Parent Company under equity method.	Sales	1,373,131 (USD 45,096)	77.70%	3 months	－	－	173,105 (USD 5,817)	35.72%	Accounts receivable
	Fujian Lian Wei Logistics Co., Ltd.	Related party in substance	Sales	394,077 (USD 12,942)	22.30%	3 months	－	－	311,465 (USD 10,466)	64.28%	Accounts receivable
	Angang Lianzhong (Guangzhou) Stainless Steel Corporation	Related Party in Substance	Purchases	660,644 (RMB 21,697)	100%	T/T in advance	－	－	－	－	－
Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Parent company	Sales	1,281,795 (RMB 284,120)	4.32%	1-2 months	－	－	237,175 (RMB 51,865)	10.34%	Accounts receivable
	ASIAZONE CO., LIMITED	An investee of the Parent Company under equitymethod.	Sales	349,086 (USD 11,522)	1.18%	1-2 months	－	－	27,909 (USD 978)	1.22%	Accounts receivable
Yieh Hsing Enterprise Co., Ltd.	Yieh United Steel Corporation	An investee accounted for using equity method	Purchases	5,392,366	75.52%	T/T or Sight L/C before goods acceptance.	－	－	－	－	－
Tianjin Lianfa Precision Steel Corporation	Angang Hanyang (Guangzhou) Stainless Steel Corporation	Related Party in Substance	Purchases	232,040 (RMB 51,434)	15.31%	T/T in advance	－	－	1,337 (RMB 292)	－	Accounts payable
	Angang Lianzhong (Guangzhou) Stainless Steel Corporation	Related Party in Substance	Purchases	130,089 (RMB 28,835)	8.58%	T/T in advance	－	－	－	－	－

366

Table 8

Yieh Phui Enterprise Co., Ltd.

Receivables from Related Parties Amounting to At Least NT$ 100 Million or Exceeding 20% of Paid-in Capital December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Company Name	Counter- party	Relationship	Ending balance - related party	Turnover Days	Overdue	Overdue		Allowance
					Amount		Amounts Received in Subsequent Period (Note 2)	for Doubtful Accounts
						Action Taken

Yieh Phui Enterprise Co., Ltd.	ASIAZONE CO., LIMITED	An investee accounted for using equitymethod	213,953	7.85	－	－	162,813	－
	Great Emperor Hotel CO.,LTD.	Parent company	380,000	(Note 1)	－	－	－	－
	Kingsgarden International CO.,LTD.	Parent company	570,000	(Note 1)	－	－	－	－
1. Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	Parent company	3,606,381 (RMB 38,850) (USD 115,213)	(Note 1)	－	－	－	－
	Yieh United Steel Corporation	An investee of the Parent Company under equity method.	173,105 (USD 5,817)	3.04	－	－	USD 5,817	－
	Fujian Lian Wei Logistics Co., Ltd.	Related party in substance	311,465 (USD 10,466)	2.47	－	－	USD 3,050	－
GOOD HONOR HOLDINGS LTD.	1. Yieh Phui (Hong Kong) Holdings Limited	Same ultimate parent company as the Company	133,920 (USD 4,500)	(Note 1)	－	－	－	－
Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Parent company	150,906 (RMB 33,000)	(Note 1)	－	－	－	－
			237,175 (RMB 51,865)	8.48	－	－	RMB 39,000	－

(Note 1):These are accounts receivable financing, on which the calculation of turnover doesn＇t apply.

(Note 2): Amounts received as of March 21, 2018.

367

Table 9

Yieh Phui Enterprise Co., Ltd.

Reinvestment Information

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Name of Investor	Name of Investee	Location	Primary Business Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
Yieh Phui Enterprise Co., Ltd.	1. Yieh Phui (Hong Kong) Holdings Limited	Hong Kong	Investment	7,455,887	7,455,887	233,500	100%	9,952,223	290,986	290,986
	CHAMPION LOGISTIC INC.	Samoa	Investment	1,913,111	1,913,111	57,000	97.44%	1,709,343	148,478	144,671
	Eliter International Corp.	Kaohsiung City	Construction of buildings	2,833,595	2,833,595	283,584	32.84%	2,764,614	(183,166)	(60,158)
	Yieh HsingEnterprise Co.,Ltd.	KaohsiungCity	Wire rods trading	2,238,883	2,237,751	299,458	56.43%	1,481,220	(184,153)	(90,277)
	TangengIron Works Co.,Ltd.	KaohsiungCity	Steel trading	1,453,572	1,453,572	39,553	11.30%	1,374,311	243,225	27,487
	E-Da Development Corp.	KaohsiungCity	Leisure development	1,868,658	1,868,658	186,866	28.44%	1,130,773	(248,116)	(70,570)
	United Brightening Development Corp.	Kaohsiung City	Technical consultation for steel products manufacturing	1,836,383	1,561,166	144,860	95.56%	1,869,190	33,105	31,105
	Shin Yang Steel Co., Ltd.	Kaohsiung City	Steel products related businesses	870,000	870,000	87,000	100%	825,718	62,641	62,641
	Synn Industrial Co., Ltd.	Kaohsiung City	Steel products related businesses	294,000	294,000	45,975	30%	571,760	177,982	53,395
	Yieh Mau Corp.	Kaohsiung City	Trading & manufacturing	422,605	422,605	45,075	23%	560,722	171,882	39,524
	Kuo Chang Enterprise Co., Ltd.	Kaohsiung City	Wholesaling of hardware	1,256,726	777,259	96,739	99.04%	1,263,133	13,391	13,424
	ASIAZONE CO.,LIMITED	HongKong	Steel trading	595,424	595,424	15,090	32.80%	610,037	101,421	33,270
	Shin Phui Steel Corporation	Kaohsiung City	Trading of steel products	295,736	295,736	31,246	100%	318,954	2,012	1,224
	Sin Bang Investment & Development Co.,Ltd.	Kaohsiung City	Investment	295,809	295,809	22,313	100%	283,898	4,939	4,939
	TYCOONS STEEL INTERNATIONAL CO., LTD.	Cayman Island	Investment	427,629	427,629	14,700	28.27%	109,745	325,662	92,062
	HSING JUI INVESTMENTS LIMITED	Samoa	Investment	4,603	4,603	5	100%	1,917	4	4
	EMMT Systems Corporation	Taichung City	Manufacturing and marketing of military specification printed circuit boards	306,158	306,158	28,651	77.54%	265,137	(17,423)	(13,509)

368

Name of Investor	Name of Investee	Location	Primary Business Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
Yieh Phui Enterprise Co., Ltd.	GOOD HONOR HOLDINGS LTD.	British Virgin Islands	Investment	14,723	14,723	46	100%	151,205	3,538	3,538
	Gen-Wan TechnologyCorp.	KaohsiungCity	Telecommunication	148,609	148,609	2,447	86.99%	23,348	(1,432)	(1,246)
	ChengShin SecurityCo.,Ltd.	KaohsiungCity	Security	14,000	14,000	1,400	35%	14,853	(839)	(294)
	Da Yao Engineering & Consulting Co., Ltd.	Kaohsiung City	Management service	9,800	9,800	980	49%	10,954	269	132
	E-Da Bus Transportation Co.,Ltd.	KaohsiungCity	Bus transportation	36,086	36,086	3,609	17.09%	11,552	(32,509)	(5,555)
	E-DA Tour Bus Co.,Ltd.	KaohsiungCity	Bus transportation	9,500	9,500	950	19%	3,420	(6,590)	(1,252)
	Golden Developments Holdings Ltd.	Hong Kong	Investment	2,928	2,928	100	100%	7,266	331	331
	E-Da Cultural Creative Industry Co.,Ltd.	Kaohsiung City	Cultural creativity	38,000	38,000	3,800	19%	15,535	(417)	(79)
	WORTHING HONOR HOLDINGS LTD	British Virgin Islands	Investment	6,672	6,672	100	100%	2,722	5	5
	Cheng Hsin Building Managemt and Maintanance Co., Ltd. ( the former Cheng Hsin House Management Co.)	Kaohsiung City	Maintenance and management of utilities, air condition and parking space in buildings.	3,915	3,915	320	32%	1,962	(158)	(50)
	E United Japan Co.,Ltd.	Japan	Steel trading	8,027	8,027	－	47%	4,419	2,196	1,032
	Skylark Hot Spring& Resort Corp.	KaohsiungCity	Hotel industry	11,700	11,700	1,170	14.63%	165	(1,655)	(242)
	Eda Entertainment CO., LTD	Kaohsiung City	Entertainment industry	74,100	74,100	7,410	19%	47,448	(4,306)	(818)
	Li Hui Development CO.,LTD	KaohsiungCity	Investment	321,216	321,216	61,001	44.56%	312,373	(3,466)	(1,544)	Note 1
	Ji ChangEnterprise CO.,LTD	KaohsiungCity	Investment	5,050	5,050	1,009	45%	4,917	359	(61)	Note 1
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	4,826,777	4,579,423	645,435	24.63%	4,229,446	696,226	139,798	Note 1
	HongYuh Assets Management Co.,Ltd.	KaohsiungCity	Management service	768,000	338,000	80,000	80%	485,346	(206,048)	(164,134)
	E-Da Visual Effects Company Limited.	Kaohsiung City	Entertainment industry	10,393	10,393	1,470	49%	1,807	(1,075)	(527)
	LIAN SO(H.K)CO.,LIMITED	HongKong	Investment	311,110	15,766	10,160	80%	288,308	(16,809)	(13,447)
	E-Da Health Biotechnology Co., Ltd.	Kaohsiung City	Manufacturer of food additives	3,800	－	380	19%	3,729	(375)	(71)
	Total			30,993,185	29,260,871	－	－	30,713,470	1,370,115	515,734

369

Name of Investor	Name of Investee	Location	Primary Business Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
Shin Phui Steel Corporation	Companyco Technology	Taichung City	RADIO	37,492	37,492	3,830	42.53%	4,478	326	139
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	24,562	24,562	3,178	0.12%	20,807	696,226	685	Note 2
Gen-Wan Technology Corp.	EMMT Systems Corporation	Taichung City	Manufacturing and marketing of military specification printed circuit boards	27,630	27,376	2,763	7.48%	25,573	(17,423)	(1,304)
EMMT Systems Corporation	Companyco Technology	Taichung City	RADIO	45,000	45,000	4,500	49.97%	5,261	326	163
	APPLIED WIRELESS IDENTIFICATIONS Company,INC.	San Francisco, US	RFID	242,545	242,545	40,488	91.47%	123,317	24,015	21,967
	UniPattern Corporation	Taipei City	Manufacture of computer and peripherals	54,960	39,960	5,200	43.33%	50,682	(18,167)	(7,623)
APPLIED WIRELESS IDENTIFICATIONS Company,INC.	AWID Asia Co., Ltd.	Kaohsiung City	Telecommunication s equipment wholesaling	74,668 (USD 2,509)	80,915 (USD 2,509)	3,030	100%	18,488 (USD 612)	(345) (USD 11)	(345) (USD 11)
CHAMPION LOGISTIC INC.	TYCOONS STEEL INTERNATIONAL CO.,LTD.	Cayman Island	Investment	699,360 (USD 23,500)	645,000 (USD 20,000)	34,000	65.38%	253,831 (USD 8,529)	325,662 (USD 10,695)	124,369 (USD 4,084)
TYCOONS STEEL INTERNATIONAL CO., LTD.	GUANG LIAN STEEL (VIETNAM) CO., LTD.VIETNAM	Vietnam	Steel products related businesses	-	1,415,775 (USD 43,900)	-	-	-	350,958 (USD 11,526)	350,958 (USD 11,526)
Shin Yang Steel Co., Ltd.	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	17,385	17,385	2,195	0.08%	14,373	696,226	473	Note 1
Sin Bang Investment & Development Co., Ltd.	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	265,482	265,482	7,224	2.06%	251,006	243,225	5,020
Kuo Chang Enterprise Co., Ltd.	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	439,197	439,197	56,817	2.17%	372,220	696,226	12,300	Note 1
	Eliter International Corp.	Kaohsiung City	Construction of buildings	219,977	219,977	21,558	2.50%	210,214	(183,166)	(4,573)
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	786,714	786,714	21,328	6.09%	1,039,434	243,225	14,821

370

Name of Investor	Name of Investee	Location	Primary Business Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
United Brightening Development Corp.	Chao Ying Investment Development Co.,,Ltd.	Kaohsiung City	Investment	341,992	341,992	30,400	100%	311,378	5,817	5,817
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	449,508	449,508	58,151	2.22%	380,792	696,226	12,528	Note 1
	CHAMPION LOGISTIC INC.	Samoa	Investment	49,376	49,376	1,500	2.56%	44,983	148,478	3,807
	Da Yao Engineering & Consulting Co.,Ltd.	Kaohsiung City	Management service	199	199	20	1.00%	222	269	3
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	1,177,838	1,177,838	32,050	9.16%	1,541,896	243,225	22,272
	TYCOONS STEEL INTERNATIONAL CO., LTD.	Cayman Island	Investment	9,374	9,374	300	0.58%	2,240	325,662	1,879
	Eliter International Corp.	Kaohsiung City	Construction of buildings	70,393	70,393	6,898	0.8%	67,276	(183,166)	(1,463)
Chao Ying Investment Development Co.,,Ltd.	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	336,957	336,957	8,898	2.55%	309,170	243,225	6,184
Hong Yuh Assets Management Co.,Ltd.	PT.YIEH FERRO ORIENTAL	Indonesia	Tradingbusiness	9,265	9,265	400	40%	3,605	25	10
	PT. E-UNITED FERROINDONESIA	Indonesia	Metal manufacturing industry	93,462	93,462	250	100%	45,735	(12,136)	(12,136)
	Prepaid subscriptions - PT. E-UNITED FERRO INDONESIA	Indonesia	Metal manufacturing industry	184,257	-	-	-	-	-	-
	PT.YIEH FERROINDONESIA	Indonesia	Metal manufacturing industry	1,633	1,633	50	10%	1,063	(3,203)	(320)
	PT.GENBA MULTI MINERAL	Indonesia	Nickle mining	295,632	273,875	9,765	49%	268,309	(15,555)	(26,772)
	PT. GENBA INDO RESOURCES	Indonesia	Nickle mining	9,371	-	-	75%	(7,844)	(19,141)	(17,304)
	Prepaid subscriptions - PT. GENBA INDO RESOURCES	Indonesia	Nickle mining	-	9,371	-	-	-	-	-
LIAN SO(H.K)CO., LIMITED	PT. YIEH FERROINDONESIA	Indonesia	Metal manufacturing industry	13,392 (USD 450)	14,112 (USD 450)	450	90%	9,563 (USD 321)	(3,203) (USD 105)	(2,883) (USD 95)
	Subscription Prepaid PT. E-UNITED FERROINDONESIA	Indonesia	Metal manufacturing industry	266,352 (USD 8,950)	-	-	-	-	-	-

371

Name of Investor	Name of Investee	Location	Primary Business Activities	Original Investment Amount	Original Investment Amount	Balance-ending	Balance-ending	Balance-ending	Net Income (Losses) of Investee	Investment Gain (Loss) Recognized in Current Period	Note
				End of Currenct Period	End of the Prior Year	Shares (thousand shares)	%	Carrying Amount
PT. E-UNITED FERRO INDONESIA	Prepaid subscriptions - PT.GENBA MULTI MINERAL	Indonesia	Nickle mining	231,367 (USD 7,886)	-	-	-	231,367 (USD 7,886)	-	-
	Prepaid Dividends - PT. GENBA INDO RESOURCES	Indonesia	Nickle mining	17,143 (USD 580)	-	-	-	17,143 (USD 580)	-	-
Yieh Hsing Enterprise Co., Ltd.	Great Emperor Hotel CO., LTD.	Kaohsiung City	Hotel industry	2,100,000	2,100,000	210,000	100%	- (Note 2)	(14,102)	(24,519)	Note 3
	Kingsgarden International CO., LTD.	Kaohsiung City	Leasing, sales, and development of residential and commercial buildings, department stores	2,150,000	2,150,000	215,000	100%	- (Note 2)	(26,652)	(35,609)	Note 3
	UNITED WINNER METALS L.P	Virginia,US	Scrapsteel recycling	108,752	109,371	-	33.75%	82,304	11,740	3,962
	Cheng Shin Security Co., Ltd.	Kaohsiung City	Security	4,000	4,000	400	10%	4,244	(839)	(84)
	Cheng Hsin Building Managemt and Maintanance Co., Ltd. ( the former Cheng Hsin House Management Co.)	Kaohsiung City	Maintenance and management of utilities, air condition and parking space in buildings.	750	750	75	7.50%	460	(158)	(12)
	Eliter International Corp.	Kaohsiung City	Construction of buildings	639,772	639,772	64,043	7.42%	624,569	(183,166)	(13,585)
	E-Da Development Corp.	Kaohsiung City	Leisure development	390,380	390,380	39,038	5.94%	237,951	(248,116)	(14,743)
	Yieh United Steel Corporation	Kaohsiung City	Steel products related business	20,204	20,204	2,542	0.10%	16,649	696,226	548	Note 1
	E-Da Health Biotechnology Co., Ltd.	Kaohsiung City	Manufacturer of food additives	3,800	-	380	19%	3,729	(375)	(71)
Kingsgarden International CO., LTD.	Yi Hua International Co., Ltd	Kaohsiung City	Leasing, selling and development of residential and commercial buildings	4,200	4,200	420	70%	1,177	(1,982)	(1,387)

Note 1 : Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation , investment gain/loss is accounted for using the treasury stock approach. Thus, the income/loss of investee for the period excludes gain/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company. Note 2: The Company sold land lot no. 16, 17 and 18 at Long Dong Section, Gushan District, Kaohsiung City to subsidiaries,Great Emperor Hotel CO., LTD. and Kingsgarden International CO., LTD., in December 2012. The unrealized gain from the sale of land was about NT$ 4,968,461 thousand. After deducting the investments accounted for using equity method, the credit balance of investment of NT$ 1,008,213 thousand was reclassified to “other non-current liabilities – others＂.

Note 3: The internal gains under the consolidation basis are eliminated.

372

Table 10

Yieh Phui Enterprise Co., Ltd.

Information on Investment in Mainland China

January 1, 2017 ~ December 31, 2017

Information on January 1,	Information on January 1,	Information on January 1,	Information on January 1,	Information on January 1,	Information on January 1,	Information on January 1,	Information on January 1,	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017	Investment in Mainland China 2017 ~ December 31, 2017
								Unit: Thousands of NT Dollar/ Foreign Currency
Name of Investor	Investee in Mainland China	Primary Business Activities		Paid-in Capital	Means of Investment (Note 1)	Accumulated investment balance - beginning of current period		Wire-in or wire-out amount			Accumulated investment balance-end of current period	Income (Losses) of the Investee	Direct and indirect percentage of ownership		Investment gain or loss recognized in the current period (Note 2)	Carrying amount of the investment by the end of the period	Accumulate d investment income received by the end of period
								Remitted	Received
Yieh Phui Enterprise Co., Ltd.	Yieh Phui (China) Technomaterial Co., Ltd.	Manufacturing and marketing of pickled, cold rolled, galvanized and pre-painted steel coils		7,029,312 (USD 236,200) (Note 6)	(II) 1	6,948,960 (USD 233,500)		－	－		6,948,960 (USD 233,500)	307,780	100%		307,780 (II).2	9,954,300	－
	Changshou ChangHuei Trading Co.	Trading of steel products		45,729 (RMB 10,000)	(II) 1 (Note 4)	－		－	－		－	391	100%		391 (II).2	47,066	－
	Tianjin Lianfa Precision Steel Corporation	Manufacturing and marketing of special high grade alloy		401,760 (USD 13,500)	(II) 1 (Note 5)	－		－	－		－	(59,637)	100%		(59,637) (II).2	(46,312)	－
AWID Asia Co., Ltd.	AWID Sanghai Co., Ltd.	Telecommunicat ions equipment wholesaling		20,832 (USD 700)	(I)	20,832 (USD 700)		－	－		20,832 (USD 700)	(373)	100%		(373) (II).2	4,235	－
	AWID Changshou Co., Ltd.	Telecommunicat ions equipment wholesaling		8,928 (USD 300)	(I)	8,928 (USD 300)		－	－		8,928 (USD 300)	(1,891)	100%		(1,891) (II).2	6,325	－
			Investee in Mainland China Accumulated remitted investment balance - end of current period Approval through Investment Committee of the Ministry of Economic Affairs Ceiling on investment in Mainland China imposed by the Investment Commission of the Ministry of Economic Affairs Yieh Phui (China) Technomaterial Co., Ltd. 6,948,960 (USD 233,500) 7,029,312 (USD 236,200) 16,705,015 AWID Sanghai Co., Ltd. 20,832 (USD 700) 20,832 (USD 700) 80,000 AWID Changshou Co., Ltd. 8,928 (USD 300) 8,928 (USD 300) 80,000
	Investor		Investee in Mainland China				Accumulated remitted investment balance - end of current period			Approval through Investment Committee of the Ministry of Economic Affairs				Ceiling on investment in Mainland China imposed by the Investment Commission of the Ministry of Economic Affairs
Yieh Phui Enterprise Co., Ltd.			Yieh Phui (China) Technomaterial Co., Ltd.				6,948,960 (USD 233,500)			7,029,312 (USD 236,200)				16,705,015
AWID Asia Co., Ltd.			AWID Sanghai Co., Ltd.				20,832 (USD 700)			20,832 (USD 700)				80,000
			AWID Changshou Co., Ltd.				8,928 (USD 300)			8,928 (USD 300)				80,000

373

  - Note 1: Investment is handled in one of the three means below, please specify the chosen investment means as:

     - (I) Engaged in direct investment in Mainland China.

     - (II) Reinvested in China through a third area (please specify the investment companies in the third area).

        2. Yieh Phui (Hong Kong) Holdings Limited

     - (III) Other means.

  - Note 2: Investment gain or loss recognized in the current period:

        - (I) Please specify if it is in the preparation stage without any investment gains or losses generated.

        - (II) Recognition basis of investment profit or loss is categorized into three types, which shall be identified.

        1. Financial statements audited and certified by the international CPA firms that cooperates with ROC CPA firms.

        2. Financial statements reviewed, or audited and certified by the CPA firm of the parent company in Taiwan. 3. Others.

  - Note 3: The figures in the Table shall be expressed in New Taiwan Dollars. Carrying amount at the end of the period is converted using the exchange rate on the reporting date (USD:NTD 1:29.76; RMB:NTD 1:4.5729). Investment gain or loss recognized in the current period is converted using the average exchange rate in from January 1 to December 31, 2017 (USD:NTD 1:30.4492 ; RMB:NTD 1:4.5121 ).

  - Note 4: Yieh Phui (China) Technomaterial Co., Ltd. invests in Changshou ChangHuei Trading Co. with equity funds of RMB 10 million. As of December 31, 2017, accumulated investment amounted to RMB 10 million.

  - Note 5: The Company originally holds 100% of Tianjin Lianfa Precision Steel Corporation Beneficiary (paid-in capital equals USD 13,500 thousand) through its holding in Hsing Jui Investments Limited. It transfered its ownership to Yieh Phui (China) Technomaterial Co., Ltd.at RMB 20,000 thousand in July 2015. The said proceed, net of tax, of RMB 19,990 thousand (equivalent to USD 3,213 thousand) has been transferred back to the Company＇s account in Taiwan.

  - Note 6. Yieh Phui (China) Technomaterial Co., Ltd. recapitalized its retained earnings of USD 2,700 thousand in April, 2017.

  - Note 7: Investment in Changshu Chief Leading Edge Construction Materials Co., Ltd. was completely sold in February, 2013. Investment amount and earnings were received. Investment in Jiangsu J & Y Engineering Co., Ltd. was liquidated in 2012. Thus:

     - (1) Accumulated investment in China investees that were disposed: NT$ 498,539 thousand.

     - (2) Investment gains received from China investees that were disposed: NT$ 69,518 thousand.

(2) Significant transactions between the Company and investees in Mainland China during January 1 and December 31, 2017 directly or indirectly through the third area are as follows:
Significant transactions between the Company and investees in China: Note 13, Table 7 ~ Table 8.
Financing between the Company and investees in China: Note 13, Table 1.
Endorsement and guarantee provided by the Company for investees in China: Note 13, Table 2.

374

XIV. Segment Information

Information regarding business segments has been disclosed in the consolidated financial statements. Therefore, the Company does not disclose such information in the standalone financial statements.

375

Descriptions of Major Accounting Subjects

Item	Page/Index
Assets, Liabilities and Equities
Cash and Cash Equivalents	94
Financial Asset Measured at Fair Value Through Profit or Loss - Current	95
Notes Receivables	96
Accounts Receivables	97
Accounts Receivables - Related Party	98
Construction Contract Receivables	99
Construction Contract Receivables - Related Party	100
Other Receivables	101
Other Receivables - Related Party	102
Inventory	103
Prepayment	104
Other Financial Assets - current	105
Financial Assets at Fair Value through Profit or Loss - Non-current	106
Changes in Available-for-sale Financial Assets - Non-current	107
Changes in Financial Assets Carried at Cost - Non-current	108
Changes in Bond Investment with No Active Markets - Non-current	109
Changes in Investment under Equity Method	110
Changes in Property, Plant and Equipmet	Note 6 (13)
Changes in Accumulated Depreciation of Property, Plant and Eqiupment	Note 6 (13)
Changes in Accumulated Impairment Loss of Property, Plant and Eqiupment	Note 6 (13)
Changes in Investment Property	Note 6 (14)
Changes in Accumulated Depreciation of Investment Property	Note 6 (14)
Changes in Accumulated Impairment Loss of Investment Property	Note 6 (14)
Deffered Income Tax Assets	Note 6 (31)
Refundable Deposits	113

376

Other Financial Assets - Non-current	114
Short-term Loans	115~116
Short-term Bills Payables	117
Financial Liabilities Measured at Fair Value Through Profit or Loss - Current	Note 6 (2)
Notes Payables	118
Accounts Payable	119
Construction Contract Payable	120
Other Payable	Note 6 (18)
Provision - current	Note 6 (19)
Advance Receipts	121
Long-term Loans and the Current Portion of Long-term Liabilities	122~124
Deferred Income Tax Liabilities	Note 6 (31)
Deposits Recieved	125
Items under Profit or Loss
Operating Revenue	126
Operating Cost	127~128
Manufacturing Overheads	129
Selling Expenses	130
General & Administrative Expenses	131
Financial Costs	Note 6 (30)
Summary Table of Personnel, Depreciation, Depletion and Amortization Expenses for the Period	Note 6 (29)

377

Yieh Phui Enterprise Co., Ltd.

Cash and Cash Equivalents

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Item Petty cash Subtotal of petty cash Bank deposits Subtotal of bank deposits Cash equivalents Subtotal of cash equivalent Total	Description Petty cash Checking deposits Demand deposits - NTD Demand deposits - foreign currencies Time deposits to be matured within three months	Amount Note $1,940 $1,940 $233,957 11,260 1,192,788 USD 40,080 $1,438,005 $29,760 USD 1,000 $29,760 $1,469,705

Exchange rate as of December 31, 2017: USD:NTD 1:29.76

378

Yieh Phui Enterprise Co., Ltd.

Financial Asset Measured at Fair Value Through Profit or Loss - Current December 31, 2017

Unit: Thousands of NT Dollars Fair Value

Name of Financial Instruments	Description	Shares or Units	Acquisition Cost	Unit Price (NT$)	Total
Paradigm Global Oil Resources Fund	Mutual Funds	516	$5,030	6.06	$3,128
SinoPac RMB Bond Fund - Accumulated	Mutual Funds	300	3,000	9.46	2,838
Paradigm 3-Year Maturity RMB Emerging Market Bond Fund	Mutual Funds	900	9,045	10.17	9,156
First Financial Holding Global Utility/Infrastructure Income Fund	Mutual Funds	500	5,031	9.85	4,925
Fidelity Funds - Asian High Yield Fund	Mutual Funds	500	5,032	9.97	4,985
Yuanta iSTOXX MUTB Asia/Pacific Quality Dividend 100 Index Fund	Mutual Funds	554	5,500	10.11	5,605
CTBC Global iSport Fund	Mutual Funds	300	3,006	9.99	2,997
Total			$35,644		$33,634

379

Yieh Phui Enterprise Co., Ltd.

Notes Receivables

December 31, 2017

Unit: Thousands of NT Dollars

Item Greaten Construction Co., Ltd. Tungwei Constrution Co., Ltd. Others Subtotal Less: Changes in allowance for doubtful accounts: Total	Description Notes receivable for construction Notes receivable for construction (5% and under)	Amount Note $11,372 8,413 798 $20,583 (89) $20,494

380

Yieh Phui Enterprise Co., Ltd.

Accounts Receivables

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Parties METAL ONE Shang Shing Steel Industrial Co., Ltd. HON HAI PRECISION STEMCOR LONDDN Others Subtotal Less: Changes in allowance for doubtful accounts: Total	Description Trades receivable Trades receivable Trades receivable Trades receivable (5% and under)	Amount Note $318,032 USD 10,687 189,656 106,204 USD 3,569 93,496 USD 3,142 552,001 $1,259,389 (5,454) $1,253,935

Exchange rate as of December 31, 2017: USD:NTD 1:29.76

381

Yieh Phui Enterprise Co., Ltd.

Accounts Receivables - Related Party

December 31, 2017

Unit: Thousands of NT Dollar/ Foreign Currency

Parties ASIAZONE CO., LIMITED Shin Phui Steel Corporation Shin Yang Steel Co., Ltd. Yieh United Steel Corporation Others Subtotal Less: Bad debt allowance - related party Total	Description Trades receivable Trades receivable Trades receivable Trades receivable (5% and under)	Amount Note $213,953 USD 7,189 50,329 45,012 20,009 - $329,303 (1,014) $328,289

Exchange rate as of December 31, 2017: USD:NTD 1:29.76

382

Yieh Phui Enterprise Co., Ltd.

Construction Contract Receivables

December 31, 2017

Unit: Thousands of NT Dollars

Item China Container Terminal Corp. Greaten Construction Co., Ltd. Chung-Lu Construction Co., Ltd. Taiwan Kumagai Co., Ltd Hontai Life Insurance and CoCoon Construction Others Total	Description Construction contract receivable Construction contract receivable Construction contract receivable Construction contract receivable Construction contract receivable (5% and under)	Amount Note $66,404 38,924 19,580 17,021 11,344 22,179 $175,452

383

Yieh Phui Enterprise Co., Ltd.

Construction Contract Receivables - Related Party

December 31, 2017

Unit: Thousands of NT Dollars

Item New Spring Construction Corp. Others Total	Description Construction contract receivable (5% and under)	Amount Note $190,033 4,428 $194,461

384

Yieh Phui Enterprise Co., Ltd.

Other Receivables

December 31, 2017

Unit: Thousands of NT Dollars

Item Business tax refundable Purchase allowance receivable Insurance claims receivables Interest receivable Other receivables Total	Description Business tax refund - November and December Purchase allowance receivable Insurance claims receivables Interest receivable Road administrative fee receivable, etc.	Amount Note $136,500 29,146 4,965 264 339 $171,214

385

Yieh Phui Enterprise Co., Ltd.

Other Receivables - Related Party

December 31, 2017

Unit: Thousands of NT Dollars

Item Loans receivable Service fee receivable - guarantee Interest receivable Revenues from sale of scrap iron, etc. Purchase allowance receivable Other receivables Total	Description Loans receivable Service fee receivable - guarantee Interest receivable Revenues from sale of scrap iron, etc. Purchase allowance receivable Receivables - human capital support, etc	Amount Note $950,000 7,737 2,017 1,878 1,195 3,423 $966,250

386

Yieh Phui Enterprise Co., Ltd.

Inventory

December 31, 2017

Unit: Thousands of Taiwan Dollars

Item Rolled Steel (Product) Department Raw materials Supplies Work in progress Finished goods By-products and scraps Subtotal Less: allowance for inventory valuation and obsolescence loss Net Heavy Industry Departments Raw materials Supplies Subtotal Less: allowance for inventory valuation and obsolescence loss Net Total	Description Steel coil LPG, LNG, resin acid, thinner Cold rolled, galvanized and pre-painted steel coil, etc. Acid pickling, cold rolling, galvanized and pre-painted steel coil, etc. By-products and scraps Angle steel, molded steel Bolt, shear concrete stud	Description Steel coil LPG, LNG, resin acid, thinner Cold rolled, galvanized and pre-painted steel coil, etc. Acid pickling, cold rolling, galvanized and pre-painted steel coil, etc. By-products and scraps Angle steel, molded steel Bolt, shear concrete stud
		Cost $1,014,337 15,541 743,493 2,173,086 67,082 $4,013,539 (1,250) $4,012,289 $129,738 3,404 $133,142 (294) $132,848 $4,145,137

387

Yieh Phui Enterprise Co., Ltd.

Prepayment

December 31, 2017

Unit: Thousands of NT Dollars

Item Prepaid material purchase Prepaid expense Prepaid expense Prepaid expense Prepaid expense Others Total	Description Prepaid material purchase Sea freight prepaid Insurance claims Prepaid rental Prepaid royalty Other prepayments	Amount Note $195,718 57,145 27,083 4,365 2,906 21,643 $308,860

388

Yieh Phui Enterprise Co., Ltd.

Other Financial Assets - current

December 31, 2017

Item Land Bank - Kangshan Mega International Commercial Bank - (Kaohsiung Metropolitan Branch) Total	Description Pledged demand deposits Pledged time deposits	Unit: Thousands of NT Dollar/ Foreign Currency Amount Note $55,157 124,992 USD 4,200 $180,149

Exchange rate as of December 31, 2017: USD:NTD 1:29.76

389

Yieh Phui Enterprise Co., Ltd.

Financial Assets at Fair Value through Profit or Loss - Non-current

December 31, 2017

				Fair Value
Name of Financial Instruments	Description	Shares or Units	Acquisition Cost	Unit Price (NT$)	Total		Note
Bank of Panhsin Sinsing Branch – 2014 First term subordinated financial bonds	Financial bonds	10,000	$10,000	0.9999		$9,999
Total			$10,000			$9,999

390

Yieh Phui Enterprise Co., Ltd.

Changes in Available-for-sale Financial Assets - Non-current

January 1 - December 31, 2017

Name Asia Pacific Telecom Total	Shares Fair Value 4,500 $46,575 $46,575 Beginning balance	Shares Amount - $ - $ - Increase	Shares Amount - $1,665 $1,665 Decrease	Shares Fair Value 4,500 $44,910 $44,910 Ending balance	Collateral or Pledge Note None
	Shares 4,500	Shares -	Shares -	Shares 4,500

Note: The decrease amount of NT$ 1,665 thousand is due to unrealized valuation loss of financial assets.

391

Yieh Phui Enterprise Co., Ltd.

Changes in Financial Assets Carried at Cost - Non-current January 1 - December 31, 2017

Name	Beginningbalance	Beginningbalance	Increase	Increase	Decrease	Decrease	Ending	Unit: Thousands of NT Dollars Carrying Amount Note $55,899 None 41,833 None 23,520 None 18,913 None 35,482 None 9,130 None 2,002 None 1,650 None - None 535 None 10,000 None 350,357 None - None - None - None - None - None $549,321 Balance Colleteral or Pledge
	Shares	Carrying Amount	Shares	Amount	Shares	Amount	Shares	Carrying Amount
TaiwanVes-Power Co., Ltd. New Spring Construction Corp. Ascentke Venture Capital Corp. Taiwan Implant Technology Company, Ltd. Sunny Bank Universal Venture Capital Investment Co., Ltd. YIEH CORPORATION LIMITED Pacific Harbor Stevedoring Corporation NEOFLEX TECHNOLOGY CO., LTD ImageDJ Software Co., Ltd. Chao-Feng Venture Capital Co., Ltd. Skylark International Hotel Co., Ltd. Shuo Huang Enterprise Co., Ltd. Chateau Bridgetop Inc. Grand Fortune Special Steel Co., LTD. HUNG-TAI Management and Consulting Co. Ltd Windance Co., Ltd. Total	1,800 7,640 2,352 1,891 3,736 1,100 200 150 104 24 1,000 13,688 980 5,000 3,558 100 18,469	$55,899 41,833 23,520 18,913 35,482 9,130 2,002 1,650 1,060 535 10,000 281,960 - - - - -	- 909 - - 187 - - - - - - 6,840 - - - - -	$ - - - - - - - - - - - 68,397 - - - - -	- - - - - - - - 104 - - - - - - - -	$ - - - - - - - - 1,060 - - - - - - - -	1,800 8,549 2,352 1,891 3,923 1,100 200 150 - 24 1,000 20,528 980 5,000 3,558 100 18,469	$55,899 41,833 23,520 18,913 35,482 9,130 2,002 1,650 - 535 10,000 350,357 - - - - -
		$481,984		$68,397		$1,060		$549,321

Note: 1. The increase of NT$ 68,397 thousand is the result of subscriptions to cash offering.

The decrease of NT$ 1,060 thousand is recognized as Impairment loss.

392

Yieh Phui Enterprise Co., Ltd.

Bond investments with no active market - non-current

January 1 - December 31, 2017

Company Name Preferred stock: E-Da Development Corp. Eliter International Corp. Subtotal Less: Accumulated impairment Total	Shares Carrying Amount 17,065 $170,654 - - $170,654 - $170,654 Beginning Balance	Shares Amount - - $ 26,275 262,747 $262,747 - $262,747 Increase	Shares Amount - $ - - - $ - - $ - Decrease	Shares Carrying Amount 17,065 $170,654 26,275 262,747 $433,401 - $433,401 Ending Balance
		Shares - 26,275	Shares - -

Note: The increase of NT$ 170,654 thousand is a result of increase in investment.

393

Yieh Phui Enterprise Co., Ltd. Changes in Investment under Equity Method January 1 - December 31, 2017

										Unit:
Name	Beginning balance		Increase		Decrease		Ending Balance			Unit Price Total 42.62 $9,952,223 29.99 1,709,343 9.92 2,812,179 5.30 1,586,683 34.75 1,374,311 6.10 1,139,015 12.82 1,857,101 9.49 825,718 12.44 571,760 12.44 560,722 13.19 1,275,662 40.43 610,037 10.16 317,311 12.72 283,898 7.47 109,745 383.40 1,917 9.25 265,137 3,287.07 151,205 9.54 23,348 10.61 14,853 11.18 10,954 3.20 11,552 3.60 3,420 72.66 7,266 4.09 15,535 27.22 2,722 6.13 1,962 - 4,419 0.14 165 6.40 47,448 5.12 312,373 4.87 4,917 6.60 4,262,787 6.07 485,346 1.23 1,807 28.38 288,308 9.81 3,729 $30,906,878 Market Value/ Net Equity
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Share	Amount	Unit Price
Yieh Phui (Hong Kong) Holdings Limited CHAMPION LOGISTIC INC. Eliter International Corp. Yieh Hsing Enterprise Co., Ltd. Tangeng Iron Works Co., Ltd. E-Da Development Corp. United Brightening Development Corp. Shin Yang Steel Co., Ltd. Synn Industrial Co., Ltd. Yieh Mau Corp. Kuo Chang Enterprise Co., Ltd. ASIAZONE CO., LTD. Shin Phui Steel Corporation Sin Bang Investment & Development Co., TYCOONS STEEL INTERNATIONAL CO., LTD. HSING JUI INVESTMENTS LTD EMMT Systems Corporation GOOD HONOR HOLDINGS LTD. Gen-Wan Technology Corp. Cheng Shin Security Co., Ltd. Da Yao Engineering & Consulting Co., E-Da Bus Transportation Co., Ltd. E-DA Tour Bus Co., Ltd. GOLDEN DEVELOPMENTS HOLDINGS LTD. E-Da Cultural Creative Industry Co., WORTHING HONOR HOLDINGS LTD. Cheng Shin Apartment Building Management and Maintenance Co., Ltd E United Japan Co., Ltd. Skylark Hot Spring & Resort Corp. Eda Entertainment CO., LTD Li Hui Development CO., LTD Ji Chang Enterprise CO., LTD Yieh United Steel Corporation Hong Yuh Assets Management Co.,Ltd. E-Da Visual Effects Company Limited. LIAN SO(H.K)CO., LIMITED E-Da Health Biotechnology Co., Ltd. Total	233,500 57,000 283,584 355,647 39,553 186,866 108,111 87,000 45,975 40,977 51,548 15,090 30,968 22,313 14,700 5 28,651 46 2,392 1,400 980 3,609 950 100 3,800 100 320 - 1,170 7,410 56,468 946 609,803 37,000 1,470 480 -	$9,818,285 1,697,847 2,826,191 1,596,329 1,357,233 1,201,890 1,532,379 763,632 615,566 535,129 690,453 625,840 318,370 280,860 21,423 2,074 287,237 160,109 25,312 15,147 10,822 17,107 4,672 7,046 15,615 2,944 2,014 3,560 407 51,989 313,941 4,977 3,969,169 253,910 2,334 14,512 -	- - - 243 - - 36,749 - - 4,098 45,191 - 278 - - - - - 55 - - - - - - - - - - - 4,533 63 35,632 43,000 - 9,680 380	290,986 145,844 23 15,365 27,666 194 362,695 62,755 53,395 41,666 590,831 33,270 2,178 4,972 92,062 4 76 3,538 5 - 132 - - 331 - 5 - 1,032 - - - - 401,448 430,000 - 295,344 3,800	- - - 56,432 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	157,048 134,348 61,600 130,474 10,588 71,311 25,884 669 97,201 16,073 18,151 49,073 1,594 1,934 3,740 161 22,176 12,442 1,969 294 - 5,555 1,252 111 80 227 52 173 242 4,541 1,568 60 141,171 198,564 527 21,548 71	233,500 57,000 283,584 299,458 39,553 186,866 144,860 87,000 45,975 45,075 96,739 15,090 31,246 22,313 14,700 5 28,651 46 2,447 1,400 980 3,609 950 100 3,800 100 320 - 1,170 7,410 61,001 1,009 645,435 80,000 1,470 10,160 380	100.00 97.44 32.84 56.43 11.30 28.44 95.56 100.00 30.00 23.00 99.04 32.80 100.00 100.00 28.27 100.00 77.54 100.00 86.99 35.00 49.00 17.09 19.00 100.00 19.00 100.00 32.00 47.00 14.63 19.00 44.56 45.00 24.63 80.00 49.00 80.00 19.00	$9,952,223 1,709,343 2,764,614 1,481,220 1,374,311 1,130,773 1,869,190 825,718 571,760 560,722 1,263,133 610,037 318,954 283,898 109,745 1,917 265,137 151,205 23,348 14,853 10,954 11,552 3,420 7,266 15,535 2,722 1,962 4,419 165 47,448 312,373 4,917 4,229,446 485,346 1,807 288,308 3,729	42.62 29.99 9.92 5.30 34.75 6.10 12.82 9.49 12.44 12.44 13.19 40.43 10.16 12.72 7.47 383.40 9.25 3,287.07 9.54 10.61 11.18 3.20 3.60 72.66 4.09 27.22 6.13 - 0.14 6.40 5.12 4.87 6.60 6.07 1.23 28.38 9.81
		$29,046,325		$2,859,617		$1,192,472			###########

394

Details of the increase of NT$ 2,859,617 thousand are stated below:
Details of the decrease of NT$ 1,192,472 thousand are stated below:

1. Details of the increase of NT$ 2,859,617 thousand are stated below:	1. Details of the decrease of NT$ 1,192,472 thousand are stated below:
Investment Increment Accounted for using equity method Cumulative gain or loss Cash flow hedge Capital surplus Realized gain/loss on investment (downstream) Total unrealized gain/loss from financial instruments	$1,751,426 Cash Dividend 955,047 Accounted for using equity method 33 Exchange differences on translation of foreign financial statements 15,008 867 Cash flow hedge 136,639 Actuarial gain/loss from defined benefit plan 597 Cumulative gain or loss Realized gain/loss on investment (downstream) $2,859,617 Total Adjustment recognized according to shareholding percentage - unrealized gain/loss from financial instrume	105,395 439,313 556,730 6,172 5,862 34,051 24,357 20,592
		$1,192,472

As of December 31, 2017, acquisition costs and carrying amounts using equity method for long-term equity investments are as follows:

	Investee	Acquisition Cost	Valuation under Equity Method	Cumulative Translation Adjustment	Others (Note)	Total $9,952,223 1,709,343 2,764,614 1,481,220 1,374,311 1,130,773 1,869,190 825,718 571,760 560,722 1,263,133 610,037 318,954 283,898 109,745 1,917 265,137 151,205 23,348 14,853 10,954 11,552 3,420 7,266 15,535 2,722 1,962 4,419 165 47,448
	Da Yao Engineering & Consulting Co., Ltd. E-Da Bus Transportation Co., Ltd. EMMT Systems Corporation GOOD HONOR HOLDINGS LTD. United Brightening Development Corp. Shin Yang Steel Co., Ltd. Synn Industrial Co., Ltd. Yieh Mau Corp. Tangeng Iron Works Co., Ltd. E-Da Development Corp. Skylark Hot Spring & Resort Corp. Eda Entertainment CO., LTD Gen-Wan Technology Corp. Cheng Shin Security Co., Ltd. Yieh Phui (Hong Kong) Holdings Limited CHAMPION LOGISTIC INC. Eliter International Corp. Yieh Hsing Enterprise Co., Ltd. Kuo Chang Enterprise Co., Ltd. ASIAZONE CO., LIMITED Shin Phui Steel Corporation Sin Bang Investment & Development Co., Ltd. TYCOONS STEEL INTERNATIONAL CO., LTD. HSING JUI INVESTMENTS LIMITED E-DA Tour Bus Co., Ltd. Golden Developments Holdings Ltd. Cheng Shin Apartment Building Management and Maintenance Co., Ltd WORTHING HONOR HOLDINGS LTD Cheng Hsin House Management Co. E United Japan Co., Ltd.	$7,455,887 1,913,111 2,833,595 2,238,883 1,453,572 1,868,658 1,836,383 870,000 294,000 422,605 1,256,726 595,424 295,736 295,809 427,629 4,603 306,158 14,723 148,609 14,000 9,800 36,086 9,500 2,928 38,000 6,672 3,915 8,027 11,700 74,100	395 $3,165,869 (233,193) (82,494) (1,347,288) (48,484) (738,016) 182,619 (70,379) 277,760 122,648 69,069 48,847 30,084 (6,290) (371,199) (94,985) (27,445) 28,696 (127,001) 853 1,154 (24,534) (6,080) 4,617 (22,465) (3,889) (1,461) (3,194) (14,076) (22,929)	($518,636) 49,243 - (1,539) - - (18,443) (699) - (2,103) (15,177) (31,625) (1,012) - (1,214) (58,597) (3,406) (5,596) (308) - - - - (279) - (47) - (414) - -	($150,897) (19,818) 13,513 591,164 (30,777) 131 (131,369) 26,796 - 17,572 (47,485) (2,609) (5,854) (5,621) 54,529 150,896 (10,170) 113,382 2,048 - - - - - - (14) (492) - 2,541 (3,723)

E-Da Health Biotechnology Co., Ltd. Total Li Hui Development CO., LTD Ji Chang Enterprise CO., LTD Yieh United Steel Corporation Hong Yuh Assets Management Co.,Ltd. E-Da Visual Effects Company Limited. LIAN SO(H.K)CO., LIMITED	321,216 5,050 4,826,777 768,000 10,393 311,110 3,800	(8,775) (133) (800,577) (214,037) (8,586) (14,573) (71)	- - (199,822) (11,041) - (8,229) -	(68) - 403,068 (57,576) - - -	312,373 4,917 4,229,446 485,346 1,807 288,308 3,729
	$30,993,185	($359,938)	($828,944)	$909,167	$30,713,470

Notes: Including capital surplus of long-term investment, unrealized profit or loss from financial instruments, cumulative gain or loss and unrealized downstream transactions.

(4) Net equity value of investees under equity method, except for that of HSING JUI INVESTMENTS LIMITED and E United Japan Co., Ltd., was calculated based on the financial states for the period that were certified by a certified public accountant.

396

Yieh Phui Enterprise Co., Ltd.

Refundable Deposits

December 31, 2017

Unit: Thousands of NT Dollars

Item Refundable deposits Total	Description Construction contract performance deposits Lease deposits Others	Amount Note $40,460 3,456 16 $43,932

397

Yieh Phui Enterprise Co., Ltd.

Other Financial Assets - Non-current

December 31, 2017

Unit: Thousands of NT Dollars

Item Mega International Commercial Bank - Kaohsiung Total	Description Pledged time deposits	Amount Note $857 $857

398

Yieh Phui Enterprise Co., Ltd. Short-term Loans December 31, 2017

Creditor Shin Kong Bank - CiSian Chinatrust Commercial Bank - Mintsu Bank of China - Taipei First Commercial Bank - Hsin Hsing Hua Nan Bank - Kangshan Bangkok Bank - Kaohsiung Mega International Commercial Bank - Kaohsiung Metropolitan Taiwan Business Bank - Kaohsiung Shanghai Commercial & Savings Bank - Chien Chin Shanghai Commercial & Savings Bank - Chien Chin Land Bank of Taiwan - Kangshan Bank of Taiwan - Kangshan Mega International Commercial Bank - Kaohsiung Chang Hwa Commercial Bank - Kaohsiung KGI Bank - Kaohsiung Taiwan Cooperative Bank - Kaohsiung JihSun International Commercial Bank - Kaohsiung (foreign currency) Subtotal of loans for material purchase Chinatrust Commercial Bank - Mintsu Shin Kong Bank - CiSian Bank of China - Taipei Far Eastern International Bank - Kaohsiung	Description	Ending balance $99,758 79,862 293,895 186,808 119,491 318,024 489,922 378,388 144,532 79,314 442,966 339,262 372,474 447,331 125,206 171,523 85,460 ######## $150,000 100,000 295,000 300,000	Contract Duration	Credit Limit (Note 3)	Collateral or Pledge	Unit: Thousands of NT Dollar/ Foreign Currency Note
						USD
	~~Loans for material~~ purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Loans for material purchase Credit loan Credit loan Credit loan Credit loan		~~December 21, 2017 - April 27,~~ 2018 October 19, 2017-April 24, 2018 September 28, 2017-April 3, 2018 September 28, 2017-April 25, 2018 October 5, 2017-March 9, 2018 August 21, 2017-June 26, 2018 November 10, 2017-June 20, 2018 September 14, 2017-May 9, 2018 November 9, 2017-March 14, 2018 September 14, 2017-March 13, 2018 August 21, 2017-May 22, 2018 August 21, 2017-June 12, 2018 September 11, 2017 - June 23, 2018 September 7, 2017-May 29, 2018 December 28, 2017-June 11, 2018 August 10, 2017-March 13, 2018 October 27, 2017-May 21, 2018 October 13, 2017-April 13, 2018 September 20, 2017 - March 20, 2018 December 1, 2017-April 13, 2018 November 6, 2017-January 5, 2018	200,000 230,000 612,000 400,000 120,000 600,300 614,200 460,800 150,475 230,000 550,000 750,000 600,000 700,000 400,000 550,000 300,000 230,000 200,000 612,000 300,000	Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: Note 1: None None None None	2,872

399

Creditor KGI Bank - Kaohsiung Bangkok Bank - Kaohsiung Sunny Bank - Liwun Taiwan Cooperative Bank - Kaohsiung Mega International Commercial Bank - Kaohsiung Land Bank of Taiwan - Kangshan Bank of Taiwan - Kangshan First Commercial Bank - Hsin Hsing Chang Hwa Commercial Bank - Kaohsiung JihSun International Commercial Bank - Kaohsiung Shanghai Commercial & Savings Bank - Chien Chin Yuanta Bank - Kaohsiung Taihsin Bank - Linya Entie Commercial Bank - Kaohsiung Bank of Singapore - Taipei Subtotal of credit loans The Export-Import Bank of the ROC - Kaohsiung Bank of Singapore - Taipei Subtotal of export loans Total Interest Rate Range by the end of	Description	Ending balance 150,000 150,000 100,000 378,000 180,000 100,000 100,000 100,000 100,000 200,000 150,000 300,000 250,000 285,000 240,000 $3,628,000 $200,000 178,560 $378,560 $8,180,776 1.07%-2.88%	Contract Duration December 22, 2017-June 20, 2018 December 25, 2017 - June 23, 2018 November 7, 2017 - November 7, 2018 November 14, 2017 - December 29, 2018 December 25, 2017 - June 25, 2018 December 11, 2017-February 9, 2018 December 29, 2017-June 27, 2018 December 15, 2017 - January 12, 2018 September 15, 2017-September 15, 2018 December 21, 2017 - March 21, 2018 December 14, 2017-March 14, 2018 May 23, 2017 - May 23, 2018 December 20, 2017 - January 25, 2018 November 27, 2017-February 28, 2018 November 9, 2017-May 9, 2018 July 28, 2017-July 28, 2018 December 26, 2017-March 26, 2018	Credit Limit (Note 3) 400,000 600,300 100,000 550,000 600,000 550,000 750,000 400,000 700,000 300,000 230,000 500,000 250,000 400,000 450,000 200,000 450,000	Collateral or Pledge USD None None None None None None None None None None None None None None None None None 6,000
	Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Export Loans Export Loans the period

Note 1: Please refer to Note 8 for the collaterals of the above short-term loans Note 2: Exchange rate as of December 31, 2017: USD:NTD 1:29.76 Note 3: Credit lines shown above are the combined limits from each banks

400

Yieh Phui Enterprise Co., Ltd.

Short-term Bills Payables December 31, 2017

Unit: Thousands of NT Dollars

Amount

			Amount
Item	Guarantee or Accepting Institution Contract Duration	Issuing Amount	Discounts	Carrying Amount	Note
Commercial paper (CP2)	Mega Bills Finance Corp. November 14, 2017 - January 16, 201	$100,000	$65	$99,935
Commercial paper (CP2)	International Bills Finance C November 24, 2017-January 3, 2018	200,000	23	199,977
Commercial paper (CP2)	Da Chung Bills Finance Cor December 13, 2017-January 17, 201	100,000	60	99,940
Commercial paper (CP2)	Taiwan Cooperative Bills Fi December 20, 2017 - January 18, 201	150,000	100	149,900
Commercial paper (CP2)	Taiwan Finance Corporation November 1, 2017- January 30, 2018	100,000	136	99,864
Total		$650,000	$384	$649,616
Interest Rate Range				1.63%-1.80%

401

Yieh Phui Enterprise Co., Ltd.

Notes Payables

December 31, 2017

				Unit: Thousands of NT Dollars
Item	Description	Amount		Note
Mega International Commercial Bank (Note)	Notes payable for purchase		$330,506
Others	(5% and under)		305,177
Total			$635,683

Note: This is notes payable to China Steel Corporation, which transferred all rights to Mega International Commercial Bank.

402

Yieh Phui Enterprise Co., Ltd.

Accounts Payable

December 31, 2017

Unit: Thousands of NT Dollars

Parties	Description	Amount
Yung Chi Paint & Varnish Mfg. Co.,Ltd.	Trade payable	$144,800
China Steel Corporation	Trade payable	143,372
Shang Cheng Steel Co., Ltd.	Trade payable	91,504
Nan Jehn Natural Gas Co., Ltd.	Trade payable	30,793
Others	(5% and under)	118,888
Total		$529,357

403

Yieh Phui Enterprise Co., Ltd.

Construction Contract Payable

December 31, 2017

Unit: Thousands of NT Dollars

Item Central Freight Terminal Co., Ltd. Wei Yi Construction Co., Ltd. Sun Pao Tsun Construction Co., Ltd Hong-Chang Construction Corp. Hong Sheng Construction Co., Ltd. Others Total	Description Construction contract payable Construction contract payable Construction contract payable Construction contract payable Construction contract payable (5% and under)	Amount Note $3,378 3,263 2,204 1,926 1,600 2,026 $14,397

404

Yieh Phui Enterprise Co., Ltd.

Advance Receipts

December 31, 2017

Item METAL ONE AMERICE,INC. CLM ENTERPRISES INC. MITSUI & CO.(USA) INC. Others Total	Description Unearned sales revenue Unearned sales revenue Unearned sales revenue (5% and under)	Unit: Thousands of NT Dollars Amount Note $379,857 376,175 286,047 233,263 $1,275,342

405

Yieh Phui Enterprise Co., Ltd. Long-term Loans and the Current Portion of Long-term Liabilities December 31, 2017

Creditor (1) Syndicated loan with Mega International Commercial Bank Mega International Commercial Bank - Kaohsiung Metropolitan Chang Hwa Commercial Bank - Kaohsiung Agricultural Bank of Taiwan - Operating Department Taiwan Cooperative Bank - Bank of Taiwan - Kangshan First Bank Hua Nan Bank - Kangshan Taiwan Business Bank - Kaohsiung Land Bank of Taiwan - Kangshan Mega International Commercial Bank - Kaohsiung Metropolitan Chang Hwa Commercial Bank - Kaohsiung Agricultural Bank of Taiwan - Operating Department Taiwan Cooperative Bank - Bank of Taiwan - Kangshan First Bank Hua Nan Bank - Kangshan Taiwan Business Bank - Kaohsiung Land Bank of Taiwan - Kangshan Subtotal	Description Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan	Borrowing Amount $318,000 318,000 274,000 274,000 274,000 244,000 181,000 181,000 136,000 332,000 332,000 286,000 286,000 286,000 256,000 189,000 189,000 144,000 $4,500,000	Contract Duration December 5, 2017-December 5, 2022 December 5, 2017-December 5, 2022 December 5, 2017-December 5, 2022 December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, 2022 December 5, 2017-December 5, 2022 December 5, 2017-December 5, 2022 December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5, December 5, 2017-December 5,	Unit: Thousands of NT Dollars Collateral or Pledge Note Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment Land, plant, machinery and equipment None None None None None None None None None

406

Creditor (2) Syndicated loan with Taiwan Cooperative Bank Taiwan Cooperative Bank - Kaohsiung Hua Nan Bank - Kangshan Land Bank of Taiwan - Kangshan Mega International Commercial Bank - Kaohsiung Metropolitan First Commercial Bank - Hsin Hsing Agricultural Bank of Taiwan - Operating Department Chinatrust Commercial Bank - Mintsu Shanghai Commercial & Savings Bank - Chien Chin Taihsin Bank - Linya Chang Hwa Commercial Bank - Kaohsiung Taiwan Cooperative Bank - Kaohsiung Hua Nan Bank - Kangshan Land Bank of Taiwan - Kangshan Mega International Commercial Bank - Kaohsiung Metropolitan First Commercial Bank - Hsin Hsing Agricultural Bank of Taiwan - Operating Department Chinatrust Commercial Bank - Mintsu Shanghai Commercial & Savings Bank - Chien Chin Taihsin Bank - Linya Chang Hwa Commercial Bank - Kaohsiung Subtotal	Description Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan	BorrowingAmount $309,700 257,450 257,450 206,150 206,150 154,850 123,500 103,550 103,550 82,650 260,300 217,550 217,550 173,850 173,850 130,150 104,500 86,450 86,450 69,350 $3,325,000	Contract Duration Collateral or Pledge September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 Land, plant, machinery and equipment September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None September 22, 2015 - September 22, 2020 None

407

Creditor Taiwan Business Bank - Kaohsiung Mega International Commercial Bank - Kaohsiung Metropolitan Mega International Commercial Bank - Kaohsiung Metropolitan Mega International Commercial Bank - Kaohsiung Metropolitan Bank of Taiwan - Kangshan First Commercial Bank - Hsin Hsing First Commercial Bank - Hsin Hsing Taiwan Cooperative Bank - Kaohsiung Sub-total of mortgage loan O Bank - Kaohsiung Subtotal of credit loans Total Less: unamortized syndicated loan arrangement fee Less: current portion Balance of long-term loans Interest rate range by the end of the period	Description Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Credit loan	BorrowingAmount $138,420 440,000 800,000 700,000 100,000 84,600 86,640 160,000 $2,509,660 $40,000 $40,000 $10,374,660 (19,835) (671,777) $9,683,048 1.79%~ 2.325%	Contract Duration January 21, 2015 - January 21, 2022 October 16, 2014 - October 16, 2021 August 12, 2016 - August 12, 2021 August 12, 2016 - August 12, 2021 May 16, 2017-May 16, 2021 July 29, 2013 - July 29, 2028 August 3, 2016 - July 15, 2030 October 9, 2014 - October 9, 2021 May 15, 2016 - May 15, 2018	Collateral or Pledge
				Land, buildings Land, buildings Land, buildings Land, buildings Land, plants Buildings Buildings Land None

408

Yieh Phui Enterprise Co., Ltd.

Deposits Recieved

December 31, 2017

Item Deposits received	Description Sales deposits from customers	Unit: Thousands of NT Dollars Amount Note $2,000

409

Yieh Phui Enterprise Co., Ltd. Operating Revenue

January 1 - December 31, 2017

Unit: Thousands of NT Dollars

Item
Quantity (tons)
Rolled Steel (Product) Department
Hot rolled steel coil
67,182
Steel plates
880
Sub-total of revenue from raw materials
Pickled steel coil
172
Rolled steel coil
3,384
Galvanized steel coil
770,081
Coated steel coil
255,253
Sub-total of revenue from finished goods
Steel plate OEM
26,910
Head & tail plates
19,888
Zinc dross
1,863
Iron oxide
4,693
Shearing materials
11,421
Cutting plates
7,316
Scrap iron
2,915
Revenue from by-products and scraps
Total of Steel Product Department
Heavy Industry Departments
Construction revenue
Total
Realized (unrealized) gross profit from sales of goods
Less: Sales return
Sales discount
Net operating revenue

Amount
Note
$1,086,700
21,007
$1,107,707
$1,732
41,995
17,856,304
8,642,130
$26,542,161
$130,132
$157,592
By-products
123,558
By-products
6,716
By-products
96,408
scraps
54,046
scraps
23,447
scraps
$461,767
$28,241,767
$1,078,743
$29,320,510
(19,995)
-
(121,297)
$29,179,218

410

Yieh Phui Enterprise Co., Ltd. Operating Cost

January 1 - December 31, 2017

Yieh Phui Enterprise Co., Ltd. Operating Cost January 1 - December 31, 2017
Unit: In Item Rolled Steel (Product) Department Raw materials - beginning Purchase Other additions: shipment expense for purchase Raw materials - ending Other subtractions: requisition transferred to expenses Sale of raw materials Raw materials consumed Supplies - beginning Purchase SuppliesSupplies - ending Supplies consumed Direct labor Manufacturing Overhead Manufacturing Costs Work in process - beginning Other additions: finished goods transferred in Work in process - ending Production of scraps and by-products Cost of finished goods Finished goods - beginning Finished goods - ending Cost of processing transferred out Other subtractions: requisition transferred to expenses Other deductions: transferred to work in process Cost of finished goods sold Other deductions: requisition transferred to expenses Other additions - Under-allocated fixed manufacturing overheads	Thousands of Taiwan Dollars 2017
	$857,320 21,798,044 90,043 (1,014,337) (27,481) (1,096,561)
	$20,607,028
	$14,575 763,562 (15,541) (762,596)
	$-
	$258,607 2,942,572
	$23,808,207 610,016 92,301 (743,493) (438,337)
	$23,328,694
	$1,953,614 (2,173,086) (116,747) (185,876) (92,301)
	$22,714,298

411

2017


Item Adjustments to costs Loss on inventory value decline (gain on recovery) Unallocated fixed manufacturing overheads Other changes - purchase allowance, etc. Subtotal of cost for Rolled Steel (Product) Department Cost of raw materials sold Cost of by-products sold Processing costs Total cost for Rolled Steel (Product) Department Heavy Industry Department: Construction costs Loss on inventory value decline (gain on recovery) Subtotal of cost for Heavy Industry Department Total operating expenses	2017
	(794) 63,028 (60,125)
	$22,716,407
	$1,096,561 426,628 116,747
	$24,356,343
	$1,028,647 4,593
	$1,033,240
	$25,389,583

412

Yieh Phui Enterprise Co., Ltd. Manufacturing Overheads January 1 - December 31, 2017

Unit: Thousands of NT Dollars

Item Indirect labor Rental expense Stationary Traveling expense Freight expense Postage Repairs Packing expense Utilities expense Insurance expense Processing fee Taxes Depreciation Meals expense Employee benefits/welfare Miscellaneous purchases Indirect material Training expense R&D expense Consumables Pension Transportation expense Overtime allowance expense Professional service fees Other expenses Constructions in progress - outsourced Unallocated fixed manufacturing overheads Total	Rolled Steel (Product) Department $434,617 16,196 2,397 1,672 64,902 351 183,868 276,477 427,961 88,744 23,215 4,487 496,330 14,132 19,940 5,439 762,557 978 2,521 45,871 28,117 2,451 37,845 674 63,858 - (63,028) $2,942,572	Heavy Industry Departments Total $82,663 $517,280 3,656 19,852 647 3,044 77 1,749 13,999 78,901 518 869 8,509 192,377 - 276,477 14,294 442,255 12,263 101,007 48 23,263 3,769 8,256 29,151 525,481 2,902 17,034 4,301 24,241 442 5,881 76,929 839,486 110 1,088 206 2,727 1,772 47,643 4,480 32,597 735 3,186 4,805 42,650 60 734 12,581 76,439 420,649 420,649 - (63,028) $699,566 $3,642,138

413

Yieh Phui Enterprise Co., Ltd. Selling Expenses January 1, 2017 ~ December 31, 2017

Unit: Thousands of New Taiwan Dollars

Item	2017
Payroll expense	$158,200
Rental expense	5,639
Stationary	650
Traveling expense	6,560
Freight expense	5,137
Postage	839
Repairs	2,875
Advertising expense	1,341
Utilities expense	275
Insurance expense	17,701
Entertainment expense	14,881
Donation	36
Taxes	847
Depreciation	7,585
Meals expense	4,663
Employee benefits/welfare	6,922
R&D expense	95
Training expense	86
Professional service fees	4,192
Pension	9,405
Miscellaneous purchases	573
Overtime allowance expense	5,454
Transportation expense	1,655
Export expense	1,679,226
Books and magazines	528
Other expenses	8,834
	-----------------
Total	$1,944,199
	=================

414

Yieh Phui Enterprise Co., Ltd. General & Administrative Expenses January 1, 2017 ~ December 31, 2017

Yieh Phui Enterprise Co., Ltd. General & Administrative Expenses
January 1, 2017 ~ December 31, 2017	Unit: Thousands of New
	Taiwan Dollars
Item	2017
Payroll expense	$202,978
Rental expense	4,413
Stationary	1,798
Traveling expense	1,795
Freight expense	23
Postage	2,649
Repairs	7,621
Advertising expense	2,848
Utilities expense	6,067
Insurance expense	20,545
Entertainment expense	19,894
Donation	2,570
Taxes	2,844
Depreciation	21,743
Meals expense	5,248
Employee benefits/welfare	7,823
Training expense	475
Professional service fees	21,184
Pension	10,795
Miscellaneous purchases	4,296
Overtime allowance expense	5,232
Transportation expense	3,260
Books and magazines	234
Other expenses	27,772
	-----------------
Total	$384,107
	=================

VI. Impact on the Company's Financial Status due to Financial Difficulties Experienced by the Company and Its Related Companies during the Last Fiscal Year up to the Publication Date of This Report: None

415

Chapter 7 Review, Analysis, and Risks of Financial Status and Performance

I. Financial Status:

Comparative Analysis of Financial Conditions

Unit: in NT$ thousands

Year Item	2017	2016	Difference	Difference
			Amount	%
Current assets	27,335,270	24,414,242	2,921,028	11.96%
Non-current assets	59,893,078	57,622,248	2,270,830	3.94%
Totalassets	87,228,348	82,036,490	5,191,858	6.33%
Currentliabilities	27,092,385	23,911,787	3,180,598	13.30%
Non-currentliabilities	30,500,102	27,880,724	2,619,378	9.39%
Total liabilities	57,592,487	51,792,511	5,799,976	11.20%
Total equity attributable to shareholders of the parent company	27,841,691	27,537,651	304,040	1.10%
Non-controllinginterests	1,794,170	2,706,328	-912,158	-33.70%
Totalequity	29,635,861	30,243,979	-608,118	2.01%
Total liabilities and equity	87,228,348	82,036,490	5,191,858	6.33%




Analysis of percentage of change: 1. Decrease in non-controlling interests: Mainly due to purchase from associates the subsidiaries shares, including Kuo Chang Enterprise Co., Ltd, United Brightening Development Corp., and TYCOONS STEEL INTERNATION CO., LTD.

Decrease in non-controlling interests: Mainly due to purchase from associates the subsidiaries shares, including Kuo Chang Enterprise Co., Ltd, United Brightening Development Corp., and TYCOONS STEEL INTERNATION CO., LTD.

416

II. Financial Performance

1. Comparative analysis of financial performance

Unit: in NT$ thousands

Year Item	2017	2016	Increases (decreases)	Change ratio%
Netoperatingrevenue	71,158,662	52,847,410	18,311,252	34.65%
Operating costs	64,859,279	45,641,051	19,218,228	42.11%
Gross profit(loss)	6,299,383	7,206,359	-906,976	-12.59%
Operating expenses	4,088,009	3,362,322	725,687	21.58%
Operatingincome (loss)	2,211,374	3,844,037	-1,632,663	-42.47%
Non-operating income and expenses	-406,009	-471,965	65,965	13.97%
Net income (loss) before tax	1,805,365	3,372,072	-1,566,707	-46.46%
Incometaxexpense (gains)	460,055	993,527	-533,472	-53.69%
Net income (loss)	1,345,310	2,378,545	-1,033,235	-43.44%
Other comprehensive income (loss),net	-504,626	-904,716	400,070	44.22%
Total comprehensive income (loss)	840,684	1,473,829	-633,145	-42.96%
Analysis of change in ratios: 1. Increase in operating revenue and operating costs: Benefited from China’s noticeable supply-side reforms, the price of steel becomes stable, prompting a growth in sales volumes and sales price. Added by new production lines launched by Yieh Phui (China) Technomaterial Co., Ltd., the operating performance sees a brilliant improvement. Therefore, both operating revenue and operating costs increase. 2. Increase in operating expense: The anti-dumping duty for galvanized steel products selling from Taiwan to U.S. is 3.77%, which later be raised to 10.34% by the end of July 2016, pushing up the costs to export, thereby bringing up the operating expenses. 3. Decrease in income before tax and net operating profit: China’s de-capacity policy provides a support for the steel price across the straights, and price for raw materials soars as compared to a year before. The rise in costs can not be offset on time by adjusting the selling price, reducing the size of the gross income. In addition, the U.S. inflicts anti-dumping measures, which further increases the cost to export and suppresses the room for profits. Therefore, income before tax and net operating income decrease as compared to the same period a year before. 4. Increase in income tax expense: Mainly due to the decrease in the current profits. 5. Increase in other comprehensive income (loss) - net: Mainly due to increase in foreign exchange rate, which puts up the exchange differences arising from translation of foreign financial statements of entities accounted for under equity method.

Increase in operating revenue and operating costs: Benefited from China’s noticeable supply-side reforms, the price of steel becomes stable, prompting a growth in sales volumes and sales price. Added by new production lines launched by Yieh Phui (China) Technomaterial Co., Ltd., the operating performance sees a brilliant improvement. Therefore, both operating revenue and operating costs increase.
Increase in operating expense: The anti-dumping duty for galvanized steel products selling from Taiwan to U.S. is 3.77%, which later be raised to 10.34% by the end of July 2016, pushing up the costs to export, thereby bringing up the operating expenses.
Decrease in income before tax and net operating profit: China’s de-capacity policy provides a support for the steel price across the straights, and price for raw materials soars as compared to a year before. The rise in costs can not be offset on time by adjusting the selling price, reducing the size of the gross income. In addition, the U.S. inflicts anti-dumping measures, which further increases the cost to export and suppresses the room for profits. Therefore, income before tax and net operating income decrease as compared to the same period a year before.
Increase in other comprehensive income (loss) - net: Mainly due to increase in foreign exchange rate, which puts up the exchange differences arising from translation of foreign financial statements of entities accounted for under equity method.
Explanation of significant changes in gross margin of main product type or department type in

417

the last two years

(1) Changes in gross margin percentage of the last two years

Unit: in NT$ thousands

Year	2016	2016	2016	2017	2017	2017
Product Category	Operating revenue	Gross Profit	Gross Margin Percentage	Operating revenue	Gross Profit	Gross Margin Percentage	Change
Galvanized steelcoil	23,734,000.56	3,305,754.05	13.93%	29,927,132.04	2,956,310.39	9.88%	-29.08%
Coated steel coil	15,522,696.26	3,165,130.79	20.39%	15,704,883.64	2,311,962.36	14.72%	-27.80%
Steel pipe	1,936,405.96	170,037.49	8.78%	2,922,071.06	287,737.95	9.85%	12.14%
Wire	7,372,381.00	58,362.00	0.79%	8,081,415.00	178,101.00	2.20%	178.39%
Others	4,281,926.22	507,074.67	11.84%	14,523,159.27	565,270.30	3.89%	-67.13%
Total	52,847,410.00	7,206,359.00	13.64%	71,158,661.00	6,299,382.00	8.85%	-35.08%

Details of main products with 20% change in gross margin between 2016 and 2017:

Unit: NT$ thousand /ton

	Year	2016	2017
Item
Galvanized steel coil	Unit Cost	17.021	20.813
	UnitPrice	19.775	23.095
	Sales Volume	1,200,204	1,295,836
Coated steel coil	Unit Cost	21.385	25.417
	UnitPrice	26.862	29.805
	Sales Volume	577,859	526,921
Wire	Unit Cost	22.260	20.034
	UnitPrice	22.437	20.485
	Sales Volume	328,575	394,502
Others	Unit Cost	11.863	15.232
	UnitPrice	13.456	15.849
	Sales Volume	318,211	916,363

Unit: in NT$ thousands

Main Products	Analysis Items	2016-2017
Galvanized steel coil	1. Variance analysis of operating revenue
	(Q’-Q)×P	1,891,111
	(P’-P)×Q	3,984,535
	(P’-P)×(Q’-Q)	317,485
	P’Q’-PQ	6,193,131
	2. Variance analysis of operating cost
	(Q’-Q)×P	1,627,711

418

	(P’-P)×Q	4,552,151
	(P’-P)×(Q’-Q)	362,713
	P’Q’-PQ	6,542,575
	3. Gross profit change	(349,444)
Coated steel coil	1. Variance analysis of operating revenue
	(Q’-Q)×P	(1,368,326)
	(P’-P)×Q	1,700,404
	(P’-P)×(Q’-Q)	(149,891)
	P’Q’-PQ	182,187
	2. Variance analysis of operating cost
	(Q’-Q)×P	(1,089,319)
	(P’-P)×Q	2,330,071
	(P’-P)×(Q’-Q)	(205,396)
	P’Q’-PQ	1,035,356
	3. Gross profit change	(853,168)
Wire	1. Variance analysis of operatingrevenue
	(Q’-Q)×P	1,479,232
	(P’-P)×Q	(641,487)
	(P’-P)×(Q’-Q)	(128,711)
	P’Q’-PQ	709,034
	2. Variance analysis of operating cost
	(Q’-Q)×P	1,467,522
	(P’-P)×Q	(731,462)
	(P’-P)×(Q’-Q)	(146,764)
	P’Q’-PQ	589,295
	3. Gross profit change	119,739
Others	1. Variance analysis of operatingrevenue
	(Q’-Q)×P	8,048,901
	(P’-P)×Q	761,296
	(P’-P)×(Q’-Q)	1,431,037
	P’Q’-PQ	10,241,233
	2. Variance analysis of operating cost
	(Q’-Q)×P	7,095,733
	(P’-P)×Q	1,072,078
	(P’-P)×(Q’-Q)	2,015,226
	P’Q’-PQ	10,183,037
	3. Gross profit change	58,196

Note: P’Q’ ： Recent years' unit price, quantity P Q: Previous year's unit price, quantity

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Reasons for difference in price and volume:

I. Galvanized steel coil:

2017's unit price of galvanized steel coil products increases compared to 2016, generating favorable sales price variance of NT$ 3,984,535 thousand. Unit cost in 2017 increases, generating an unfavorable cost differentials of NT$ 4,552,151 thousand. Since increase in unit cost is greater than increase in unit price, along with increase in sales volume, the 2017 gross operating margin for galvanized steel coils decreases by NT$ 349,444 thousand as compared to a year before.

II. Coated steel coil:

2017's unit price of coated steel coil products increases compared to 2016, generating favorable sales price variance of NT$ 1,700,404 thousand. Unit cost in 2017 increases, generating an unfavorable cost differentials of NT$ 2,330,071 thousand. Since increase in unit cost is greater than increase in unit price, along with increase in sales volume, the 2017 gross operating profit for coated steel coils decreases by NT$ 853,168 thousand as compared to a year before.

III. Wire:

2017 wire products' unit selling price drops compared to 2016, generating unfavorable sales price variance of NT$ 641,487 thousand. Unit cost in 2017 decreases, generating a favorable cost differentials of NT$ 731,462 thousand. Since decrease in unit cost is greater than decrease in unit price, the 2017 gross operating profit for wires increases by NT$ 119,739 thousand as compared to a year before.

IV. Others:

2017's unit price of other products increases compared to 2016, generating favorable sales price variance of NT$ 761,296 thousand. Unit cost in 2017 increases, generating an unfavorable cost differentials of NT$ 1,072,078 thousand. Since increase in unit cost is greater than increase in unit price, along with increase in sales volume, the 2017 gross operating profits for other products increase by NT$ 58,196 thousand as compared to a year before.

Expected sales volume and basis 2018 Expected Sales Volume

2018 Expected Sales Volume
Main Products	Quantity (tons)
Rolled steel coil	571,980
Galvanized steel coil	1,296,307
Coated steel coil	564,448
Steel structure engineering	36,000
Bridge crane (number)	48
Wire	305,700
Stainless steel	81,300
Steel pipe	158,500
Others	192,414

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With the 2018 production capacity planning by the sales departments of each company in assessing production volume and product sales, the projected 2018 sales volume by main product types are as follows:

Pickled steel coil: Majority of the pickled steel coil manufactured is put into the production line. Rolled steel coil: Majority of the rolled steel coil manufactured is put into the production line. Besides 571,980 tons estimated for sales, majority of the remaining steel coil is put into production line. Galvanized steel coil: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 1,296,307 tons.

Coated steel coil Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 564,448 tons.

Wire: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 305,700 tons.

Steel Pipes: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 158,500 tons.

Others: Mainly include steel structure, steel plate, stainless steel, scrap and by-products.

III.Cash Flow:

Analysis of changes in cash flow for the past year, improvement plans for liquidity shortage, and cash liquidity analysis for the next year

Analysis of changes in cash flow for the past year, improvement plans for liquidity shortage in 2017

Year Item	2017	2016	Percentage of change
Cash flow ratio	0%	14.14%	-100.00%
Cash flow adequacyratio	32.72%	44.44%	-26.37%
Cash re-investment ratio	0%	4.14%	-100.00%
Mainly due to decrease in annual profits, the three indicators, namely, cash flow ratio, cash flow adequacy ratio, and cash flow reinvestment ratio, also decease correspondingly As compared to thepreviousperiod.

2017 Unit ： in NT$ thousands

Beginning cash balance Balance	Net operating cash flow for the year	Annual Cash Inflow/Outflo w	Cash surplus (Inadequacy )	Remedial measures forcash inadequacy	Remedial measures forcash inadequacy
				Investmen tplans	Financial plans
8,133,181	(1,462,060)	1,033,304	7,704,425	─	─

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Analysis of current year's cash flow change:
- (1) Operating activities: Due to decrease in income before tax by NT$ 1,566,707 thousand as compared to the previous period, increase in inventory by NT$ 1,744,327 thousand, increase in prepayments by NT$ 860,320 thousand, a net operating cash outflow occurs.
- (2) Investment activities: Net cash outflow of NT$ 4,271,137 thousand, mainly due to equity investment increase of NT$ 585,976 thousand and purchase of property, plant and equipment of NT$ 3,428,503 thousand, increase of other financial assets of NT$ 191,567 thousand, resulting in current investment activities generating net cash outflow.
- (3) Financing activities: The net cash inflow of NT$5,384,206 thousand is a result of increase in short-term loans of NT$ 5,311,016 thousand.
Remedial measures for cash inadequacy: None.
Cash liquidity analysis for the following year

Cash liquidity analysis for the following year	Cash liquidity analysis for the following year	Cash liquidity analysis for the following year	Cash liquidity analysis for the following year	Cash liquidity analysis for the following year	Cash liquidity analysis for the following year
Unit: In Thousands of New Taiwan Dollars Beginning cash balance (1) Expected net operating cash flow for the year (2). Net investment and financing cash flows (3) Expected cash surplus (inadequacy) (1)+(2)-(3) Remedial measures for expected cash inadequacy Invest ment plans Financing plans 7,704,425 3,351,418 (4,310,466) 6,745,377 - -
Beginning cash balance (1)	Expected net operating cash flow for the year (2).	Net investment and financing cash flows (3)	Expected cash surplus (inadequacy) (1)+(2)-(3)	Remedial measures for expected cash inadequacy
				Invest ment plans	Financing plans
7,704,425	3,351,418	(4,310,466)	6,745,377	-	-

(1) Analysis of next year's cash flow changes:
Operating activities: As global iron and steel industry continue to see a stable operating growth,

current period's operating activities is expected to generate a net cash inflow.

Investment activities: Net cash outflows mainly due to extension and engagement in new constructions
Financing activities: Net cash inflows due to distribution of cash dividends and increase in bank loans.
(2) Remedial measures for expected cash inadequacy: None

IV.Major Capital Expenditures in the Last Fiscal Year and Their Impact on the Company's Financial Affairs: None

V. Investment Policies for the Last Fiscal Year, the Main Reasons for the Profits or Losses Generated thereby, Improvement Plans, and Investment Plans for the Coming Year.

Investment policies for last year:
For long-term business development considerations, besides maintaining our market advantage in our core business, carbon steel, and maintain profitability, we also branch into stainless steel domain,

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increasing diversified income by adopting a diversified investment strategy.

Main reasons for profit or loss in investments, and its improvement plans:
(1) TYCOONS STEEL INTERNATIONAL CO., LTD 及 CHAMPION LOGISTIC INC ： Main reasons for 2017 profit:

The Group entered into a factoring contract regarding operating assets of its subsidiary, Guang Lian Steel (Vietnam) Co., Ltd., with Hoa Phat Steel in the Rong-guo Industrial Park. The total amount of such contract was VND 255,290,917 thousand (NT$ 345,524 thousand). As the aforesaid property, plant and equipment were fully recognized as impairment loss, the book values of which were NT$ 0. As a result, the gain from disposal was NT$ 345,524 thousand.

(2) Tangeng Iron Works Co., Ltd.

Main reasons for 2017 profit:

The stainless-steel industry in 2017 experienced oversupply, and a volatile and competitive environment. Especially during the second half the year, when soaring material prices pushed up production costs and selling prices were late to respond, the net income for the year saw a shrink. Nonetheless, in exercising the Company’s strategies and raising the productivity by employees, sales volume and revenue posed a growth as compared to last year, which further improved the inventory turnover ratio and equipment utilization rate, thereby lowering the production costs and gaining profits for two consecutive years.

(3) Yieh United Co., Ltd.

Main reasons for 2017 profit:

China’s de-capacity policy in its steel industry gradually eliminated excessive capacity. Last year, nickel price increased by US$ 800 per ton as compared to the previous year. Unit price of steel products also averaged higher than its previous period. Along with the fact that annual exchange gains performed better than previous period, revenue and profits soared, consolidating a basis for profits. In addition, its implementation of policy respecting 6 dimension, namely, “Better the better, create benefits”, “Optimization of process, loss prevention, quickest and best, innovation, teamwork”, had formed several optimization projects as the profit center for management. Efficiency at the departmental level was achieved, and the overall value of the company was created, turning profits for two years in a row.

(4) Yieh Hsing Enterprise Co., Ltd.

Main reasons for 2017 loss:

Affected by the supply side environment, the stainless steel market and commodity market saw a rise in the 2 half of 2017. In the first half, the downstream industry and the market had no intention to fill their stocks but to de-stock, plunging the prices and filling the inventory of steel mills. In the second half of 2017, when the inventory was at a lower point, demands for filling stocks rose, bringing about a growth both in terms of price and in volume. Despite the price

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recovery of nickel is likely to attract procurement demands, the changes in the price is rather volatile, and the demands for nickel are rather de-linked with industrial demands. Fueled by the fierce appreciation of NT dollars, it’s rather difficult to win orders. Yieh Hsing is taking serious consideration as how to expand its market to lower costs, and to achieve a surplus. Improvement plans:

Continue to reduce carbon steel raw material cost and expand steel billet's source of material.
Actively expand stainless steel wire coil channel and expand market share.
Continue to enhance product research and development and sales.
Energy saving, carries out cost reduction program. Our company will continue to conduct new product research and development. Besides developing high value-added products, it also branches into different industries, by investing in E-DA Asia Plaza development project, achieving the highest profitability by using the company's asset, creating new opportunities for transformation.
Investment plans for next year:

In line with the Company’s diversification management policy, the Company will keep investing in the stainless-steel industry, whereas Yieh Hsing Enterprise Co., Ltd., the subsidiary, will be investing in tourism, recreation, and relevant industries.

VI.Risk Analysis and Review:

(I) Impact on the company's consolidated profit and loss due to changes in interest rate, exchange rates, and inflation, as well as the future countermeasures:
Impact of 2017 interest income and exchange rate changes on the Company:

Unit: NT$ thousand

			Unit: NT$ thousand
Item	Account	2017 Amount/ Percentage of Impact	Future response measures
Interest Rate	Interest income (expense)	(1,120,195)	Fed raised its policy rate by 0.25% at the end of 2016 and hiked its policy rare for 3 times in 2017. Although Taiwan’s central bank did not peg to the U.S. rate hike, the correlation between USD and RMB puts up the annual interest expenses of the Company, which still lies within 2% of total revenue. Looking forward to changes in domestic and overseas' main funding currency interest rate levels in 2017, the Company shall pay close attention to the movement of capital market's interest rate, and maintain strict monitoring of interest expense.
	Percentage of Revenue (%)	1.574%
Exchange rate	Exchange gain(loss)	28,795	Besides adopting natural hedging and swap transaction, the Company will also make adjustment by selling when foreign currency exchange rate increases.
	Percentage of Revenue (%)	0.04%
	Operating revenue	71,158,662

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Our Company's products are widely used as intermediate materials for plants, residential door plank and home appliances. In the future, it will expand to automobile steel plate, and will be affected by the economy. Hence, it will add service elements in its existing management activities to promote YPS (Yieh Phui Production Services System) activities, in the aim to increase work quality, continue zero-waste operations, and reduce cost, to reduce the impact to the Company due to inflation.

(II) The policies to engage in high-risk, high-leverage investments, lending funds to others, endorsements and guarantees, and the transactions of derivative products, the main reasons for profits and losses, and the future countermeasures:

The Company does not invest in high risk and highly leveraged investments. Endorsements and guarantees shall be carried out in accordance with the Company's Operating Procedures for Loaning of Funds and Making of Endorsements and Guarantees. Derivative product transactions shall comprise mainly of exchange rate and interest hedging products. Hence, there is no material gain or loss. In the future, the Company will continue to carry out prudent assessment, and avoid investments and transactions with excessive risks.

(III)Future research and development plans and projected R&D investment amount:

With the rise in health awareness, consumers not only expect steel materials to comply with environmental protection requirements. In 2008, Yieh Phui invested in the R&D of reducing the contact between human and bacteria, thereby improving the anti-bacterial steel for healthy environment, which were well received by consumers. At present, Yieh Phui Enterprise's Anti-bacteria, healthy eco-friendly steel plate is fully used on the air-conditioning and duct system of National Cheng Kung University's Yun-Suan Sun Green Building Research Center (also known as The Magic School of Green Technologies). The university is the first in the world to have a 100% green building, and is also Taiwan's first zero-carbon emission building. This innovative building with the characteristics of green energy, was awarded EEWH's highest Diamond Grade Building Label by the Ministry of the Interior in April 2011. In May the same year, it was again awarded U.S. Green Building Council LEED's highest Platinum Grade Building Label. As at 2015 Q1, Yieh Phui once again developed a nano-grade environmental friendly, fingerprint resistant steel plate that passed the certification by the Industrial Development Bureau, Ministry of Economic Affairs, and was awarded Nano Label, setting a new milestone in innovative research and development.

Pertaining to the above, Yieh Phui has continued its current successful research and development model, and cooperates with suppliers of surface treatment and coating materials to develop new products, and integrates with the supply chain's sales system such as dealers or molding plants, to maximize the products' benefits. In 2014, the Company plans to once again cooperate with hot-rolling and cold-rolling suppliers to develop high forming and high tensile strength steel for structural building materials and steel plate for automotive molding. Also, it will develop low cost processing products that conform to Australia's G450 and Japan's STK 700 specifications, and rose metallic paint, wood grain and marble grain coated steel plate, to be used on home appliances or indoor purposes, creating greater added value for the Company. Also, in response to the concept of global village, EU has implemented directives, RoHS and WEEE, in 2006, which emphasize that electronic and electrical appliances are to comply with

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the requirements of product, environmentally friendly processing and recycle and reuse. It has also received response and attention from governments and industries throughout the world. At that time, as Yieh Phui has completed the research and development of eco-friendly products and processes, it received large amount and long-term orders from home appliance brands. In June 2007, the Company obtained the IECQ QC080000 certification to ensure safer and more efficient product quality assurance and management, and to boost customers confidence in the value of our products.

In the past two years, E.U. launch another two directives in 2 phases, in which building materials such as plated and coated products are required to be surface treated without using any chromium or hexavalent chromium, while maintaining their product characteristics; the Company successfully developed its outdoor environmental friendly plated and coated products as early as May 2017, which allowed itself to switch its building material products seamlessly to environmental friendly products, and once again produced outstanding performance in promotion and sales.

This year's research and development projects are expected to be completed by Q4 2018, with an estimated investment amount of around NT$ 95,200 thousand. Upon successful research and development, it will provide more complete product portfolio of environmentally friendly home appliances and building materials. Also, with the promotion and production of high quality and usage products, it would be able to generate higher profit.

(IV)The impact of changes of important domestic and foreign policies and laws on the Company’s finance and business, and the countermeasures: None

(V) The impact of changes in technologies and industries on the Company’s finance and business, and the countermeasures:

Our Company's products are traditional iron and steel products. With more than 50 years of technological development, our technologies are considerably stable, and we do not see major changes. Hence, technology and industry changes do not have significant impact on the Company's products.

(VI)The impacts of changes of corporate image on the company's crisis management and the countermeasures:

In line with the vision of Becoming world's best iron and steel manufacturing and service enterprise by 2018, the Company set annual targets to be participated and executed by all staffs in a top-down approach. Trainings and counseling are also improved to enhance corporate image.

(VII) Anticipated benefits of mergers and possible risks: None

(VIII) Anticipated benefits and possible risks of plant expansion:

Our Company's China subsidiary, Yieh Phui (China) Technomaterial Co., Ltd., is expanding its plant in Changshu Economic Development Zone, to achieve an annual capacity of 620,000 tons of galvanized steel roll, and 420,000 tons of color coated steel roll. It is estimated that with the mass production in the future, besides increasing the sale of steel plate for motor cars, it can also provide more comprehensive color steel roll products, thereby increasing revenue. However, there is still a potential threat of demand reduction of iron and steel from the world and China due to economic slowdown.

(IX)Risks due to concentrated procurement and sales, and the countermeasures:

Besides choosing suppliers that we have long-term cooperation and good relationship with to be our raw materials supplier, we also maintain good relationship with potential suppliers, so as to ensure stable supply of materials, high production yield, and higher advantage over competitors in terms of

426

long-term cost.

Our products are sold to countries all over the world, and we choose the largest local dealers and customers, with the strongest sales capabilities, establishing high market diversification. Also, our Company carries products with all dimensions, which gives the Company excellent market transfer capability in response to the constantly changing sales market.

(X) The impact on the Company, and risks arising from major exchange or transfer of shares by directors, supervisors or major shareholders with over 10% of shareholdings, and the countermeasures:

The Company's directors, supervisor and major shareholders with more than 10% shareholding, due to their high shareholding and low movement, pose no risk of significant equity transfer or change.

(XI) The impact on the Company, and risk due to changes in managerial authority, and the countermeasures: None
(XII) For any litigious or non-litigious matters, the company and company's directors, supervisors, general managers, person with actual responsibility in the company, and major shareholders holding more than 10% of the company's shares, shall be disclosed. If there has been any substantial impact upon shareholders' equity or prices for the company's securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving the company that was finalized or remained pending during the most recent 2 fiscal years or during the current fiscal year up to the printing date of the annual report, the report shall disclose the facts in dispute, amount in dispute, commencement date, main parties involved, and current status of the case as at the date of printing of the report: None.
(XIII) Other material risks and countermeasures: None

VII.Other Important Issues: None

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Chapter 8 Special Items

I. Affiliation Information:

Related companies:
(I) Consolidated Operating Report of Affiliates
- (1) Organization chart of related companies: December 31, 2017

==> picture [1060 x 537] intentionally omitted <==

----- Start of picture text -----

Yieh Phui Enterprise Co., Ltd.
100% 100% 100% 100% 100% 86.99% 77.54% 100% 56.43% 100% 97.44% 95.56% 49% 28.27% 99.04% 80% 100% 80%
HSING JUI Sin Bang Yieh Phui GOOD Gen-Wan EMMT Shin Phui Steel Yieh Hsing Enterprise WORTHING HONOR United Brightening 1% Da Yao Engineering & Kuo Chang Enterprise Hong Yuh Assets Shin Yang Steel Co., LIAN SO (H.K) CO.,
INVESTMEN Investment & (Hong Kong) HONOR Technology Systems Corporatio Co., Ltd. HOLDINGS Development Consulting Co., Ltd. Management Ltd. LIMITED
TS LIMITED Development Holdings HOLDINGS Corp. Corporation n LTD Corp. Co., Ltd. Co., Ltd
Co., Ltd. Limited LTD.
2.56%
42.53%
100% 7.48% 10% 90%
CHAMPION 0.58% TYCOONS STEEL
PT. YIEH FERRO
91.47% LOGISTIC INTERNATIONAL CO.,
49.97 INC. LTD. INDONESIA
GOLDEN Yieh Phui (China) APPLIED WIRELESS (YFI)
Groupco 100
DEVELOPMENTS Technomaterial IDENTIFICATIONS
Technology
INGS LTD. Co., Ltd. GROUP INC. 100%
Chao Ying 100% PT. E-UNITED FERRO
Investment
INDONESIA
100% Development Co.,
Ltd. (EFI)
Guang Lian Steel (Viet
100% 100% AWID Asia Co., Ltd. 100% 100% Nam) Co., Ltd
75%
Tianjin Lianfa Changshou ChangHuei Kingsgarden International Great Emperor Hotel CO., 65.38% PT. GENBA INDO
Precision Trading CO., LTD. LTD. RESOURCES
Steel Co. 100% 100%
(GIR)
Corporatio
n AWID Sanghai AWID
Co., Ltd. Changshou Co.,
Ltd.
70%
Yi Hua
International
Co., Ltd
----- End of picture text -----

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(2) Basic information of each affiliated company

Data date: December 31, 2017; Unit: NT$ 1000 (exchange rate for US$:29.76) (exchange rate for RMB: 4.5729) (exchange rate for IDR: 0.0022)

Company Name	Date of Incorporation	Address	Paid-in Capital	Main businesses
Yieh Phui Enterprise Co., Ltd.	1978/04/14	No. 369, Yuliao Road, Qiaotou District, Kaohsiung City	NT$17,180,906	Galvanized, coated steelcoil
WORTHING HONOR HOLDINGS LTD	1995/07/24	Tropic Isle Building P.O.BOX 438, Road Town, TortolaB.V.I.	US$ 100	Investment
GOOD HONOR HOLDINGS LTD.	1995/12/04	Tropic Isle Building P.O.BOX 438, Road Town, Tortola B.V.I.	US$ 46	Investment
Shin Phui Steel Co., Ltd.:	1990/06/25	1st Floor, No.25, Lane 175, Daren Road, Taishang Village, Gangshan District,Kaohsiung City	NT$ 312,464	Trading of steel products
Yieh Phui (Hong Kong) Holdings Limited	2010/06/10	20th Floor, Tesbury Centre, 28 Queen's Road, Hong Kong	US$ 233,500	Investment
Yieh Phui (China) Technomaterial Co., Ltd.	2002/01/28	No.1, Yehui Road, Riverside Industrial Park, Changshu City, JiangsuProvince, China	RMB$1,689,322	Galvanized, coated steelcoil
Gen-Wan Technology Corp	2000/05/01	No. 366, Zhongcheng Street, Gangshan Village, GangshangDistrict,Kaohsiung City	NT$ 28,133	Telecommunica tion
EMMT Systems Corporation	1988/10/04	No. 16-1, South 2nd Road, Taichung Export Processing Zone, Tanzi District, Taichung City	NT$ 369,497	Manufacture of military standard printed circuit boards and module boards
Groupco Technology Inc.	2006/09/05	1st Floor, No. 100, Shengli 3rd Street, Ganzhe Village, Tanzi Village, Taichung City	NT$ 90,050	Wholesale of telecommunicat ions equipment and electronic materials
APPLIED WIRELESS INDENTIFICATION GROUP,INC.	1997/07/09	Gorporation Trust Center, 1209 Orange Street, Wilmington, Delaware, USA	US$ 441	RFID technology product
AWID Asia Co.,Ltd.	2008/07/15	3rd Floor,No.9,Section 1,XuechengRoad,Dashu	NT$ 30,300	Wholesale of

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Company Name	Date of Incorporation	Address	Paid-in Capital	Main businesses
		District, Kaohsiung City		telecommunicat ions equipment and electronic materials
AWID Sanghai Co., Ltd.	2011/01/26	Room 706, Rongke Building, No.443, Dapu Road, Luwan District, Shanghai City	RMB$ 4,47 2	Wholesale of telecommunicat ions equipment and electronic materials
AWID Changshou Co., Ltd.	2016/6/28	No.1, Yehui Road, Riverside Industrial Park, Changshu City, Jiangsu Province, China	US$ 300	Wholesale of telecommunicat ions equipment and electronic materials
Yieh Hsing Enterprise Co., Ltd.	1978/07/18	No. 369, Baomi Road, Baimi Village, Gangshan District, Kaohsiung City	NT$ 5,306,516	Production and sales of steel pipe, steel coil products, wire
Great Emperor Hotel CO., LTD.	2011/11/24	2nd Floor, No.111, Minghua 1st Road, Zuoying District,Kaohsiung City	NT$ 2,100,000	Hotel Industry, etc.
Kingsgarden International Co., Ltd.	2011/11/24	2nd Floor, No.111, Minghua 1st Road, Zuoying District, Kaohsiung City	NT$ 2,150,000	Departmental stores, supermarkets, etc.
Shin Yang Steel Co., Ltd.	2011/02/15	No.297, Yuliao Road, Qiaotou District, Kaohsiung City	NT$ 870,000	Black steel pipe, galvanized steel pipe, EMT steel pipe, rectangular tube, API casing, pipeline, etc.

430

Company Name	Date of Incorporation	Address	Paid-in Capital	Main businesses
GOLDEN DEVELOPMENTS HOLDINGS LTD.	2012/05/02	Kingston Chambers,P.O.Box 217,Road Town,Tortola,British Virgin Islands	RMB$ 62 9	Investment
CHAMPION LOGISTIC INC.	2002/02/08	Offshore Chambers,P.O.Box 217,Apia,Samoa	US$ 58,500	Investment
TYCOONS STEEL INTERNATIONAL CO.,LTD.	2006/01/04	Scotia Centre,4Th Floor,P.O.Box 2804,George Town,Grand Cayman,Cayman Islands.	US$ 52,000	Investment
GUANG LIAN STEEL (VIET NAM) CO., LTD	2006/09/08	Dung Quat Economic Zone,Quang Ngai,Vietnam	US$ 44,000	Manufacture and sale of iron and steel products and by-products
HSING JUI INVESTMENT LIMITED	2003/01/06	Offshore Chambers,P.O.Box 217,Apia,Samoa.	US$ 5	Investment
Tianjin Lianfa Precision Steel Corporation	2006/07/20	No.125, Zhongnan 6th Street, West Zone, Tianjin Economic-Technological Development Area,	RMB$ 143,43 8	Steel manufacturing, processing, sale, etc.
Changshou ChangHuei Trading Co.	2014/08/15	No.1, Yehui Road, Riverside Industrial Park, Changshu City, Jiangsu Province, China	(RMB 10,000)	Wholesale and import and export, etc. of various fabricated metal products
Sin Bang Investment & Development Co., Ltd.	2001/05/10	2nd Floor, No.9, Section 1, Xuecheng Road, Dashu District,Kaohsiung City	NT$ 223,125	Investment
Hong Yuh Assets Management Co.,Ltd.	2007/01/10	2nd Floor, No.9, Section 1, Xuecheng Road, Dashu District, Kaohsiung City	NT$ 1,000,000	Wholesale and real estate related management consultancy
United Brightening Development Corp.	2002/10/01	2nd Floor, No.9, Section 1, Xuecheng Road, Dashu District, Kaohsiung City	NT$ 1,515,868	Technical consultation for steel products manufacturing
Kuo Chang Enterprise Co., Ltd.	2003/07/01	1st Floor, No.62-1, Renai Road, Luzhu District, Kaohsiung City	NT$ 976,771	Wholesaling of hardware

431

Company Name	Date of Incorporation	Address	Paid-in Capital	Main businesses
Chao Ying Investment Development Co., Ltd.	2001/05/11	2nd Floor, No.9, Section 1, Xuecheng Road, Dashu District,Kaohsiung City	NT$ 304,000	Investment
Da Yao Engineering Consultation Co., Ltd.	2008/01/23	2nd Floor, No.9, Section 1, Xuecheng Road, Dashu District,Kaohsiung City	NT$ 20,000	Management service
PT. E-UNITED FERRO INDONESIA	2014/09/18	Perwata Tower, Lt. 2 Suite DEF Jl. Pluit Selatan Raya, Kav. 1, Kel. Penjaringan, Kec. Penjaringan, Jakarta Utara 14440	US$ 2,500	Metal manufacturing industry
PT. E-UNITED FERRO INDONESIA	2016/3/17	Perwata Tower, Lt. 2 Suite DEF Jl. Pluit Selatan Raya, Kav. 1, Kel. Penjaringan, Kec. Penjaringan, Jakarta Utara 14440	US$ 500	Metal manufacturing industry
LIAN SO(H.K)CO., LIMITED	2015/01/16	20th Floor, Tesbury Centre, 28 Queen's Road, Hong Kong	US$ 12,700	Investment
I-Hwa International Co., Ltd.	2015/10/05	3rd Floor, No.5, Section 1, Xuecheng Road, Dashu District, Kaohsiung City	NT$ 6,000	Leasing, selling and development of residential and commercial buildings
PT. GENBA INDO RESOURCES	2006/03/13	RUKO ELANG LAUT BOULEVARD BLOK B2 No. 19 Pantai Indah Kapuk RT/RW, 003/003 Kel. KAMAL MUARA Kec. PENJARINGAN KOTA JAKARTA UTARA	IDR$5,075,000	Nickle mining

Note: 1. All affiliated companies, regardless of its scale, shall be disclosed.

Note: 2. If the affiliated company has plant, and the sales value of the plant's products exceeds 10% of the controlling company's operating revenue, the plant's name, date of incorporation, address and the main product items manufactured by the plant shall be stated.

Note: 3. If the affiliated company is a foreign company, the company name and address shall be stated in English, the date of incorporation indicated in Gregorian format, and paid-up capital indicated in foreign currency (the exchange rate on the date of report shall be stated).

(3) Companies presumed to have a relationship of control and subordination according to Article 369-3 of the Company Act: None

432

(4) The industries that are covered by the affiliated companies, and their distribution of work if the businesses of affiliate companies are interconnected with others:
A 、 The main operating businesses of all affiliated companies are plated steel products manufacturing, steel products trading, steel products cutting and slitting, manufacture of black steel pipe, galvanized steel pipe, EMT steel pipe, rectangular tube, API casing and pipeline, etc., investment, hotel industry and departmental stores, supermarkets, nickel iron manufacturing, etc.
(Base Date: December 31, 2017)

Industry	Name of affiliated company	Business relationship with other affiliated companies
Investment holding company	Yieh Phui(HongKong)Holdings Limited	Holding company of Yieh Phui (China)
	TYCOONS STEEL INTERNATIONAL CO., LTD.	Holding company of Guang Lian
	Sin Bang Investment & Development Co., Ltd.	Invested enterprise of Yieh Phui
	HSING JUI INVESTMENT LIMITED	Invested enterprise of Yieh Phui
	Chao Ying Investment Development Co., Ltd.	Investment of United Brightening Development Corp.
	HongYuh Assets Management Co.,Ltd.	Invested enterprise of Yieh Phui
	United BrighteningDevelopment Corp.	Holding company ofChaoYing
	LIAN SO(H.K)CO.,LIMITED	Invested enterprise of Yieh Phui
Overseas investee	WORTHING HONOR HOLDINGS LTD	Invested enterprise of Yieh Phui
	CHAMPION LOGISTIC INC.	Invested enterprise of Yieh Phui
	Golden Developments Holdings Ltd.	Invested enterprise of Yieh Phui
	GOOD HONOR HOLDINGS LTD.	Invested enterprise of Yieh Phui
Iron and steel industry	Yieh Phui(China)Technomaterial Co.,Ltd.	Investment of Yieh Phui(HongKong)
	Shin Phui Steel Co.,Ltd.:	Sale of someproducts of Yieh Phui
	Yieh HsingEnterprise Co.,Ltd.	Invested enterprise of Yieh Phui
	Shin YangSteel Co.,Ltd.	Invested enterprise of Yieh Phui
	GUANG LIAN STEEL (VIET NAM) CO., LTD	Investment of Tycoons
	Tianjin Lianfa Precision Steel Corporation	Investment of Yieh Phui(China)
Electronics industry	Gen-Wan Technology Corp	Invested enterprise of Yieh Phui
	EMMT Systems Corporation	Investment of Gen-Wan Technology
	GroupcoTechnologyInc.	Investment of EMMTSystems Corporation
	APPLIED WIRELESS INDENTIFICATION GROUP,INC.	Investment of EMMT Systems Corporation
	AWID Asia Co., Ltd.	Investment of Applied Wireless Identifications Group, Inc.
	AWIDSanghaiCo.,Ltd.	Investment of AWID
	AWIDChangshou Co.,Ltd.	Investment of AWID
Hotel industry	Great Emperor Hotel CO.,LTD.	Investment of Yieh Hsing

433

Industry	Name of affiliated company	Business relationship with other affiliated companies
Departmental stores, supermarkets, etc.	Kingsgarden International Co., Ltd.	Investment of Yieh Hsing
	I-Hwa International Co., Ltd.	Investment of Kingsgarden
Management consulting	Da Yao Engineering Consultation Co., Ltd.	Investment of United Brightening Development Corp.
Trade industry	Changshou ChangHuei TradingCo.	Investment of Yieh Phui(China)
	Kuo ChangEnterprise Co.,Ltd.	Invested enterprise of Yieh Phui
Metal manufacturing industry	PT. E-UNITED FERRO INDONESIA	Investment of HongYuh
	PT. E-UNITED FERRO INDONESIA	Investment of Lian So (H.K)
Nickle mining	PT. GENBA INDO RESOURCES	Investment of Hong Yuh

(5) The names of the directors, supervisors, and presidents of each affiliated enterprises, and the number of shares they hold or the amount of capital they contributed:

Information of affiliated company's directors, supervisors and presidents as at 31 December 2017

			Unit: Shares;%	Unit: Shares;%
Company Name	Title	Name or representative	Shareholding (Note2)(Note 3)
	Note (1)		Shares	Share Holding %
Yieh Phui Enterprise Co., Ltd.	Chairman	Kuo Chiao Investment & Development Co., Ltd. Representative:I. S.Lin	58,890,774	3.23%
	Director	Kuo Chiao Investment & Development Co., Ltd. Representative: Ping-Yong Liang	58,890,774	3.23%
	Director	Kuo Chiao Investment & Development Co., Ltd. Representative:Lin-Maw Wu	58,890,774	3.23%
	Director	Kuo Chiao Investment & Development Co., Ltd. Representative: Ching-TsungHuang	58,890,774	3.23%
	Independent Director	Chin-Shu Sun	─	─
	Independent Director	Wen-I Chang	─	─
	Independent Director	Te-Yuan Yang	─	─
	Manager	Lin-Maw Wu	─	─
GOOD HONOR HOLDINGSLTD.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Pi-Hsian Li	46,400	100.00%
WORTHING HONOR HOLDINGSLTD	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Pi-Hsian Li	100,000	100.00%
Yieh Phui (Hong Kong) Holdings Limited	Chairman	Yieh Phui Enterprise Co., Ltd. Representative: Pi-Hsian Li	233,500,000	100.00%

434

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
Shin Phui Steel Co., Ltd.:	Chairman	Yieh Phui Enterprise Co., Ltd. Representative: Yung-Hsien Chen	31,246,434	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:I. S.Lin	31,246,434	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	31,246,434	100.00%
	Supervisor	Yieh Phui Enterprise Co., Ltd. Representative: He-Hsing Lai	31,246,434	100.00%
Shin Yang Steel Co., Ltd.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative: Lin-Maw Wu	87,000,000	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative: I. S. Lin	87,000,000	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	87,000,000	100.00%
	Supervisor	Yieh Phui Enterprise Co., Ltd. Representative: Ching-TsungHuang	87,000,000	100.00%
	Manager	Lin-Maw Wu	─	─
Hong Yuh Assets Management Co.,Ltd.	Chairman	Yieh United Steel Corporation Representative:Lin-Maw Wu	80,000,000	80.00%
	Director	Yieh United Steel Corporation Representative:Huang-Tsai Ye	13,667,000	13.67%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	80,000,000	80.00%
	Supervisor	Yieh Mau Corporation Representative:Tien-ChiChang	6,333,000	6.33%
	Supervisor	Yieh Mau Corporation Representative:Hung-Chi, Chang	6,333,000	6.33%
PT. E-UNITED FERRO INDONESIA	Chairman	Pi-Hsian Li	─	─
	Director	Yung-Hsien Chen	─	─
	Director	Tien-Chi Chang	─	─
	Director	Huang-Tsai Ye	─	─
	Supervisor	Chia-ChengLin	─	─
Sin Bang Investment & Development Co., Ltd.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	22,312,500	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:I. S.Lin	22,312,500	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Ping-YongLiang	22,312,500	100.00%
	Supervisor	Yieh Phui Enterprise Co., Ltd. Representative: Tien-Chi Chang	22,312,500	100.00%
Golden Developments Holdings Ltd.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative: Pi-Hsian Li	100,000	100.00%
Yieh Phui (China) Technomaterial Co., Ltd.	Chairman	Yieh Phui (Hong Kong) Holdings Limited Representative:Lin-Maw Wu	─	─
	Director	Yieh Phui (Hong Kong) Holdings Limited Representative: Tien-Chi Chang	─	─

435

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
	Director	Yieh Phui (Hong Kong) Holdings Limited Representative:Yung-Fang Chang	─	─
	Director	Yieh Phui (Hong Kong) Holdings Limited Representative: Sen-Long Chen	─	─
	Director	Yieh Phui (Hong Kong) Holdings Limited Representative:Yung-HsienChen	─	─
	Supervisor	Yieh Phui (Hong Kong) Holdings Limited Representative: Ching-Tsung Huang	─	─
	Manager	Yung-Fang Chang	─	─
Changshou ChangHuei Trading Co.	Chairman	Yieh Phui (China) Technomaterial Co., Ltd. Representative:Yung-Fang Chang	─	─
	Director	Yieh Phui (China) Technomaterial Co., Ltd. Representative:Lin-Maw Wu	─	─
	Director	Yieh Phui (China) Technomaterial Co., Ltd. Representative:Yung-HsienChen	─	─
	Supervisor	Yieh Phui (China) Technomaterial Co., Ltd. Representative: Ching-Tsung Huang	─	─
HSING JUI INVESTMENTS LIMITED	Chairman	Yieh Phui Enterprise Co., Ltd. Representative: Lin-Maw Wu	5,000	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative: Tien-Chi Chang	5,000	100.00%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	5,000	100.00%
Tianjin Lianfa Precision Steel Corporation	Chairman	Yieh Phui (China) Technomaterial Co., Ltd. Representative:Yung-Fang Chang	─	─
	Director	Yieh Phui (China) Technomaterial Co., Ltd. Representative:Lin-Maw Wu	─	─
	Director	Representative of Yieh Phui (China) Technomaterial Co., Ltd. Yung-Hsien Chen	─	─
	Supervisor	Yieh Phui (China) Technomaterial Co., Ltd. Representative: Ching-TsungHuang	─	─
Gen-Wan Technology Corp	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	2,447,241	86.99%
	Director	Yieh Phui Enterprise Co., Ltd. Representative: Lin-Maw Wu	2,447,241	86.99%

436

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
	Director	Yieh Phui Enterprise Co., Ltd. Representative: Tien-Chi Chang	2,447,241	86.99%
	Supervisor	Weiqiao Investment Development Co., Ltd Representative:He-HsingLai,	17,289	0.61%
EMMT Systems Corporation	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	28,650,599	77.54%
	Director	Yieh Phui Enterprise Co., Ltd. Representative: Ching-TsungHuang	28,650,599	77.54%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	28,650,599	77.54%
	Supervisor	Gen-Wan Technology Corp Representative:Tien-ChiChang	2,737,769	7.41%
Groupco Technology Inc.	Chairman	EMMT Systems Corporation Representative:Lin-Maw Wu	4,500,000	49.97%
	Director	EMMT Systems Corporation Representative: Ching-TsungHuang	4,500,000	49.97%
	Director	EMMT Systems Corporation Representative:Yung-HsienChen	4,500,000	49.97%
	Director	Ko-ChinChen	530,000	5.89%
	Director	EMMT Systems Corporation Representative:Tien-ChiChang	4,500,000	49.97%
	Supervisor	Shin Phui Steel Co., Ltd.: Representative: Ching-ShengYu	3,830,000	42.53%
	Supervisor	Shin Phui Steel Co., Ltd.: Representative:He-HsingLai,	3,830,000	42.53%
APPLIED WIRELESS INDENTIFICATION GROUP,INC.	Chairman	EMMT Systems Corporation Representative:Lin-Maw Wu	─	─
	Director	EMMT Systems Corporation Representative:Yung-HsienChen	─	─
	Director	EMMT Systems Corporation Representative: Ching-TsungHuang	40,488,461	91.47%
	Director	EMMT Systems Corporation Representative: Shih-IChou	─	─
	Director	You-ShengHuang	─	─
AWID Asia Co., Ltd.	Chairman	Applied Wireless Identifications Group, Inc. Representative:Lin-Maw Wu	3,030,000	100.00%
	Director	Applied Wireless Identifications Group, Inc. Representative: Ching-TsungHuang	3,030,000	100.00%
	Director	Applied Wireless Identifications Group, Inc. Representative:Yung-HsienChen	3,030,000	100.00%
	Supervisor	Applied Wireless Identifications Group, Inc. Representative: Tien-Chi Chang	3,030,000	100.00%

437

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
AWID Sanghai Co., Ltd.	Chairman	AWID Asia Co., Ltd. Representative: Lin-Maw Wu	─	─
	Director	AWID Asia Co., Ltd. Representative: Ching-TsungHuang	─	─
	Director	AWID Asia Co., Ltd. Representative:Yung-HsienChen	─	─
	Supervisor	AWID Asia Co., Ltd. Representative:Tien-ChiChang	─	─
CHAMPION LOGISTIC INC.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Pi-Hsian Li	57,000,000	97.44%
	Director	I. S.Lin	─	─
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	57,000,000	97.44%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	57,000,000	97.44%
Yieh Hsing Enterprise Co., Ltd.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	299,458,386	56.43%
	Director	Yieh Phui Enterprise Co., Ltd. Representative: Sen-Long Chen	299,458,386	56.43%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:I. S.Lin	299,458,386	56.43%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	299,458,386	56.43%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Tien-ChiChang	299,458,386	56.43%
	Independent Director	Chin-Shu Sun	─	─
	Independent Director	Wen-I Chang	─	─
	Supervisor	Hsing Lung Investment & Development Co., Ltd Representative: Ching-Tsung Huang	2,788,385	0.53%
	Supervisor	Hsing Lung Investment & Development Co., Ltd Representative:He-HsingLai,	2,788,385	0.53%
	Manager	Sen-Long Chen	─	─
Great Emperor Hotel CO., LTD.	Chairman	Yieh Hsing Enterprise Co., Ltd. Representative:Lin-Maw Wu	210,000,000	100.00%
	Vice Chairman	Yieh Hsing Enterprise Co., Ltd. Representative: Chun-TienWang	210,000,000	100.00%
	Director	Yieh Hsing Enterprise Co., Ltd. Representative:I. S.Lin	210,000,000	100.00%
	Director	Yieh Hsing Enterprise Co., Ltd. Representative:Tien-ChiChang	210,000,000	100.00%
	Director	Yieh Hsing Enterprise Co., Ltd. Representative:Yung-HsienChen	210,000,000	100.00%
	Supervisor	Yieh Hsing Enterprise Co., Ltd. Representative: Hong-Chi Chang	210,000,000	100.00%

438

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
Kingsgarden International Co., Ltd.	Chairman	Yieh Hsing Enterprise Co., Ltd. Representative: Lin-Maw Wu	215,000,000	100.00%
	Director	Yieh Hsing Enterprise Co., Ltd. Representative:I. S.Lin	215,000,000	100.00%
	Director	Yieh Hsing Enterprise Co., Ltd. Representative:Tien-ChiChang	215,000,000	100.00%
	Supervisor	Yieh Hsing Enterprise Co., Ltd. Representative:Hong-ChiChang	215,000,000	100.00%
I-Hwa International Co., Ltd.	Chairman	Kingsgarden International Co., Ltd. Representative: Chun-ShengLin	420,000	70.00%
	Director	Kingsgarden International Co., Ltd. Representative:You Jing-Sheng	420,000	70.00%
	Director	Jinghua Commercial Asset Management Limited Representative: Wang Chun-Wan	180,000	30.00%
	Supervisor	Yung-HsienChen	─	─
TYCOONS STEEL INTERNATIONAL CO.,LTD.	Chairman	Yieh United Steel Corporation Representative:Huang-Tsai Ye	14,000,000	26.92%
	Director	Yieh United Steel Corporation Representative:Pi-Hsian Li	14,000,000	26.92%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	14,700,000	28.27%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:I. S.Lin	14,700,000	28.27%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	14,700,000	28.27%
	Director	United Brightening Development Corp. Representative: Ping-Yong Liang	300,000	0.58%
	Director	United Brightening Development Corp. Representative:Tien-ChiChang	300,000	0.58%
GUANG LIAN STEEL (VIETNAM) CO.,LTD.	Chairman	Pi-Hsian Li	─	─
Kuo Chang Enterprise Co., Ltd.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Yung-HsienChen	96,739,408	99.04%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:I. S.Lin	96,739,408	99.04%
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	96,739,408	99.04%
	Supervisor	Jiayuan Investment Development Co., Ltd Representative:Hung-Chi, Chang	937,700	0.96%
United Brightening Development Corp.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative: Yung-Hsien Chen	144,859,883	95.56%
	Director	Yieh Phui Enterprise Co., Ltd. Representative: I. S. Lin	144,859,883	95.56%

439

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
	Director	Yieh Phui Enterprise Co., Ltd. Representative: Lin-Maw Wu	144,859,883	95.56%
	Supervisor	Xinyang Investment Development Co., Ltd Representative:Hung-Chi, Chang	6,726,917	4.44%
Chao Ying Investment Development Co., Ltd.	Chairman	United Brightening Development Corp. Representative:Huang-Tsai Ye	30,400,000	100.00%
	Director	United Brightening Development Corp. Representative:Tien-ChiChang	30,400,000	100.00%
	Director	United Brightening Development Corp. Representative:Lin-Maw Wu	30,400,000	100.00%
	Supervisor	United Brightening Development Corp. Representative: Ching-TsungHuang	30,400,000	100.00%
Da Yao Engineering Consultation Co., Ltd.	Chairman	Yieh Phui Enterprise Co., Ltd. Representative:Tien-ChiChang	980,000	49.00%
	Director	Yieh United Steel Corporation Representative:Huang-Tsai Ye	800,000	40.00%
	Director	United Brightening Development Corp. Representative: Ching-TsungHuang	19,900	1.00%
	Supervisor	Yung-HsienChen	─	─
LIAN SO(H.K)CO., LIMITED	Chairman	Pi-Hsian Li	─	─
	Director	Yieh Phui Enterprise Co., Ltd. Representative:Lin-Maw Wu	10,160,000	80.00%
	Director	Yieh United Steel Corporation Representative:Huang-Tsai Ye	1,270,000	10.00%
	Supervisor	Yieh Mau Corporation Representative:Tien-ChiChang	1,270,000	10.00%
AWID Changshou Co., Ltd.	Chairman	AWID Asia Co., Ltd. Representative:Lin-Maw Wu	─	─
	Director	AWID Asia Co., Ltd. Representative: Ching-TsungHuang	─	─
	Director	AWID Asia Co., Ltd. Representative:Yung-HsienChen	─	─
	Supervisor	AWID Asia Co., Ltd. Representative: Tien-Chi Chang	─	─
PT. E-UNITED FERRO INDONESIA	Chairman	Pi-Hsian Li	─	─
	Director	I. S.Lin	─	─
	Director	Lin-Maw Wu	─	─
	Director	Chong-Chi Kuo	─	─
	Director	Ping-YongLiang	─	─
	Director	Chia-ChengLin	─	─
	Director	Yung-Hsien Chen	─	─
	Supervisor	Tien-Chi Chang	─	─

440

Company Name	Title	Name or representative	Shareholding (Note 2)(Note 3)	Shareholding (Note 2)(Note 3)
	Note (1)		Shares	Share Holding %
	Supervisor	Huang-Tsai Ye	─	─
	Supervisor	Ching-TsungHuang	─	─
	Supervisor	AchmadKurniadi	─	─
PT. GENBA INDO RESOURCES	Chairman	Lin-Maw Wu	─	─
	Director	Chong-Chi Kuo	─	─
	Director	Chia-ChengLin	─	─
	Director	Adi Wijoyo	─	─
	Supervisor	Yung-Hsien Chen	─	─

Note 1: If the affiliated company is a foreign company, list the personnel holding key positions. Note 2: If the invested company is a company limited by shares, fill in the number of shares and proportion of shareholding. For others, fill in the investment amount and indicate the proportion of contribution.

Note 3: If the director or supervisor is a legal person, the related information of the representatives shall be disclosed.

441

(6) Operational overview of related companies:

	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands	Data date: December 31, 2017; Unit: in NT$ thousands
Company name	Capital	Total assets	Total liabilities	Net value	Operating revenue	Operating income	Current profit and loss (after tax)	Earnings per share (NT$) (after tax)
Yieh Phui Enterprise Co.,Ltd.	18,211,760	50,942,235	23,100,544	27,841,691	29,179,218	1,461,328	1,367,404	0.75
WORTHINGHONOR HOLDINGSLTD	2,976	2,722	—	2,722	—	—	5	—
GOOD HONOR HOLDINGSLTD.	1,381	151,205	—	151,205	—	(224)	3,538	2.50
Shin PhuiSteelCo.,Ltd.:	312,464	452,294	134,983	317,311	306,952	7,420	2,012	0.07
Gen-Wan Technology Corp	28,133	26,909	69	26,840	—	(140)	(1,432)	(0.51)
Yieh Phui (China) Technomaterial Co., Ltd.	7,725,102	27,497,194	17,542,902	9,954,292	29,689,232	890,050	307,824	—
Changshou ChangHuei Trading Co.	45,729	47,123	57	47,066	—	(141)	391	—
EMMTSystems Corporation	369,497	409,684	67,746	341,938	288,229	(28,381)	(17,423)	(0.47)
GroupcoTechnologyInc.	90,050	12,478	1,950	10,528	19,564	268	326	0.04
APPLIED WIRELESS INDENTIFICATION GROUP,INC.	13,135	176,338	35,096	141,242	237,335	23,867	24,015	—
AWID AsiaCo.,Ltd.	30,300	22,413	4,193	18,220	16,026	2,073	(345)	(0.11)
AWIDSanghaiCo.,Ltd.	20,452	4,479	244	4,235	563	(384)	(373)	—
AWIDChangshou Co.,Ltd.	9,122	8,223	1,898	6,325	3,824	(1,828)	(1,891)	—
Yieh HsingEnterprise Co.,Ltd.	5,306,516	9,833,762	6,614,199	3,219,564	8,081,415	54,826	(184,153)	(0.35)
Great Emperor HotelCO.,LTD.	2,100,000	6,326,999	4,285,522	2,041,477	—	(14,695)	(14,102)	(0.07)
Kingsgarden InternationalCo.,Ltd.	2,150,000	7,045,993	4,970,369	2,075,623	—	(26,124)	(26,652)	(0.12)
I-Hwa InternationalCo.,Ltd.	6,000	3,522	1,840	1,681	8,013	(1,985)	(1,982)	(3.30)
Shin Yang SteelCo.,Ltd.	870,000	2,459,696	1,633,977	825,718	2,922,071	89,090	62,641	0.72
HongYuh AssetsManagementCo.,Ltd.	1,000,000	629,760	23,077	606,683	—	(148,740)	(206,048)	(2.38)
Sin Bang Investment & Development Co., Ltd.	223,125	283,968	70	283,898	—	(164)	4,939	0.22
HSING JUI INVESTMENT LIMITED	149	1,917	—	1,917	—	—	4	—
Tianjin LianfaPrecisionSteelCorporation	655,930	588,960	630,858	(41,898)	1,668,057	(38,908)	(59,637)	—

442

Company name	Capital	Total assets	Total liabilities	Net value	Operating revenue	Operating income	Current profit and loss (after tax)	Earnings per share (NT$) (after tax)
Yieh Phui(HongKong)HoldingsLimited	6,948,960	14,092,714	4,140,491	9,952,223	1,767,208	6,896	290,986	—
Golden DevelopmentsHoldingsLtd.	2,878	7,266	—	7,266	—	(211)	331	—
CHAMPIONLOGISTICINC.	1,740,960	1,754,400	74	1,754,326	—	(139)	148,478	—
UnitedBrighteningDevelopmentCorp.	1,515,868	1,930,102	415,047	1,515,055	—	(310)	33,105	0.22
Chao Ying Investment Development Co., Ltd.	304,000	311,444	66	311,378	—	(370)	5,817	0.19
Da Yao Engineering Consultation Co., Ltd.	20,000	22,904	549	22,355	2,500	503	269	0.13
Kuo ChangEnterprise Co.,Ltd.	976,771	1,350,460	360,803	989,658	—	(412)	13,391	0.14
LIAN SO(H.K)CO.,LIMITED	377,952	362,682	2,298	360,384	—	(14,091)	(16,809)	—
PT.E-UNITED FERROINDONESIA	62,722	494,346	2,665	491,682	—	(30,414)	(12,136)	—
PT.E-UNITED FERROINDONESIA	14,486	10,779	154	10,625	—	(3,226)	(3,203)	—
PT. GENBA INDORESOURCES	11,165	5	10,465	(10,459)	—	(19,133)	(19,141)	—
TYCOONS STEEL INTERNATIONAL CO.,LTD.	1,547,520	389,637	1,425	388,212	—	(3,146)	325,662	—
GUANG LIAN STEEL (VIETNAM) CO., LTD.	—	—	—	—	—	—	—	—

(II) Consolidated financial statements of affiliated companies: refer to page 155 for details.

(III) Affiliation report: None

443

II. Private Placement of Securities: None

III. Holding or Disposal of the Company's Shares by Subsidiaries: None IV. Other Required Disclosures: None

444

445

Company seal Yieh Phui Enterprise Co., Ltd.

Company representative: I.S. Lin

446

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YP — Annual Report 2017

51950_rns_2018-06-28_e7903861-51fa-4dc4-b58f-c72825090782.pdf

Stock Code: 2023

Annual Report 2017 (Translation)

Published date: May 15, 2018

Deputy spokesperson: Yung-Hsien Chen

II. Address and Contact of Head Office and Plant:

III. Name, address, website, and telephone of stock transfer agency:

IV. Contact Information of the Certified Public Accountants for the Latest Financial Report

V. Overseas Trade Places for Listed Negotiable Securities:

Table of Contents

Chapter 1Letter to Shareholders

Dear Shareholders,

With China’s fully implementation of its policies regarding steel production capacity reduction and environmental governance in 2018, the outlook for our operation is prudently optimistic.

I. The Outline of the Operation of 2017

1. The Performance of Business Plan

Consolidated Information of Financial Statements

Financial Information of the Company

II. Overview of 2017 business plan:

1. Business Strategy

2. Expected sales and marketing strategies:

III. Corporate Strategies for Future Development

IV. Impact from competition, legal environment, and overall economy

Chapter 2Company Profile

I. Date of establishment:

II. Corporate history

Chapter 3Corporate Governance Report

I. Organization:

Organization of Yieh Phui Enterprise Co., Ltd.

2. Roles and Responsibility

II. Information on the Directors, President, Vice Presidents, Associate Managers, and Supervisors of Departments and Branch Offices:

(I) Information about directors

Table 1: Major Shareholders of Institutional Shareholders

Table 2: Major shareholders of the major institutional shareholders

Table 3: Information on Directors

(II) General Manager, Deputy General Manager, Assistant Manager, and Managerial Officer of Various Departments or Branches

III. Compensations to Directors, President and Vice Presidents:

(I) Compensations paid to Directors (including independent directors, with the aggregate method and with disclosure of individual names and their corresponding compensation range) Unit: in NT$ thousands

Compensation Range

(II) Compensations paid to president and vice president (with the aggregate method and with disclosure of individual names and their corresponding compensation range) Unit: in NT$ thousands

Compensation Range

(III) Names of executive officers making decisions on employees' compensations and the status of payment

IV. Implementation of Corporate Governance

(I) Operations of the Board of Directors

Other required disclosure:

(II) Operations of the Audit Committee:

Operations of the Auditing Committee

Note:

(III) Status of corporate governance operations, conformity with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the cause of non-conformity

(IV) Information on the Members of the Compensation Committee

Operations of the Compensation Committee

held 3 meetings (A), in which the qualification and attendance of the Committee members are stated as follows:

(V) The company's CSR practices, such as environmental protection, social engagement, social contribution, community service, community welfare, consumer rights, human rights, safety and health, the system and methods used to plan and organize CSR activities and the status of implementation:

Corporate Social Responsibility

(VI) Your company's corporate integrity practices and actions taken:

Ethical Corporate Management

1. The Company's Internal Control Statement

(XI)Significant resolutions made in/by the Shareholders ＇ Meeting and the Board of Directors in the most recent fiscal year up to the date of publication of this Annual Report:

Yieh Phui Enterprise Co., Ltd.

Minutes of the 2017 Shareholders Meetings:

III.Report Items

IV. Recognition

PROFIT DISTRIBUTION TABLE

Item Amount

V. Discussions

the meeting manual.)

VI. Matters relating to election

List of Directors Nominated by Shareholders

VII. Other Agendas

VIII. Special motion: None

IX. Meeting adjourned

(2) Status of implementation of the Shareholders Meeting: June 22, 2017

Implementation of Shareholders' Meeting:

Yieh Phui Enterprise Co., Ltd.

The 5th Board of Directors Meeting 2017 (regular)

Chairman: I. S. Lin Minutes taker: Yung-Hsien Chen

II. Discussions:

Proposal No. 1: Propose to discuss the Company ＇ s 2017 Corporate Social

Responsibility Report

YP Annual Report 2017