YP - Annual Report 2019 | FinancialReports.eu

Stock Code: 2023

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 AND INDEPENDENT AUDITORS’ REPORT

Address: No. 369, Yuliao Road, Qiaotou District, Kaohsiung City Tel: (07) 611-7181

－－ 1

Item	Page
1. Cover	1
2. Table of Contents	2
3. Representation Letter	3
4. Independent Auditors’ Report	4
5.Consolidated Balance Sheets	5
6.Consolidated Statements of Comprehensive Income	6
7.Consolidated Statements of Changes in Equity	7
8.Consolidated Statements of Cash Flows	8
9.Notes to Consolidated Financial Statements
(1) General Information	9
(2) The Authorization of the Consolidated Financial Statements	9
(3) Application of New and Amended Standards and Interpretations	9~12
(4) Summary of Significant Accounting Policies	12~31
(5) Critical Accounting Judgments, Estimates and Major Sources of Assumption Uncertainty	31~33
(6) Details of Significant Accounts	33~75
(7) Related Party Transactions	75~83
(8) Pledged Assets	83
(9) Significant Contingent Liabilities and Unrecognized Contract commitments	83~86
(10) Significant Disaster Loss	86
(11) Significant Subsequent Events	86~87
(12) Others	87~97
(13) Supplementary disclosures	98
A.Significant transactions information	99~114
B.Information on investees	115~122
C.Information on investments in Mainland China	123~125
(14)Segment information	126~128

－－ 2

Representation Letter

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, 2019, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Financial Statements of Affiliated Enterprises and Consolidated Business Reports 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 is included in the consolidated financial statements. Consequently, Yieh Phui Enterprise Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Yieh Phui Enterprise Co., Ltd.

Yi Shou Lin Chairman

March 17, 2020

－－ 3

==> picture [102 x 30] intentionally omitted <==

國富浩華聯合會計師事務所 Crowe (TW) CPAs 80250 高雄市苓雅區四維三路 6 號 27 樓之 1 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 80250, Taiwan Tel +886 7 3312133 Fax +886 7 3331710 www.crowe.tw

Independent Auditors’ Report

To the Board of Directors and Shareholders Yieh Phui Enterprise Co., Ltd.

Opinion

We have audited the consolidated financial statements of Yieh Phui Enterprise Co., Ltd. and its subsidiaries (the “Group"), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, the consolidated statements of comprehensive income, changes in equity, and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of the other independent accountants, as described in the other matters section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

—4—

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group's consolidated financial statements for the year ended December 31, 2019 are stated as follows:

Revenue recognition

Please refer to Note 4.23 to the consolidated financial statements for the accounting policy on revenue recognition; Note 5.1.(1) for major accounting estimates and assumptions of revenue recognition; and Note 6.31 for the details of revenue recognition.

Description of key audit matter

Due to fierce competition in the industry, the Group may be affected by the growth of its performance and competition in the same industry, which increases the risk of recognition of operating income. Therefore, we determined the revenue recognition for those product lines and customers with significant sales increase in 2019 as a key audit matter.

How the matter was addressed in our audit

Our key audit procedures included analyzing the industry trends, income types, product lines, and customer group's two-year operating income status to confirm whether there are abnormal circumstances or centralized transactions and identify possible risks; understanding and testing the internal control procedure to assess the effectiveness of the relevant internal control for revenue recognition; conducting a sample test on the sales transactions of the top ten new customers to confirm the authenticity of the sales transaction and executing sales cutoff test.

Valuation of inventory

Please refer to Note 4.8 to the consolidated financial statements for the accounting policy on inventories; Note 5.2.(6) for major accounting estimates and assumptions of inventories; and Note 6.6 for inventory valuation.

Description of key audit matter

The Group's inventory amounted to $7,749,584 thousand (net of $8,169,123 thousand of total inventory less $419,539 thousand of allowance for inventory valuation loss) as of December 31, 2019, which accounted for 9.25% of total assets. The inventory valuation is measured at the lower 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.

How the matter was addressed in our audit:

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

－－ 4-1

Other Matters

We did not audit the financial statements of certain associates accounted for using equity method. Those financial statements were audited by the other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements was based solely on the reports of the other independent accountants. Investments in these associates amounted to $4,796,695 thousand and $4,779,519 thousand, representing 5.73% and 5.49% of total consolidated assets as of December 31, 2019 and 2018, and the share of profit of these associates accounted for using equity method amounted to $17,752 thousand and ($424,772) thousand, representing (0.89%) and (119.47%) of total consolidated income before income tax for the years then ended, respectively. In addition, the share of other comprehensive income of these associates accounted for using equity method amounted to ($578) thousand and $27,756 thousand, representing 0.18% and (132.10%) of total consolidated comprehensive income for the years then ended, respectively.

We have also audited the standalone financial statements of Yieh Phui Enterprise Co., Ltd. as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion with emphasis of matter.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

－－ 4-2

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in Our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financia1 statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethica1 requirements regarding independence, and to communicate with them all re1ationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably

－－ 4-3

be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ling Wen Huang and Shu Man Tsai.

Crowe (TW) CPAs Kaohsiung, Taiwan Republic of China March 17, 2020

Notice to Readers

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

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

－－ 4-4

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

				(In Thousands of	(In Thousands of	New Taiwan Dollars)
Assets	Note	December 31, 2019		December 31, 2018		Liabilities and Equity	Note	December 31, 2019		December 31, 2018
		Amount	%	Amount	%			Amount	%	Amount	%
CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Contract assets - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties, net Other receivables Current tax assets Inventories Prepayments Noncurrent assests held for sale Other financial assets - current Total Current Assets NONCURRENT ASSETS Financial assets at fair value through profit or loss - noncurrent Financial assets at fair value through other comprehensive income or loss - noncurrent Investments accounted for using equity method Property, plant and equipment Right-of-use asset Investment properties Intangible assets Deferred tax assets Other noncurrent assets Refundable deposits Other financial assets - noncurrent Long-term prepaid rent Total Noncurrent Assets TOTAL ASSETS	6(1) 6(2) 6(31) 6(3) 6(4) 7 6(5) 6(6) 6(7) 6(8) 6(9) 6(2) 6(10) 6(11) 6(12) 6(13) 6(14) 6(15) 6(36) 6(16) 6(17) 8 6(18)	$5,023,717 428,279 822,605 845,312 1,682,946 789,857 193,409 10,559 7,749,584 1,935,447 23,342 1,405,930	6 1 1 1 2 1 - - 9 2 - 2	$5,522,926 285,944 532,786 1,650,972 1,990,296 1,166,014 274,801 12,577 10,347,451 1,893,869 218,096 1,109,111	6 - 1 2 2 1 - - 14 2 - 1	CURRENT LIABLITIES Short-term loans Short-term notes and bills payable Financial liabilities at fair value through profit or loss - current Contract liabilities - current Notes payable Accounts payable Other payables Current tax liabilities Provisions - current Liabilties directly associated with noncurrent assets held for sale Lease liabilities - current Advance receipts Current portion of long-term loans Total Current Liabilities NONCURRENT LIABILITIES Long-term loans Deferred tax liabilities Lease liabilities - noncurrent Long-term deferred revenue Net defined benefit liability - noncurrent Guarantee deposits Total Noncurrent Liabilities Total Liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Share capital Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Total equity attributable to owners of the parent NON-CONTROLLING INTERESTS Total Equity TOTAL LIABILITIES AND EQUITY	6(19) 6(20) 6(2) 6(31) 6(21) 6(22) 6(8) 6(13) 6(23) 6(23) 6(36) 6(13) 6(24) 6(25) 6(26) 6(27) 6(28) 6(29) 6(30)	$15,597,746 931,272 - 972,787 799,965 1,188,827 1,651,603 3,486 90,806 7,630 7,813 72 6,359,286	19 1 - 1 1 1 2 - - - - - 8	$16,001,636 837,598 7,437 1,410,498 1,156,449 1,245,748 1,557,229 153,410 111,092 62,423 - 69 4,183,655	19 1 - 2 1 1 2 - - - - - 5
		$20,910,987	25	$25,004,843	29
		$289,289 709,886 14,661,318 43,146,104 526,096 622,562 432,499 983,851 11,590 925,853 532,827 -	- 1 18 50 1 1 1 1 - 1 1 -	$1,011,252 715,117 15,492,641 41,118,529 - 776,270 452,363 583,658 7,534 1,350,617 114,465 434,304	1 1 18 46 - 1 1 1 - 2 - -
								$27,611,293	33	$26,727,244	31
								$28,009,760 2,533 81,469 29,577 550,777 17,533	33 - - - 1 -	$29,894,253 17,547 - 32,854 733,314 14,749	34 - - - 1 -
								$28,691,649	34	$30,692,717	35
								$56,302,942	67	$57,419,961	66
								$19,133,275 4,884,281 2,866,052 559,232 (614,438) (978,171)	23 6 3 1 (1) (1)	$18,758,113 4,883,218 2,835,202 636,655 1,233,913 (559,232)	22 6 3 1 1 (1)
		$62,841,875	75	$62,056,750	71

								$25,850,231 1,599,689	31 2	$27,787,869 1,853,763	32 2
								$27,449,920	33	$29,641,632	34
		$83,752,862	100	$87,061,593	100			$83,752,862	100	$87,061,593	100

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

－－ 5

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Item	Note	Year Ended December 31	Year Ended December 31	Year Ended December 31
		2019		2018
		Amount	%	Amount	%
OPERATING REVENUE OPERATING COST GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses INCOME (LOSS) FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income Other gains and losses Finance costs Share of loss of associates and joint ventures Total non-operating income and expenses INCOME (LOSS) BEFORE INCOME TAX INCOME TAX (EXPENSE) BENEFIT NET INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments designated as at fair value through other comprehensive income Share of other comprehensive income (loss) of associates and joint ventures Income tax benefit (expense) related to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Share of other comprehensive income (loss) of associates and joint ventures Income tax benefit related to items that may be reclassified subsequently to profit or loss Total other comprehensive income (loss), net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) NET INCOME (LOSS) ATTRIBUTABLE TO: Shareholders of the parent Non-controlling interests Total TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Shareholders of the parent Non-controlling interests Total EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share Diluted earnings (loss) per share	6(31) 6(6) 6(33) 6(34) 6(35) 6(36) 6(37) 6(38) 6(38)	$59,687,597 (57,138,479)	100 (95)	$73,856,189 (67,944,988)	100 (93)
		$2,549,118 (2,380,383) (954,670) (91,803) (17,455)	5 (4) (2) - -	$5,911,201 (3,280,971) (1,068,227) (100,245) (3,248)	7 (5) (1) - -
		($3,444,311)	(6)	($4,452,691)	(6)
		($895,193)	(1)	$1,458,510	1
		$660,856 632,134 (1,315,673) (1,067,,590)	1 1 (2) (2)	$1,254,320 (20,238) (1,264,244) (1,072,802)	2 - (2) (1)
		($1,090,273)	(2)	($1,102,964)	(1)
		($1,985,466) 285,181	(3) -	$355,546 (90,602)	- -
		($1,700,285)	(3)	$264,944	-
		84,399 (15,997) (19,582) (16,880) (317,854) (116,231) 72,875	- - - - (1) - -	(32,943) 5,241 30,031 3,043 (125,682) 74,598 24,700	- - - - - - -
		($329,270)	(1)	($21,012)	-
		($2,029,555)	(4)	$243,932	-
		($1,401,081) (299,204)	(2) (1)	$308,506 (43,562)	- -
		($1,700,285)	(3)	$264,944	-
		($1,745,191) (284,364)	(4) -	$293,049 (49,117)	- -
		($2,029,555)	(4)	$243,932	-
		($0.73)		$0.16
		($0.73)		$0.16

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

－－ 6

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Common Stock		Retained Earnings			Other EquityItem	Other EquityItem		Unrealized Gain (Loss) on Available-for-sale Financial Assets	Shareholders of the parent	Non-controlling Interests	Total Equity
	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gain (Loss) On Financial Assetsat Fair Value Through Other Comprehensive Income	Gain (Loss) on Hedging Instruments
$18,211,760 -	$4,873,770 -	$2,698,462 -	$327,757 -	$2,366,597 51,160	($697,778) -	$- 123,526	$6,390 -	$54,733 (54,733)	$27,841,691 119,953	$1,794,170 3,515	$29,635,861 123,468
18,211,760 - - - 546,353 - - -	4,873,770 - - - - 6,930 - -	2,698,462 136,740 - - - - - -	327,757 - 308,898 - - - - -	2,417,757 (136,740) (308,898) (364,235) (546,353) 34,815 308,506 (24,807)	(697,778) - - - - - - (26,025)	123,526 - - - - - - 35,086	6,390 - - - - - - 289	- - - - - - - -	27,961,644 - - (364,235) - 41,745 308,506 (15,457)	1,797,685 - - - - 204 (43,562) (5,555)	29,759,329 - - (364,235) - 41,949 264,944 (21,012)
-	-	-	-	283,699	(26,025)	35,086	289	-	293,049	(49,117)	243,932
- - - -	2,518 - - -	- - - -	- - - -	(100,928) (45,924) - 720	- - - -	- - - (720)	- - - -	- - - -	(98,410) (45,924) - -	98,410 45,924 (39,343) -	- - (39,343) -
18,758,113 - - 375,162 - - - -	4,883,218 - - - - (73) - -	2,835,202 30,850 - - - - - -	636,655 - - - (77,423) - - -	1,233,913 (30,850) (187,581) (375,162) 77,423 3,744 (1,401,081) 74,829	(723,803) - - - - - - (366,243)	157,892 - - - - - - (52,355)	6,679 - - - - - - (341)	- - - - - - - -	27,787,869 - (187,581) - - 3,671 (1,401,081) (344,110)	1,853,763 - - - - 1,689 (299,204) 14,840	29,641,632 - (187,581) - - 5,360 (1,700,285) (329,270)
-	-	-	-	(1,326,252)	(366,243)	(52,355)	(341)	-	(1,745,191)	(284,364)	(2,029,555)
- - -	1,136 - -	- - -	- - -	- (9,673) -	- - -	- - -	- - -	- - -	1,136 (9,673) -	(1,136) 9,673 20,064	- - 20,064
$19,133,275	$4,884,281	$2,866,052	$559,232	($614,438)	($1,090,046)	$105,537	$6,338	-	$25,850,231	$1,599,689	$27,449,920

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

－－ 7

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Item	Year Ended December 31	Year Ended December 31
	2019	2018
1.CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjudtments to rewncile profit and loss : Depreciation Amortization Expected credit loss Net gain on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss of associates and joint ventures Loss on disposal and retirement of property, plant and equipment Transfer of property, plant and equipment to expenses Gain on investment properties Gain on disposal of noncurrent assets held for sale Gain on disposal of investments Impairment loss recognized on nonfinancial assets Others Total adjudtments to rewncile profit and loss Changes in operating assets and liabilities Net changes in oprating assets: Decrease (increase) in financial assets as at fair value through profit or loss Decrease (increase) in contract assets Decrease (increase) in notes receivable Decrease (increase) in accounts receivables Decrease (increase) in accounts receivables - related parties Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments	($1,985,466) 1,728,926 42,353 17,455 (2,958) 1,315,673 (124,964) (106,632) 1,067,590 26,700 16,394 (341,434) (401,121) (20) - (217)	$355,546 1,739,734 10,701 3,248 (41,609) 1,264,244 (105,056) (34,213) 1,072,802 30,138 23,825 - - (115,938) 42,889 (217)
	3,237,745	3,890,548
	23,615 (290,493) 805,737 289,776 377,419 130,600 2,597,867 (49,671)	(23,452) (129,575) (261,060) 489,021 (406,959) 58,527 (302,601) 1,149,647

－－ 8

Item	Year Ended December 31	Year Ended December 31
	2019	2018
Decrease (increase) in other financial assets Total net changes in operating assets Net changes in oprating liabilities: Increase (decrease) in contract liabilities Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in other payables Increase (decrease) in provisions Increase (decrease) in advance receipts Increase (decrease) in net defined benefit liability Total net changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities 2.CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of subsidiaries (deducting cash received) Proceeds from capital reduction of investments accounted for using equity mothod Acquisition of noncurrent assests held for sale Proceeds from disposal of noncurrent assets held for sale Acquisition of property, plant and equipment	576	783
	3,885,426	574,331
	(437,711) (356,484) (56,921) (35,189) (20,286) 3 (98,138)	(524,662) (660,045) 131,317 (40,050) (3,013) (41) (240,074)
	(1,004,726)	(1,336,568) (762,237) 3,128,311
	2,880,700
	6,118,445
	4,132,979 125,400 106,632 (1,325,093) (218,243)	3,483,857 102,796 82,213 (1,248,176) (84,094)
	2,821,675	2,336,596
	(15,000) 4,234 - 550,145 (372,387) 203 - 679 (1,652) 566,075 (4,251,566)	- 2,352 (605,179) - (95,105) 617,884 (30,375) 21,981 - 62,423 (4,245,853)

－－ 8-1

Item	Year Ended December 31	Year Ended December 31
	2019	2018
Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Decrease (increase) in other receivables Acquisition of intangible assets Acquisition of right-of-use assets Acquisition of investment properties Proceeds from disposal of investment properties Decrease (increase) in other financial assets Decrease (increase) in other noncurrent assets Net cash used in investing activities 3.CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Increase in long-term loans Repayment of long-term loans Increase (decrease) in guarantee deposits received Repayments of principal of lease liabilities Increase (decrease) in other noncurrent liabilities Cash dividends paid Increase (decrease) in non-controlling interests Net cash generated from (used in) financing activities 4.EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 5.NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6.CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 7.CASH AND CASH EQUIVALENTS, END OF YEAR	329 424,764 - (4,768) (1,187) (13,930) 434,619 (715,757) (4,056)	20,471 (1,277,718) 46,072 - - (8,229) - 75,532 4,213
	(3,399,255)	(5,411,531)
	(403,890) 94,000 8,669,625 (8,378,067) 2,784 (9,325) (3,277) (187,581) 20,064	176,113 (150,000) 7,711,366 (6,602,770) 110 - (2,815) (364,235) (75,770)
	(195,667)	691,999
	274,038	201,437
	(499,209) 5,522,926	(2,181,499) 7,704,425
	$5,023,717	$5,522,926

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

－－ 8-2

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Amounts In Thousands of New Taiwan Dollars, Unless specified Otherwise)

1. GENERAL INFORMATION

1.1 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.
1.2 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 holders of the newly issued shares were the same as those of the Company’s original shareholders.
1.3 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.
1.4 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 18, 2011, and a total of 191 employees were transferred to Shin Yang Steel Co., Ltd.
1.5 For main operation activities of the Company and its subsidiaries (hereinafter referred to as “the Group”), please refer to Note 4.3(2)
1.6 These consolidated financial statements are presented in the Company’s functional currency, New Taiwan Dollars.

2. THE AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 17, 2020.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

3.1 Effect of the adoption of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and new or amended International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”):

Except for the following, the application of the above amendments did not have a significant effect on the Group’s financial condition and financial performance.

－－ 9

(1) IFRS 16 “Leases”

IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and IFRIC 4, a number of related interpretations. Upon initial application of IFRS 16, the Group will apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 will not be reassessed and will be accounted for in accordance with the transitional provisions under IFRS 16. Please refer to Note 4 for related accounting policies.

The Group as lessee

Upon initial application of IFRS 16, except for payments for low-value asset and short-term leases which will be recognized as expenses on a straight-line basis, the Group will recognize right-of-use assets and lease liabilities for all leases on the consolidated balance sheets. On the consolidated statements of comprehensive income, the Group will present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities and computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion and the interest portion of lease liabilities are classified within financing activities and operating activities, respectively.

Prior to application of IFRS 16, payments under operating lease contracts are recognized as expenses on a straight-line basis. Cash flows for operating leases are classified within operating activities on the consolidated statements of cash flows. Finance lease contracts are classified within lease assets and obligation under capital leases, respectively.

The Company elects to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard on January 1, 2019. Comparative information is not restated.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at their carrying amount as if IFRS 16 had been applied since the commencement date, but discounted using the aforementioned incremental borrowing rate. The Company applies IAS 36 to all right-of-use assets.

The Company also applies the following practical expedients:

(1) The Company applies a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
(2) The Company accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.
(3) The Company excludes initial direct costs from the measurement of right-of-use assets on January 1, 2019.
(4) The Company uses hindsight, such as in determining lease terms, to measure lease liabilities.

The Group’s incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 was 1.9661%. The difference between the lease liabilities recognized and the future minimum lease payments of non-cancellable lease on December 31, 2018 is explained as follows:

－－ 10

The future minimum lease payments of non-cancellable operating lease on December 31, 2018 Less: Recognition exemption for short-term leases Undiscounted gross amounts on January 1, 2019 Discounted using the incremental borrowing rate on January 1, 2019 Less: prepaid rent Lease liabilities recognized on January 1, 2019	$73,900 (8,750)
	$65,150
	$67,197 (8,093)
	$59,104

The Group as lessor

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

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

Prepayments Long-term prepaid rent Right-of-use assets Total impact on assets Lease liabilities - current Lease liabilities - noncurrent Total impact on liabilities	Unadjusted Carrying Amount as of January 1, 2019 $1,893,869 434,304 - $2,328,173 $ - - $-	Adjustments Arising from Initial Application ($8,093) (434,304) 501,501 $59,104 $4,392 54,712 $59,104	Adjusted Carrying Amount as of January 1, 2019
			$1,885,776 - 501,501
			$2,387,277
			$4,392 54,712
			$59,104

3.2 Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group:

New standards, interpretations and amendments endorsed by the FSC effective from Year 2020 are as below:

Year 2020 are as below:
New, Revised or Amended Standards and Interpretations Amendments to IFRS 3 “Definition of a Business” Amendments to IAS 1 and IAS 8 “Definition of Material” Amendments to IFRS 9, IAS 39 and IFRS 7“Interest Rate Benchmark Reform”	Effective Date Announced by IASB
	January 1, 2020 (Note 1) January 1, 2020 (Note 2) January 1, 2020 (Note 3)

Note 1: The Group shall apply these amendments to business combinations for which the acquisition date is on or after January 1, 2020.
Note 2: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.
Note 3: The Group shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.

－－ 11

The Group has no plans to acquire any business in 2020, therefore it is not expected to have any effect on the Group's financial statements when the amendment to IFRS 3 is first applied in 2020 and the amendments to IAS 1 and IAS 8 are assessed as having no effect on the Group's financial statements. The Group is not engaged in hedging transaction, so the amendments to IFRS 9, IAS 39 and IFRS 7 is assessed as having no effect on the Group’s financial statements. However, the estimated impact of the abovementioned amendments may be subject to change due to future operating environment or program changes.

3.3 The IFRSs issued by IASB but not yet endorsed and issued into effect by FSC

The IFRSs issued by IASB but not yet endorsed and issued into effect by FSC are as below:

Effective Date Announced New, Revised or Amended Standards and Interpretations by IASB (Note) Amendments to IFRS 10 and IAS 28 “Sale or Contribution To be determined by IASB of Assets between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts” January 1, 2021 Amendments to IAS 1“ Classification of Liabilities as January 1, 2022 Current or Non-current”

Note: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

The Group continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Group completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

4.1 Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the IFRSs, IASs interpretations as well as related guidance endorsed by the FSC with the effective dates.

4.2 Basis of Preparation

(1) Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
A. Financial assets and financial liabilities at fair value through profit or loss (including derivative instruments).
B. Financial assets and liabilities measured at fair value through other comprehensive income.

－－ 12

C. Liabilities on cash-settled share-based payment arrangements measured at fair value.
D. Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
(2) The preparation of the consolidated financial statements in conformity with the IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
(3) The Group applied IFRS 16 electing not to prepare comparative consolidated financial report and notes of Year 2018 and recognized the differences in retained earnings or other equity at January 1, 2019.

4.3 Basis of Consolidation

(1) The basis for the consolidated financial statements:
A. All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
B. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
C. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.
D. Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
E. When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss or transferred directly to retained

－－ 13

earnings as appropriate, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

(2) The subsidiaries in the consolidated financial statements:

Investee / 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 Yieh Phui (Hong Kong) Holdings Limited Investment Yieh Hsing Enterprise Co., Ltd. Wire rods trading Great Emperor Hotel Co., Ltd. Hotel industry Kings Garden International Co., Ltd. Leasing, sales, and development of residential and commercial buildings, department stores Shin Phui Steel Corporation Trading of steel products Worthing Honor Holdings Ltd. Investment Sin Bang Investment & Development Co., Ltd. Investment Gen-Wan Technology Corp Telecommunication Champion Logistic Inc. Investment EMMT Systems Corporation Manufacturing and marketing of military specification printed circuit boards Kuo Chang Enterprise Co., Ltd. Wholesale of hardware United Brightening Development Corp. Technical consultation for steel products Hong Yuh Assets Management Co., Ltd. Management service Lian So (H.K) Co., Limited Investment	Percentage of Ownership	Percentage of Ownership
	December 31, 2019 100.00% 100.00% 100.00% 56.98% 41.18% 49.28% 100.00% 100.00% 100.00% 86.99% 89.66% 78.10% 99.04% 95.56% 80.00% 80.00%	December 31, 2018
		100.00% 100.00% 100.00% 56.73% 35.98% 40.11% 100.00% 100.00% 100.00% 86.99% 96.10% 78.10% 99.04% 95.56% 80.00% 80.00%

－－ 14

Investee / Subsidiary Main Businesses Yieh Phui America Inc. Steel trading 2. Hong Yuh Assets Management Co., Ltd. Lien-Hsin steel Co., Ltd. Metal manufacturing industry Lien-Sheng steel Co., Ltd. Metal manufacturing industry Lien-Heng Mining Co., Ltd. Nickle mining Lien-Hung Mining Co., Ltd. Nickle mining Asiamax Mining Indonesia Nickle mining 3. Gen-Wan Technology Corp. EMMT Systems Corporation Manufacturing and marketing of military specification printed circuit boards 4. Yieh Phui (Hong Kong) Holdings Limited Yieh Phui (China) Technomaterial Co., Ltd. Manufacturing and marketing of pickled, cold rolled, galvanized and prepainted steel coils 5. Yieh Phui (China) Technomaterial Co., Ltd. Tianjin Lianfa Precision Steel Corporation Manufacturing and marketing of special high grade alloy Changshou ChangHuei Trading Co. Trading of steel products 6. EMMT Systems Corporation Applied Wireless Identifications Group, Inc. RFID Groupco Technology Inc. Radio 7. Applied Wireless Identifications Group, Inc. AWID Asia Co., Ltd. Telecommunications equipment wholesale 8. AWID Asia Co., Ltd. AWID Sanghai Co., Ltd. Telecommunications equipment wholesaling AWID Changshou Co., Ltd. Telecommunications equipment wholesaling	Percentage of Ownership	Percentage of Ownership
	December 31, 2019 100.00% (Please refer to Note 4 47.88% 10.00% 75.00% 19.00% (Please refer to Note 4 100.00% (Please refer to Note 4 7.48% 100.00% 100.00% 100.00% 91.47% 49.97% 100.00% 100.00% 100.00%	December 31, 2018
		100% 3. (2) (A) for details) 52.48% 10.00% 75.00% 19.00% 3. (2) (A) for details) 100.00% 3. (2) (A) for details) 7.48% 100.00% 100.00% 100.00% 91.47% 49.97% 100.00% 100.00% 100.00%

－－ 15

Investee / Subsidiary Main Businesses 9. Shin Phui Steel Corporation Groupco Technology Radio Great Emperor Hotel Co., Ltd. Hotel industry Kings Garden International Co., Ltd. Leasing, sales, and development of residential and commercial buildings, department stores 10. Yieh Hsing Enterprise Co., Ltd. Great Emperor Hotel Co., Ltd. Hotel industry Kings Garden International Co., Ltd. Leasing, sales, and development of residential and commercial buildings, department stores 11. Kings Garden International Co., Ltd. Yi Hua International Co., Ltd. Leasing, selling and development of residential and commercial buildings Hua Li International Co., Ltd. Daily necessities wholesale 12. United Brightening Development Corp. Chao Ying Investment Development Co., Ltd. Investment Champion Logistic Inc. Investment 13. Lian So (H.K)Co., Limited Lien-Hsin Steel Co., Ltd. Metal manufacturing industry Lien-Sheng Steel Co., Ltd. Metal manufacturing industry Lian Yang (Hong Kong) Trading Limited Trading business 14. Lien-Hsin Steel Co., Ltd. Lien-Heng Mining Co., Ltd. (Note) Nickle mining Lien-Hung Mining Co., Ltd. (Note) Nickle mining	Percentage of Ownership	Percentage of Ownership
	December 31, 2019 42.53% 0.01% 0.01% 58.81% 50.71% 70.00% 100% (Please refer to Note 4 100.00% 10.34% 52.12% 90.00% 100.00% (Please refer to Note 4 25.00% 81.00% (Please refer to Note 4	December 31, 2018
		42.53% 0.01% 0.01% 64.01% 59.88% 70.00% - 3. (2) (A) for details) 100.00% 3.90% 47.52% 90.00% 100.00% 3. (2) (A) for details) 25.00% (Note 2) 81.00% 3. (2) (A) for details)

－－ 16

(Note): Due to legal restriction within the local jurisdiction, 25% shareholding of LienHeng Mining Co., Ltd. and 51% shareholding of Lien-Hung Mining Co., Ltd. are registered temporarily under the name of a third-party; in order that the rights be secured, the third-party has pledged all shares under his/her name to the Group through a contract agreement.
- A. Increase and decrease in consolidated subsidiaries:
  - Hua Li International Co., Ltd. which was invested by Kingsgarden International Co., Ltd. with 100% shareholding, was incorporated in October 2019.
  - Yieh Phui America Inc., which was invested by Yieh Phui Enterprise Co., Ltd. with 100% shareholding, was incorporated in March 2018. Lian Yang (Hong Kong) Trading Limited, which was invested by Lian So (H.K) Co., Limited with 100% shareholding, was incorporated in June 2018. In May 2018, Hong Yuh Assets Management Co., Ltd. increased its investment and acquired 100% shares of Asiamax Mining Indonesia, and thus obtained control over such company. Lien-Hung Mining Co., Ltd., which was co-invested by Hong Yuh Assets Management Co., Ltd. and Lien-Hsin steel Co., Ltd. with respective shareholding of 19% and 81%. The Group acquired 49% shares of Lien-Hung Mining Co., Ltd. in cash in 2014, followed by a purchase of another 41% shares of which in September 2018. Since the total shares acquired have reached 90% and constituted a control, such company is included into the consolidated financial statements. In addition, the Group acquired additional 10% shares in December 2018, resulting in the changes in its shareholding to 100%. In addition, Tycoons Steel International Co., Ltd., Da Yao Engineering & Consulting Co., Ltd., Golden Developments Holdings Ltd., and Hsing Jui Investments Ltd. had been liquidated in March 2018, April 2018, July 2018, and August 2018, respectively.
- B. The financial statements of subsidiaries, Changshou ChangHuei Trading Co. and Good Honor Holdings Ltd. and Worthing honor Holdings Ltd. for 2019 and 2018, were not audited. The mangement considered unaudited financial statements of these subsidiaries will not have a significant impact on the consolidated financial statements.
(3) Subsidiaries not consolidated in the consolidated financial statements: None.
(4) Adjustments for subsidiaries with different accounting periods: Not applicable.
(5) Major restrictions:

Cash and bank deposits of $3,039,247 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).

(6) Securities issued by the parent company and held by subsidiaries: None.
(7) Information about subsidiaries with significant non-controlling interest: December 31, 2019：

December 31, 2019：
Name of Subsidiary Yieh Hsing Enterprise Co., Ltd. Others Total	Shareholding % 43.02%	Non-controlling interests
		$1,178,613 421,076
		$1,599,689

－－ 17

December 31, 2018：

December 31, 2018：
Name of Subsidiary Yieh Hsing Enterprise Co., Ltd. Others Total	Shareholding % 43.27%	Non-controlling interests
		$1,443,867 409,896
		$1,853,763

A. 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.
B. Summary of the financial information are as follows:
a. Balance Sheets:

a. Balance Sheets:
Current assets Non-current assets Current liabilities Non-current liabilities Equity	Yieh Hsing Enterprise Co., Ltd. and its Subsidiaries
	December 31, 2019 $3,279,346 20,282,292 3,043,549 14,148,958 $6,369,131	December 31, 2018
		$3,257,389 17,072,005 3,899,783 10,517,737
		$5,911,874

b. Statements of Comprehensive Income：

Operating revenue Net income Other comprehensive income (net after tax) Total comprehensive income (loss) Total comprehensive income (loss) attributable to non-controlling interests Dividends paid to non-controlling interest	Yieh Hsing Enterprise Co., Ltd. and its Subsidiaries	Yieh Hsing Enterprise Co., Ltd. and its Subsidiaries
	2019 $6,552,804 ($652,969) 18,750 ($634,219) ($269,459) $ -	2018
		$8,741,762
		$10,865 (7,623)
		$3,242
		$1,552
		$ -

c. Statements of Cash Flows：

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

	Yieh Hsing Enterprise Co., Ltd. and its Subsidiaries	Yieh Hsing Enterprise Co., Ltd. and its Subsidiaries
	2019 ($224,007) (3,410,684) 3,777,337 $142,646 315,729 $458,375	2018
		$153,589 (2,403,714) 2,282,344
		$32,219 283,510
		$315,729

－－ 18

4.4 Foreign Currencies

(1) Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency.
(2) In preparing the financial statements of each individual consolidated entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of nonmonetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.
(3) For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into New Taiwan Dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to noncontrolling interests as appropriate).

4.5 Classification of Current and Noncurrent Assets and Liabilities

(1) Steel Department and Other Non-heavy Industry Department
A. 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.

B. 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

－－ 19

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

The business cycle of the majority of the 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.

4.6 Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including the original maturity of the time deposits within three months).

4.7 Financial instruments

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 plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

(1) Financial assets

The Group adopts trade-date accounting to recognize and derecognize financial assets.

A. Category of financial assets and measurement

Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

a. Financial asset at FVTPL

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets are designated initially at FVTPL, if the designation can eliminated or significantly reduces the measurement or recognition of inconsistencies.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss (excluding relevant dividend or interest income). Fair value is determined in the manner described in Note 12(3).

－－ 20

b. Financial assets at amortized cost

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

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

Financial assets at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Expect for the following two cases, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

(a) Purchased or originated credit-impaired financial assets: for those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets: for those financial assets, the Group shall apply the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.
c. Investments in equity instruments at FVTOCI

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

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

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

B. Impairment of financial assets
a. At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable), investments in debt instruments that are measured at FVTOCI, lease receivable and contract assets.
b. The Group always recognizes lifetime Expected Credit Loss (i.e. ECL) for accounts receivables. For other financial assets, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial

－－ 21

instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equaling to 12-month ECL.

c. Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. In contrast, lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.
d. The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.
C. Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

a. The contractual rights to receive cash flows from the financial asset expire.
b. The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
c. The Group neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

On derecognition of financial asset at amortized cost in its entirety, the difference between the financial asset’s carrying amount and the sum of the consideration received is recognized in profit or loss. On derecognition of equity instruments at fair value through other comprehensive income in its entirety, the cumulative profit and loss will be transferred directly to retained earning without reclassified into profit and loss.

(2) Equity instruments

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

(3) Financial liabilities
A. Subsequent measurement

All financial liabilities are measured at amortised cost using the effective interest method.

B. Derecognition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between

－－ 22

the carrying amount of the financial liability derecognized and the consideration paid and payable (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

4.8 Inventories

Inventories, under a perpetual system, are measured at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

4.9 Noncurrent assests held for sale

When the carrying amount of non-current assets (or disposal categories) is mainly recovered through sales transactions rather than continued use, and it is highly likely to be sold, it is classified as an asset held for sale. Assets classified as noncurrent assets held for sale are measured at the lower of the carrying amount and fair value less costs to sell.

4.10 Investments accounted for using equity method - associates

(1) 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 initially recognised at cost and are accounted for using the equity method.
(2) The Group’s share of its associate’s profit or loss after the date of acquisition is recognised in the Group’s profit or loss, and its share of changes in the associate’s other comprehensive income is recognised in the Group’s other comprehensive income. When the Group’s share of losses of its associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group discontinues recognizing its share of further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
(3) Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(4) In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be

－－ 23

required if the relevant assets or liabilities were disposed of.

(5) Upon loss of significant influence over an associate, the Group remeasures any retained investment in the former associate at its fair value. Any difference between the fair value and carrying amount is recognised in profit or loss.
(6) When the Group disposes its investment in an associate, if it loses significant influence over the associate, the Group shall account for all amounts previously recognised in other comprehensive income in relation to that investment on the same basis as would have been required if the associate had directly disposed of the related assets or liabilities. If it still retains significant influence over the associate, then the Group shall reclassify to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
(7) When the Group disposes its investment in an associate, if it loses significant influence over the associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over the associate, then the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

4.11 Property, Plant and Equipment

(1) Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
(2) 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 Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repair and maintenance is recognized in profit or loss as incurred.
(3) 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 assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each end of reporting 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 plants 15 to 56 years Main office buildings 40 to 60 years Other accessory equipment 5 to 35 years Machinery and equipment 2 to 38 years Other equipment 2 to 32 years

－－ 24

(4) An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

4.12 Government grants

Government grants are recognised 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 are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as non-current liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

4.13 Leases

2019

The Group assesses whether the contract is (or includes) a lease at the date of the contract.

(1) The Group as lessee

Except for payments for low-value asset and short-term leases which will be recognized as expenses on a straight-line basis, the Group will recognize right-ofuse assets and lease liabilities for all leases at the inception of lease.

Right-of-use asset

The right-of-use asset is initially measured at cost (including the initial measurement amount of the lease liability, the payments less incentives, initial direct costs and the estimated recover cost), the subsequent measurement is based on the cost less accumulated depreciation and accumulated impairment loss, and adjusting the amount of re-measures of lease liabilities.

The right-of-use asset recognized depreciation is using the straight-line basis from the date of the lease until the expiration of the useful life or the expiration of the lease term, the depreciation is provided that the title of the underlying asset will be acquired at the end of the lease period or, if the cost of the right-of-use asset reflects the execution of the purchase option

Lease liability

The lease liability is initially measured by the present value of the lease payment (including fixed payment, substantive fixed payment, change in lease payment depending on the index or rate, etc.). If the implied interest rate on the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, the lessee's increase borrowing rate is used.

If the lease period, the evaluation of the purchase choice, the amount of expected to be paid under the residual value guarantee or the change in the index or rate used to determine the lease payment result in a change in the future lease payment, the Group will measure the lease liability and adjust the right to use assets relatively. If the carrying amount has been reduced to zero, the remaining amount

－－ 25

will recognize in the profit and loss. Lease liabilities are presented in a single-line project on the consolidated balance sheet.

Lease payments in lease agreements that do not depend on the index or rate are recognized as expenses in the period in which they occur.

(2) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2018

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

(1) The Group as lessor
Operating lease income is recognized as income on a straight-line basis over the lease term.
(2) The Group as lessee

Payment made under operating lease are recognized in profit or loss on a straightline basis over the lease term.

4.14 Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes) and include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs, and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

Investment properties under construction are stated at cost less accumulated impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Depreciation of these assets commences when the assets are ready for their intended use.

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

4.15 Intangible assets

Separately acquired intangible assets with finite useful lives are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis over the estimated lives as follows:

(1) Mineral right : 12 years
(2) Computer software: 2 to 5 years;
(3) Trademarks and patents: the period of contractual rights or the future economic benefits flowing to the Group.

－－ 26

The estimated useful life and amortization method for an intangible asset are reviewed at each financial year-end. Any changes in estimates is accounted for on a prospective basis.

An intangible asset is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising from the disposal of the assets is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognized in profit or loss.

4.16 Other non-current assets - exploration and evaluation assets

Exploration and evaluation assets are initially measured at cost and classified as either tangible assets or intangible assets according to the nature of the assets acquired, and such classification shall be consistently applied. Tangible assets (eg. vehicles and drilling rigs) are subsequently measured at cost less accumulated depreciation and accumulated impairment, whereas intangible assets (eg. rights to explore minerals) are subsequently measured at cost less accumulated impairment. An exploration and evaluation asset is no longer be classified as such when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Prior to reclassification of an exploration and evaluation asset, the entity shall assess the impairment of which and recognize an impairment loss accordingly.

4.17 Impairment of non-financial assets

The Group assesses at the end of reporting period the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. When the indication of impairment loss recognized in prior years for an asset other than goodwill no longer exists, the impairment loss is reversed to the extent of the loss previously recognized in profit or loss.

4.18 Provisions

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

4.19 Employee benefits

Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.

－－ 27

Pensions

(1) Defined contribution plans

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

(2) Defined benefit plans
a. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior period. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present valueof the defined benefit obligation at the balance sheet date less the fair value of plan assets The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The discount rate is determined by using the interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the defined benefit plans.
b. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
c. Past service costs are recognised immediately in profit or loss.

Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Any difference between the amount accrued and the amount actually distributed is accounted for a change in accounting estimate.

Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a result of either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of benefits in exchange for the termination of employment. The Group recognises expense when it can no longer withdraw an offer of termination benefits or when it recognises related restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date are discounted to their present value.

4.20 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are recognized in equity as a deduction from the proceeds.

4.21 Share-based payment transactions

(1) 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 recognised 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

－－ 28

number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

(2) For the cash-settled share-based payment arrangements, the employee services received and the liability incurred are measured at the fair value of the liability to pay for those services, and are recognised as compensation cost and liability over the vesting period. The fair value of the liability shall be remeasured at each balance sheet date until settled at the settlement date, with any changes in fair value recognised in profit or loss.

4.22 Income tax

(1) The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
(2) The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
(3) Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred 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 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 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 tax asset is realised or the deferred tax liability is settled.
(4) Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.
(5) Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

－－ 29

(6) A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

4.23 Revenue Recognition

The Group recognizes revenue from contracts with customers in accordance with the principles and steps as stated below:

(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.

The Group does not adjust the transaction price in a contract for the effects of a significant financing component, if the period between when the customer pays for the goods or services and when the entity transfers the goods or services is one year or less.

(1) Sale of goods

Sales revenue from goods mainly comes from the sales of galvanized steel coils, painted steel coils, steel pipes and electronic materials. Sales revenue is recognized when the control of goods is passed to customers. Since customers have obtained the right to set the price and make use of the goods and assumed the responsibility for resale and risks of obsolescence, the Group recognizes revenue and accounts receivable at such time point, presented as the net amount after deducting sales returns, discounts and allowance. When supplying materials for processing, control of the processed goods is not transfered, in which case it is not recognized as revenue.

(2) Service revenue

Service revenue is recognized when the service is rendered. Revenue from service rendered in accordance with contracts is recognized in proportion to the completion of a contract.

(3) Revenue from construction contracts

A real estate contract is a construction contract under which the real estate units have been controlled by customers in the process of construction, in which case the Group recognizes revenue over time. Since construction costs are directly related to the stage of completion of performance obligations, the Group measures the stage of completion by the ratio of real costs incurred to date to total expected costs. The Groups recognizes contract assets over the construction period, and transfers them to accounts receivables upon billing the customers. Where the construction proceeds received exceed the recognized amount, the difference is recognized as contract liability. Construction retainage, which is the amount withheld by customers in accordance with the contractual terms in order to assure that the Group will satisfy its contractual obligation, is recognized as a contract asset before the Group completes its performance obligation. If the outcome of the performance obligations cannot be measured reliably, construction revenue is recognized only to the extent of the expenses incurred for

－－ 30

satisfaction of performance obligations that are expected to be recovered.

(4) Revenue from leases, dividends and interests
A. The rental revenue shall be recognized as revenue in the duration of the lease based on straight-line method.
B. 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.
C. Interest revenue is recognized based on outstanding principal and applicable effective interest according to passage of time on an accrual basis.

4.24 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of those assets until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

To the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. Except for those qualifying capitalization, all other borrowing costs are recognized as an expense in profit or loss as incurred.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND MAJOR SOURCES OF ASSUMPTION UNCERTAINTY

In the preparation of the consolidated financial statements, the critical accounting judgments the Group has made and the major sources of estimation and assumption uncertainty are described as follows:

5.1 Critical judgements in applying accounting policies

(1) Revenue recognition

The Group follows IFRS 15 to determine if it controls the specified good or service before that good or service is transferred to the customer, and the Group is acting as a principal or an agent in that transaction. When the Group acts as an agent, revenue is recognized on a net basis.

The Group acts as a principal as that it meets one of the following situations:

A. The Group gains control over the goods from the other party before transferring goods to customers.
B. The Group controls the right of providing service by the other party in order to control the ability of the party to provide service to customers.
C. The Group gain control over goods or service from the other party in order to combine with other goods or services to provide specific goods or services to customers.

The indicators (not limited to) which assist making judgment on whether the Group controls the goods or services before transferring goods or services to customers:

A. The Group has primary responsibilities for the goods or services it provides;
B. The Group bears inventory risk before transferring the specific goods or

－－ 31

services to customer, or after transferring the control to customer (for example, if the customer has the right to return).

C. The Group has the discretion to set prices.

(2) Lease term (applied to 2019)

In determining the lease term, the Group considers all the facts and circumstances that generate an economic incentive to exercise (or not exercise) the option, including all expected change of facts and circumstances from the inception of commencement to the exercise of the option. The considerations include the contract clause and conditions of the period covered by the option, the significant leasehold improvements made (or expected) during the contract period, and the importance of the underlying assets to the Group's operations. The lease period is reassessed when significant events or major changes occur within the control of the Group.

5.2 Critical accounting estimates and assumptions

(1) Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Please refen to Note 6.4 for major assumption and input adapted. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

(2) Process of fair value measurement and evaluation

When the assets and liabilities at fair value with no active market, the Group determines whether to use outside appraisal and using proper evaluation techniques based on related regulation or its own judgment.

If the Level 1 input value is not available while evaluating, the Group refers to the analysis of the investee’s financial position and operating outcome, recent trading price, quotes on non-active market of same equity instrument, quotes on active market of similar equity instrument and evaluation multiples of comparable companies. If the future input value is different from expectation, the fair value might change. The Group updates input values quarterly according to the market status in order to moniter if the measurement of fair value is appropriate.

Please refer to Note 12(3) for fair value valuation technique and input values.

(3) Impairment assessment of tangible and intangible assets

In the course of impairment assessments, the Group determines, based on how assets are utilised and relevant industrial characteristics, the useful lives of assets and the future cash flows of a specific group of the assets. Changes in economic circumstances or the Group’s strategy might result in material impairment of assets in the future.

(4) Impairment assessment of investments accounted for using the equity method

The Group assesses the impairment of an investment accounted for using the equity method once there is any indication that it might have been impaired and its carrying amount cannot be recoverable. The Group assesses the recoverable amounts of an investment accounted for using the equity method based on the present value of the Group’s share of expected future cash flows of the investee or

－－ 32

the present value of expected cash dividends receivable from the investee and expected future cash flows from disposal of the investment, analyzing the reasonableness of related assumptions.

(5) Realisability of deferred tax assets

Deferred assets are recognised only to the extent that it is probable that future taxable profits will be available against which the deferred tax asset can be utilised. The Group’s management assesses the realisability of deferred tax assets by making critical accounting judgements and significant estimates of expected future revenue growth rate and gross profit rate, the tax exemption period, available tax credits, and tax planning, etc. Changes in global economic environment, industrial environment, and laws and regulations might result in material adjustments to deferred tax assets.

(6) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value; thus, the Group estimates the net realizable value of inventory for obsolescence and unmarketable items on balance sheet date due to the rapid technology changes and writes down inventories to the net realisable value.

(7) Calculation of accrued pension obligations

When calculating the present value of defined pension obligations, the Group uses judgments and actuarial assumptions to determine related estimates, including discount rates and future salary increase rate. Changes in these assumptions may have a significantly impact on the carrying amount of defined pension obligations.

(8) Tenant's increase in borrowing interest rate

At the time of the decision to increase the borrowing rate of the lessee used in the lease payment, the risk-free interest rate and the same currency is used as the reference rate, and the estimated lessee's credit risk sticker and lease specific adjustments (such as asset-specific and secured factors) are taken into account.

6. DETAILS OF SIGNIFICANT ACCOUNTS

6.1 Cash and cash equivalents

Item Cash on hand Checking account Demand deposits Time deposits (with original maturities within three months) Total	December 31	December 31
	2019 $6,394 732,449 4,239,184 45,690 $5,023,717	2018
		$7,649 698,269 3,623,502 1,193,506
		$5,522,926

1.The Group have good credit quality in financial institutions, and the Group's transactions with a number of financial institutions to diversify credit risk that are unlikely to be expected to default.
2.The Group had no cash and cash equivalents pledged to others.

－－ 33

6 . 2 Financial assets at fair value through profit or loss

Item Financial assets - current: Non-derivative Financial assets mandatorily measured at FVTPL Mutual funds Domestic unlisted preferred stock Held for trading Derivatives Cross currency swap contracts Total Financial assets - noncurrent: Non-derivative financial assets mandatorily measured at FVTPL Domestic unlisted preferred stock Financial bonds Total Financial liabilities - current: Derivatives Cross currency swap contracts	December 31	December 31
	2019 $43,769 376,755 7,755 $428,279 $279,285 10,004 $289,289 $-	2018
		$63,093 220,540 2,311
		$285,944
		$1,001,236 10,016
		$1,011,252
		$7,437

1.The Group had no financial assets at fair value through profit or loss pledged to others. 2.Please refer to Note 12(2) for credit risk management and evaluation method.
3.The Group enters cross currency swaps contracts with banks to hedge exchange rate risk of assets 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 upon initial recognition. Outstanding contracts are as follows:

December 31, 2019：

Currency Contract Period USD(SELL) January 9, 2019 to June 24, 2020 RMB(BUY) December 31, 2018： Currency Contract Period USD(SELL)July 5, 2018 to December 11, 2019 RMB(BUY) USD(BUY)November 21, 2018 to January 31, 2019 NTD(SELL)	Contract Amount (in thousands) 19,000 129,243 Contract Amount (in thousands) 18,000 122,759 11,000 339,900	Paid Interest Rate Range 6.35%-7.21% Paid Interest Rate Range 6.80%-7.05% 1.73%	Received Interest Rate Range
			LIBOR+4.15% Received Interest Rate Range
			LIBOR+4.15% 4.186%

－－ 34

6.3 Notes receivable, net

Notes receivable, net
Item At amortized cost Notes receivable Less: Loss allowance Net	December 31
	2019 $845,328 (16) $845,312	2018
		$1,651,065 (93)
		$1,650,972

1.As of December 31, 2019 and 2018, the Group pledged a portion of its notes receivable as collateral for its borrowings. Please refer to Note 8.
2.Please refer to Note 7.3.5. for accounts receivable with related parties
Please refer to Note 6.4 for the relevant disclosure of loss allowance for notes receivable.
4.The Group has transferred the endorsement of the bank acceptance bills of the Mainland to the suppliers to pay the accounts payable. As the risks and rewards of the notes have been transferred, the Group has derecognized the bank acceptance bills and the corresponding accounts payable. The suppliers still have the right to request the Group to settle the payment if the outstanding bank acceptance notes are not fulfilled at the end of the period. Therefore, the Group continues to participate in the notes. The Group's maximum loss of the continued involvement in the derecognized bank acceptance bills is the amount of bank acceptance bills that have been transferred but not yet matured. As of December 31, 2019 and 2018, the balances were RMB441,574 thousand, and RMB735,198 thousand, respectively. These notes will expire within 1~12 months after the balance sheet date. In consideration of the credit risk of the bank acceptance bills, the Group's assessment of the fair value of its continuing involvement is not significant. The Group did not recognise any gains and losses on the transfer of the bank's acceptance for the year ended December 31, 2019 and 2018.

6.4 Accounts receivable, net

Accounts receivable, net
Item At amortized cost Accounts receivable Less: Loss allowance Net	December 31
	2019 $1,706,965 (24,019) $1,682,946	2018
		$1,997,090 (6,794)
		$1,990,296

A. The Group’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 credit period varies: 30~60 days for Carbon Steel Department, and interest-bearing deferred payment is allowed upon mutual agreement; 7~26 days for the sale of steel products; agreed days for the Engineering Department based on the contractual terms; and 60~90 days for other departments.
B. For the information about the Group’s accounts receivable pledged as collateral, please see Note 8 for details.

－－ 35

C. The Group factored part of its accounts receivables to banks without recourse. The Group had already transferred substantially all risks and rewards upon factoring the accounts receivables, which were thereby derecognized from the balance sheet. Please refer to Note 12 (4) for related information.
D.The Group applies the simplified approach to provisions for expected credit losses prescribed by IFRS 9, which permits the use of a lifetime expected credit losses provision for trade receivables. The expected credit losses on trade receivables are estimated by reference to past account aging records of the debtor, an analysis of the debtor’s current financial position, industrial trend. which receivables are past due. As the Group’s historical credit losses experience does not show significantly different loss patterns for different customer segments, the provision for losses based on past due status of receivables is not further distinguished between the Group’s different customer base.

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

The Group measures the allowance for notes receivable, accounts receivable according and contract assets to the preparation matrix (including related parties)：

December 31, 2019 No past due 181 to 365 days Total December 31, 2018 No past due	Expected credit loss rate 0%-0.5% 100% Expected credit loss rate 0%-0.5%	Gross carrying amount $3,326,056 16,699 $3,342,755 Gross carrying amount $4,816,036	Allowance for doubtful accounts (ECL) ($7,941) (16,699) ($24,640) Allowance for doubtful accounts (ECL) ($8,754)	Amortized cost
				$3,318,115 -
				$3,318,115
				Amortized cost
				$4,807,282

Movements of the loss allowance for notes receivable and accounts receivable (including related parites) were as follows:

including related parites) were as follows:
Beginning balance Add: Provision for impairment Less: Write-offs Impact of foreign exchange differences Ending balance	Year Ended December 31
	2019 $8,754 16,782 (349) (547) $24,640	2018
		$7,033 1,533 - 188
		$8,754

－－ 36

As of December 31, 2019 and 2018, the above provision has already taken into consideration collateral or other credit enhancement. The other credit enhancement (e.g., L/C) possessed by above receivables were $2,806,110 thousand, and $3,312,555 thousand, respectively.

Please refer to Note 12(2) for the relevant credit risk management and assessment.

6.5 Other receivables

Item Business tax refundable Proceeds receivable from disposal of land Insurance claims receivables Purchase allowance receivable Proceeds rereivable arising from sale of funds Interest receivable Others Total Less: Loss allowance Net	December 31	December 31
	2019 $112,629 48,560 - 2,875 6,181 6,305 16,859 $193,409 - $193,409	2018
		$129,450 - 78,048 37,719 5,097 6,741 17,746
		$274,801 -
		$274,801

This is the insurance claims receivable, are the insurance claims for estimated loss incurred from fire. Please refer to Note 10 for details.
Please refer to Note 7.3.5 for related party transactions.

6.6 Inventories and operating cost

Item Steel Department and other Non-heavy Industry Department: Raw materials Supplies Work in progress Finished goods Other inventories Subtotal Less: Valuation allowance Net	December 31	December 31
	2019 $3,426,910 409,573 1,086,084 2,738,642 268,945 $7,930,154 (418,538) $7,511,616	2018
		$4,793,692 397,632 1,342,464 3,530,684 273,933
		$10,338,405 (260,763)
		$10,077,642

－－ 37

Heavy Industry Department： Raw materials Supplies Subtotal Less: Valuation allowance Net Total	$233,533 5,436 $238,969 (1,001) $237,968 $7,749,584	$265,081 4,901
		$269,982 (173)
		$269,809
		$10,347,451

1.Inventory gains (losses) recognized as cost of sales are as follows: Year Ended December 31 Item 2019 2018 Cost of inventories sold $54,882,897 $66,342,655 Construction cost 1,434,748 1,101,467 Processing cost 397,128 520,131 Unallocated manufacturing overhead 212,147 78,158 Inventory counting gain (loss) 1,149 (763) Purchase and construction contract loss (recovery gain) (8,701) 1,362 Inventory valuation loss and obsolescence loss (recovery gain) 158,603 (99,488) Impact of foreign exchange difference 60,508 1,466 Total operating cost $57,138,479 $67,944,988	1.Inventory gains (losses) recognized as cost of sales are as follows: Year Ended December 31 Item 2019 2018 Cost of inventories sold $54,882,897 $66,342,655 Construction cost 1,434,748 1,101,467 Processing cost 397,128 520,131 Unallocated manufacturing overhead 212,147 78,158 Inventory counting gain (loss) 1,149 (763) Purchase and construction contract loss (recovery gain) (8,701) 1,362 Inventory valuation loss and obsolescence loss (recovery gain) 158,603 (99,488) Impact of foreign exchange difference 60,508 1,466 Total operating cost $57,138,479 $67,944,988	1.Inventory gains (losses) recognized as cost of sales are as follows: Year Ended December 31 Item 2019 2018 Cost of inventories sold $54,882,897 $66,342,655 Construction cost 1,434,748 1,101,467 Processing cost 397,128 520,131 Unallocated manufacturing overhead 212,147 78,158 Inventory counting gain (loss) 1,149 (763) Purchase and construction contract loss (recovery gain) (8,701) 1,362 Inventory valuation loss and obsolescence loss (recovery gain) 158,603 (99,488) Impact of foreign exchange difference 60,508 1,466 Total operating cost $57,138,479 $67,944,988
	2019 $54,882,897 1,434,748 397,128 212,147 1,149 (8,701) 158,603 60,508 $57,138,479	2018 $66,342,655 1,101,467 520,131 78,158 (763) 1,362 (99,488) 1,466 $67,944,988

The Group recognized inventory valuation loss (recovery gain) of $158,603 thousand and ($99,488) thousand for the year ended December 31, 2019 and 2018, respectively, due to inventory's write-down to net realizable value, or the net realizable value of inventories recovered as a result of market stabilization that enabled the Group to raise prices on certain products.
3.The Group has no inventories pledged to others.

6.7 Prepayments

Prepayments
Item Prepaid material purchase Prepaid (overpaid) sales tax Prepaid insurance Prepaid sea freight Prepaid rent Prepaid land usage rights, etc. Other prepayments Total	December 31 2019 2018 $1,293,220 $1,339,728 505,202 398,839 65,515 63,230 21,694 48,187 2,763 3,908 - 6,543 47,053 33,434 $1,935,447 $1,893,869
	2019 $1,293,220 505,202 65,515 21,694 2,763 - 47,053 $1,935,447

－－ 38

6.8 Noncurrent assests held for sale / Liabilties directly associated with noncurrent assets held for sale

Item Noncurrent assests held for sale Less：Accumulated impairment Net Liabilties directly associated with noncurrent assets held for sale	December 31	December 31
	2019 $23,342 - $23,342 $7,630	2018
		$218,096 -
		$218,096
		$62,423

1.As stated in Note 6.34 and Note 9.10, on November 8, 2018, the Group entered into a contract to sell Land No. 0001-0002, Pingbei Section, Jiadong Township, Pingtung County, Land No. 0001-0027, Pingnan Section, Fangliao Township, Pingtung County, and Building No. 25, Pingnan Section, Fangliao Township, Pingtung County. The total contract price is $625 million (tax included). In May 2019, the ownership transfer was completed in accordance with the scheduled payment terms as stipulated in the contracts. In addition, In November 2019, the Group entered into a contract to sell part of Land No.0026 in Pingbei Section, Jiadong Township, Pingtung County. The contract price is $76,344 thousand, and the disposal is expected to be completed within 12 months. As of December 31, 2019, $7,630 thousand have been collected.
Please refer to Note 8 for the information of noncurrent assests held for sale pledged as collateral.

6.9 Other financial assets - current

Other financial assets - current
Item Time deposits within three months Pledged demand deposits Pledged time deposits Total	December 31
	2019 $26,681 741,017 638,232 $1,405,930	2018
		$27,257 485,078 596,776
		$1,109,111

6.10 Financial assets at fair value through other comprehensive income or loss - noncurrent

noncurrent
Item Equity instruments： Domestic listed stocks Domestic unlisted stocks Subtotal Valuation adjustment Total	December 31 2019 2018 $45,000 $45,000 560,182 549,415 $605,182 $594,415 104,704 120,702 $709,886 $715,117
		2018 $45,000 549,415 $594,415 120,702 $715,117

－－ 39

The Group invests in domestic listed and unlisted stocks in accordance with its medium/long-term strategies and expects to make a profit through long-term investment. Management of the Group believes that it is not consistent with the afore-mentioned long-term investment planning if the short-term fair value changes of such investment are presented in profit or loss. Therefore, the Group elects to designate such investment as to be measured at FVTOCI.
For related credit risk management and means of assessing, please refer to Note 12(2).
As of December 31, 2018 and 2019, the Group had no financial assets at FVTOCI pledged as collateral.

6.11 Investments accounted for using equity method

Investee Associates: Associates with significance: Eliter International Corp. E-Da Development Corp. Tangeng Iron Works Co., Ltd. Yieh United Steel Corp. Associates without significance Total	December 31	December 31
	2019 $3,536,605 1,448,243 4,094,392 3,763,677 1,818,401 $14,661,318	2018
		$3,602,035 1,279,418 4,074,315 4,730,650 1,806,223
		$15,492,641

1. Associates:

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

CompanyName Eliter International Corp. E-Da Development Corp. Tangeng Iron Works Co., Ltd. Yieh United Steel Corp.	ShareholdingPercentage	ShareholdingPercentage
	December 31,2019 43.56% 34.38% 31.16% 30.31%	December 31,2018
		43.56% 34.38% 31.16% 29.88%

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.

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

－－ 40

A. Balance Sheets

A. Balance Sheets
Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity Share in associates’ net assets Unrealized loss from transactions with associates Carrying amount of associate Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity Share in associates’ net assets Unrealized loss from transactions with associates Carrying amount of associate Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity Share in associates’ net assets Unrealized gain (loss) from transactions with associates Carrying amount of associate	Eliter International Corp. December 31,2019 December 31,2018 $6,971,622 $6,938,640 5,195,803 5,001,312 1,603,831 1,228,879 2,299,960 2,297,166 $8,263,634 $8,413,907 $3,599,334 $3,664,787 (62,729) (62,752) $3,536,605 $3,602,035 E-Da Development Corp. December 31,2019 December 31,2018 $867,776 $599,659 8,123,713 8,427,286 1,021,390 2,350,696 3,735,304 2,931,887 $4,234,795 $3,744,362 $1,456,096 $1,287,465 (7,853) (8,047) $1,448,243 $1,279,418 TangengIron Works Co., Ltd. December 31,2019 December 31,2018 $4,274,280 $4,679,858 23,749,927 23,551,048 3,638,556 4,594,916 11,244,913 10,559,687 $13,140,738 $13,076,303 $4,094,392 $4,074,315 - - $4,094,392 $4,074,315
	December 31,2019 $4,274,280 23,749,927 3,638,556 11,244,913 $13,140,738 $4,094,392 - $4,094,392

Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate

Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate

Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized gain (loss) from
transactions with associates
Carrying amount of associate

Eliter International Corp.
December 31,2019 December 31,2018
$6,971,622
$6,938,640
5,195,803
5,001,312
1,603,831
1,228,879
2,299,960
2,297,166
$8,263,634
$8,413,907
$3,599,334
$3,664,787
(62,729)
(62,752)
$3,536,605
$3,602,035
E-Da Development Corp.
December 31,2019 December 31,2018
$867,776
$599,659
8,123,713
8,427,286
1,021,390
2,350,696
3,735,304
2,931,887
$4,234,795
$3,744,362
$1,456,096
$1,287,465
(7,853)
(8,047)
$1,448,243
$1,279,418
TangengIron Works Co., Ltd.
December 31,2019 December 31,2018
$4,274,280
$4,679,858
23,749,927
23,551,048
3,638,556
4,594,916
11,244,913
10,559,687
$13,140,738
$13,076,303
$4,094,392
$4,074,315
-
-
$4,094,392
$4,074,315

December 31,2019
$4,274,280
23,749,927
3,638,556
11,244,913
$13,140,738
$4,094,392
-
$4,094,392

－－ 41

Yieh United Steel Corp.

Yieh United Steel Corp.	Yieh United Steel Corp.	Yieh United Steel Corp.
December 31,2019 December 31,2018 Current assets $8,343,346 $9,676,986 Noncurrent assets 36,320,870 38,151,425 Current liabilities 23,899,830 20,586,663 Noncurrent liabilities 8,107,714 11,203,793 Equity $12,656,672 $16,037,955 Share in associates’ net assets $3,835,884 $4,791,775 Unrealized loss from transactions with associates (72,207) (61,125) Carrying amount of associate $3,763,677 $4,730,650 B.Statements of Comprehensive Income Eliter International Corp. 2019 2018 Operating revenue $229,538 $427,657 Net loss ($144,372) ($149,541) Other comprehensive income (loss) (net after tax) (5,901) 1,086 Total comprehensive loss ($150,273) ($148,455) Dividends received from associate $ - $ - E-Da Development Corp. 2019 2018 Operating revenue $795,002 $845,419 Net loss ($294,609) ($261,012) Other comprehensive income (loss) (net after tax) (14,958) 718 Total comprehensive loss ($309,567) ($260,294) Dividends received from associate $ - $ - TangengIron Works Co., Ltd. 2019 2018 Operating revenue $12,350,956 $14,879,535 Net income (loss) $14,953 ($1,441,675) Other comprehensive income (loss) (net after tax) 49,483 24,697 Total comprehensive income (loss) $64,436 ($1,416,978) Dividends received from associate $ - $ -
	2019 2018 $795,002 $845,419 ($294,609) ($261,012) (14,958) 718 ($309,567) ($260,294) $ - $ - TangengIron Works Co., Ltd.	2018
		$845,419
		($261,012) 718
		($260,294)
		$ -
	2019 $12,350,956 $14,953 49,483 $64,436 $ -	2018 $14,879,535 ($1,441,675) 24,697 ($1,416,978) $ -

－－ 42

Operating revenue Net income (loss) Other comprehensive income (loss) (net after tax) Total comprehensive loss Dividends received from associate	Yieh United Steel Corp.	Yieh United Steel Corp.
	2019 $35,843,299 ($3,046,907) (325,289) ($3,372,196) $ -	2018
		$42,713,976
		($1,517,499) 170,755
		($1,346,744)
		$ -

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

follows:
Share of: Net income Other comprehensive income (loss) (net after tax) Total comprehensive income (loss)	Year Ended December 31
	2019 $29,989 (42,032) ($12,043)	2018 $4,959 32,964 $37,923

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

inputs) are as follow:
Yieh United Steel Corp. (Note) Tangeng Iron Works Co., Ltd. Total	December 31
	2019 $3,506,463 4,678,374 $8,184,837	2018 $4,026,050 5,016,438 $9,042,488

(Note): The fair value information above does not include shares acquired in private placement, which are not allowed to be transferred freely in open markets.
(5)For Skylark Hot Spring & Resort Corp., E-Da Tour Bus Corporation, E-Da Bus Transportation Co., Ltd., and E-Da Entertainment Co., the Group has significant influence over which 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 Corp. in February 2017, and December 2015, and subscribed at $7 per share, with the total subscription amount of $204,876 thousand and $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 to complete the supplementary procedures of public offering.
(7)Due to cross ownership and the adoption of equity method between the Group and Yieh United Steel Corp., an investee accounted for using equity method, investment

－－ 43

gain (loss) is recognized using the treasury stock approach.

(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., which is calculated based on its unaudited financial statements, are calculated based on audited financial statements of those investees. However, the Group’s management believes unaudited financial statements of above investees would not have a significant impact on the Group.
(9)As of December 31, 2019 and 2018, the Group pledged part of its investments accounted for using equity method as collateral for its borrowings. Please refer to Note 8.

6.12 Property, Plant and Equipment

Property, Plant and Equipment
Item Land Buildings and structures Machinery Other equipment Equipment to be inspected and construction in progress Total cost Less: Accumulated depreciation Accumulated impairment Total	December 31
	2019 $6,008,209 8,480,633 34,700,290 3,280,289 16,386,255 $68,855,676 (25,222,049) (487,523) $43,146,104	2018
		$6,007,639 8,648,387 35,150,954 3,319,698 12,628,421
		$65,755,099 (24,148,930) (487,640)
		$41,118,529

						Equipment to be
						inspected and
			Buildings and			construction in
	Land		structures	Machinery	Other equipment	progress	Total
Cost
Balance, January 1, 2019	$6,007,639		$8,648,387	$35,150,954	$3,319,698	$12,628,421	$65,755,099
Additions	570		6,025	70,873	186,610	4,126,507	4,390,585
Transferred to expenses		-	-	(111)	-	(16,283)	(16,394)
Disposals		-	(81,492)	(96,467)	(251,676)	-	(429,635)
Reclassification		-	16,851	61,741	77,976	(156,568)	-
Impact of foreign exchange differences		-	(109,138)	(486,700)	(52,319)	(195,822)	(843,979)
December 31, 2019	$6,008,209		$8,480,633	$34,700,290	$3,280,289	$16,386,255	$68,855,676
Accumulated depreciation
and impairment
Balance, January 1, 2019	$	-	$3,635,942	$18,443,813	$2,226,177	$330,638	$24,636,570
Depreciation		-	244,913	1,212,924	254,320	-	1,712,157
Disposals		-	(79,604)	(75,009)	(247,993)	-	(402,606)
Impact of foreign exchange differences		-	(29,896)	(185,620)	(21,033)	-	(236,549)
December 31, 2019	$	-	$3,771,355	$19,396,108	$2,211,471	$330,638	$25,709,572

－－ 44

Cost	Land	Buildings and structures	Machinery	Other equipment	Equipment to be inspected and construction in progress	Total
	$6,007,639 - - - - - - -	$8,602,615 6,267 - (4,370) 95,329 - 6,663 (58,117)	$35,232,848 129,414 (231) (805,245) 807,525 - 94,892 (308,249)	$3,218,544 289,048 (26,389) (295,799) 86,222 - 76,824 (28,752)	$10,181,218 3,740,786 (14,051) - (989,076) (193,573) 5,110 (101,993)	$63,242,864 4,165,515 (40,671) (1,105,414) - (193,573) 183,489 (497,111)
Balance, January 1, 2018 Additions Transferred to expenses Disposals Reclassification Transferred to long-term prepaid rent Acquired through business combination Impact of foreign exchange differences Balance, December 31, 2018 Accumulated depreciation and impairment
	$6,007,639	$8,648,387	$35,150,954	$3,319,698	$12,628,421	$65,755,099
	$ - - - - - - - -	$3,411,580 245,545 - (3,673) - (6,793) 3,918 (14,635)	$18,027,574 1,164,093 - (684,545) 20,124 (710) 49,993 (132,716)	$2,146,230 328,748 (17,032) (272,275) 22,765 - 38,914 (21,173)	$330,638 - - - - - - -	$23,916,022 1,738,386 (17,032) (960,493) 42,889 (7,503) 92,825 (168,524)
Balance, January 1, 2018 Depreciation Transferred to expenses Disposals Impairment loss Repair expenses offset against accumulated impairment Acquired through business combination Impact of foreign exchange differences Balance, December 31, 2018
	$ -	$3,635,942	$18,443,813	$2,226,177	$330,638	$24,636,570

1.Reconciliations of current additions and the acquisition of property, plant and equipment in statement of cash flows were as follows:

Item Increase in property, plant and equipment Repair payment on wind disasters Increase/decrease in payables for purchase of equipment Cash paid for acquisition of property, plants and equipment	Year Ended December 31 2019 2018 $4,390,585 $4,165,515 - 7,503 (139,019) 72,835 $4,251,566 $4,245,853
	2019 $4,390,585 - (139,019) $4,251,566

2.Please refer to Note 6.35 for details of the amount of capitalized borrowing costs.

－－ 45

3.Since the recoverable amount of part of the Group’s production equipment is less than the carrying amount, the impairment loss recognized for 2019 and 2018 were $0 thousand and $42,889 thousand, stated under other gains and losses on the consolidated statements of comprehensive income. The recoverable amount of such production equipment was determined by the Group by using its fair value less cost of disposal. The fair value, which was determined by reference to status in use and relevant market activities, is Level 3 fair value measurement.
4.For the information about property, plant and equipment pledged as collateral, please see Note 8 for details.
5.The Group’s land amounting to both $78,568 thousand as of December 31 2019 and 2018 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.

6.13 Lease Agreement

A. Right-of-use asset - 2019

	Item	December 31,2019 $503,019 38,579 $541,778 (15,682) - $526,096 Land Building $ - $ - 500,691 810 2,595 37,949 (267) - $503,019 $38,759 $ - $ - 9,887 6,179 (231) (153) $9,656 $6,026	Total
			$ - 501,501 40,544 (267)
			$541,778
			$ - 16,066 (384)
			$15,682

B. Lease liabilities - 2019

at January 1, 2019 ation expense f foreign exchange differences at December 31, 2019 . Lease liabilities - 2019	$ - $ 9,887 6,1 (231) (15 $9,656 $6,0
Item Carrying amount of lease liabilities - current - noncurrent	December 31, 2019
	$7,813
	$81,469

The discount rate interval for lease liabilities is 1.9661%-2.4%.

Please refer to Note 12(2) for lease liabilities with repayment periods.

－－ 46

C. Significant lease activities and clause

The Group rented land and buildings for operation. The lease terms range from 2 to 32 years. Part of the lease may be extended with its duration and is calculated based on the area of the land leased and the rate based on the announced land value of the current year. In accordance with the contract, without the lessor’s consent, the Group is not allowed to sublet the leased object to the third party. There is no sign of impairment of right-of-use assets, hence the Group didn’t assess the impairment as of December 31, 2019.

D. Other lease information:

(1) The current lease relevant expense information was as follows:

Short-term lease expense Gross cash outflow (Note)	Year Ended December 31, 2019
	$20,910
	$30,235

(Note): Including principle paid for lease liability for the year ended December 31, 2019.

The Group adopted exemption for short-term leases and low-value asset recognition, and did not recognize relevant right-of-use asset and lease liability.

(2) The Group rented the land under non-cancellable operating lease agreement in 2018, with the lease term from Year 1996 to 2050. The Group recognized rental expenses of $21,920 thousand for the year ended December 31, 2018. The future aggregate minimum lease payments under non-cancellable operating leases are as follow:

follow:
Item Within 1 year 1 to 5 years More than 5 years Total	December 31,2018
	$12,936 13,192 47,772
	$73,900

6.14 Investment properties

Investment properties
Item Land Buildings Construction in progress Total cost Less: Accumulated depreciation Accumulated impairment Total	December 31
	2019 $605,403 46,281 40,554 $692,238 (1,667) (68,009) $622,562	2018
		$760,128 48,196 36,988
		$845,312 (1,033) (68,009)
		$776,270

－－ 47

1. Investment properties and accumulated depreciation and impairment c hanges are as follows

follows
Cost	Land	Buildings	Construction in progress	Total
	$760,128 - (132,853) (21,872) -	$48,196 - - - (1,915)	$36,988 13,930 (8,894) (1,470) -	$845,312 13,930 (141,747) (23,342) (1,915)
Balance, January 1, 2019 Additions Transferred to expenses Transferred to noncurrent assests held for sale Impact of foreign exchange differences Balance, December 31, 2019 Accumulated depreciation and impairment
	$605,403	$46,281	$40,554	$692,238
	$68,009 - -	$1,033 703 (69)	- - -	$69,042 703 (69)
Balance, January 1, 2019 Depreciation Impact of foreign exchange differences Balance, December 31, 2019 Cost
	$68,009	$1,667	$ -	$69,676
	Land	Buildings	Construction in progress	Total
	$950,636 - - (190,508) -	$69,950 5,775 - (26,604) (925)	$45,789 2,454 (186) (11,069) -	$1,066,375 8,229 (186) (228,181) (925)
Balance, January 1, 2018 Additions Transferred to expenses Transferred to noncurrent assests held for sale Impact of foreign exchange differences Balance, December 31, 2018 Accumulated depreciation and impairment
	$760,128	$48,196	$36,988	$845,312
	$68,009 - - -	$9,790 1,348 (10,085) (20)	- - - -	$77,799 1,348 (10,085) (20)

Please refer to Note 6.8 for details on transferred to noncurrent assests held for sale.

2.Rental revenue and direct operating expenses of investment properties:

Item Rental revenue from investment properties Direct operating expenses incurred by the investment properties with rental revenue generating in current period Direct operating expenses incurred by the investment properties with no rental revenue generating in current period	Year Ended December 31	Year Ended December 31
	2019 $ - $ - $8,459	2018
		$ -
		$ -
		$12,046

－－ 48

3.As of December 31, 2019 and 2018, the fair values of investment properties held by the Group were $1,599,330 thousand and $1,787,908 thousand, respectively, which were based on evaluation appraised by independent appraisers as of December 2019 and 2018. 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(3). The Group 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.
For the information about investment properties pledged as collateral, please see Note 8 for details.
The Group’s land amounting to both $8,987 thousand as of December 31 2019 and 2018 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.

6.15 Intangible assets

December 31	December 31
2019 $504,111 8,207 10,241 $522,559 (90,060) - $432,499 Trademarks Others $8,207 $6,133 - 4,768 - (434) - (226) $8,207 $10,241 $ - $6,072 - 58 - (434) - (226) $ - $5,470		2018
		$484,468 8,207 6,133
		$498,808 (46,445) -
		$452,363
Trademarks $8,207 - - - $8,207 $ - - - - $ -		Total $498,808 4,768 (434) 19,417 $522,559 $46,445 42,353 (434) 1,696 $90,060
	$6,133 4,768 (434) (226)
	$10,241
	$6,072 58 (434) (226)
	$5,470

－－ 49

Cost Balance, January 1, 2018 Acquired through business combination Impact of foreign exchange differences Balance, December 31,2018 Accumulated amortization and impairment Balance, January 1, 2018 Depreciation Acquired through business combination Impact of foreign exchange differences Balance, December 31, 2018	Mineral right $ - 484,468 - $484,468 $ - 10,093 30,280 - $40,373	Trademarks $8,207 - - $8,207 $ - - - - $ -	Others	Total
			$6,267 - (134)	$14,474 484,468 (134)
			$6,133	$498,808
			$5,594 608 - (130)	$5,594 10,701 30,280 (130)
			$6,072	$46,445

6.16 Other non-current assets

Item Intangible exploration and evaluation assets Less: Accumulated impairment Net	December 31	December 31
	2019 $11,590 - $11,590	2018
		$7,534 -
		$7,534

The above-mentioned intangible exploration and evaluation assets are mainly the rights to explore nickel laterite ores, which will be reclassified as “Intangible assets - drilling rights to minerals” when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable in the future.

6.17 Refundable deposits

Item Deposit for dumping margins Performance deposits Rent deposits Others Total	December 31	December 31
	2019 $851,218 27,544 33,616 13,475 $925,853	2018
		$1,291,745 18,529 34,513 5,830
		$1,350,617

An antidumping investigation into the corrosion-resistant steel sold from Taiwan, conducted by the Department of Commerce of the U.S. in June 2015, had completed in July 2016, with an official announcement that all corrosion resistant products manufactured in or sold from Taiwan must temporarily bear a dumping margin duty. The custom was also instructed to impose a temporary dumping margin on all entries of merchandise sold by the Company to the U.S. that had been covered by the investigation. The antidumping duty is imposed by the U.S. using the retrospective system. The difference between the tax rate of the provisional tax rate paid and the final survey result is presented as “refundable deposit”.

－－ 50

6.18 Long-term prepaid rent – Year 2018

Item Land usage right Other long-term prepaid rent Subtotal Less: Transfer within 12 months Total	December 31, 2018 $238,671 202,176 $440,847 (6,543) $434,304

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 2018, RMB 1,349 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.

6.19 Short-term Loans

Type of Loan Credit loans Credit for material purchase Mortgage loans Total Type of Loan Credit loans Credit for material purchase Mortgage loans Total	December	31, 2019
	Amount $6,797,255 8,150,491 650,000 $15,597,746 December	Interest Rate 1.33%-5.50% 1.54%-3.98% 2.09%-2.84% 31, 2018
	Amount $8,292,147 7,084,489 625,000 $16,001,636	Interest Rate 1.21%-6.13% 1.50%-4.45% 2.09%-3.00%

Some financial assets, and property, plant, and equipment are pledged as collateral for short-term loans. Please refer to Note 8 for details.

6.20 Short-term notes and bills payable

Short-term notes and bills payable
Item Commercial paper payable Less: Unamortized discount Net Interest Rate Range	December 31
	2019 $934,000 (2,728) $931,272 1.70%-2.78%	2018
		$840,000 (2,402)
		$837,598
		1.71%-2.78%

－－ 51

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.

6.21 Other Payables

Other Payables
Item Compensations payable Equipment payable Interest payable Utility expense payable Consumables payable Export and transportation expense payable Business tax payable Cash dividends payable - from previous period Repairing charges payable Others Total	December 31
	2019 $408,153 560,606 63,945 50,256 25,407 74,538 56,562 22,994 19,223 369,919 $1,651,603	2018 $538,763 421,587 72,619 55,490 36,248 46,669 7,770 22,944 19,467 335,672 $1,557,229

Please refer to Note 7.3.6. for related party transactions

6.22 Provisions - current

	December 31 2019 2018 $82,750 $81,585 3,013 2,290 1,006 9,707 4,037 3,577 - 13,933 $90,806 $111,092 Onerous contract Derecognized liabilities Others Total $9,707 $ 3,577 $13,933 $111,092 - 460 - 2,348 (8,701) - (13,933) (22,634) $1,006 $4,037 $ - $90,806	December 31 2019 2018 $82,750 $81,585 3,013 2,290 1,006 9,707 4,037 3,577 - 13,933 $90,806 $111,092 Onerous contract Derecognized liabilities Others Total $9,707 $ 3,577 $13,933 $111,092 - 460 - 2,348 (8,701) - (13,933) (22,634) $1,006 $4,037 $ - $90,806	December 31 2019 2018 $82,750 $81,585 3,013 2,290 1,006 9,707 4,037 3,577 - 13,933 $90,806 $111,092 Onerous contract Derecognized liabilities Others Total $9,707 $ 3,577 $13,933 $111,092 - 460 - 2,348 (8,701) - (13,933) (22,634) $1,006 $4,037 $ - $90,806	December 31 2019 2018 $82,750 $81,585 3,013 2,290 1,006 9,707 4,037 3,577 - 13,933 $90,806 $111,092 Onerous contract Derecognized liabilities Others Total $9,707 $ 3,577 $13,933 $111,092 - 460 - 2,348 (8,701) - (13,933) (22,634) $1,006 $4,037 $ - $90,806
	2019
Warranty $2,290 723 - $3,013		$82,750 3,013 1,006 4,037 -
		$90,806
		Derecognized liabilities $ 3,577 460 - $4,037	Others $13,933 - (13,933) $ -
				$111,092 2,348 (22,634)
				$90,806

－－ 52

Item January 1, 2018 Effect of adjustments made by retrospective application of IFRS 15 Beginning balance Recognized in current period Write-off in current period December 31, 2018	Employee benefits $75,797 - $75,797 5,788 - $81,585	Warranty $5,723 - $5,723 - (3,433) $2,290	Onerous contract $ - 8,345 $8,345 - 1,362 $9,707	Derecognized liabilities $ - - $ - 3,577 - $3,577	Others $20,663 - $20,663 - (6,730) $13,933	Total
						$102,183 8,345
						$110,528 9,365 (8,801)
						$111,092

Provision for employee benefits is an estimate of the short-term service leave vested to employees.
The Group’s “provision for warranty” is the warranty for the sales of electronic products, and is estimated based upon the historical warranty data of such products.
Provision for onerous contracts covers the irrevocable material purchase contract signed by the Group, the excess of costs incurred due to the performance of contractual obligation over the economic benefits expected to be obtained from the contract, and the expected loss of construction contracts.

6.23 Long-term Loans and Current Portion of Long-term Loans

Item Bank syndicated loans: The Company Subsidiaries Subtotal Secured loans from banks Unsecured loans from banks Other financial institutions Total Less: Unamortized discount Less: Current portion Long-term loans Interest rate range	December 31	December 31
	2019 $8,275,000 23,923,488 $32,198,488 1,808,880 429,089 42,036 $34,478,493 (109,447) (6,359,286) $28,009,760 1.50%-5.65%	2018
		$8,500,000 22,363,373
		$30,863,373 2,738,020 568,750 16,792
		$34,186,935 (109,027) (4,183,655)
		$29,894,253
		1.82%-6.42%

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 2019, it needed to pay to the

－－ 53

managing bank a compensation at 0.125% of the loan balance within agreed time, or was subject to 0.10%~1.50% incremental on its interest rate. However, this is not seen as a breach of contract.

6.24 Long-term Deferred Revenue

The subsidiary, Tianjin Lianfa Precision Steel Corporation Beneficiary, 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 revenue from government grants: Subsidy for engineering construction Less: Accumulated revenue recognized Ending balance	December 31	December 31
	2019 $49,292 (19,715) $29,577	2018
		$51,332 (18,478)
		$32,854

6.25 Benefit Plan After Retirement

1.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 government accordingly.
(2) The Group recognized pension expense of $120,468 thousand and $116,903 thousand for the year ended December 31, 2019 and 2018, respectively.
2.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% ~ 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 Group does not have rights to influence its investment management strategy.

－－ 54

(2) The amounts recognized in the consolidated balance sheet for obligation from defined benefit plans are as

defined benefit plans are as
Item Present value of defined benefit obligations Fair value of planned assets Net defined benefit liability	December 31
	2019 $1,726,682 (1,175,905) $550,777	2018
		$1,787,468 (1,054,154)
		$733,314

(3) Movements in net defined benefit liability are as follows:

Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019
Present value of defined benefit obligations Fair value of planned assets Net defined benefit liability $1,787,468 ($1,054,154) $733,314 8,628 - 8,628 (395) - (395) 13,322 (8,184) 5,138 $21,555 ($8,184) $13,371 $ - ($36,898) ($36,898) 203 - 203 8,750 - 8,750 (56,454) - (56,454) ($47,501) ($36,898) ($84,399) - (110,378) (110,378) (34,840) 33,709 (1,131) $1,726,682 ($1,175,905) $550,777 Year Ended December 31, 2018		Net defined benefit liability
		$733,314 8,628 (395) 5,138
		$13,371
		($36,898) 203 8,750 (56,454)
		($84,399)
		(110,378) (1,131)
		$550,777
Present value of defined benefit obligations $1,766,808 10,430 17,490 $27,920	Fair value of planned assets ($826,363) - (8,982) ($8,982)	Net defined benefit liability
		$940,445 10,430 8,508
		$18,938

－－ 55

Remeasurement
Return on plan asset	$ -	($23,324)	($23,324)
(Amounts included in interest
income or expense are excluded)
Actuarial (gains) losses -
Effect of change in demographic	(307)	-	(307)
assumptions
Effect of change in financial	44,113	-	44,113
assumptions
Experience adjustment	12,461	-	12,461
Recognized in other comprehensive income	$56,267	($23,324)	$32,943
Pension fund contribution	-	(252,164)	(252,164)
Paid pension	(63,527)	56,679	(6,848)
Balance as of December 31	$1,787,468	($1,054,154)	$733,314

(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 defined benefit obligation were carried out by qualified actuaries.The principal assumptions adopted on the valuation date were as follows:

valuation date were as follows:
Item Discount rate Future salary increase rate Average maturity period of defined benefit obligations	Measurement date
	December 31,2019 0.70%-1.00% 2.00% 8.4-9 years	December 31,2018
		0.75%-1.05%
		2.00%
		8.5-9 years

－－ 56

A. Assumptions on future mortality experience are set based on the 5th Taiwan Standard Ordinary Experience Mortality Table.
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:

follows:
Item Discount rate Increase by 0.25% Decrease by 0.25% Expected growth rate of salaries Increase by 0.25% Decrease by 0.25%	December 31 2019 2018 (39,338) (43,308) 40,708 44,892 41,446 45,589 (40,114) (44,065)
		2018
		(43,308)
		44,892
		45,589
		(44,065)

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 Group expects to make contributions of $75,122 thousand to the pension plans for the year ended December 31, 2020.

6.26 Common Stock

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

and ending of periods were as follows:
Item January 1 Capitalization of earnings December 31 Item January 1 Capitalization of earnings December 31	Year Ended December 31,2019 Shares (thousand shares) Amount 1,875,811 $18,758,113 37,516 375,162 1,913,327 $19,133,275 Year Ended December 31,2018
	Shares (thousand shares) 1,821,176 54,635 1,875,811	Amount
		$18,211,760 546,353
		$18,758,113

2.As of December 31, 2019, the Company had an authorized capital of $20,000,000 thousand with 2,000,000 thousand shares.
3.The Company's shareholders' meeting held on June 20, 2019 had resolved to capitalize earnings of $375,162 thousand. The plan was approved by FSC on July 12, 2019 and 37,516 thousand shares of common share at the par value of $10 were issued. The record date for share capital increase is set on Sebtember 2, 2019.

－－ 57

6.27 Capital Surplus

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
	2019 $4,060,366 557,739 216,200 8,665 41,311 $4,884,281	2018
		$4,060,366 557,739 215,064 8,665 41,384
		$4,883,218

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.

6.28 Retained Earnings

1.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.

2.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.

－－ 58

3.Special reserve

Special reserve
Item Provision for debit balance of other equity Provision upon initial application of IAS Total	December 31
	2019	2018
	$231,475 327,757	$308,898 327,757
	$559,232	$636,655

(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-Guan-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 relevant assets in the future.
4.Earnings distribution proposals and dividends per share for 2018 and 2017, which were resolved by the Shareholders Meeting in June 2019 and June 2018, are stated below

below
Legal reserve Appropriation for (reversal of) special reserve Cash dividends for common stock Stock dividends for common stock Total	Earnings appropriation proposal 2018 2017 $30,850 $136,740 (77,423) 308,898 187,581 364,235 375,162 546,353 $516,170 $1,356,226	Dividends per share (NTD)
	2018 $30,850 (77,423) 187,581 375,162 $516,170	2018 0.1 0.2	2017
			0.2 0.3

5.The Company's appropriations of earnings for 2019 had been approved in the meeting of the board of directors held on March 17, 2020. No dividends will be distributed to the shareholders due to accumulated deficit as of December 31, 2019. The appropriations of earnings for 2019 are to be presented for approval in the Company's annual shareholders' meeting to be held in June 2020.
6.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.

－－ 59

6.29 Other Equity Items

6.29 Other Equity Items
Item	Exchange differences on translation of foreign financial statements		Unrealized gain (loss) on financial asset at fair ralue through other comprehensive income		Gain (loss) on hedging instruments
	($723,803) (254,956) - (111,287)			$157,892 - (16,198) (36,157)		$6,679 - - (341)
	($1,090,046)			$105,537		$6,338
		Unrealized valuation gain (loss) on available -for-sale financial assets		Unrealized gain (loss) on financial asset at fair ralue through other comprehensive income		Gain (loss) on hedging instruments
		$54,733 (54,733)		$ - 123,526		$6,390 -	($636,655) 68,793
		$ - - - - -		$123,526 - 5,181 29,905 (720)		$6,390 - - 289 -	($567,862) (62,628) 5,181 66,797 (720)
		$ -		$157,892		$6,679	($559,232)

－－ 60

6.30 Non-controlling Interest

Item Beginning balance (IAS 39) Effect of adjustments made by retrospective application of IFRS 9 Beginning balance (IFRS 9) Share attributable to non-controlling interest: Net loss for the current year Other comprehensive income of the year Remeasurement of defined benefit plans Exchange differences on translation of foreign financial statements Unrealized gain (loss) on financial asset at fair value through other comprehensive income Share of associates and joint ventures accounted for using equity method Exchange differences on translation of foreign financial statements Unrealized gain (loss) on financial asset at fair ralue through other comprehensive income Remeasurement of defined benefit plans Gain (loss) on hedging instruments 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 Decrease in non-controlling interest - sale Decrease in non-controlling interest - liquidating distribution Increase (decrease) in non-controlling interest Ending balance	Year Ended December 31	Year Ended December 31
	2019 $1,853,763 - $1,853,763 (299,204) 9,588 6,786 201 (1,406) (543) 220 (6) 1,689 - 26,098 (6,034) - 8,537 $1,599,689	2018
		$1,794,170 3,515
		$1,797,685 (43,562) (5,262) (1,179) 60 525 198 97 6 204 52,791 124,258 (185,743) (30,649) 144,334
		$1,853,763

6.31 Operating Revenue

Operating Revenue
Item Revenue from contracts with customers Sales revenue Construction revenue Processing revenue Realized (unrealized) profits from sales Total sales revenue from contracts with customers Less: Sales return Sales discount Net operating revenue	Year Ended December 31 2019 2018 $57,919,391 $72,399,191 1,497,479 1,154,174 359,186 571,931 217 217 $59,776,273 $74,125,513 (23,182) (38,199) (65,494) (231,125) $59,687,597 $73,856,189
	2019 $57,919,391 1,497,479 359,186 217 $59,776,273 (23,182) (65,494) $59,687,597

－－ 61

1.Segments of revenue from contracts with customers

The Group’s source of revenue comes from providing goods and services that are transferred either over time or at a specific timing. Revenue can be split into the following segments:

(1) Segmented by revenue from different types of goods and services: 2019：

2019：
	Steel coils and		Construction
	steel pipes	Wire rods	revenue	Others	Total
External customer
Contract revenue	$48,237,922	$6,165,940	$1,497,696	$3,786,039	$59,687,597
Timingof revenue recognition
Revenue recognized at a	$48,237,922	$6,165,940	$ -	$3,786,039	$58,189,901
specific timing
Revenue recognized over	-	-	1,497,696	-	1,497,696
time
Total	$48,237,922	$6,165,940	$1,497,696	$3,786,039	$59,687,597
2018：
	Steel coils and		Construction
	steel pipes	Wire rods	revenue	Others	Total
External customer
Contract revenue	$59,087,188	$8,096,135	$1,154,391	$5,518,475	$73,856,189
Timingof revenue recognition
Revenue recognized at a	$59,087,188	$8,096,135	$ -	$5,518,475	$72,701,798
specific timing
Revenue recognized over	-	-	1,154,391	-	1,154,391
time
Total	$59,087,188	$8,096,135	$1,154,391	$5,518,475	$73,856,189

(2) For detailed revenue information by business segments, please refer to Note 14.

2.Contract Balance

act Balance
Item Notes receivable and accounts receivable Contract assets - current Steel structure construction and overhead cranes Contract liabilities - current Unearned sales revenue Advance construction receipts Total	December31
	2019 $3,318,115 $822,605 $857,294 115,493 $972,787	2018
		$4,807,282
		$532,786
		1,264,258 146,240
		$1,410,498

(1) Changes in contract assets and contract liabilities are caused mainly by the difference of timing between when performance obligations are fulfilled and when customers make payments.

－－ 62

(2) Allowance for contract assets:

) Allowance for contract assets:
Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Net	December31
	2019 0%-0.5% $824,994 (2,389) $822,605	2018
		0%-0.5%
		$534,501 (1,715)
		$532,786

The Group recognizes allowance losses on contract assets based on expected credit losses during existence. Contract assets will be transferred to accounts receivable at the time of billing. Its credit risk characteristics are the same as accounts receivable generated from similar contracts. Therefore, the Group believes that the expected credit loss rate of accounts receivable can also be applied to contracts. Changes in allowance losses on contract assets are as follows:

follows:
Beginning balance Add: Provision for impairment Ending balance	Year EndedDecember31
	2019 $1,715 674 $2,389	2018
		$- $1,715
		$1,715

(3) Contract liabilities recognized for the years ended December 31, 2019 and 2018 under operating revenue amounted to $1,264,258 thousand and $1,888,654 thousand.

6.32 Employee benefits, depreciation and amortization expense

Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019
OperatingCost $1,469,104 150,096 100,240 368,629 1,596,243 - $3,684,312	OperatingExpense $706,546 66,143 33,219 96,041 122,581 42,353 $1,066,883	Total
		$2,175,650 216,239 133,459 464,670 1,718,824 42,353
		$4,751,195

Pension (Note 1) Other employee benefits Depreciation (Note 1) Amortization Total	100,240 33,219 133,459 368,629 96,041 464,670 1,596,243 122,581 1,718,824 - 42,353 42,353 $3,684,312 $1,066,883 $4,751,195	100,240 33,219 133,459 368,629 96,041 464,670 1,596,243 122,581 1,718,824 - 42,353 42,353 $3,684,312 $1,066,883 $4,751,195	100,240 33,219 133,459 368,629 96,041 464,670 1,596,243 122,581 1,718,824 - 42,353 42,353 $3,684,312 $1,066,883 $4,751,195
Nature Employee benefits Salary Insurance Pension (Note 2) Other employee benefits Depreciation (Note 2) Amortization Total	Year Ended December 31,2018
	OperatingCost $1,474,761 140,877 100,019 394,849 1,616,988 - $3,727,494	OperatingExpense $778,693 65,891 35,079 109,371 115,653 10,701 $1,115,388	Total
			$2,253,454 206,768 135,098 504,220 1,732,641 10,701
			$4,842,882

－－ 63

(Note 1)Excluding pension of $380 thousand and depreciation of $10,102 thousand under equipment prepayments.
(Note 2)Excluding pension of $743 thousand and depreciation of $6,415 thousand under equipment prepayments.
1.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 and before which the compensation to employees and remuneration to directors are deducted from. Due to the accumulated loss of the Company for 2019, the estimated amount of the above compensation and remuneration were both $0 thousand. Compensation to employees and remuneration to directors for 2018 was distributed at 0.2% and 0.1% of the net income before tax. Any changes in the amounts, if any, after the annual financial statements were authorized for issue, shall be recorded as a change in accounting estimate, and should be adjusted the next year.
2.Compensation to employees and remuneration to directors for the years ended December 31, of 2019 and 2018 have been resolved and approved by the Board of Directors in March 2019 and 2018. Relevant amounts recognized in the financial statement are as follows:

Year Ended December 31	Year Ended December 31	Year Ended December 31
2019 Employees’ Compensation Directors’ Remuneration $ - $ - - - $ - $ -	2018
Employees’ Compensation $ - - $ -	Employees’ Compensation $579 579 $ -	Directors’ Remuneration
		$145 290
		($145)

(1)The above-mentioned employee compensation was distributed in cash.
(2)The differences between the amount resolved for 2018 and the amount recognized in financial statements are mainly estimate difference and has been adjusted in profit or loss for 2019.
3.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.

－－ 64

6.33 Other Income

Item Interest income Interest from bank deposits Others Subtotal Dividend income Other income Income from subsidy (Note 1) Dumping margins (Note 2) Return of refundable deposits (Note 3) Income from sales of scraps Others Subtotal Total	Year Ended December 31	Year Ended December 31
	2019 $121,857 3,107 $124,964 106,632 - 255,998 71,952 63,416 37,894 $429,260 $660,856	2018
		$101,873 3,183
		$105,056
		34,213 102,256 929,959 - 49,219 33,617
		$1,115,051
		$1,254,320

(Note 1) Financial subsidy granted in 2018 by Changshu Economic Development Zone to the sub-subsidiary, Yieh Phui (China) Technomaterial Co., Ltd.

(Note 2) For information on dumping margins, please refer to Note 6.17. (Note 3) For information on return of refundable deposits, please refer to Note 10.

6.34 Other gains and losses

Item Gain (loss) on disposal of financial assets at fair value through profit and loss Gain (loss) on disposal of investments under equity method Valuation gain (loss) on financial assets and financial liabilities Financial assets mandatorily measured at FVTPL Net foreign exchange gain (loss) Realized gain from disposal of property, plant, and equipment Gain (loss) from disposal of property, plant, and equipment Insurance claims income Gain on disposal of investment proverties Gain on disposal of noncurrent assets held for sale (Note) Impairment loss on property, plant, and equipment Others Total	Year Ended December 31	Year Ended December 31
	2019 552 20 2,406 (71,202) - (26,700) - 341,434 401,121 - (15,497) $632,134	2018
		($650) 115,938 42,259 (79,757) 16,264 (124,450) 78,048 - - (42,889) (25,001)
		($20,238)

－－ 65

(Note) On November 8, 2018, the Group sold to San-Hsin Crop. (1) Land No. 00010002 in Pingbei Section, Jiadong Township, Pingtung County; (2) Land No. 0001-0027 in Pingnan Section, Fangliao Township, Pingtung County; and (3) Building No. 25 in Pingnan Section, Fangliao Township, Pingtung County. The contract price is $625 million. The afore-mentioned transaction price is determined by both parties upon negotiation by reference to the appraisal report made by Euro-Asia Asset Evaluation Group. In May 2019, the ownership transfer was completed in accordance with the scheduled payment terms as stipulated in the contracts, and the disposal gain of $401,121 thousand is presented as “other gains and losses”

6.35 Finance Costs

Finance Costs
Item Interest expense: Interest on loans Interest on lease liabilities Subtotal Less: Amount qualified for capitalization Finance costs	Year Ended December 31
	2019 $1,763,137 1,340 $1,764,477 (448,804) $1,315,673	2018
		$1,765,242 -
		$1,765,242 (500,998)
		$1,264,244

6.36 Income Tax

1.Income tax expense (1) Components of income tax expense

Item Current income tax Current income tax expense Adjustment to prior year income taxes Tax on undistributed retained earnings Land value increment tax Current income tax expense Deferred income tax Deferred income tax on temporary differences originated and reversed Effect of tax rate changes Deferred income tax expense Income tax expense (benefit)	Year Ended December 31	Year Ended December 31
	2019 $42,972 111 1,513 25,741 $70,337 ($355,518) - ($355,518) ($285,181)	2018
		$232,817 3,119 175 -
		$236,111
		($118,624) (26,885)
		($145,509)
		$90,602

－－ 66

(2) Income tax expense (benefit) associates with other comprehensive income

Item Remeasurement of defined benefit plans Exchange differences on translation of foreign financial statements Effect of tax rate changes Total	Year Ended December 31	Year Ended December 31
	2019 $16,880 (72,875) - ($55,995)	2018
		$6,980 (1,553) (33,170)
		($27,743)

2.Reconciliation of income before income tax and income tax expense recognized in profit or loss is as follows:

profit or loss is as follows:
Item Income (loss) before tax Income tax expense (benefit) at the statutory rate Tax effect of adjusting items: Investment loss (gain) recognized under equity method Unrealized inventory valuation loss (recovery gain) Timing difference of revenue recognition Realized (unrealized) investment loss Gain (loss) on sale of land exempt from income tax Paid (unpaid) pension Other adjustments Loss carryforwards Adjustment to prior year income taxes Additional tax on undistributed retained earnings Land value increment tax Net changes of deferred income tax Income tax expense (benefit) recognized in profit or loss	2019 ($1,985,466) ($439,402) 213,518 33,270 (1,526) (12,265) (148,608) (19,627) 78,846 338,766 111 1,513 25,741 (355,518) ($285,181)	2018
		$355,546
		$56,211 214,560 (27,883) (36,946) (96,050) - (48,014) (2,831) 173,770 3,119 175 - (145,509)
		$90,602

The Group was subject to a tax rate of 20% from 17% starting from 2018 as stipulated in the Income Tax Act of the Republic of China. In addition, the tax rate on the undistributed earnings in 2018 is lowered from 10% to 5%. The taxable amount in other jurisdictions is calculated based on the tax rate applicable therein.

－－ 67

3.Deferred income tax assets or liabilities from temporary differences, loss carry forwards and investment credits:

	Year Ended December 31,	Year Ended December 31,	2019
Beginning balance $7,020 155,868 14,388 5,000 73,897 4,808 63,415 146,808 68,261 44,193 $583,658 ($57) (16,769) (721) ($17,547) $566,111	Recognized in profit or loss $274,009 - 38,953 - - (1,526) (3,577) (19,772) 42,319 10,176 $340,582 ($537) 16,769 (1,296) $14,936 $355,518	Recognized in other comprehensive income $ - 72,875 - - - - - (16,880) - - $55,995 $ - - - $- $55,995	Effect of Exchange Rate Changes $ - - 3,618 - - - - - - (2) $3,616 $ - - 78 $78 $3,694	Ending balance
				$281,029 228,743 56,959 5,000 73,897 3,282 59,838 110,156 110,580 54,367
				$983,851
				($594) - (1,939)
				($2,533)
				$981,318

－－ 68

		Year Ended December 31, 2018	Year Ended December 31, 2018	Year Ended December 31, 2018
Beginning balance	Acquired through business combination	Recognize d in profit or loss	Recognized in other comprehensive income $ - 1,553 - - - - - 6,589 (13,569) - - ($5,427) $ - - - $ - ($5,427)	Effect of Exchange Rate Changes	Effect of tax rate changes	Ending balance
	$ - - - - - - - - - 9,068 -	($171) - (55,307) - (3,488) (37,190) (6,973) (47,869) - (5,681) 25,592		$ - - 1,247 - - - - - - - (24)	$1,079 23,147 657 750 11,608 6,300 10,558 28,213 2,035 9,731 6,067	$7,020 155,868 14,388 5,000 73,897 4,808 63,415 146,808 - 68,261 44,193
$609,736	$9,068	($131,087)		$1,223	$100,145	$583,658
	- - -	($17) 250,458 (730)		$ - - 9	($6) (40,084) -	($57) (16,769) (721)
($227,177)	$ -	$249,711		$9	($40,090)	($17,547)
$382,559	$9,068	$118,624		$1,232	$60,055	$566,111

－－ 69

4.Items not recognized as deferred income tax assets:

Item Investment loss recognized under equity method Impairment loss of investments under the cost approach Loss carryforwards Others Total	December 31	December 31
	2019 $856,053 48,499 1,343,196 107,190 $2,354,938	2018
		$643,658 48,499 929,509 96,992
		$1,718,658

5.The Company’s income tax returns through 2017 have been ractified by the tax authorities.

6.37 Other Comprehensive Income

Year Ended December	Year Ended December	31, 2019
Before tax $84,399 (15,997) 17,118 (36,700) $48,820 ($317,854) (115,884) (347) ($434,085) ($385,265)	Income tax expense (benefit) ($16,880) - - - ($16,880) $69,684 3,191 - $72,875 $55,995	After tax
		$67,519 (15,997) 17,118 (36,700)
		$31,940
		($248,170) (112,693) (347)
		($361,210)
		($329,270)

－－ 70

Year Ended December	Year Ended December	31,2018
Before tax ($32,943) 5,241 (72) 30,103 $2,329 ($125,682) 74,303 295 ($51,084) ($48,755)	Income tax expense (benefit) $12,816 - (9,773) - $3,043 $61,875 (37,175) - $24,700 $27,743	After tax
		($20,127) 5,241 (9,845) 30,103
		$5,372
		($63,807) 37,128 295
		($26,384)
		($21,012)

6.41 Earnings (loss) Per Share

Earnings (loss) Per Share
Item A.Basic earnings (loss) per share Net income (loss) attributable to shareholders of parent company (A) Weighted average number of outstanding shares (thousand shares) Weighted average number of shares outstanding after retrospective adjustment (thousand shares) (B) Basic earnings (loss) per share (after tax) (NT$)(A)/(B)	Year Ended December 31
	2019 ($1,401,081) 1,913,327 1,913,327 ($0.73)	2018
		$308,506 1,875,811 1,913,327
		$0.16

－－ 71

B.Diluted earnings (loss) per share Net income (loss) attributable to shareholders of parent company (C) Weighted average number of outstanding shares (thousand shares) Impact on employees' compensation (Note) Weighted average number of ordinary shares outstanding after dilution (thousand shares) (D) Diluted earnings (loss) per share (after tax) (NT$) (C)/(D)	($1,401,081) 1,913,327 - 1,913,327 ($0.73)	$308,506 1,875,811 80
		1,875,891
		$0.16

The Company's shareholders' meeting held on June 20, 2019 had resolved to capitalize earnings and issue 37,516 thousand new shares . The record date for capital increase was set on September 2, 2019. After retrospective adjustment for 2018, the number of shares was 1,913,327 thousand shares.

(Note) Since the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

6.42 Business Combination

2019：None.

2018：

1.Acquisition of subsidiaries

Name Asiamax Mining Indonesia Lien-Hung Mining Co., Ltd.	Date of Acquisition May 23, 2018 September 30, 2018	Ownership interest with voting power/Acquisition percentage (%) 100%/100% 90%/41%	Consideration Transferred
			$38,542 239,208

Purposes and means of acquiring the aforementioned subsidiaries by the Group are stated as follows：

(1) Asiamax Mining Indonesia

In consideration of long-term operation development and a diversified investment strategy, the Group acquired 100% shares of Asiamax Mining Indonesia, constituting a control. Therefore, Asiamax Mining Indonesia is consolidated into the consolidated financial statements.

－－ 72

(2) Lien-Hung Mining Co., Ltd.

In consideration of long-term operation development and a diversified investment strategy, the Group acquired 49% shares of Lien-Hung Mining Co., Ltd. in cash in 2014, followed by a purchase of another 41% shares (Note) of which in September 2018. Since the total shares acquired have reached 90% and constituted a control, such company is included into the consolidated financial statements. In addition, the Group acquired additional 10% shares (Note) in December 2018, resulting in the changes in its shareholding to 100%.

(Note)Due to legal restriction within the local jurisdiction, the shares are registered temporarily under the name of a third-party; in order that the rights be secured, the third-party has pledged all shares under his/her name to the Group through a contract agreement.

2.Assets acquired and liabilities assumed upon acquisition date

Item Current assets Cash and cash equivalents Other receivables Inventory Prepayments Non-current assets Intangible assets Property, plant and equipment Deferred income tax assets Refundable deposits Current liabilities Provisions - current Other payables Contract liabilities Identifiable net assets	Asiamax Mining Indonesia $4,583 26 - 1,091 - 47,943 - - - 15,101 - $38,542	Lien-Hung Mining Co., Ltd. $21,941 - 51,405 9,697 454,188 42,721 9,068 3,329 3,577 3,448 34,650 $550,674	Total
			$26,524 26 51,405 10,788 454,188 90,664 9,068 3,329 3,577 18,549 34,650
			$589,216

3.Goodwill arising out of acquisition

odwill arising out of acquisition
Consideration transferred Add: Fair value of previously held equity on acquisition date Non-controlling interests Less: Fair value of obtained identifiable assets Goodwill arising out of acquisition	Asiamax Mining Indonesia $38,542 - - 38,542 $ -	Lien-Hung Mining Co., Ltd. $239,208 258,675 52,791 550,674 $ -	Total
			$277,750 258,675 52,791 589,216
			$ -

－－ 73

4.Net cash outflows from the acquisition of subsidiaries

Consideration paid in cash Less: Prepaid investment Balance of cash and cash equivalents acquired Net cash outflows (inflows)	Asiamax Mining Indonesia $38,542 - (4,583) $33,959	Lien-Hung Mining Co., Ltd. $239,208 (220,851) (21,941) ($3,584)	Total
			$277,750 (220,851) (26,524)
			$30,375

5.Between the acquisition date and the end of 2018, revenue from the aforementioned subsidiaries was $45,325 thousand.
6.If the business combination had occurred at the beginning of the year, the Group’s pro forma operating revenue would have been $73,958,431 thousand.

6.40 Transactions with Non-controlling Interests

1.Acquisition of additional equities in subsidiaries

2019：

Between January and December, 2018, the Group had purchased in cash additional equities of 0.25% for the subsidiaries, Yieh Hsing Enterprise Co., Ltd. with $6,034 thousand, resulting in the changes in its shareholding percentage from 56.73% to 56.98%, respectively. 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 Capital surplus - consideration paid to non-controlling interests Capital surplus - difference between the price received and its book value from acquisition or disposal of a subsidiary	Yieh Hsing Enterprise Co., Ltd.
	$7,170 (6,034)
	$1,136

2018：

Between January and December 2018, the Group had purchased in cash additional equities of 10%, 0.56%, 25% (Note), 10% (Note), and 0.3% for the subsidiaries, Da Yao Engineering & Consulting Co., Ltd., EMMT Systems Corporation, Lien-Heng Mining Co., Ltd., Lien-Hung Mining Co., Ltd., and Yieh Hsing Enterprise Co., Ltd. with $2,236 thousand, $1,917 thousand, $15,612 thousand, $123,542 thousand, and $7,647 thousand, resulting in the changes in its shareholding percentage from 50% to 60%, 85.02% to 85.58%, 75% to 100%, 90% to 100%, and 56.43% to 56.73%, respectively. Since the said transaction did not change the Group’s control over the said subsidiaries, it is deemed as an equity transaction.

－－ 74

	Da Yao
	Engineering		Lien-		Yieh
	&	EMMT	Heng	Lien-Hung	Hsing
	Consulting	Systems	Mining	Mining	Enterprise
	Co., Ltd.	Corporation	Co., Ltd.	Co., Ltd.	Co., Ltd.
Carrying amount of non- controlling interests acquired	$2,234	$2,121	($2,057)	$40,285	$9,961
Consideration paid to non- controlling interests	(2,236)	(1,917)	(15,612)	(123,542)	(7,647)
Difference between the price
received from acquisition or disposal of a subsidiary and its	($2)	$204	($17,669)	($83,257)	$2,314
book value

Note：Due to legal restriction within the local jurisdiction, the shares are registered temporarily under the name of a third-party; in order that the rights be secured, the third-party has pledged all shares under his/her name to the Group through a contract agreement.

7. RELATED PARTY TRANSACTIONS

7.1 Parent and ultimate controlling party.

The Company is the ultimate controlling party of the Group.

7.2 Names of related parties and relationship categories

Name of related party Related party category Yieh United Steel Corp. Associate Yieh Mau Corp. Associate Synn Industrial CO., Ltd. Associate (all shares were disposed of in May 2018) Asiazone Co., Ltd. Associate Zheng Xin Security Co., Ltd. Associate Eliter International Corp. Associate Unipattern Corporation Co.,Ltd. Associate E-Da Bus Transportation Co., Ltd. Associate E-DA Tour Bus Co., Ltd. Associate E-Da Development Corp. Associate E United Japan Co., Ltd. Associate Lien-Hung Mining Co., Ltd. Associate (which has become a subsidiary in September 2018) E- Da Visual Effects Company Limited. Associate Yieh Hong Enterprise Co., Ltd. Other related party Yieh Mau Corp. Other related party Li-Hsin Co., Ltd. Other related party Angang Hanyang (Guangzhou) Stainless Other related party Steel Corporation

－－ 75

Name of relatedparty
Angang Lianzhong (Guangzhou)
Stainless Steel Corporation
Fujian Lian Wei Logistics Co., Ltd.
Fujian Lian De Enterprise Co., Ltd.
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
I-Hsiang-Le International Co., Ltd.
Chiao-Ling Leisure Co., Ltd.
New Spring Construction Corp.
E-Da Royal Hotel Company Ltd.
E-Da Hospital
I-Shou University
I-Shou University Internship Center
Long Hua Travel Services Co., Ltd.
I-Shou International School

Relatedpartycategory

Other related party
Other related party
Other related party
Other related party
( which has become a subsidiary in
May 2018)
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party

7.3 Significant transactions with 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

Item Sales revenue Construction revenue	Relatedpartycategory Associates Other related parties Total Associates Other related parties Subtotal Less: Construction revenue that are eliminated in consolidation Total	Year Ended Decmber 31	Year Ended Decmber 31
		2019 $3,165,523 2,134,157 $5,299,680 $5,053 969,048 $974,101 (147,277) $826,824	2018 $3,009,745 2,959,872
			$5,969,617
			$3,706 223,187
			$226,893 (99,650)
			$127,243

－－ 76

(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 and nickel laterite ores to related parties are set by reference to the purchase price of a non-related party as a trading counterparty. 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 counterparty. 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. In 2019 and 2018, the eliminated construction revenue was $147,277 thousand, and $99,650 thousand, respectively.
Purchases

Purchases
Relatedpartycategory Associate： Yieh United Steel Corp. Others Other related parties Total	Year Ended Decmber 31 2019 2018 $4,525,596 $5,705,975 - 198,109 1,069,144 3,106,056 $5,594,740 $9,010,140
	2019 $4,525,596 - 1,069,144 $5,594,740

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 L/C at sight (not significantly different than terms to other suppliers) or T/T before shipment or payment is due 120 days from invoices issued.

Contract assets

issued. Contract assets
Relatedpartycategory Associates Other related party: New Spring construction Corp. Total Less: Loss allowance Total	December 31 2019 2018 $3,435 $2,856 518,380 35,563 $521,815 $38,419 - - $521,815 $38,419
	2019 $3,435 518,380 $521,815 - $521,815

－－ 77

4. Contract liability

Contract liability
Relatedpartycategory Other related party: New Spring construction Corp. Others Total	December 31 2019 2018 $84,625 $59,892 1,091 5,320 $85,716 $65,212
	2019 $84,625 1,091 $85,716

Receivables from related parties (excluding loans to related parties and contract assets )

assets )
Item Notes receivable Accounts receivable Other receivables	Related party category Associates Other related parties Total Less: Loss allowance Net Associates: Asiazone Co., Ltd. Yieh United Steel Corp. Other related party： Fujian Lian Wei Logistics Co., Ltd. Others Total Less: Loss allowance Net Associates: Yieh United Steel Corp. Others Other related parties Total Less: Loss allowance Net	December 31
		2019 $45 23 $68 - $68 $169,307 446,230 173,026 1,899 $790,462 (605) $789,857 $2,134 160 646 $2,940 - $2,940	2018 $1,102 23 $1,125 - $1,125 403,413 142,403 451,554 170,511 $1,167,881 (1,867) $1,166,014 $28,176 50 5,422 $33,648 - $33,648

Payables to related parties (excluded loans from related parties)

Item Notes payable Accounts payable	Related party category Associates Other related parties Total Associates Other related parties Total	December 31	December 31
		2019 $2,638 1,159 $3,797 $20,525 6,876 $27,401	2018
			$472 6,884
			$7,356
			$102,948 13,357
			$116,305

－－ 78

Item Other payables Advance receipts	Related party category Associates Other related parties Total Other related parties	December 31	December 31
		2019 $27,833 8,628 $36,461 $72	2018
			$22,385 2,595
			$24,980
			$69

7. Prepayments

Prepayments
Relatedpartycategory Other related parties Others Total	December 31
	2019 $28,823 - $28,823	2018
		$97,196 1,665
		$98,861

Asset transaction

(1)Acquisition of property, plant and equipment:

2019:

2019:
Type of related party Other related party： New Spring Construction Corp. Associates	Transaction target Construction in progress (Note 1) Other equipment (Note 2)	Transaction amount
		$997,478 136,381

(Note 1) The above-mentioned transaction price was by reference to appraisal reports offered by professional institutions, and were agreed on by both parties upon negotiation or through price comparision. As of December 31, 2019, the unpaid portion was $28,962 thousand.

(Note 2) The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, the transaction price was fully paid.

2018:

fully paid. 2018:
Type of related party Other related party： New Spring Construction Corp. Others Associates	Transaction target Construction in progress (Note 1) Other equipment (Note 2) Prepayments for equipment (Note 2)	Transaction amount
		$879,526 52 85,882

－－ 79

(Note 2) The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2018, the transaction price was fully paid.

(2)Disposal of property, plant and equipment:

2019:

2019:
Type of related party / Name Associates	Transaction target Transportation equipment	Transaction amount $50	Gain or loss on disposal
			$42

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, all the transaction amount was fully recovered.

2018: None.

(3)Acquisition of investment properties:

2019:

2019:
Type of related party / Name Other related party： New Spring Construction Corp.	Transaction content Construction in progress	Transaction amount
		$8,411

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, the transaction price was fully paid.

2018: None.

(4)Acquisition of other assets:

2019: None.

2018:

4)Acquisition of other assets: 2019: None. 2018:
Type of relatedparty/ Name Other related party : Unique Step Investments Holding Ltd.	Transaction target 38 thousand shares of Asiamax Mining Indonesia.	Transaction amount
		$38,542

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, 2018, the transaction price was fully paid.

－－ 80

(5)Disposal of other assets: 2019:

2019:
Type of related party Associate	Transaction target 26 thousand shares of E-Da Cultural Creative Industry Co., Ltd.	Transaction amount $203	Gain or loss on disposal
			$20

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, 2019, all the transaction amount was fully recovered.

2018: None.

9. Others

(1)Miscellaneous income

recovered. 018: None. ers Miscellaneous income
Relatedpartycategory Associates Other related parties Total	Year Ended December 31
	2019 $21,503 1,088 $22,591	2018
		$26,741 1,556
		$28,297

These are mainly technical service income, and sporadic rent income. The rent price is determined by contract and received monthly or quarterly.

(2)Miscellaneous expenses

Miscellaneous expenses
Relatedpartycategory Associates Other related parties Total	Year Ended December 31
	2019 $57,997 118,555 $176,552	2018
		$58,674 144,622
		$203,296

These are mainly service charges, export expenses, and not applicable to IFRS 16 of 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, 2019 were as follows:

Type of related party / Name Associates Other related party： New Spring Construction Corp.	Name of construction Flue pipe installation construction Above-ground structures construction for E-Da Asia Commercial Plaza, etc.	Total contract price $12,271 $3,376,861 (Note)	contract assets / liabilities
			$3,435/$ - $518,380/$84,625

－－ 81

(b)Unfinished construction contracts with related parties as of December 31, 2018 were as follows:

Type of related party / Name Associates Other related party： New Spring Construction Corp.	Name of construction Flue pipe installation construction Above-ground structures construction for E-Da Asia Commercial Plaza, etc.	Total contract price $8,975 $3,430,491 (Note)	contract assets / liabilities
			$2,856/ $- $35,563/$56,245

(Note) As stated in Note 7.3.1.(e), where the Group contracts from and subcontracts 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.

Where the Group participated in the cash offering by related parties and consequently increased its investment are disclosed as follows:

2019:

2019:
Investee Associate： E-Da Development Crop. E-Da Bus Transportation Co., Ltd. E-DA Tour Bus Co., Ltd. 2018: Investee Associate： Eliter International Corp. E-Da Development Crop.	Investment Increase Shares (thousand shares) Amount 27,507 275,073 1,367 13,669 1,140 11,400 Investment Increase Shares (thousand shares) Amount 26,133 261,338 34,384 343,841	Shareholding Percentage Before Offering After Offering 34.38% 34.38% 17.09% 17.09% 19.00% 19.00% Shareholding Percentage Before Offering After Offering (Note) (Note) (Note) (Note)
	Shares (thousand shares) 26,133 34,384	Before Offering (Note) (Note)

(Note) Subscription to associates’ preferred stock and listed as financial assets at fair value through profit or loss.

－－ 82

7.4 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	Year Ended December 31	Year Ended December 31
	2019 $91,537 1,578 - - - $93,115	2018
		$96,247 1,221 - - -
		$97,468

8. PLEDGED ASSETS

The following assets have been pledged as collateral for long-term and short-term loans:

Item
Pledged demand deposits
Pledged time deposits
Subtotal of other financial assets - current
Pledged demand deposits
Pledged time deposits
Subtotal of other financial assets - noncurrent
Property, plant and equipment (net)
Non-current assets held for sale
Right-of-use asset
Long-term prepaid rent - land-use right
(including current portion)
Investment properties
Investments accounted for using equity
method
Notes receivable and accounts receivable
Total

December 31
2019
2018
$741,017
$485,078
638,232
596,776
$1,379,249
$1,081,854
$130,202
$67,590
402,625
46,875
$532,827
$114,465
$24,934,945
$21,055,755
23,342
207,097
57,975
-
-
62,176
502,790
657,514
1,415,693
1,374,566
176,523
79,170
$29,023,344
$24,632,597

2019
$741,017
638,232
$1,379,249
$130,202
402,625
$532,827
$24,934,945
23,342
57,975
-
502,790
1,415,693
176,523
$29,023,344

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Guarantee notes issued by the Group to banks for loans and purchases performance totaled $49,635,722 thousand, $50,099,480 thousand as of December 31, 2019 and 2018, respectively.
(2) Guarantee notes receired by the Group for its contract performance and creditor’s right totaled $187,662 thousand, $431,820 thousand, as of December 31, 2019 and 2018, respectively.

－－ 83

(3) The unused letters of credit as of December 31, 2019, and 2018 are as follows:

Item L/C Amount	December 31	December 31
	2019 USD 19,634 NTD 708,194 JPY 4,679	2018
		USD 22,658 NTD 806,684 JPY 13,180

(4) As of December 31, 2019 and 2018, guarantees provided to banks by the Group for performance and warranty amounted to $134,679 thousand, and $212,161 thousand, respectively.
(5) As of December 31, 2019 and 2018, guarantee letters of credit issued by the Group for export business totaled USD13,400 thousand, and USD9,100 thousand, respectively.
(6) The Group entered into raw material purchase agreements with suppliers of billets, including MUKAND, EAST, and OUTO KUMPU. The price was agreed on by both parties upon negotiation. As of December 31, 2019, the unperformed portion totaled 11,412 tons, amounting to $152,552 thousand.
(7) Capital expenditures committed but not yet incurred are as follows:

Item Property, plant and equipment	December 31 2019 2018 $3,619,656 $4,097,733
	2019 $3,619,656

(8) Establishment of important construction contracts
(a) As of December 31, 2019, estimated total contract costs, contract costs paid, and expected completion dates 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
Construction and installation of 40T*42M tracked overhead container crane for China Container Transport at pier 10 and 11 of Taichung Harbor	202,300 205,019	204,853 99.92%	Year 2020 (2,716)
Manufacture and installation of overhead cranes sized 300t(150t+150t)*43m for the Wind Power Department of Century Iron and Steel Industrial Co., Ltd.	205,000 200,458	156,173 77.91%	Year 2020 3,539
6 40T-gantry cranes for storage in the rear area at Wharf No. 120 of Kaohsiung Harbor	311,100 260,717	259,208 99.42%	Year 2020 50,091
Construction of phase 1 Pangu buildings by Greaten Construction Co., Ltd.	220,807 224,596	185,857 82.75%	Year 2020 (3,789)
Manufacturing and installation of 13 overhead cranes, their steel tracks and safety electric bus-way for GMTC steel furnace plant at Liuying	313,600 312,494	227,278 72.73%	Year 2020 804

－－ 84

YKK Taiwan's Chungli Plant No.2 construction project by Chung Lu Construction	341,610 335,419	317,844 94.76%	Year 2020 5,867
Development project phase 1 of district C of the core area of Shalun Smart Green Energy Science City by Reiju Construction	261,804 260,244	247,754 95.20%	Year 2020 1,485
Steel structure engineering construction of E-Da Empire Buildings by New Spring Construction Corp.	1,320,433 1,280,441	779,886 60.91%	Year 2020 24,358
New Construction of New Crystal Section of Tainan City for Dongpu Construction	203,675 200,918	45,632 22.71%	Year 2020 626
Manufacturing and installation of 14 overhead cranes, and safety electric bus-way for CSBC Corporation Taiwan	170,567 165,017	18,659 11.31%	Year 2020 628

(b) As of December 31, 2018, estimated total contract costs, contract costs paid, and expected completion dates 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
Construction of international multi-purpose business building with Hwa Xung Kee Ta	217,362 217,428	213,628 98.25%	Year 2019 (66)
Construction and installation of 40T*42M tracked overhead container crane for China Container Transport at pier 10 and 11 of Taichung Harbor	202,300 203,114	199,082 98.01%	Year 2019 (814)
Construction of E-Da Empire Buildings by New Spring Construction Corp.	154,688 142,907	129,517 90.63%	Year 2019 10,678
Manufacture and installation of overhead cranes sized 300t(150t+150t)*43m for the Wind Power Department of Century Iron and Steel Industrial Co., Ltd.	205,000 201,019	19,217 9.56%	Year 2019 381
6 40T-gantry cranes for storage in the rear area at Wharf No. 120 of Kaohsiung Harbor	311,100 260,717	258,917 99.31%	Year 2019 50,035
Construction of phase 1 Pangu buildings by Greaten Construction Co., Ltd.	220,806 224,596	138,606 61.71%	Year 2019 (3,790)
Manufacturing and installation of 13 overhead cranes, their steel tracks and safety electric bus-way for GMTC steel furnace plant at Liuying	313,600 312,494	147,495 47.20%	Year 2019 522

－－ 85

YKK Taiwan's Chungli Plant No.2 construction project by Chung Lu Construction	331,610 331,262	281,545 84.99%	Year 2019 296
Development project phase 1 of district C of the core area of Shalun Smart Green Energy Science City by Reiju Construction	259,065 257,640	153,812 59.70%	Year 2019 851
Steel structure engineering Construction of E-Da Empire Buildings by New Spring Construction Corp.	1,320,433 1,280,441	85,104 6.65%	Year 2020 2,659

(9) Great Emperor Hotel Co., Ltd. and Kings Garden International Co., Ltd., two subsidiaries, entered into the syndicated loan agreements with Land Bank of Taiwan and First Commercial Bank in August 2014. Yieh United Steel Corp., Yieh Phui Enterprise Co., Ltd., and Yieh Hsing Enterprise Co., Ltd. issued a commitment letter before the first use that the Company and its related parties shall jointly hold more than 50% of Kings Garden International Co., Ltd. and Great Emperor Hotel Co., Ltd.’s issued shares and gain the majority of directors' seats at all times. The Group held 100% of Kings Garden International Co., Ltd. and Great Emperor Hotel Co., Ltd. and acquired all directors' seats of both companies as of December 31, 2019.
(10) In November, 2019, the Group sold part of Land in Pingbei Section, Jiadong Township, Pingtung County. The total contract price is $76,344 thousand, from which the expected disposal gain of $53,022 thousand is derived. The above-mentioned transaction price is determined by both parties upon negotiation. As of December 31, 2019, contract deposits of $7,630 thousand have been collected. The ownership transfer will be completed in accordance with the scheduled payment terms as stipulated in the contracts.

10. SIGNIFICANT DISASTER LOSS

The Group’s Rolling Plant No. 3 was caught on fire in April 2018, resulting in damage of part of the equipment therein. The carrying amount of the damaged equipment was $85,048 thousand. Aside from recognizing deductible for fire loss of $7,000 thousand , an insurance claim receivable for the damaged part in the amount of $78,048 thousand was also recognized in December 31, 2018. The Group has obtained $150,000 thousand in insurance claim in 2019. After offsetting the insurance claim receivable, $71,952 thousand is recorded as “other income”.

11. SIGNIFICANT SUBSEQUENT EVENTS

(1) The Company's Board of Directors resolved on March 13, 2020 to repurchase 100,000 shares in the concentrated market from March 16 to May 15, 2020 at a price of $8 to $9.5 per share. The number of shares repurchased by the Company as of March 17, 2020 is zero.
(2) Sun company Kings Garden International Co., Ltd.( Originally acquired by the subsidiary Yieh Hsing Enterprise Co., Ltd for 50.71% shareholding, which was control obtained.) On February 24, 2020, the Board of Directors resolved to raise working capital by issuing 7,000 thousand shares of common stock at a cash issue price of $10.3 per share, and the total amount of funds raised was $ 72,100

－－ 86

thousand. The capital increase base date is set on March 11, 2020. The Company intends to fully subscribe the shares. After the subscription, the Company's shareholding will increase from 49.28% to 50.12%. Yieh Hsing Enterprise Co., Ltd's shareholding will be reduced from 50.71% to 49.87%, The Company thus obtained control over such company.

12. OTHERS

(1) 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.

(2) Financial Instruments

1. Financial risk of financial instruments

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

A. Market risks

(A)Foreign exchange rate risk

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, RMB, USD, and IDR. 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 .Those derivative financial instruments can diminish but not completely eliminate the impacts of changes in exchange rate. As net investments in foreign operations are for strategic purposes, they are not hedged by the Group.

－－ 87

a. Exchange rate exposure and sensitivity analysis

Exchange rate		December 31, 2019	December 31, 2019	December 31, 2019
	Presented amount (New Taiwan Dollars) 1,446,787 736,427 145,181 101,641 741,614 3,608,632 144,977	Sensitivity Analysis
		December 31, 2018 Range of change Effects on profitor loss Up 1% 14,468 Up 1% 7,364 Up 1% 1,452 Up 1% 1,016 Up 1% - Up 1% (36,086) Up 1% (1,450)		Effects on Equity
Exchange rate 29.98 6.9762 1.1203 13,924.50 29.98 6.9762 7.8155				- - - 7,416 - -
	Presented amount (New Taiwan Dollars) 1,574,508 1,625,178 147,216 742,578 447,195 5,069,332 107,895	Sensitivity Analysis
		Range of change Up 1% Up 1% Up 1% Up 1% Up 1% Up 1% Up 1%	Effects on profitor loss 15,745 16,252 1,472 - (4,472) (50,693) (1,079)	Effects on Equity
30.715 6.8632 0.1457 30.715 30.715 6.8632 7.865				- - - 7,426 - -

If NTD appreciates against the above-mentioned currencies, held all other variables constant, the impact generated as of December 31, 2019 and 2018 would stay the same with the 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

－－ 88

can not be fully written off.

b. Due to the exchange rate volatility, total exchange gains and losses (including realized and unrealized) from the Group’s monetary items amounted to ($71,202) thousand and ($79,757) thousand for the years ended December 31, 2019 and 2018, respectively.

(B) Price risk

Since the Group’s investment in securities is classified as financial assets at FVTPL or financial assets at FVTOCI on the consolidated balance sheet, the Group does not expose to price risks of securities. The Group mainly invests in domestic listed and unlisted stocks and beneficiary certificates. The price of such securities can be affected by changes in future value of those investment targets.

If the security price goes up or down by 1%, the post-tax profit or loss for the year 2019 and 2018 will increase or decrease by $7,098 thousand and $12,949 thousand due to the increase or decrease of the fair value of financial assets measured at FVTPL. The post-tax other comprehensive income for the year 2019 and 2018 will increase or decrease by $7,099 thousand and $7,151 thousand due to the increase or decrease of the fair value of financial assets measured at FVTOCI.

(C) Interest rate risk

The carrying amount of the Group’s financial assets and financial liabilities that are exposed to interest rate risk at the reporting date is stated as follows:

follows:
Item With fair value interest rate risk Financial assets Financial liabilities Net With cash flow interest rate risk Financial assets Financial liabilities Net	Carrying Amount
	December31,2019 $1,385,094 (1,020,554) 364,540 $5,523,436 (49,966,792) ($44,443,356)	December31,2018
		$3,086,190 (837,598)
		2,248,592
		$4,186,186 (50,079,544)
		($45,893,358)

a. Sensitivity analysis of those with fair value interest rate risk:

Starting from 2018, the Group classifies its investment in preferred stocks with fixed income as financial assets measured at FVTPL. Fair value of such preferred stock investment changes in line with the interest rate changes in the market. If the market interest rate goes up 1% and other variables are held constant, the profit or loss for the year 2019 and 2018 will increase or decrease by $8,101 thousand and $30,566 thousand, respectively.

b. Sensitivity analysis of those with cash flow interest rate risk:

The interest-fluctuate instruments possessed by the Group were floatinginterest assets (liabilities). Therefore the effective interest rate, as well as

－－ 89

the future cash flows, changes along with the market movement. Every one percent reduce (increase) in the market interest will increase (decrease) the net profit by ($444,434) thousand and ($458,934) thousand for the years 2019 and 2018, respectively.

B.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.

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.

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 counterparties are creditworthy and investment-graded financial institutions, companies and government agencies without any significant default concerns. In addition, the Group does not have any debt instrument investments that are either measured at amortized cost, or at FVTOCI.

(A) Credit concentration risk

As of December 31, 2019 and 2018, the top ten clients accounted for 45.14% and 42.60% of the Group’s accounts receivable, indicating a credit concentration risk. However, no significant credit concentration risk was shown from the remaining accounts receivables.

(B) Measurement of expected credit impairment loss
a. Accounts receivables and contract assets apply the simplified approach. Please refer to Note 6.4. for details.
b. Indications for determining whether the credit risk is increased significantly: None (the Group does not have any debt instrument investments that are either measured at amortized cost, or at FVTOCI).
c. Collaterals and other credit enhancement held 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 sheets, pledged collateral, master netting arrangements and other credit enhancement held by the Group:

－－ 90

Decreased	amount of maximum exposure to credit risks	amount of maximum exposure to credit risks	amount of maximum exposure to credit risks
Collateral $- - - $- Decreased	Net Settlement Agreement Other Credit Enhancement Total $- $- $- - - - - - - $- $- $- amount of maximum exposure to credit risks		Total
			$-
			- -
			$-
Collateral $- - - $-	Net Settlement Agreement $- - - $-	Other Credit Enhancement $- - - $-	Total
			$-
			- -
			$-

C.Liquidity risk

(A) Overview

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:

－－ 91

Non-derivative financial Liabilities			December 12, 2019	December 12, 2019	December 12, 2019
	Within 6 months	7-12 months	1-2 years	2-5 years	Over 5 years	Contractual cash flows $ 15,597,746 934,000 799,965 1,188,827 1,651,603 107,319 34,478,493 17,533 $54,775,486	Carrying amount
Short-term loans Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liabilities (including current) Long-term loans (including current portion) Guarantee deposits Received Subtotal	$ 13,978,543 934,000 799,785 1,188,827 1,651,603 5,766 3,223,243 2,026	$1,619,203 - 180 - - 3,310 3,151,262 1,845	$ - - - - - 9,279 8,168,322 559	$ - - - - - 26,621 12,699,886 9,972	$ - - - - - 62,343 7,235,780 3,131		$ 15,597,746 931,272 799,965 1,188,827 1,651,603 89,282 34,369,046 17,533
	$21,783,793	$4,775,800	$8,178,160	$12,736,479	$7,301,254		$54,645,274

Further information on lease liability maturity analysis is as follows:

Lease liabilities Non-derivative financial Liabilities	Less than 1 year	1-5 years $35,900	5-10 years	10-15 years $12,278	15-20 years	Over 20 years $19,397	Total undiscounted lease payments
	$ 9,076		$18,390		$12,278		$107,319
			December 12, 2018
	Within 6 months	7-12 months	1-2 years	2-5 years	Over 5 years	Contractual cash flows $ 16,001,636 840,000 1,156,449 1,245,748 1,557,229 34,186,935 14,749 $55,002,746 $7,437	Carrying amount
Short-term loans Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term loans (including current portion) Guarantee deposits Received Subtotal Derivative financial liabilities Cross currency swap contracts	$ 13,646,952 840,000 1,156,399 1,245,748 1,556,360 1,224,421 134	$2,354,684 - 50 - 869 2,972,618 603	$ - - - - - 12,167,904 284	$ - - - - - 12,774,314 11,728	$ - - - - - 5,047,678 2,000		$ 16,001,636 837,598 1,156,449 1,245,748 1,557,229 34,077,908 14,749
	$19,670,014	$5,328,824	$12,168,188	$12,786,042	$5,049,678		$54,891,317
	$7,437	$-	$-	$-	$-		$7,437

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.

－－ 92

2. Types of Financial instruments

Financial assets Financial assets measured at amortized cost Cash and cash equivalents Notes receivables and accounts receivables (including related parties) Other receivables(including related parties) Other financial assets - current Refundable deposits Other financial assets - noncurrent Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - noncurrent Financial assets at fair value through other comprehensive income or loss - noncurrent Financial liabilities Financial liabilities measured at amortized costs Short-term loans Short-term notes and bills payable Notes receivables and accounts payable (including related parties) Other payables (including related parties) Long-term loans (including current portion) Guarantee deposits Lease liabilities (including due within one year) Financial liabilities at fair value through profit or loss - current	December 31	December 31
	2019 $5,023,717 3,318,115 193,409 1,405,930 925,853 532,827 428,279 289,289 709,886 15,597,746 931,272 1,988,792 1,651,603 34,369,046 17,533 89,282 -	2018
		$5,522,926 4,807,282 274,801 1,109,111 1,350,617 114,465 285,944 1,011,252 715,117 16,001,636 837,598 2,402,198 1,557,229 34,077,908 14,749 - 7,437

(3) Fair Value Information:

For information on fair value of financial assets and financial liabilities not measured at fair value, please refer to Note 12(3)3.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 6.11
Definition of the three levels in fair value:

Level 1:

Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, beneficiary certificates, onthe-run Taiwan central government bonds and derivative instruments with quoted market prices is included in Level 1.

－－ 93

Level 2

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 Company’s investment in off-the-run government bonds, corporate bonds, bank debentures, convertible bonds and most derivative instruments is included in Level 2.

Level 3

Unobservable inputs for the asset or liability. The fair value of the Group’s investment in certain derivative instruments, equity investment without active market and investment property is included in Level 3.

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, lease liabilities (including current and noncurrent), long-term loans (including current portion), and guarantee deposits received, is the reasonable approximation of their fair value.

4. Fair value hierarchy:

The fair value hierarchy of financial instrument is measured at fair value on a recurring basis. Information about the Group’s fair value hierarchy is disclosed in the following table:

in the following table:
Item Assets: Recurring fair value Financial assets at fair value through profit or loss Non-derivative financial assets held for trading Domestic unlisted stocks Derivative financial instruments Financial assets measured at FVTOCI Domestic unlisted stocks Domestic listed stocks Total		December 31, 2019
	Level 1 $43,769 - - - 33,885 $77,654	Level 2 $10,004 - 7,755 - - $17,759	Level 3 $- 656,040 - 676,001 - $1,332,041	Total
				$53,773 656,040 7,755 676,001 33,885
				$1,427,454

－－ 94

	December 31, 2018	December 31, 2018
Level 1 $63,093 - - - 31,050 $94,143 $-	Level 2 $10,016 - 2,311 - - $12,327 $7,437	Level 3 $- 1,221,776 - 684,067 - $1,905,843 $-	Total
			$73,109 1,221,776 2,311 684,067 31,050
			$2,012,313
			$7,437

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) Except for financial assets with an active market, the fair value of other financial assets is obtained either based on the valuation technique or by reference to the quotes from counter-parties. Fair value can be obtained by using a valuation technique that refers to the fair value of financial instruments having substantially the same terms and characteristics, the discounted cash flow method, or other valuation technique e.g. the one that applies market information available on the balance sheet date to a pricing model for calculation.

－－ 95

The fair value of the Group’s holding of unlisted stocks for which no active market exists is estimated by using the market approach, which refers to the valuation of similar entities, quoted prices from a third party, the net worth of an entity and the operating performance. In addition, the significant unobservable inputs mainly comprise liquidity discount, in which the possible changes would not result in a potentially material financial effect. Therefore, the Group does not disclose the quantitative information.

(3) 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.
(4) Valuation of derivative financial instruments adopts valuation models that are commonly used by marketparticipants, e.g. discounted cash flows method and option pricing model.
(5) Outputs from the valuation models are estimates and valuation techniques may not be able to reflect all relevant factors of the financial and nonfinancial 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 individual balance sheet. Every price data and parameters used in the valuation is reviewed thoroughly and adjusted for current market conditions.
(6) 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 counter-party 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:

Item January 1, 2019 Additions Special shares recovered Proceeds from capital reduction Recognized in profit and loss Recognized in other comprehensive income December 31, 2019	Investment in unquoted financial instruments
	$1,905,843 15,000 (550,145) (4,234) (15,590) (18,833)
	$1,332,041

－－ 96

Item January 1, 2018 Adjustment due to retrospective application of IFRS 9 Additions Proceeds from capital reduction Recognized in profit and loss Recognized in other comprehensive income December 31, 2018	Investment in unquoted financial instruments
	$- 1,253,273 605,179 (2,352) 30,641 19,102
	$1,905,843

Valuation process for Level 3 fair value measurement: Valuation process regarding fair value Level 3 is conducted by the Group’s finance department, by which the independence of fair value of financial instruments is verified though use of independent data source in order to make the valuation results close to market conditions. Such valuation results are regularly reviewed so as to ensure their reasonableness.

(4) Transfer of financial assets:

Transferred financial assets fully derecognized

The Group entered into accounts receivable factoring agreement with Chang Hwa Bank. According to the contract, the Group does not bear the risk of default over the transferred accounts receivables but only the loss from trade disputes. As the Group did not have any continued participation over those transferred accounts receivables, they were derecognized from the accounts. Information on outstanding receivables is as follows:

December 31, 2019 ：

Counter-party Chang Hwa Bank	Factoring Amount 27,884 (EUR 829)	Amount Collected in Cash -	Advance Amount - End of the Period 25,096 (EUR 746)	Annual Interest Rate for the Advance Amount 1.16464%	Line of Credit
					EUR 3,200

December 31, 2018 ： None.

Transferred financial assets not fully derecognized: None

(5) Offsetting financial assets and financial liabilities: None.

－－ 97

13. SUPPLEMENTARY DISCLOSURES

A. Significant transactions information
(a) Loans to others: Please see Table 1 attached;
(b) Endorsements and guarantees provided to others: Please see Table 2 attached;
(c) Marketable securities held (excluding investments in subsidiaries and associates) at the end of the period: Please see Table 3 attached;
(d) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Please see Table 4 attached;
(e) Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: Please see Table 5 attached;
(f) Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: Please see Table 6 attached;
(g) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Please see Table 7 attached;
(h) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 8 attached;
(i) Information about the derivative financial instruments transaction: Please see Note 6.2. for details;
(j) The business relationship between the parent and the subsidiaries and significant transactions between them: Please see Table 9 attached;
B. Information on investees : Please see Table 10 attached.
C. Information on investment in mainland China : Please see Table 11 attached.

－－ 98

TABLE 1

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Loans to Others For The Year Ended December 31, 2019

Unit: Thousands of NT Dollar/ Foreign Currency

No.	Creditor	Borrower	General ledger account	Related party	Maximum outstanding balance for the period	Ending balance	Amount actually drawn	Interest rate	Nature of loan	Transaction amount	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party	Ceiling on total loans granted
													Item	Value
1	Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	Long-term receivable – related party and Other receivables - relatedparty	Y	4,622,096 (RMB222,880) (USD109,570) (EUR 4,300)	2,681,625 (RMB 20,160) (USD 81,740) (EUR 4,300)	2,681,625 (RMB 20,160) (USD 81,740) (EUR 4,300)	2.00%- 8.09267%	2	－	Operating capital	－	－	－	10,340,092 (Note 3)	10,340,092 (Note 3)
2	Yieh Phui (China) Technomaterial Co.,Ltd.	Tianjin Lianfa Precision Steel Corporation	Long-term receivable – relatedparty	Y	114,888 (RMB 25,000)	107,438 (RMB 25,000)	107,438 (RMB 25,000)	4.00%	2	－	Operating capital	－	－	－	10,340,092 (Note 3)	10,340,092 (Note 3)
3	Good Honor Holdings Ltd.	Yieh Phui (Hong Kong) Holdings Limited	Long-term receivable – relatedparty	Y	142,200 (USD 4,500)	134,910 (USD 4,500)	134,910 (USD 4,500)	0%- 4.15%	2	－	Operating capital	－	－	－	10,340,092 (Note 3)	10,340,092 (Note 3)
4	Lian So (H.K) Co., Limited	Lian Yang (Hong Kong) Trading Limited	Other receivables - relatedparty	Y	142,200 (USD 4,500)	－	－	－	2	－	Operating capital	－	－	－	179,777 (Note 2)	179,777 (Note 1)
5	Champion Logistic Inc.	Yieh Phui (Hong Kong) Holdings Limited	Other receivables - relatedparty	Y	528,530 (USD 17,000)	－	－	4.00%	2	－	Operating capital	－	－	－	10,340,092 (Note 3)	10,340,092 (Note 3)
6	Shin Yang Steel Co., Ltd.	Yieh Phui (Hong Kong) Holdings Limited	Other receivables - relatedparty	Y	376,680	－	－	4.00%	2	－	Operating capital	－	－	－	366,299 (Note 2)	366,299 (Note 1)
7	Lian Yang (Hong Kong) Trading Limited	Yieh Phui (Hong Kong) Holdings Limited	Other receivables - relatedparty	Y	40,807 (USD 1,300)	－	－	4.00%	2	－	Operating capital	－	－	－	5,987 (Note 2)	5,987 (Note 1)
8	Applied Wireless Identifications Group, Inc.	Yieh Phui (Hong Kong) Holdings Limited	Other receivables - relatedparty	Y	69,058 (USD 2,200)	65,956 (USD 2,200)	65,956 (USD 2,200)	4.00%	2	－	Operating capital	－	－	－	85,458 (Note 2)	85,458 (Note 1)

－－ 99

(Note 1) The maximum amount of total loans to othjers 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 entities 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) Nature of loans is classified as follows: Entities having business relations with the Company is ‘1’; entities with needs for short-term financing is ‘2’.

(Note 5) Transactions between the aforesaid subsidiaries and the parent company have been written off.

－－ 100

TABLE 2

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Endorsements and Guarantees Provided to Others For The Year Ended December 31, 2019

Unit: Thousands of NT Dollar/ Foreign Currency

No.	Endorser/ guarantor	Party being endorsed/guaranteed	Party being endorsed/guaranteed	Limit on endorsement/ guarantees provided for a single party	Maximum balance for the period	Ending balance	Amount actually drawn	Amount of endorsement/ guarantees collateralized by properties	Ratio of accumulated endorsement/ guarantee to net equity per latest financial statement	Maximum endorsement/ guarantee allowable	Guarantee provided by parent company to subsidiary	Guarantee provided by a subsidiary to parent company	Guarantee provided to subsidiaries in Mainland China
		Company name	Relationship with the endorser/ guarantor
0	Yieh Phui Enterprise Co., Ltd. (Note 1)	Yieh Phui (China) Technomaterial Co., Ltd.	Investee of the Company’s Sub-subsidiary	25,850,231	6,835,806 (RMB 1,487,500)	6,392,531 (RMB 1,487,500)	2,296,477 (RMB 534,375)	－	24.73%	25,850,231	Y	－	Y
		Shin Yang Steel Co., Ltd.	Subsidiary of the Company	25,850,231	1,536,000	1,236,000	870,799	336,000	4.78%	25,850,231	Y	－	－
		Yieh Phui (Hong Kong) Holdings Limited	Subsidiary of the Company	25,850,231	4,645,200 (USD 147,000)	4,407,060 (USD 147,000)	2,832,176 (USD 84,630) (RMB 20,160) (EUR 4,300)	－	17.05%	25,850,231	Y	－	－
1	Shin Phui Steel Corporation (Note 2)	Yieh Phui Enterprise Co., Ltd.	Parent company of the company	1,081,496	942,230	942,230	942,230	942,230	435.61%	1,081,496	－	Y	－
2	Kings Garden International Co., Ltd.(Note 3)	Great Emperor Hotel Co., Ltd.	(Note 9)	28,919,925	7,186,000	7,186,000	5,465,000	7,186,000	173.94%	28,919,925	－	－	－
3	Great Emperor Hotel Co., Ltd. (Note 4)	Kingsgarden International Co., Ltd.	(Note 9)	25,643,265	7,413,000	7,413,000	5,904,000	7,413,000	202.36%	25,643,265	－	－	－
4	Shin Yang Steel Co., Ltd.(Note 6)	Yieh Phui Enterprise Co., Ltd.	Parent company of the company	2,747,239	900,000	900,000	560,000	900,000	98.28%	2,747,239	－	Y	－
5	Yieh Phui (China) Technomaterial Co.,Ltd.(Note 5)	Tianjin Lianfa Precision Steel Corporation	Subsidiary of the Company	8,416,022	78,124 (RMB 17,000)	42,674 (RMB 9,930)	42,674 (RMB 9,930)	－	0.51%	8,416,022	Y	－	Y
6	Champion Logistic Inc. (Note 7)	Yieh Phui (Hong Kong) Holdings Limited	The same ultimate parent company	460,644 (USD 15,365)	505,600 (USD 16,000)	479,680 (USD 16,000)	151,734 (USD 5,061)	430,761 (USD 14,368)	104.13%	460,644 (USD 15,365)	－	－	－

－－ 101

(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 the 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 the endorsement/guarantee provided by Shin Phui to a single entity.
(Note 3):The maximum amount of endorsement/guarantee provided by Kings Garden International Co., Ltd. shall not exceed 7 times of Kings Garden’s net worth. The same limit applies to the endorsement/guarantee provided by Kings Garden 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 the 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 the endorsement/guarantee provided by Shin Yang to a single entity.
(Note 7): The maximum amount of endorsement/guarantee provided by Champion Logistic Inc. shall not exceed 100% of its net worth; the same limit applies to the endorsement/guarantee provided by Champion Logistic Inc. to a single entity.

(Note 8): The net worth referred to above is based on the latest financial statements audited or reviewed by independent auditors.

(Note 9): Mutually guaranteed companies based on the need of construction contract.

－－ 102

TABLE 3

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Marketable securities held at the end of the period (not including subsidiaries, associates and joint ventures) For The Year Ended December 31, 2019

Unit: Thousands of NT Dollar/ Foreign Currency

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2019	As of December 31, 2019	As of December 31, 2019
				Shares (in thousands)	Carrying value	Ownership (%)	Fair value
Yieh Phui Enterprise Co., Ltd.	Fund/ Schroder 2023 Maturity Asian Emerging Bond Fund	None	Financial assets at fair value through profit or loss - current	25	7,564	－	7,564
	Fund/ Capital Global Financial Bond Fund	None	Financial assets at fair value through profit or loss - current	300	2,986	－	2,986
	Fund/ Fubon 3-Year Maturity Asia USD Bond Fund	None	Financial assets at fair value through profit or loss - current	500	4,903	－	4,903
	Fund/ NN (L) Emerging Markets Debt (Hard Currency)	None	Financial assets at fair value through profit or loss - current	0.3	3,007	－	3,007
	Fund/FSITC Global Wealthy Nations Bond Fund	None	Financial assets at fair value through profit or loss - current	500	5,001	－	5,001
	Preferred stock/ Eliter International Corp.- Preferred stock D	An investee accounted for usingequitymethod	Financial assets at fair value through profit or loss - current	26,275	284,110	－	284,110
		Total			307,571		307,571
	Financial bonds/ Bank of Panhsin Sinsing Branch – 2014 First term subordinated financial bonds	None	Financial assets at fair value through profit or loss - noncurrent	10,000	10,004	－	10,004
	Preferred stock/ Eliter International Corp.- Preferred stock E	An investee accounted for usingequitymethod	Financial assets at fair value through profit or loss - noncurrent	19,706	210,573	－	210,573
		Total			220,577	－	220,577

－－ 103

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Shares (in thousands)	Carrying value	Ownership (%)	Fair value
Yieh Phui Enterprise Co., Ltd.	Stock/ TaiwanVes-Power Co., Ltd.	Related party in substance	Financial assets at fair value through other comprehensive income or loss - noncurrent	1,800	50,618	3.60%	50,618
	Stock/ New Spring Construction Corp.	Related party in substance	Financial assets at fair value through other comprehensive income or loss - noncurrent	15,187	116,234	15.49%	116,234
	Stock/ Ascentke Venture Capital Corp.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	1,693	17,155	6.42%	17,155
	Stock/ Taiwan Implant Technology Company, Ltd.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	701	5,569	4.20%	5,569
	Stock/ Sunny Bank	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	4,367	41,042	0.17%	41,042
	Stock/ Universal Venture Capital Investment Co., Ltd.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	1,100	6,674	0.91%	6,674
	Stock/ Yieh Corporation Limited	Related party in substance	Financial assets at fair value through other comprehensive income or loss - noncurrent	200	94,155	4.82%	94,155
	Stock/ Pacific Harbor Stevedoring Corporation	Director of the entity is the Company’s director	Financial assets at fair value through other comprehensive income or loss - noncurrent	150	5,481	3.00%	5,481
	Stock/ ImageDJ Software Corp.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	24	535	0.96%	535
	Stock/ Chao-Feng Venture Capital Co., Ltd.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	1,000	7,398	0.79%	7,398
	Stock/ Skylark International Hotel Co.,Ltd.	Related party in substance	Financial assets at fair value through other comprehensive income or loss - noncurrent	20,528	315,349	13.68%	315,349
	Stock/ Neolink Capital Corp.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	`1,500`	`10,310`	2.41%	`10,310`
	Stock/ Asia Pacific Telecom Co., Ltd.	None	Financial assets at fair value through other comprehensive income or loss - noncurrent	`4,500`	`33,885`	－	`33,885`
		Total			704,405		704,405
Worthing Honor Holdings Ltd.	Stock/ SEE Corporation None Financial assets at fair value through profit	None	Financial assets at fair value through profit or loss - current	1	－	－	－
EMMT Systems Corporation	Stock/ Rodan (Taiwan) Ltd.	None	Financial assets at fair value through other comprehensive income - noncurrent	17	－	0.73%	－
Kuo Chang Enterprise Co., Ltd.	Preferred stock/ Eliter International Corp.- Preferred stock D	An investee of the Parent Company under equity method.	Financial assets at fair value through profit or loss - current	1,997	21,592	－	21,592
	Preferred stock/ Eliter International Corp.- Preferred stock E	An investee of the Parent Company under equity method.	Financial assets at fair value through profit or loss - noncurrent	1,498	16,014	－	16,014

－－ 104

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Shares (in thousands)	Carrying value	Ownership (%)	Fair value
United Brightening Development Corp.	Preferred stock/ Eliter International Corp.- Preferred stock D	An investee of the Parent Company under equity method.	Financial assets at fair value through profit or loss - current	639	6,910	－	6,910
	Preferred stock/ Eliter International Corp.- Preferred stock E	An investee of the Parent Company under equity method.	Financial assets at fair value through profit or loss - noncurrent	479	5,124	－	5,124
Yieh Hsing Enterprise Co., Ltd	Fund/ SinoPac CSI 300 Dividend Index Fund	None	Financial assets at fair value through profit or loss - current	221	4,283	－	4,283
	Fund/ Schroder 2023 Maturity Asian Emerging Bond Fund	None	Financial assets at fair value through profit or loss - current	20	6,051	－	6,051
	Fund/ Allianz Global Investors All Seasons Harvest Fund of Bond Funds	None	Financial assets at fair value through profit or loss - current	154	2,002	－	2,002
	Fund/ Capital Global Financial Bond Fund	None	Financial assets at fair value through profit or loss - current	200	1,991	－	1,991
	Fund/ FSITC Global Wealthy Nations Bond Fund	None	Financial assets at fair value through profit or loss - current	200	2,000	－	2,000
	Fund/ Amundi TW - Emerging Markets High Yield Bond Fund	None	Financial assets at fair value through profit or loss - current	100	995	－	995
	Preferred stock/Eliter International Corp.- Preferred stock D	An investee accounted for usingequitymethod	Financial assets at fair value through profit or loss - current	5,934	64,143	－	64,143
	Total				81,465	－	81,465
	Preferred stock/Eliter International Corp.- Preferred stock E	An investee accounted for usingequitymethod	Financial assets at fair value through profit or loss - noncurrent	4,450	47,574	－	47,574
	Pacific Harbor Stevedoring Corporation	Director of the entity is the Company’s chairman	Financial assets at fair value through other comprehensive income - noncurrent	150	5,481	3.00%	5,481
Kings Garden International Co., Ltd.	Fund/ Capital Global Financial Bond Fund	None	Financial assets at fair value through profit or loss - current	300	2,986	－	2,986

－－ 105

TABLE 4

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Marketable Securities Acquired and Disposed of at Costs or Prices of at Least NT$300 Million or 20% of the Paid-in Capital For The Year Ended December 31, 2019

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Beginning balance	Beginning balance	Addition	Addition		Disposal	Disposal		Ending balance	Ending balance
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Yieh Phui Enterprise Co., Ltd.	Champion Logistic Inc.	Investments accounted for using equity method	Proceeds from Capital reduction	Subsidiary of the Company	37,000	1,165,429	－	－	24,000	－	752,438 (Note 1)	－	13,000	412,991
	Kings Garden International Co., Ltd.	Investments accounted for using equity method	Capital increase by cash	Investee of the Company’s Sub- subsidiary	142,000	1,399,854	64,000	636,204 (Note 2)	－	－	－	－	206,000	2,036,058

(Note 1):Including proceeds from capital reduction of ($777,846) thousand, gain (loss) on investments accounted for using equity method and shares of other comprehensive income of $25,744 thousand, accumulated earning/loss recognized in non-proportion to the Company’s shareholding percentage of ($336) thousand.

(Note 2):Including capital increase by cash of $659,200 thousand, income and loss on investment accounted for using equity method in the amount of ($7,682) thousand and accumulated earning/loss of ($15,314) thousand recognized due to the failure to subscribe to new shares in proportion to its shareholding percentage.

－－ 106

TABLE 5

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Acquisition of individual Real Estate Properties at Costs of At Least NT$300 Million or 20% of the Paid-in Capital For The Year Ended December 31, 2019

==> picture [773 x 251] intentionally omitted <==

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

Prior transaction of related counterparty
Relationship
Company Transaction Transaction Payment with the Transfer Purpose of Other
name Real estate date amount terms Counterparty seller Owner Relationship Date Amount Price reference acquisition terms
To build a
Kings Garden Determined at boutique
International 5,399,904 4,561,463 prices agreed shopping
Co., Ltd. New Spring Construction
on by both mall
Corp., Taiwan Cement
Related party parties upon
Corporation, Yieh Hsing
Construction January 28, Enterprise Co., Ltd. and in substance, negotiation or
of commercial building at November 2014 ~ Yieh Phui Enterprise Co., Ltd. Union Engineering Parent company, ultimate －－－－ through price comparison with reference None
E-da Asia Plaza Co., Ltd. Teco Electric &
29, 2019 parent to appraisal
Machinery Co., Ltd.,
Great Hsin.Kao Gas Co,. Ltd. etc. company reports issued by professional For development
Emperor 5,917,200 4,163,484 appraisal of an
Hotel Co., institutions
international
Ltd.
hotel
----- End of picture text -----

Note: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

－－ 107

TABLE 6

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Disposal of Individual Real Estate Properties at Prices of at Least NT$300 Million or 20% of the Paid-in Capital For The Year Ended December 31, 2019

								Unit: Thousands of NT Dollars/ForeignCurrency	Unit: Thousands of NT Dollars/ForeignCurrency	Unit: Thousands of NT Dollars/ForeignCurrency	Unit: Thousands of NT Dollars/ForeignCurrency
Real estate disposed by	Real estate	Transaction date or date of the event	Acquisition date	Carrying value	Transaction amount	Status of collection of proceeds	Gain (loss) on disposal	Counterparty	Relationship with the seller	Reason for disposal	Price reference	Other terms
Yieh Phui Enterprise Co., Ltd.	No.0001, 0002, Pingbei Section, Jiadong Township, No.0001- 0027, Pingnan Section, Jixiang Township, and No. 25, Pingnan Section, Minxiang Township	November 8, 2018	June 2006- May 2019	219,747	620,868 (Note 2)	Fully recovery	401,121 (Note 1)	Sanxin Industrial Co., Ltd.	－	Enrich the working capital of the company	Euro-Asia Asset Evaluation Group	None

(Note 1):. Please refer to Note 6.34

(Note 2): The amount of the contract price without tax minus the necessary fee.

－－ 108

TABLE 7

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Purchases from or Sales to Related Parties of at Least NT$100 Million or 20% of the Paid-in Capital For The Year Ended December 31, 2019

							Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency
Purchaser/ seller	Counterparty	Relationship with the counterparty		Transaction			Differences in transaction terms compared to third party transactions		Notes/accounts receivable (payable)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)	Note
Yieh Phui Enterprise Co., Ltd.	Yieh Hong Enterprise Co., Ltd.	Related party in substance	Purchases			T/T or Sight L/C before goods acceptance.	－	－	－	－	－
				996,124	4.73%

	Yieh United Steel Corporation	An investee accounted for using equity method	Purchases			T/T or Sight L/C before goods acceptance.	－	－	－	－	－
				208,746	0.99%

	Yieh Corporation Limited	Related party in substance	Sales			1-2 months	－	－	1,900	0.14%	Accounts receivable
				1,332,730	5.34%

	Asiazone Co., Limited	An investee accounted for using equity method	Sales			1-2 months	－	－	169,307	12.50%	Accounts receivable
				1,452,611	5.82%

	Shin Yang Steel Co., Ltd.	Subsidiary of the Company	Sales	893,720	3.58%	1-2 months	－	－	31,979	2.37%	Accounts receivable
			Purchases	331,794	1.58%	1-2 months	－	－	333,615	39.91%	Accounts payable
	New Spring Construction Corp.	Related party in substance	Sales	969,047	3.88%	Pursuant to the agreement	－	－	－	－	－
	Shin Phui Steel Corporation	Subsidiary of the Company	Sales	239,462	0.96%	1-2 months	－	－	31,143	2.31%	Accounts receivable

－－ 109

Purchaser/ seller	Counterparty	Relationship with the counterparty			Transaction	Transaction	Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)	Note
Yieh Phui Enterprise Co., Ltd.	Yieh United Steel Corporation	An investee accounted for using equity method	Sales	202,376	0.81%	Galvanized steel coils；payment periods were within one to two months. carbon steel: payment term is monthly, and closes in 15 days. Projectis contractually agreed	－	－	17,006	1.26%	Accounts receivable
Yieh Phui (Hong Kong) Holdings Limited	Fujian Lian Wei Logistics Co., Ltd.	Related party in substance	Sales	722,092 (USD 23,449)	34.95%	The agreed period is 3 months, but a grace period may be granted by mutual agreement.	－	－	173,026 (USD 5,771)	29.10%	Accounts receivable
	Yieh United Steel Corporation	An investee of the Parent Company under equity method.	Sales	1,344,148 (USD 43,649)	65.05%	The agreed period is 3 months, but a grace period may be granted by mutual agreement.	－	－	421,557 (USD 14,061)	70.90%	Accounts receivable
Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Subsidiaries	Sales	1,421,521 (RMB 318,103)	15.86%	1-2 months	－	－	195,011 (RMB 45,378)	42.69%	Accounts receivable
Yieh Hsing Enterprise Co., Ltd.	Yieh United Steel Corporation	An investee accounted for using equity method	Purchases	4,313,858	77.92%	T/T or Sight L/C before goods acceptance.	－	－	20,524	93.13%	Accounts payable

Note: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

－－ 110

TABLE 8

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Receivables from Related Parties Amounting to at Least NT$100 Million or 20% of the Paid-in Capital For The Year Ended December 31, 2019

					Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency	Unit: Thousands of NT Dollars/Foreign Currency
Creditor	Counterparty	Relationship with the counterparty	Ending balance	Turnover rate	Overdue	receivables	Amount collected subsequent to the end of the reporting period (Note 2)	Allowance for doubtful accounts
					Amount	Action taken
Yieh Phui Enterprise Co.,Ltd.	Asiazone Co., Limited	Affiliated enterprises	169,307	5.08	－	－	151,110	－
Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	Subsidiaries	2,681,625 (RMB 20,160) (USD 81,740) (EUR 4,300)	(Note 1)	－	－	USD 9,945	－
	Fujian Lian Wei LogisticsCo.,Ltd.	Related party in substance	173,026 (USD 5,771)	2.60	－	－	USD 5,000	－
	Yieh United Steel Corporation	An investee of the Parent Companyunder equitymethod.	421,557 (USD 14,061)	4.90	－	－	－	－
Shin Yang Steel Co.,Ltd.	Yieh Phui Enterprise Co., Ltd.	Parent company	333,615	2.00	－	－	333,615	－
Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	Subsidiaries	107,438 (RMB 25,000)	(Note 1)	－	－	－	－
			195,011 (RMB 45,378)	6.50	－	－	RMB 45,186	－
Good Honor Holdings Ltd.	Yieh Phui (Hong Kong) Holdings Limited	Subsidiaries	134,910 (USD 4,500)	(Note 1)	－	－	－	－

(Note 1): These are accounts receivable financing, on which the calculation of turnover doesn’t apply.

(Note 2): Amounts received as of March 17, 2020.

(Note 3): Transactions between the aforesaid subsidiaries and the parent company have been written off.

－－ 111

TABLE 9

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Intercompany Relationship and Significant Intercompany Transactions For The Year Ended December 31, 2019

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

Number (Note 1)	Company name	Counterparty	Relationship (Note 2)		Transaction	Transaction
				Account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0	Yieh Phui Enterprise Co., Ltd.	Shin Phui Steel Corporation	1	Sales revenue	239,462	－	`0.40%`
				Right-of-use asset	73,100	－	`0.09%`
		Shin Yang Steel Co., Ltd.	1	Sales revenue	893,720	－	`1.50%`
		Kings Garden International ~~C~~o.,Ltd. and Great Emperor Hotel Co., Ltd.	1	Sales revenue	147,277	(Note 5)	`0.25%`
				Construction-in-progress	111,655		`0.13%`
1	Shin Yang Steel Co., Ltd.	Yieh Phui Enterprise Co., ~~L~~td.	2	Sales revenue	331,794	－	`0.56%`
				Accounts receivable	333,615	－	`0.40%`
2	Yieh Phui (Hong Kong) Holdings Limited	Yieh Phui (China) Technomaterial Co., Ltd.	1	Long-term receivables	2,681,625	－	`3.20%`
					(RMB 20,160)
					(USD 81,740)
					`(EUR 4,300)`
3	Yieh Phui (China) Technomaterial Co., Ltd.	Tianjin Lianfa Precision Steel Corporation	1	Sales revenue	`1,421,521`	－	`2.38%`
					`(RMB 318,103)`
				Accounts receivable	195,011 (RMB 45,378)	－	0.23%
				Long-term receivables	107,438 (RMB 25,000)	－	0.13%

－－ 112

4	GOOD HONOR HOLDINGS LTD.	Yieh Phui (Hong Kong) Holdings Limited	3	Long-term receivables	134,910 (USD 4,500)	－	0.16%
5	APPLIED WIRELESS IDENTIFICATIONS	Yieh Phui (Hong Kong) Holdings Limited	3	Long-term receivables	65,956 (USD 2,200)	－	0.08%
6	Hong Yuh Assets Management Co.,Ltd.	Lien-Hsin steel Co., Ltd.	1	Other receivables	58,080	－	0.07%
7	Kings Garden International Co., Ltd.	Yieh Hsing Enterprise Co., Ltd.	2	Land	2,522,985	(Note 4)	3.01%
8	Great Emperor Hotel Co., Ltd.	Yieh Hsing Enterprise Co., Ltd.	2	Land	2,445,476	(Note 4)	2.92%
9	Yieh Hsing Enterprise Co., Ltd.	Kings Garden International Co.,Ltd.	1	Construction in progress	79,906	－	0.10%
		Great Emperor Hotel Co., Ltd.	1	Construction in progress	76,564	－	0.09%

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

(1) Parent company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.

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

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

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

－－ 113

Note 4: Gain from disposal of $4,968,461 thousand is derived from the proceeds of sale of $7,633,283 thousand less land value increment tax of $20,491 thousand and book value of $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: 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.

Note 6: Transactions between the aforesaid subsidiaries and the parent company have been written off.

－－ 114

TABLE 10

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Information on Investees (Excluding Information on Investment in Mainland China) For The Year Ended December 31, 2019

Unit: Thousands of NT Dollar/ Foreign Currency

						Unit: Thousands of NT	Unit: Thousands of NT	Unit: Thousands of NT	Dollar/ Foreign	Currency
Investor	Investee	Location	Main business activities	Initial investment amount		Shares held as the period-end			Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Note
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Yieh Phui Enterprise Co., Ltd.	Yieh Phui (Hong Kong) Holdings Limited	Hong Kong	Investment	7,455,887	7,455,887	233,500	100%	8,390,606	(524,935)	(524,935)
	Champion Logistic Inc.	Samoa	Investment	504,629	1,282,475	13,000	89.66%	412,991	24,497	23,249
	Eliter International Corp.	Kaohsiung City	Construction of buildings	2,833,595	2,833,595	283,584	32.84%	2,666,548	(144,372)	(47,417)
	Yieh Hsing Enterprise Co., Ltd.	Kaohsiung City	Wire rods trading	2,252,564	2,246,530	302,376	56.98%	1,207,867	(642,188)	(353,733)
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	1,453,572	1,453,572	39,553	11.30%	1,221,462	14,953	1,690
	E-Da Development Corp.	Kaohsiung City	Leisure development	2,096,196	1,868,658	209,619	28.44%	1,196,618	(294,609)	(83,794)
	United Brightening Development Corp.	Kaohsiung City	Technical consultation for steel products manufacturing	1,836,383	1,836,383	152,972	95.56%	1,587,809	(84,660)	(80,903)
	Shin Yang Steel Co., Ltd.	Kaohsiung City	Steel products related business	870,000	870,000	87,000	100%	916,528	7,048	7,830
	Yieh Mau Corp.	Kaohsiung City	Trading & manufacturing	422,605	422,605	51,124	23%	614,711	102,117	23,482
	Kuo Chang Enterprise Co., Ltd.	Kaohsiung City	Wholesale of hardware	1,287,428	1,256,726	100,487	99.04%	1,080,043	(84,580)	(83,768)
	Asiazone Co., Limited	Hong Kong	Steel trading	595,424	595,424	15,090	32.80%	649,497	35,920	11,783
	Shin Phui Steel Corporation	Kaohsiung City	Trading of steel products	185,736	295,736	20,715	100%	217,565	4,151	4,598

－－ 115

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as theperiod-end	Shares held as theperiod-end	Shares held as theperiod-end	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Yieh Phui Enterprise Co., Ltd.	Sin Bang Investment & Development Co.,Ltd.	Kaohsiung City	Investment	265,809	295,809	19,313	100%	225,720	178	178
	EMMT Systems Corporation	Taichung City	Manufacturing and marketing of military specification printed circuit boards	308,076	308,075	33,187	78.10%	432,637	97,422	76,087
	Good Honor Holdings Ltd.	British Virgin Islands	Investment	14,723	14,723	46	100%	159,972	2,805	2,805
	Gen-Wan Technology Corp.	Kaohsiung City	Telecommunication	148,610	148,609	2,814	86.99%	36,841	7,046	6,130
	Cheng Shin Security Co., Ltd.	Kaohsiung City	Security	14,000	14,000	1,400	35%	12,728	(4,414)	(1,545)
	E-Da Bus Transportation Co., Ltd.	Kaohsiung City	Bus transportation	49,755	36,086	1,845	17.09%	9,743	(50,367)	(8,606)
	E-DA Tour Bus Co., Ltd.	Kaohsiung City	Bus transportation	20,900	9,500	1,349	19%	13,377	16	3
	E-Da Cultural Creative Industry Co.,Ltd.	Kaohsiung City	Cultural creativity	－	22,800	－	－	－	(381)	(72)
	Worthing Honor Holdings Ltd.	British Virgin Islands	Investment	6,672	6,672	100	100%	2,764	13	13
	E United Japan Co., Ltd.	Japan	Steel trading	8,027	8,027	－	47%	3,861	(1,868)	(878)
	Skylark Hot Spring & Resort Corp.	Kaohsiung City	Hotel industry	11,700	11,700	1,170	14.63%	－	(1,760)	－
	E-Da Entertainment Co., Ltd.	Kaohsiung City	Entertainment industry	74,100	74,100	7,410	19%	42,837	(1,036)	(197)

－－ 116

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as theperiod-end	Shares held as theperiod-end	Shares held as theperiod-end	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Note
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Yieh Phui Enterprise Co., Ltd.	Li Hui Development Co., Ltd.	Kaohsiung City	Investment	321,216	321,216	64,045	44.56%	310,935	5,938	(826)	(Note 1)
	Ji Chang Enterprise Co., Ltd.	Kaohsiung City	Investment	5,050	5,050	1,042	45%	4,743	(6)	(63)	(Note 1)
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	4,995,078	4,923,615	671,291	25.62%	3,193,845	(3,046,907)	(781,228)	(Note 1)
	Hong Yuh Assets Management Co.,Ltd.	Kaohsiung City	Management service	1,167,200	1,064,000	119,920	80%	549,734	(135,343)	(108,274)
	E-Da Visual Effects Company Limited.	Kaohsiung City	Entertainment industry	10,393	10,393	1,470	49%	－	(12,204)	－
	Lian So(H.K) Co., Limited	Hong Kong	Investment	507,342	507,342	16,560	80%	359,554	(64,640)	(51,712)
	E-Da Health Biotechnology Co., Ltd.	Kaohsiung City	Manufacturer of food additives	3,800	3,800	380	19%	3,705	(69)	(13)
	Yieh Phui America Inc.	U.S.	Trading of steel products	292	292	1	100%	53,286	38,734	38,734
	Great Emperor Hotel Co., Ltd.	Kaohsiung City	Hotel industry	1,514,100	1,215,400	147,000	41.18%	1,453,417	(18,300)	(7,211)
	Prepayment for stock subscription - Great Emperor HotelCo.,Ltd.	Kaohsiung City	Hotel industry	133,597	－	－	－	133,597	－	－
	Kings Garden International Co., Ltd.	Kaohsiung City	Leasing, sales, and development of residential and commercial buildings, department stores	2,121,800	1,462,600	206,000	49.28%	2,036,058	(17,560)	(7,682)
	Total			33,496,259	32,881,400	－	－	29,201,599	(4,789,361)	(1,946,275)

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 income/loss is accounted for using the treasury stock approach. Thus, the income/loss of investee for the period excludes income/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company.

－－ 117

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as theperiod-end	Shares held as theperiod-end	Shares held as theperiod-end	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Note
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Shin Phui Steel Corporation	Groupco Technology Inc.	Taichung City	RADIO	37,492	37,492	3,830	42.53%	3,912	513	218
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	24,562	24,562	3,178	0.12%	14,734	(3,046,907)	(4,055)	(Note 1)
	Great Emperor Hotel Co., Ltd.	Kaohsiung City	Hotel industry	515	515	50	0.01%	494	(18,300)	(3)
	Kings Garden International Co., Ltd.	Kaohsiung City	Leasing, sales, and development of residential and commercial buildings, department stores	515	515	50	0.01%	494	(17,560)	(2)
Gen-Wan Technology Corp.	EMMT Systems Corporation	Taichung City	Manufacturing and marketing of military specification printed circuit boards	27,630	27,630	3,178	7.48%	41,429	97,422	7,286
EMMT Systems Corporation	Groupco Technology Inc.	Taichung City	RADIO	45,000	45,000	4,500	49.97%	4,597	513	256
	Applied Wireless Identifications Group,Inc.	San Francisco, US	RFID	242,545	242,545	40,488	91.47%	193,209	44,465	40,673
	UniPattern Corporation	Taipei City	Manufacturing of computer andperipherals	54,960	54,960	5,200	43.33%	52,806	3,022	1,310
Applied Wireless Identifications Group,Inc.	AWID Asia Co., Ltd.	Kaohsiung City	Telecommunications equipment wholesale	75,220 (USD 2,509)	77,070 (USD 2,509)	3,030	100%	17,759 (USD 592)	(13) (USD 1)	(13) (USD 1)

Note 1: Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation , investment income/loss is accounted for using the treasury stock approach. Thus, the income/loss of investee for the period excludes income/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company.

－－ 118

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as theperiod-end	Shares held as theperiod-end	Shares held as theperiod-end	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Note
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Shin Yang Steel Co., Ltd.	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	17,385	17,385	2,195	0.08%	10,181	(3,046,907)	(2,799)	(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%	223,089	14,953	309
Kuo Chang Enterprise Co., Ltd.	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	439,197	439,197	56,817	2.17%	263,471	(3,046,907)	(72,514)	(Note 1)
	Eliter International Corp.	Kaohsiung City	Construction of buildings	219,977	219,977	21,558	2.50%	202,755	(144,372)	(3,605)
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	786,714	786,714	21,328	6.09%	957,014	14,953	911
United Brightening Development Corp.	Chao Ying Investment Development Co., Ltd.	Kaohsiung City	Investment	341,992	341,992	30,400	100%	276,304	(110)	(110)
	Yieh United Steel Corporation	Kaohsiung City	Steel products related businesses	449,508	449,508	58,151	2.22%	269,656	(3,046,907)	(74,216)	(Note 1)
	Champion Logistic Inc.	Samoa	Investment	49,376	49,376	1,500	10.34%	47,653	24,497	1,248
	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	1,177,838	1,177,838	32,050	9.16%	1,418,042	14,953	1,369
	Eliter International Corp.	Kaohsiung City	Construction of buildings	70,393	70,393	6,898	0.8%	64,890	(144,372)	(1,153)

Note 1: Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation , investment income/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.

－－ 119

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as the period-end	Shares held as the period-end	Shares held as the period-end	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Chao Ying Investment Development Co.,Ltd.	Tangeng Iron Works Co., Ltd.	Kaohsiung City	Steel trading	336,957	336,957	8,898	2.54%	274,785	14,953	380
Hong Yuh Assets Management Co., Ltd.	Lien-Hsin Steel Co., Ltd.	Indonesia	Metal manufacturing industry	514,670	514,670	1,640	47.88%	376,059	(112,157)	(58,045)
	Lien-Sheng Steel Co., Ltd.	Indonesia	Metal manufacturing industry	1,633	1,633	0.05	10%	682	(2,507)	(251)
	Lien-Hung Mining Co., Ltd.	Indonesia	Nickle mining	100,303	100,303	3,319	19%	79,107	(52,570)	(16,842)
	Lien-Heng Mining Co., Ltd.	Indonesia	Nickle mining	9,371	9,371	381	75%	(27,221)	(25,460)	(19,095)
	Prepayment of stock subscription - Lien Heng MiningCo.,Ltd.	Indonesia	Nickle mining	69,365	－	－	－	69,365	－	－
	Asiamax Mining Indonesia	Indonesia	Nickle mining	89,386	38,542	55	100%	76,668	(409)	(409)
	Prepayment for stock subscription - Asiamax Mining Indonesia	Indonesia	Nickle mining	－	50,844	－	－	－	－	－
Lian So (H.K) Co., Limited	Lien-Sheng Steel Co., Ltd.	Indonesia	Metal manufacturing industry	13,491 (USD 450)	13,822 (USD 450)	0.45	90%	6,134 (USD 205)	(2,507) (USD 81)	(2,256) (USD 73)
	Lian Yang (Hong Kong) TradingLimited	Hong Kong	Trading business	2,998 (USD 100)	92,145 (USD 3,000)	100	100%	14,967 (USD 499)	1,744 (USD 57)	1,744 (USD 57)
	Lien-Hsin Steel Co., Ltd.	Indonesia	Metal manufacturing industry	535,143 (USD 17,850)	456,118 (USD 14,850)	1,785	52.12%	409,308 (USD 13,653)	(112,157) (USD 3,642)	(54,112) (USD 1,757)

Note 1: Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation , investment income/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.

－－ 120

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as the period-end	Shares held as the period-end	Shares held as the period-end	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Note
				December 31, 2019	December 31, 2018	Shares (in thousands)	Percentage of Ownership	Carrying Value
Lien-Hsin steel Co., Ltd.	Lien-Hung Mining Co., Ltd.	Indonesia	Nickle mining	442,565 (USD14,762)	453,419 (USD14,762)	16,142	81%	351,857	(52,570)	(71,800)
	Lien-Heng Mining Co., Ltd.	Indonesia	Nickle mining	20,506 (USD 684)	20,994 (USD 684)	127	25%	(9,074)	(25,460)	(6,365)
Yieh Hsing Enterprise Co., Ltd.	Great Emperor Hotel Co., Ltd.	Kaohsiung City	Hotel industry	2,099,500	2,099,500	209,950	58.81%	－ (Note 2)	(18,300)	(11,293)	(Note 3)
	Kings Garden International Co., Ltd.	Kaohsiung City	Leasing, sales, and development of residential and commercial buildings, department stores	2,119,500	2,119,500	211,950	50.71%	－ (Note 2)	(17,560)	(10,108)	(Note 3)
	United Winner Metals L.P	Virginia, US	Scrap steel recycling	107,474	108,153	－	33.75%	92,117	17,975	6,066
	Cheng Shin Security Co., Ltd.	Kaohsiung City	Security	4,000	4,000	400	10%	3,637	(4,414)	(441)
	Eliter International Corp.	Kaohsiung City	Construction of buildings	639,772	639,772	64,043	7.42%	602,412	(144,372)	(10,708)
	E-Da Development Corp.	Kaohsiung City	Leisure development	437,915	390,380	43,791	5.94%	251,625	(294,609)	(17,505)
	Yieh United Steel Corporation	Kaohsiung City	Steel products related business	20,204	20,204	2,542	0.1%	11,790	(3,046,907)	(3,244)	(Note 1)
	E-Da Health Biotechnology Co., Ltd.	Kaohsiung City	Manufacturer of food additives	3,800	3,800	380	19%	3,704	(69)	(14)
Kings Garden International Co.,Ltd.	Yi Hua International Co., Ltd	Kaohsiung City	Leasing, selling and development of residential and commercial buildings	7,000	7,000	700	70%	12,249	13,719	9,603
	Hua Li International Co., Ltd.	Kaohsiung City	Daily necessities, cosmetics wholesaler	60,000	－	6,000	100%	59,185	(815)	(815)

－－ 121

(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 Kings Garden International Co., Ltd., in December 2012. The unrealized gain from the sale of land was about $4,968,461 thousand. After deducting the investments accounted for using equity method, the credit balance of investment of $958,926 thousand was reclassified to “other noncurrent 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.

－－ 122

TABLE 11

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Information on Investment in Mainland China For The Year Ended December 31, 2019

Unit: Thousands of NT Dollar/ Foreign Currency

Name of	Investee in Mainland China	Main business activities	Total Amount of Paid-in Capital	Investment method (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2019	Net Income (Loss) of the Investee	Ownership held by the Company (direct or indirect) (%)	Share of Profit/Loss (Note 2)	Carrying Amount as of December 31, 2019	Accumulated Inward Remittance of Earnings as of December 31, 2019
						Outflow	Inflow
Investor
Yieh Phui Enterprise Co., Ltd.	Yieh Phui (China) Techno material Co., Ltd.	Manufacturing and marketing of pickled, cold rolled, galvanized and pre-painted steel coils	7,081,276 (USD 236,200) (Note 6)	(2) a	7,000,330 (USD 233,500)	－	－	7,000,330 (USD 233,500)	(519,628)	100%	(519,628) (2) 3	8,416,022	－
	Changshou ChangHuei Trading Co.	Trading of steel products	42,975 (RMB 10,000)	(2) a (Note 4)	－	－	－	－	506	100%	506 (2) 3	45,101	－
	Tianjin Lianfa Precision Steel Corporation	Manufacturing and marketing of special high grade alloy	404,730 (USD 13,500)	(2) a (Note 5)	－	－	－	－	(50,533)	100%	(50,533) (2) 2	(134,207)	－
AWID Asia Co., Ltd.	AWID Sanghai Co., Ltd.	Telecommunications equipment wholesale	20,986 (USD 700)	(1)	20,986 (USD 700)	－	－	20,986 (USD 700)	(165)	100%	(165) (2) 2	2,295	－
	AWID Changshou Co., Ltd.	Telecommunications equipment wholesale	8,994 (USD 300)	(1)	8,994 (USD 300)	－	－	8,994 (USD 300)	(1,210)	100%	(2,210) (2) 2	3,513	－

－－ 123

	Investee in Mainland China	Accumulated Investment in Mainland China as of December 31, 2019	Investment Amounts Authorized by Investment Commissio	U pp er
Investor
Yieh Phui Enterprise Co., Ltd.	Yieh Phui (China) Technomaterial Co., Ltd.	7,000,330 (USD 233,500)	7,081,276 (USD 236,200)	15,510,139
AWID Asia Co., Ltd.	AWID Sanghai Co., Ltd.	20,986 (USD 700)	20,986 (USD 700)	80,000
	AWID Changshou Co., Ltd.	8,994 (USD 300)	8,994 (USD 300)	80,000

(Note 1): Investment methods are classified into the following three categories.
(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.
- a. Yieh Phui (Hong Kong) Holdings Limited
(3) Others

(Note 2): Investment gain or loss recognized in the current period:

(1) Please specify if it is in the preparation stage without any investment gains or losses generated.
(2) 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 1:29.98; RMB: NTD 1:4.2975). Investment gain or loss recognized in the current period is converted using the average exchange rate in from January 1 to December 31, 2019 (USD: NTD 1:30.7946; RMB: NTD 1:4.4784).
(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, 2019, 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 2016.

－－ 124

(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 of NT$ 498,539 thousand by investees in China that were disposed of.
- (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, 2019, directly or indirectly through the third area are as follows:
Significant transactions between the Company and investees in China: Table 7 attached ~ Table 9 attached in Note 13.
Financing between the Company and investees in China: Table 1 attached in Note 13.
Endorsement and guarantee provided by the Company for investees in China: Table 2 attached in Note 13.

－－ 125

14. Segment Information

(1)General information

For the purpose of management, the Group separates its operations based on business unit and has four reportable segments as below:

Business Unit Yieh Phui: Primarily engaging in manufacturing and marketing of coated steel and manufacturing and installation of crane.
Business Unit Yieh Hsing: Primarily engaging in manufacturing and marketing of steel pipe, steel sheet, and wire rods.
Business Unit Yieh Phui (China, including Yieh Phui Hong Kong): Primarily engaging in manufacturing and marketing of coated steel.
Other business units: Primarily engaging in manufacturing and marketing of steel, iron, and military supplies, wholesale of telecommunication equipment, and investment business.

(2) Measurement basis

Management monitors the operation results of its segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss before tax and is measured consistently with profit or loss before tax in the consolidated financial statements. Furthermore, because the information of assets and liabilities is not reported to the chief operating decision maker for operation decision making, segment assets and liabilities are not disclosed. The accounting policies for reportable segments are the same as Group’s accounting policies described in Note 2.

(3) Segment information details:

－－ 126

Year 2019 Sales from external customers Sales among intersegments Total sales Operating loss Non-operating income and expenses Loss before income tax Income tax benefit Net loss Total assets Total liabilities Year 2018 Sales from external customers Sales among intersegments Total sales Operating income Non-operating income and expenses Income before income tax Income tax expense Net income Total assets Total liabilities	Business Unit Yieh Phui $23,892,475 1,138,427 $25,030,902 $(519,522) Business Unit Yieh Phui $29,815,797 1,223,319 $31,039,116 $898,759	Business Unit Yieh Hsing $6,552,804 － $6,552,804 $(477,681) Business Unit Yieh Hsing $8,741,762 － $8,741,762 $140,202	Business Unit Yieh Phui (China) $23,326,516 1,421,521 $24,748,037 $138,186 Business Unit Yieh Phui(China) $28,938,752 1,389,628 $30,328,380 $266,666	All other business units $6,063,079 452,295 $6,515,374 $(37,165) All other business units $6,459,528 140,371 $6,599,899 $121,917	Elimination $(147,277) (3,012,243) $(3,159,520) $989 Elimination $(99,650) (2,753,318) $(2,852,968) $30,966	Total
						$59,687,597 －
						$59,687,597
						$(895,193) (1,090,273)
						$(1,985,466) 285,181
						$(1,700,285)
						$83,752,862
						$56,302,942
						Total
						$73,856,189 －
						$73,856,189
						$1,458,510 (1,102,964)
						$355,546 (90,602)
						$264,944
						$87,061,593
						$57,419,961

(4) 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.

－－ 127

(5) Geographical information:

Geographical information:
Area Sales from external customers: Taiwan US Asia Europe Others Total Area Non-current assets: Taiwan China Others Total	Year Ended December 31
	2019 2018 $18,261,199 $18,341,615 5,767,800 10,104,815 28,877,668 36,017,634 6,672,707 9,230,750 110,223 161,375 $59,689,597 $73,856,189 Year Ended December 31	2018
		$18,341,615 10,104,815 36,017,634 9,230,750 161,375
		$73,856,189
	2019 $43,076,902 15,449,795 873,472 $59,400,169	2018
		$41,150,036 16,340,698 790,907
		$58,281,641

(6) Major customer information: No customer has reached the disclosure standard.

－－ 128

AI assistant

YP — Annual Report 2019

51950_rns_2019-11-13_90ebc3b3-668c-476d-8086-13073242be20.pdf

Table of Contents

Representation Letter

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Description of key audit matter

How the matter was addressed in our audit

Valuation of inventory

Description of key audit matter

How the matter was addressed in our audit:

Other Matters

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

1. GENERAL INFORMATION

2. THE AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

(1) IFRS 16 “Leases”

The Group as lessee

The Group as lessor

3.2 Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group:

3.3 The IFRSs issued by IASB but not yet endorsed and issued into effect by FSC

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Statement of Compliance

4.2 Basis of Preparation

4.3 Basis of Consolidation

(2) The subsidiaries in the consolidated financial statements:

b. Statements of Comprehensive Income：

c. Statements of Cash Flows：

4.4 Foreign Currencies

4.5 Classification of Current and Noncurrent Assets and Liabilities

4.6 Cash and cash equivalents

4.7 Financial instruments

b. Financial assets at amortized cost

4.8 Inventories

4.9 Noncurrent assests held for sale

4.10 Investments accounted for using equity method - associates

4.11 Property, Plant and Equipment

4.12 Government grants

4.13 Leases

2019

Right-of-use asset

Lease liability

4.14 Investment properties

4.15 Intangible assets

4.16 Other non-current assets - exploration and evaluation assets

4.17 Impairment of non-financial assets

4.18 Provisions

4.19 Employee benefits

Termination benefits

4.20 Share capital

4.21 Share-based payment transactions

4.22 Income tax

4.23 Revenue Recognition

4.24 Borrowing costs

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND MAJOR SOURCES OF ASSUMPTION UNCERTAINTY

5.1 Critical judgements in applying accounting policies

(1) Revenue recognition

(2) Lease term (applied to 2019)

5.2 Critical accounting estimates and assumptions

(1) Estimated impairment of financial assets

(2) Process of fair value measurement and evaluation

(3) Impairment assessment of tangible and intangible assets

(4) Impairment assessment of investments accounted for using the equity method

(5) Realisability of deferred tax assets

(6) Evaluation of inventories

(7) Calculation of accrued pension obligations

(8) Tenant's increase in borrowing interest rate

6. DETAILS OF SIGNIFICANT ACCOUNTS

YP Annual Report 2019