FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

December 14, 2017

 

Commission File Number 001-16125
Advanced Semiconductor Engineering, Inc.
( Exact name of Registrant as specified in its charter)
26 Chin Third Road  Nantze Export Processing Zone  Kaoshiung, Taiwan  Republic of China
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  ☒       Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ☐         No ☒

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

Not applicable

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		ADVANCED SEMICONDUCTOR ENGINEERING, INC.
Date: December 14, 2017	By:	/s/ Joseph Tung
	Name:	Joseph Tung
	Title:	Chief Financial Officer

 

 

 

EXHIBIT INDEX

 

Exhibit No.	Description
Exhibit 99.1	Unaudited Condensed Consolidated Interim Financial Statements
Exhibit 99.2	Discussion of Interim Financial Results as of and for the Nine-Month Period Ended September 30, 2017

 

 

 

EXHIBIT 99.1

 

 

 

 

 

 

Advanced Semiconductor Engineering,
Inc. and Subsidiaries

 

Condensed Consolidated Financial Statements for the
Nine Months Ended September 30, 2016 and 2017

 

 

 

 

 

 

 

 

 

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		December 31, 2016
		(Retrospectively Adjusted)				September 30, 2017
ASSETS		NT$				NT$				US$ (Note 4)
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)		$	38,392,524			$	38,975,077			$	1,285,034
Financial assets at fair value through profit or loss -
current (Notes 4 and 7)			3,069,812				3,339,900				110,119
Available-for-sale financial assets - current (Notes 4
and 8)			266,696				80,239				2,646
Trade receivables, net (Notes 4 and 9)			51,145,557				51,830,071				1,708,871
Other receivables (Note 4)			665,480				4,703,637				155,082
Current tax assets (Notes 4 and 25)			471,752				242,856				8,007
Inventories (Notes 4 and 10)			21,438,062				26,771,663				882,679
Inventories related to real estate business (Notes 4, 11
24 and 36)			24,187,515				10,494,092				345,997
Other financial assets - current (Notes 4, 12 and 36)			558,686				569,419				18,774
Other current assets			2,593,575				2,905,274				95,789
Total current assets			142,789,659				139,912,228				4,612,998
NON-CURRENT ASSETS
Available-for-sale financial assets - non-current
(Notes 4 and 8)			1,028,338				1,111,964				36,662
Investments accounted for using the equity
method (Notes 4, 5 and 13)			49,824,690				48,926,273				1,613,131
Property, plant and equipment (Notes 4, 14, 24,
and 37)			143,880,241				136,981,981				4,516,386
Investment properties (Notes 4, 15, 24 and 36)			-				8,051,721				265,471
Goodwill (Notes 4, 5, 16 and 28)			10,490,309				10,388,715				342,523
Other intangible assets (Notes 4, 17, 24, 28 and 35)			1,617,261				1,441,418				47,524
Deferred tax assets (Notes 4 and 25)			4,536,924				3,954,752				130,391
Other financial assets - non-current (Notes 4, 12 and 36)			1,320,381				1,165,254				38,419
Long-term prepayments for lease (Note 18)			2,237,033				7,809,515				257,485
Other non-current assets			205,740				351,836				11,600
Total non-current assets			215,140,917				220,183,429				7,259,592
TOTAL		$	357,930,576			$	360,095,657			$	11,872,590

 

 (Continued)

 

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		December 31, 2016
		(Retrospectively Adjusted)				September 30, 2017
LIABILITIES AND EQUITY		NT$				NT$				US$ (Note 4)
CURRENT LIABILITIES
Short-term borrowings (Note 19)		$	20,955,522			$	19,638,390			$	647,491
Financial liabilities at fair value through profit or
loss -  current (Notes 4 and 7)			1,763,660				803,925				26,506
Trade payables			35,803,984				41,077,069				1,354,338
Other payables (Note 21)			21,522,034				19,389,996				639,301
Current tax liabilities (Note 4)			6,846,350				6,060,926				199,833
Current portion of bonds payable (Notes 4 and 20)			9,658,346				6,136,891				202,337
Current portion of long-term borrowings (Notes 19
and 36)			6,567,565				6,839,993				225,519
Other current liabilities			3,852,113				4,407,842				145,329
Total current liabilities			106,969,574				104,355,032				3,440,654
NON-CURRENT LIABILITIES
Bonds payable (Notes 4 and 20)			27,341,557				16,980,485				559,858
Long-term borrowings (Notes 19 and 36)			46,547,998				32,525,043				1,072,372
Deferred tax liabilities (Notes 4 and 25)			4,856,549				4,900,453				161,571
Net defined benefit liabilities (Notes 4 and 22)			4,172,253				4,061,747				133,918
Other non-current liabilities			1,201,480				1,176,135				38,778
Total non-current liabilities			84,119,837				59,643,863				1,966,497
Total liabilities			191,089,411				163,998,895				5,407,151
EQUITY ATTRIBUTABLE TO OWNERS OF THE
COMPANY (Notes 4 and 23)
Share capital
Ordinary shares			79,364,735				83,804,781				2,763,099
Shares subscribed in advance			203,305				3,450,278				113,758
Total share capital			79,568,040				87,255,059				2,876,857
Capital surplus			22,266,500				40,348,725				1,330,324
Retained earnings (Notes 13 and 28)
Legal reserve			14,597,032				16,765,066				552,755
Special reserve			3,353,938				3,353,938				110,581
Unappropriated earnings			44,188,554				48,020,280				1,583,260
Total retained earnings			62,139,524				68,139,284				2,246,596
Accumulated other comprehensive income			(1,840,937	)			(5,144,613	)			(169,621	)
Treasury shares			(7,292,513	)			(7,292,513	)			(240,439	)
Equity attributable to owners of the Company			154,840,614				183,305,942				6,043,717
NON-CONTROLLING INTERESTS (Notes 4 and 23)			12,000,551				12,790,820				421,722
Total equity			166,841,165				196,096,762				6,465,439
TOTAL		$	357,930,576			$	360,095,657			$	11,872,590

 

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

(Concluded)

 

 

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

		For the Nine Months Ended September 30
		2016
		(Retrospectively
		Adjusted)				2017
		NT$				NT$				US$ (Note 4)
OPERATING REVENUES (Note 4)		$	197,755,474			$	206,455,154			$	6,806,962
OPERATING COSTS (Notes 10, 24 and 28)			159,942,771				168,516,606				5,556,103
GROSS PROFIT			37,812,703				37,938,548				1,250,859
OPERATING EXPENSES (Notes 24 and 28)
Selling and marketing expenses			2,610,411				2,434,644				80,272
General and administrative expenses			8,371,727				9,290,897				306,327
Research and development expenses			8,300,488				8,701,067				286,880
Total operating expenses			19,282,626				20,426,608				673,479
OTHER OPERATING INCOME AND
EXPENSES (Notes 14 and 24)			(704,251	)			274,317				9,044
PROFIT FROM OPERATIONS			17,825,826				17,786,257				586,424
NON-OPERATING INCOME AND
EXPENSES
Other income (Note 24)			411,965				453,688				14,958
Other gains and losses (Note 24)			734,066				5,750,612				189,602
Finance costs (Note 24)			(1,746,585	)			(1,345,502	)			(44,362	)
Share of profit of associates and joint
ventures (Notes 4, 5 and 13)			1,176,046				542,509				17,887
Total non-operating income and expenses			575,492				5,401,307				178,085
PROFIT BEFORE INCOME TAX			18,401,318				23,187,564				764,509
INCOME TAX EXPENSE (Notes 4, 5 and 25)			3,229,968				4,638,014				152,918
PROFIT FOR THE PERIOD			15,171,350				18,549,550				611,591

 

(Continued)

 

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

  

		For the Nine Months Ended September 30
		2016
		(Retrospectively
		Adjusted)				2017
		NT$				NT$				US$ (Note 4)
OTHER COMPREHENSIVE INCOME (LOSS)
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translating
foreign operations		$	(6,743,531	)		$	(4,179,480	)		$	(137,800	)
Unrealized gain (loss) on available- for-sale
financial assets			(52,969	)			183,026				6,035
Share of other comprehensive income (loss) of
associates and joint ventures accounted
for using the equity method			(535,044	)			426,703				14,068
			(7,331,544	)			(3,569,751	)			(117,697	)
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD		$	7,839,806			$	14,979,799			$	493,894
NET PROFIT ATTRIBUTABLE TO:
Owners of the Company		$	14,339,729			$	17,414,958			$	574,183
Non-controlling interests			831,621				1,134,592				37,408
		$	15,171,350			$	18,549,550			$	611,591
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the Company		$	7,602,650			$	14,111,282			$	465,258
Non-controlling interests			237,156				868,517				28,636
		$	7,839,806			$	14,979,799			$	493,894
EARNINGS PER SHARE (Note 26)
Basic		$	1.87			$	2.16			$	0.07
Diluted		$	1.58			$	1.98			$	0.07
EARNINGS PER AMERICAN
DEPOSITARY SHARE (“ADS”)
Basic		$	9.36			$	10.81			$	0.36
Diluted		$	7.88			$	9.88			$	0.33

 

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

(Concluded)

 

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

	Equity Attributable to Owners of the Company
																						Other Equity
																									Unrealized
																						Exchange Differences			Gain (loss) on
	Share Capital									Retained Earnings												on			Available-for-
																						Translating			sale												Non-
	(In Thousands)			Amounts			Capital Surplus			Legal Reserve			Special Reserve			Unappropriated Earnings			Total			Foreign Operations			Financial Assets			Total			Treasury Shares			Total			controlling Interests			Total Equity
ADJUSTED BALANCE AT JANUARY 1
2016 (Note 13)		7,910,428		$	79,185,660		$	23,758,550		$	12,649,145		$	3,353,938		$	37,696,865		$	53,699,948		$	4,492,671		$	588,119		$	5,080,790		$	(7,292,513	)	$	154,432,435		$	11,492,545		$	165,924,980
Change in capital surplus from investments in
associates and joint ventures accounted for using the
equity method		-			-			8,283			-			-			-			-			-			-			-			-			8,283			-			8,283
Profit for the nine months ended September 30, 2016
(After retrospectively adjusted) (Notes 13 and 28)		-			-			-			-			-			14,339,729			14,339,729			-			-			-			-			14,339,729			831,621			15,171,350
Other comprehensive loss for the nine
months ended September 30, 2016, net of income tax		-			-			-			-			-			-			-			(6,448,846	)		(288,233	)		(6,737,079	)		-			(6,737,079	)		(594,465	)		(7,331,544	)
Total comprehensive income (loss) for the nine
months ended September 30, 2016
(After retrospectively adjusted)		-			-			-			-			-			14,339,729			14,339,729			(6,448,846	)		(288,233	)		(6,737,079	)		-			7,602,650			237,156			7,839,806
Appropriation of 2015 earnings
Legal reserve		-			-			-			1,947,887			-			(1,947,887	)		-			-			-			-			-			-			-			-
Cash dividends declared by the Company		-			-			-			-			-			(12,476,779	)		(12,476,779	)		-			-			-			-			(12,476,779	)		-			(12,476,779	)
		-			-			-			1,947,887			-			(14,424,666	)		(12,476,779	)		-			-			-			-			(12,476,779	)		-			(12,476,779	)
Issue of dividends received by subsidiaries from the
Company		-			-			233,013			-			-			-			-			-			-			-			-			233,013			-			233,013
Partial disposal of interest in subsidiaries and additional
acquisition of majority-owned subsidiaries (Note 30)		-			-			(20,552	)		-			-			(5,884	)		(5,884	)		-			-			-			-			(26,436	)		26,436			-
Changes in percentage of ownership interest in
subsidiaries (Note 30)		-			-			(1,912,887	)		-			-			-			-			-			-			-			-			(1,912,887	)		(912,886	)		(2,825,773	)
Issue of ordinary shares under employee share options		26,262			323,390			396,996			-			-			-			-			-			-			-			-			720,386			-			720,386
Non-controlling interest arising from acquisition of
subsidiaries (After retrospectively adjusted) (Note 28)		-			-			-			-			-			-			-			-			-			-			-			-			42,857			42,857
Cash dividends distributed by subsidiaries		-			-			-			-			-			-			-			-			-			-			-			-			(236,426	)		(236,426	)
Additional non-controlling interest arising on issue of
employee share options by subsidiaries		-			-			-			-			-			-			-			-			-			-			-			-			425,523			425,523
ADJUSTED BALANCE AT SEPTEMBER 30, 2016		7,936,690		$	79,509,050		$	22,463,403		$	14,597,032		$	3,353,938		$	37,606,044		$	55,557,014		$	(1,956,175	)	$	299,886		$	(1,656,289	)	$	(7,292,513	)	$	148,580,665		$	11,075,205		$	159,655,870
ADJUSTED BALANCE AT JANUARY 1, 2017 (Notes 13 and 28)		7,946,184		$	79,568,040		$	22,266,500		$	14,597,032		$	3,353,938		$	44,188,554		$	62,139,524		$	(1,643,623	)	$	(197,314	)	$	(1,840,937	)	$	(7,292,513	)	$	154,840,614		$	12,000,551		$	166,841,165
Change in capital surplus from investments in
associates and joint ventures accounted for using the
equity method		-			-			2,266			-			-			-						-			-			-			-			2,266			-			2,266
Profit for the nine months ended September 30, 2017 (Notes 13 and 28)		-			-			-			-			-			17,414,958			17,414,958			-			-			-			-			17,414,958			1,134,592			18,549,550
Other comprehensive income (loss) for the nine
months ended September 30, 2017, net of income tax		-			-			-			-			-			-			-			(4,032,189	)		728,513			(3,303,676	)		-			(3,303,676	)		(266,075	)		(3,569,751	)
Total comprehensive income (loss) for the nine months
ended September 30, 2017		-			-			-			-			-			17,414,958			17,414,958			(4,032,189	)		728,513			(3,303,676	)		-			14,111,282			868,517			14,979,799

 

(Continued)

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

	Equity Attributable to Owners of the Company
																						Other Equity
																									Unrealized Gain
																						Exchange Differences			(loss) on
	Share Capital									Retained Earnings												on			Available-for-
	Shares																					Translating			sale												Non-
	(In Thousands)			Amounts			Capital Surplus			Legal Reserve			Special Reserve			Unappropriated Earnings			Total			Foreign Operations			Financial Assets			Total			Treasury Shares			Total			controlling Interests			Total Equity
Appropriation of 2016 earnings
Legal reserve		-		$	-		$	-		$	2,168,034		$	-		$	(2,168,034	)	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Cash dividends declared by the Company		-			-			-			-			-			(11,415,198	)		(11,415,198	)		-			-			-			-			(11,415,198	)		-			(11,415,198)
		-			-			-			2,168,034			-			(13,583,232	)		(11,415,198	)		-			-			-			-			(11,415,198	)		-			(11,415,198)
Issue of ordinary shares for capital increase
by cash (Note 23)		300,000			3,000,000			7,290,000			-			-			-			-			-			-			-			-			10,290,000			-			10,290,000
Issue of ordinary shares under conversion of bonds
(Notes 20 and 23)		424,258			4,242,577			9,657,905			-			-			-			-			-			-			-			-			13,900,482			-			13,900,482
Issue of dividends received by subsidiaries from the
Company		-			-			200,977			-			-			-			-			-			-			-			-			200,977			-			200,977
Changes in percentage of ownership interest in
subsidiaries (Note 30)		-			-			3,055			-			-			-			-			-			-			-			-			3,055			(3,055	)		-
Issue of ordinary shares under employee share options		55,064			444,442			928,022			-			-			-			-			-			-			-			-			1,372,464			-			1,372,464
Cash dividends distributed by subsidiaries		-			-			-			-			-			-			-			-			-			-			-			-			(246,440	)		(246,440)
Additional non-controlling interest arising on issue
of employee share options by subsidiaries		-			-			-			-			-			-			-			-			-			-			-			-			171,247			171,247
BALANCE AT SETPEMBER 30, 2017		8,725,506		$	87,255,059		$	40,348,725		$	16,765,066		$	3,353,938		$	48,020,280		$	68,139,284		$	(5,675,812	)	$	531,199		$	(5,144,613	)	$	(7,292,513	)	$	183,305,942		$	12,790,820		$	196,096,762
US DOLLARS (Note 4)
BALANCE AT SEPTEMBER 30, 2017				$	2,876,857		$	1,330,324		$	552,755		$	110,581		$	1,583,260		$	2,246,596		$	(187,135	)	$	17,514		$	(169,621	)	$	(240,439	)	$	6,043,717		$	421,722		$	6,465,439

  

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

(Concluded)

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Nine Months Ended September 30
		2016
		(Retrospectively
		Adjusted)				2017
		NT$				NT$				US$ (Note 4)
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before income tax		$	18,401,318			$	23,187,564			$	764,509
Adjustments for:
Depreciation expense			21,694,771				21,440,178				706,897
Amortization expense			389,363				344,151				11,347
Net loss on fair value change of financial assets
and liabilities at fair value through profit or loss			1,492,157				2,567,033				84,637
Finance costs			1,746,585				1,345,502				44,362
Interest income			(171,615	)			(178,027	)			(5,870	)
Dividend income			(20,625	)			(47,225	)			(1,557	)
Compensation cost of employee share options			353,676				397,659				13,111
Share of profit of associates and joint ventures			(1,176,046	)			(542,509	)			(17,887	)
Gain on disposal of property, plant and equipment			(19,284	)			(354,871	)			(11,700	)
Impairment loss recognized on financial assets			1,886				99,239				3,272
Reversal of impairment loss on financial assets			(27,664	)			-				-
Impairment loss recognized on non- financial assets			1,199,970				560,383				18,476
Gain on disposal of subsidiaries			-				(5,643,773	)			(186,079	)
Net gain on foreign currency exchange			(1,333,438	)			(1,752,759	)			(57,790	)
Others			512,775				648,472				21,381
Changes in operating assets and liabilities
Financial assets held for trading			2,708,652				1,288,958				42,498
Trade receivables			(7,049,447	)			(717,617	)			(23,660	)
Other receivables			(189,591	)			(520,774	)			(17,170	)
Inventories			1,077,286				(5,973,621	)			(196,954	)
Other current assets			(179,052	)			(501,124	)			(16,522	)
Financial liabilities held for trading			(2,044,739	)			(3,081,176	)			(101,588	)
Trade payables			3,717,681				5,273,085				173,857
Other payables			(172,266	)			(908,573	)			(29,956	)
Advance real estate receipts			(2,172,833	)			(49,878	)			(1,645	)
Other current liabilities			239,510				401,087				13,224
Other operating activities items			38,013				(161,830	)			(5,336	)
			39,017,043				37,119,554				1,223,857
Interest received			164,867				178,833				5,896
Dividend received			4,037,857				1,917,404				63,218
Interest paid			(1,668,975	)			(1,308,597	)			(43,145	)
Income tax paid			(4,838,659	)			(4,638,195	)			(152,924	)
Net cash generated from operating activities			36,712,133				33,268,999				1,096,902
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of financial assets designated as at fair value
through profit or loss			(52,981,180	)			(45,998,990	)			(1,516,617	)

 

(Continued)

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Nine Months Ended September 30
		2016
		(Retrospectively
		Adjusted)				2017
		NT$				NT$				US$ (Note 4)
Proceeds on sale of financial assets designated as at
fair value through profit or loss		$	54,592,483			$	46,243,401			$	1,524,675
Purchase of available-for-sale financial assets			(1,192,678	)			(602,648	)			(19,870	)
Proceeds on sale of available-for-sale  financial assets			867,336				821,445				27,084
Cash received from return of capital by available-for-sale
financial assets			28,927				-				-
Acquisition of associates and joint ventures			(15,816,463	)			-				-
Net cash outflow on acquisition of subsidiaries			(73,437	)			-				-
Net cash inflow from disposal of subsidiaries			-				3,526,755				116,279
Payments for property, plant and equipment			(20,391,111	)			(19,897,337	)			(656,028	)
Proceeds from disposal of property, plant and equipment			129,261				1,470,792				48,493
Payments for intangible assets			(373,928	)			(236,333	)			(7,792	)
Proceeds from disposal of intangible assets			5,482				34,951				1,152
Decrease (increase) in other financial assets			(1,754,676	)			144,394				4,761
Decrease (increase) in other non-current assets			(177,245	)			13,322				439
Net cash used in investing activities			(37,137,229	)			(14,480,248	)			(477,424	)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net repayment of short-term borrowings			(384,911	)			(631,277	)			(20,814	)
Repayment of short-term bills payable			(2,348,712	)			-				-
Proceeds from issue of bonds			9,000,000				8,000,000				263,765
Repayment of bonds payable			(10,365,135	)			(9,123,972	)			(300,823	)
Proceeds from long-term borrowings			48,963,098				31,278,466				1,031,272
Repayment of long-term borrowings			(42,202,720	)			(44,260,682	)			(1,459,304	)
Dividends paid			(12,243,766	)			(11,214,221	)			(369,740	)
Proceeds from issue of ordinary shares			-				10,290,000				339,268
Proceeds from exercise of employee share options			792,233				1,146,052				37,786
Decrease in non-controlling interests			(3,062,199	)			(246,440	)			(8,125	)
Other financing activities items			12,342				13,932				459
Net cash used in financing activities			(11,839,770	)			(14,748,142	)			(486,256	)
EFFECTS OF EXCHANGE RATE
CHANGES ON THE BALANCE OF
CASH AND CASH EQUIVALENTS			(5,324,895	)			(3,458,056	)			(114,015	)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS			(17,589,761	)			582,553				19,207
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE PERIOD			55,251,181				38,392,524				1,265,827
CASH AND CASH EQUIVALENTS AT THE END OF
THE PERIOD		$	37,661,420			$	38,975,077			$	1,285,034

 

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

(Concluded)

  

ADVANCED SEMICONDUCTOR ENGINEERING, INC. AND SUBSIDIARIES

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2017

(Amounts in Thousands, Unless Stated Otherwise)

(Unaudited)

 

1.

GENERAL INFORMATION

 

Advanced Semiconductor Engineering, Inc. (the “Company”), a corporation incorporated under the laws of Republic of China (the “ROC”), and its subsidiaries (collectively referred to as the “Group”) offer a comprehensive range of semiconductors packaging, testing, and electronic manufacturing services (“EMS”).

 

The Company’s ordinary shares are listed on the Taiwan Stock Exchange (the “TSE”) under the symbol “2311”. Since September 2000, the ordinary shares of the Company have been traded on the New York Stock Exchange (the “NYSE”) under the symbol “ASX” in the form of American Depositary Shares (“ADS”). The ordinary shares of its subsidiary, Universal Scientific Industrial (Shanghai) Co., Ltd (the “USISH”), are listed on the Shanghai Stock Exchange (the “SSE”) under the symbol “601231”.

 

The consolidated financial statements are presented in the Company’s functional currency, New Taiwan dollar (NT$).

 

2.

APPROVAL OF FINANCIAL STATEMENTS

 

The condensed consolidated financial statements were authorized for issue by the management on December 14, 2017.

 

3.

APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ISSUED BY THE INTERNATIONAL ACCOUNTING STANDARDS BOARD (“IASB”) (collectively, “IFRSs”)

 

a.

Amendments to IFRSs that are mandatorily effective for the current year

 

In the current year, the Group has applied the following new, revised or amended standards and interpretations that have been issued and effective:

 

New, Revised or Amended Standards and Interpretations				Effective Date Issued by IASB (Note 1)
Amendments to IFRSs		Annual Improvements to IFRSs: 2014-2016 Cycle		Note 2
Amendments to IAS 7		Disclosure Initiative		January 1, 2017
Amendments to IAS 12		Recognition of Deferred Tax Assets for Unrealized Losses		January 1, 2017

 

Note 1:

The aforementioned new, revised or amended standards and interpretations are effective for annual period beginning on or after the effective dates, unless specified otherwise.

 

Note 2 :

The amendment to IFRS 12 is retrospectively applied for annual periods beginning on or after January 1, 2017; the amendment to IAS 28 is retrospectively applied for annual periods beginning on or after January 1, 2018.

 

Except the adoption of Amendments to IAS 7 which can be referred to Note 34e, the Group believes that the adoption of the aforementioned new, revised or amended standards and interpretations did not have a material effect on the Group’s accounting policies.

 

b.

New, revised or amended standards and interpretations in issue but not yet effective

 

The Group has not applied the following new, revised or amended standards and interpretations that have been issued but are not yet effective:

 

New, Revised or Amended Standards and Interpretations				Effective Date Issued by IASB (Note)
Amendments to IFRS 2		Classification and Measurement of Share-based Payment Transactions		January 1, 2018
IFRS 9		Financial Instruments		January 1, 2018
Amendments to IFRS 9 and IFRS 7		Mandatory Effective Date of IFRS 9 and Transition Disclosures		January 1, 2018
Amendments to IFRS 10 and IAS 28		Sale or Contribution of Assets between an Investor and its Associate or Joint Venture		To be determined by the IASB
IFRS 15		Revenue from Contracts with Customers		January 1, 2018
Amendments to IFRS 15		Clarifications to IFRS 15		January 1, 2018
IFRS 16		Leases		January 1, 2019
Amendments to IAS 40		Transfers of investment property		January 1, 2018
IFRIC 22		Foreign Currency Transactions and Advance Consideration		January 1, 2018
Amendments to IAS 28		Long-term Interests in Associate and Joint Venture		January 1, 2019
IFRIC 23		Uncertainty over Income Tax Treatments		January 1, 2019

 

Note:

The aforementioned new, revised or amended standards and interpretations are effective for annual period beginning on or after the effective dates, unless specified otherwise.

 

c.

Significant changes in accounting policy resulted from new, revised and amended standards and interpretations in issue but not yet effective

 

Except for the following, the Group believes that the adoption of the aforementioned new, revised or amended standards and interpretations will not have a material effect on the Group’s accounting policies. As of the date that the accompanying condensed consolidated financial statements were authorized for issue, the Group continues in evaluating the impact on its financial position and operating results as a result of the initial adoption of the below standards and interpretations. The related impact will be disclosed when the Group completes the evaluation.

 

IFRS 9 “Financial Instruments” and related amendments

 

Recognition, measurement and impairment of financial assets

 

With regards to financial assets, all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost or fair value. Under IFRS 9, the requirement for the classification of financial assets is stated below:

 

For the Group’s debt instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, their classification and measurement are as follows:

 

1)

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

 

2)

For debt instruments, if they are held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of financial assets, the financial assets are measured at fair value through other comprehensive income (FVTOCI) and are assessed for impairment. Interest revenue is recognized in profit or loss by using the effective interest method, and other gain or loss shall be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses. When the debt instruments are derecognized or reclassified, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

 

Except for above, all other financial assets are measured at fair value through profit or loss. However, the Group may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss. No subsequent impairment assessment is required, and the cumulative gains or losses previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss.

 

The impairment of financial assets

 

IFRS 9 requires that impairment loss on financial assets is recognized by using the “Expected Credit Losses Model”. The credit loss allowance is required for financial assets measured at amortized cost, investment in debt instruments measured at FVTOCI, lease receivables, contract assets arising from IFRS 15 “Revenue from Contracts with Customers”, certain written loan commitments and financial guarantee contracts. A loss allowance for the 12-month expected credit losses is required for a financial asset if its credit risk has not increased significantly since initial recognition. A loss allowance for full lifetime expected credit losses is required for a financial asset if its credit risk has increased significantly since initial recognition and is not low. However, a loss allowance for full lifetime expected credit losses is required for trade receivables that do not constitute a financing transaction.

 

For purchased or originated credit-impaired financial assets, the Group takes into account the expected credit losses on initial recognition in calculating the credit-adjusted effective interest rate. Subsequently, any changes in expected losses are recognized as a loss allowance with a corresponding gain or loss recognized in profit or loss.

 

Hedge accounting

 

The main changes in hedge accounting amended the application requirements for hedge accounting to better reflect the entity’s risk management activities. Compared with IAS 39, the main changes include: (1) enhancing types of transactions eligible for hedge accounting, specifically broadening the risk eligible for hedge accounting of non-financial items; (2) changing the way hedging cost of derivative instruments are accounted for to reduce profit or loss volatility; and (3) replacing retrospective effectiveness assessment with the principle of economic relationship between the hedging instrument and the hedged item.

 

Transition

 

Financial instruments that have been derecognized prior to the effective date of IFRS 9 cannot be reversed to apply IFRS 9 when it becomes effective. Under IFRS 9, the requirements for classification, measurement and impairment of financial assets are applied retrospectively with the difference between the previous carrying amount and the carrying amount at the date of initial application recognized in the current period and restatement of prior periods is not required. The

 

requirements for general hedge accounting shall be applied prospectively and the accounting for hedging options shall be applied retrospectively.

 

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

 

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

 

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

 

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

 

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers, and will supersede IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations.

 

When applying IFRS 15, an entity shall recognize revenue by applying the following steps:

 

—

Identify the contract with the customer;

 

—

Identify the performance obligations in the contract;

 

—

Determine the transaction price;

 

—

Allocate the transaction price to the performance obligations in the contracts; and

 

—

Recognize revenue when the Group satisfies a performance obligation.

 

The Group will adopt IFRS 15 and related amendments starting from January 1, 2018, including retrospective application to all contracts that are not yet complete as of January 1, 2018, and anticipate to apply the modified retrospective transition method.  Under the modified retrospective transition method, the Group will recognize the cumulative effect of applying IFRS 15 and related amendments as an adjustment to the opening balance of retained earnings as at the date of initial application.  The comparative financial statements of prior periods will be retained as reported under the previous standards.

Presented below is the status of the process we have utilized for the adoption of IFRS 15 and related amendments and the significant implementation matters addressed:

 

—

The Group established a global cross-functional project management implementation team to assess all potential impacts of this standard.

 

—

The Group is reviewing current accounting policies and practices in each reporting segment to identify potential differences that would result from the application of this standard.

—

Customers and contracts were identified.

 

—

Evaluation of the contract provisions and the comparison of historical accounting policies and practices to the requirements of the new standard is in process, including the related qualitative disclosures regarding the potential impact of the effects of the accounting policies we expect to apply and a comparison to our current revenue recognition policies.  We expect to complete this process prior to December 31, 2017.

While the evaluation of the impact is still in process, based on our preliminary evaluation, IFRS 15 and related amendments may result in a change to the timing of revenue recognition; however, such change is not expected to have a material quantitative impact on the Group’s consolidated financial statements.

IFRS 16 “Leases”

 

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

 

Under IFRS 16, if the Group is a lessee, it shall recognize right-of-use assets and lease liabilities for all leases on the consolidated balance sheets except for low-value and short-term leases. The Group may elect to apply the accounting method similar to the accounting for operating lease under IAS 17 to the low-value and short-term leases. On the consolidated statements of comprehensive income, the Group should present the depreciation expense charged on the right-of-use asset separately from interest

 

expense accrued on the lease liability; interest is computed by using effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of the lease liability are classified within financing activities; cash payments for interest portion are classified within operating activities.

 

The application of IFRS 16 is not expected to have a material impact on the accounting of the Group as lessor.

 

When IFRS 16 becomes effective, the Group may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the initial application of this Standard recognized at the date of initial application.

 

4.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

a.

Statement of Compliance

 

The condensed consolidated financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The condensed consolidated financial statements are not subject to qualification relating to the application of IFRSs.

 

The consolidated financial statements are condensed as they do not include all of the information required for a complete set of annual financial statements, and they should be read in conjunction with the Group’s annual audited consolidated financial statements and related notes thereto for the year ended December 31, 2016 prepared in accordance with IFRSs.

 

b.

Basis of Consolidation

 

The basis for the condensed consolidated financial statements

 

The basis applied in these condensed consolidated financial statements is consistent with those applied in the consolidated financial statements for the year ended December 31, 2016.

 

The subsidiaries in the condensed consolidated financial statements

 

Subsidiaries included in the condensed consolidated financial statements were as follows:

 

						Percentage of Ownership (%)
Name of Investee		Main Businesses		Establishment and Operating Location		December 31, 2016		September 30, 2017
A.S.E. Holding Limited		Holding company		Bermuda		100.0		100.0
J & R Holding Limited (“J&R Holding”)		Holding company		Bermuda		100.0		100.0
Innosource Limited		Holding company		British Virgin Islands		100.0		100.0
Omniquest Industrial Limited		Holding company		British Virgin Islands		100.0		100.0
ASE Marketing & Service Japan Co., Ltd.		Engaged in marketing and sales services		Japan		100.0		100.0
ASE Test, Inc.		Engaged in the testing of semiconductors		Kaohsiung, ROC		100.0		100.0
USI Inc. (“USIINC”)		Engaged in investing activity		Nantou, ROC		99.2		99.2
Luchu Development Corporation		Engaged in the development of real estate properties		Taipei, ROC		86.1		86.1
TLJ Intertech Inc. (“TLJ”)		Engaged in information software services		Taipei, ROC		60.0		60.0
Alto Enterprises Limited		Holding company		British Virgin Islands		100.0		100.0
Super Zone Holdings Limited		Holding company		Hong Kong		100.0		100.0

(Continued)

 

						Percentage of Ownership (%)
Name of Investee		Main Businesses		Establishment and Operating Location		December 31, 2016		September 30, 2017
ASE (Kun Shan) Inc.		Engaged in the packaging and testing of semiconductors		Kun Shan, China		100.0		100.0
ASE Investment (Kun Shan) Limited		Holding company		Kun Shan, China		100.0		100.0
Advanced Semiconductor Engineering (China) Ltd.		Will engage in the packaging and testing of semiconductors		Shanghai, China		100.0		100.0
ASE Investment (Labuan) Inc.		Holding company		Malaysia		100.0		100.0
ASE Test Limited (“ASE Test”)		Holding company		Singapore		100.0		100.0
ASE (Korea) Inc.		Engaged in the packaging and testing of semiconductors		Korea		100.0		100.0
J&R Industrial Inc.		Engaged in leasing equipment and investing activity		Kaohsiung, ROC		100.0		100.0
ASE Japan Co., Ltd.		Engaged in the packaging and testing of semiconductors		Japan		100.0		100.0
ASE (U.S.) Inc.		After-sales service and sales support		U.S.A.		100.0		100.0
Global Advanced Packaging Technology Limited		Holding company		British Cayman Islands		100.0		100.0
ASE WeiHai Inc.		Engaged in the packaging and testing of semiconductors		Shandong, China		100.0		100.0
Suzhou ASEN Semiconductors Co., Ltd. (“ASEN”)		Engaged in the packaging and testing of semiconductors		Suzhou, China		60.0		60.0
Anstock Limited		Engaged in financing activity		British Cayman Islands		100.0		100.0
Anstock II Limited		Engaged in financing activity		British Cayman Islands		100.0		100.0
ASE Module (Shanghai) Inc.		Absorbed by ASE (Shanghai) Inc. in February 2017		Shanghai, China		100.0		-
ASE (Shanghai) Inc.		Engaged in the production of substrates		Shanghai, China		100.0		100.0
ASE Corporation		Holding company		British Cayman Islands		100.0		100.0
ASE Mauritius Inc.		Holding company		Mauritius		100.0		100.0
ASE Labuan Inc.		Holding company		Malaysia		100.0		100.0
Shanghai Ding Hui Real Estate Development Co., Ltd.		Engaged in the development, construction and sale of real estate properties		Shanghai, China		100.0		100.0
Shanghai Ding Qi Property Management Co., Ltd.		Engaged in the management of real estate properties		Shanghai, China		100.0		100.0
Advanced Semiconductor Engineering (HK) Limited		Engaged in the trading of substrates		Hong Kong		100.0		100.0
Shanghai Ding Wei Real Estate Development Co., Ltd.		Engaged in the development, construction and leasing of real estate properties		Shanghai, China		100.0		100.0
Shanghai Ding Yu Real Estate Development Co., Ltd.		Engaged in the development, construction and leasing of real estate properties		Shanghai, China		100.0		100.0
Shanghai Ding Fan Department Store Co., Ltd.		Engaged in department store business		Shanghai, China		100.0		100.0
Kun Shan Ding Yue Real Estate Development Co., Ltd. (“KSDY”)		Engaged in the development, construction and leasing of real estate properties and was disposed of in June 2017 (Note 29)		Kun Shan, China		100.0		-
Kun Shan Ding Hong Real Estate Development Co., Ltd.		Engaged in the development, construction and leasing of real estate properties		Kun Shan, China		100.0		100.0
Shanghai Ding Xu Property management Co., Ltd.		Engaged in the management of real estate properties, and was established in August 2017		Shanghai, China		-		100.0
ASE Electronics Inc.		Engaged in the production of substrates		Kaohsiung, ROC		100.0		100.0
ASE Test Holdings, Ltd.		Holding company		British Cayman Islands		100.0		100.0
ASE Holdings (Singapore) Pte. Ltd		Holding company		Singapore		100.0		100.0
ASE Singapore Pte. Ltd.		Engaged in the packaging and testing of semiconductors		Singapore		100.0		100.0
ISE Labs, Inc.		Engaged in the testing of semiconductors		U.S.A.		100.0		100.0
ASE Electronics (M) Sdn. Bhd.		Engaged in the packaging and testing of semiconductors		Malaysia		100.0		100.0
ASE Assembly & Test (Shanghai) Limited		Engaged in the packaging and testing of semiconductors		Shanghai, China		100.0		100.0
ASE Trading (Shanghai) Ltd.		Engaged in trading activity		Shanghai, China		100.0		100.0

(Continued)

 

						Percentage of Ownership (%)
Name of Investee		Main Businesses		Establishment and Operating Location		December 31, 2016		September 30, 2017
Wuxi Tongzhi Microelectronics Co., Ltd.		Engaged in the packaging and testing of semiconductors		Wuxi, China		100.0		100.0
Huntington Holdings International Co., Ltd.		Holding company		British Virgin Islands		99.2		99.2
Unitech Holdings International Co., Ltd.		Holding company		British Virgin Islands		99.2		99.2
Real Tech Holdings Limited		Holding company		British Virgin Islands		99.2		99.2
Universal ABIT Holding Co., Ltd.		In the process of liquidation		British Cayman Islands		99.2		99.2
Rising Capital Investment Limited		Holding company		British Virgin Islands		99.2		99.2
Rise Accord Limited		Holding company		British Virgin Islands		99.2		99.2
Universal Scientific Industrial (Kunshan) Co., Ltd.		Engaged in the manufacturing and sale of computer assistance system and related peripherals		Kun Shan, China		99.2		99.2
USI Enterprise Limited (“USIE”)		Engaged in the service of investment advisory and warehousing management		Hong Kong		97.0		97.0
USISH		Engaged in the designing, manufacturing and sale of electronic components		Shanghai, China		75.9		75.9
Universal Global Technology Co., Limited		Holding company		Hong Kong		75.9		75.9
Universal Global Technology (Kunshan) Co., Ltd.		Engaged in the designing and manufacturing of electronic components		Kun Shan, China		75.9		75.9
Universal Global Technology (Shanghai) Co., Ltd.		Engaged in the processing and sales of computer and communication peripherals as well as business in import and export of goods and technology		Shanghai, China		75.9		75.9
Universal Global Electronics (Shanghai) Co., Ltd.		Engaged in the sale of electronic components and telecommunications equipment		Shanghai, China		75.9		75.9
Universal Global Industrial Co., Limited		Engaged in manufacturing, trading and investing activity		Hong Kong		75.9		75.9
Universal Global Scientific Industrial Co., Ltd. (“UGTW”)		Engaged in the manufacturing of components of telecomm and cars and provision of related R&D services		Nantou, ROC		75.9		75.9
USI America Inc.		Engaged in the manufacturing and processing of motherboards and wireless network communication and provision of related technical service.		U.S.A.		75.9		75.9
Universal Scientific Industrial De Mexico S.A. De C.V.		Engaged in the assembling of motherboards and computer components		Mexico		75.9		75.9
USI Japan Co., Ltd.		Engaged in the manufacturing and sale of computer peripherals, integrated chip and other related accessories		Japan		75.9		75.9
USI Electronics (Shenzhen) Co., Ltd.		Engaged in the design, manufacturing and sale of motherboards and computer peripherals		Shenzhen, China		75.9		75.9
Universal Scientific Industrial Co., Ltd. (“USI”)		Engaged in the manufacturing, processing and sale of computers, computer peripherals and related accessories		Nantou, ROC		75.2		75.7

 

(Concluded)

 

c.

Other significant accounting policies

 

Except for the following, the accounting policies applied in these condensed consolidated financial statements are consistent with those applied in the Group’s consolidated financial statements for the year ended December 31, 2016.

 

1)

Investment properties

 

Investment properties are properties held to earn rentals (including property under construction for such purposes).

 

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are 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 depreciation and 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 included in profit or loss.

 

2)

Retirement benefits

 

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

 

3)

Taxation

 

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings.

 

d.

U.S. Dollar Amounts

 

A translation of the condensed consolidated financial statements into U.S. dollars is included solely for the convenience of the readers, and has been translated from New Taiwan dollar (NT$) at the exchange rate as set forth in the statistical release by the U.S. Federal Reserve Board of the United States, which was NT$30.33 to US$1.00 as of September 30, 2017. The translation should not be construed as a representation that the NT$ amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

 

5.

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

 

The same critical accounting judgments and key sources of estimation uncertainty of the consolidated financial statements have been followed in these condensed consolidated financial statements as were applied in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2016.

 

6.

CASH AND CASH EQUIVALENTS

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Cash on hand		$	6,856			$	6,356			$	210
Checking accounts and demand deposits			28,823,763				24,732,302				815,440
Cash equivalent			9,561,905				14,236,419				469,384
		$	38,392,524			$	38,975,077			$	1,285,034

 

Cash equivalents include time deposits that are of a short maturity of three months or less from the date of acquisitions, and are highly liquid, readily convertible to known amounts in cash and the risk of changes in values is insignificant. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investments or other purposes.

 

7.

FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Financial assets designated as at FVTPL
Private-placement convertible bonds		$	100,583			$	100,570			$	3,316
Financial assets held for trading
Quoted shares			1,855,073				2,306,794				76,056
Open-end mutual funds			584,945				588,118				19,391
Swap contracts			462,339				299,677				9,881
Forward exchange contracts			66,872				44,741				1,475
			2,969,229				3,239,330				106,803
		$	3,069,812			$	3,339,900			$	110,119
Financial liabilities held for trading
Swap contracts		$	422,934			$	747,465			$	24,644
Forward exchange contracts			108,912				56,460				1,862
Foreign currency option contracts			17,924				-				-
Conversion option, redemption option and put option of convertible bonds (Note 20)			1,213,890				-				-
		$	1,763,660			$	803,925			$	26,506

 

Private-placement convertible bonds included embedded derivative instruments which are not closely related to the host contracts and the Group designated the entire contracts as financial assets at FVTPL on initial recognition.

 

At each balance sheet date, the outstanding swap contracts not accounted for hedge accounting were as follows:

 

				Notional Amount
Currency		Maturity Period		(In Thousands)
December 31, 2016
Sell NT$/Buy US$		2017.01-2017.12		NT$59,797,499/US$1,871,000
Sell US$/Buy CNY		2017.03		US$49,904/CNY349,800
Sell US$/Buy JPY		2017.02		US$77,153/JPY8,600,000
Sell US$/Buy NT$		2017.01		US$61,000/NT$1,958,908
September 30, 2017
Sell EUR/Buy US$		2017.10		EUR1,885/US$2,265
Sell NT$/Buy US$		2017.10-2018.09		NT$60,432,586/US$1,997,400
Sell US$/Buy CNY		2017.10		US$53,544/CNY349,800
Sell US$/Buy JPY		2017.10-2017.11		US$75,667/JPY8,380,000
Sell US$/Buy NT$		2017.10		US$144,040/NT$4,332,087

 

At each balance sheet date, the outstanding forward exchange contracts not accounted for hedge accounting were as follow:

 

				Notional Amount
Currency		Maturity Period		(In Thousands)
December 31, 2016
Sell NT$/Buy US$		2017.01-2017.02		NT$2,842,330/US$90,000
Sell US$/Buy CNY		2017.01-2017.02		US$70,000/CNY484,805
Sell US$/Buy JPY		2017.01-2017.02		US$43,877/JPY5,063,820
Sell US$/Buy KRW		2017.01		US$35,000/KRW41,012,700
Sell US$/Buy MYR		2017.01-2017.02		US$19,000/MYR84,544
Sell US$/Buy NT$		2017.01-2017.03		US$190,000/NT$6,099,400
Sell US$/Buy SGD		2017.01-2017.03		US$12,900/SGD18,080
Sell US$/Buy EUR		2017.01		US$281/EUR270
September 30, 2017
Sell NT$/Buy US$		2017.10-2017.11		NT$3,296,070/US$110,000
Sell US$/Buy CNY		2017.10-2017.12		US$101,800/CNY672,969
Sell US$/Buy JPY		2017.10-2017.11		US$37,761/JPY4,163,602
Sell US$/Buy KRW		2017.10		US$5,000/KRW5,650,100
Sell US$/Buy MYR		2017.10-2017.11		US$7,000/MYR30,090
Sell US$/Buy NT$		2017.10		US$75,800/NT$2,293,351
Sell US$/Buy SGD		2017.10-2017.11		US$9,400/SGD12,734

 

At each balance sheet date, the outstanding foreign currency option contracts not accounted for hedge accounting were as follows:

 

				Notional Amount
Currency		Maturity Period		(In Thousands)
December 31, 2016
Buy US$ Call/CNY Put		2017.08 (Note)		US$2,000/CNY13,800
Sell US$ Put/CNY Call		2017.08 (Note)		US$1,000/CNY6,900

 

Note:

The contracts will be settled once a month and the counterparty has the right to early terminate the contracts, or the contracts will be early terminated or both parties will have no obligation to settle the contracts when specific criteria are met.

 

8.

AVAILABLE-FOR-SALE FINANCIAL ASSETS

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Unquoted ordinary shares		$	553,350			$	579,223			$	19,097
Limited partnership			273,372				263,147				8,676
Open-end mutual funds			243,458				23,175				764
Quoted ordinary shares			146,786				261,924				8,636
Unquoted preferred shares			78,068				64,734				2,135
			1,295,034				1,192,203				39,308
Current			266,696				80,239				2,646
Non-current		$	1,028,338			$	1,111,964			$	36,662

 

9.

TRADE RECEIVABLES, NET

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Trade receivables		$	51,199,266			$	51,916,883			$	1,711,733
Less:  Allowance for doubtful debts			53,709				86,812				2,862
Trade receivables, net		$	51,145,557			$	51,830,071			$	1,708,871

 

a.

Trade receivables

 

The Group’s average credit terms were 30 to 90 days. Allowance for doubtful debts is assessed by reference to the collectability of receivables by evaluating the account aging, historical experience and current financial condition of customers.

 

As of December 31, 2016 and September 30, 2017, except that the Group’s five largest customers accounted for 30% and 34% of accounts receivable, respectively, the concentration of credit risk is insignificant for the remaining accounts receivable.

 

Aging of receivables based on the past due date

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Not past due		$	45,959,876			$	47,648,820			$	1,571,013
1 to 30 days			4,467,435				3,694,261				121,802
31 to 90 days			700,122				469,467				15,478
More than 91 days			71,833				104,335				3,440
Total		$	51,199,266			$	51,916,883			$	1,711,733

 

Aging of receivables that were past due but not impaired

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
1 to 30 days		$	4,449,479			$	3,667,348			$	120,915
31 to 90 days			596,647				328,895				10,844
Total		$	5,046,126			$	3,996,243			$	131,759

 

Except for those impaired, the Group had not provided an allowance for doubtful debts on trade receivables at each balance sheet date since there has not been a significant change in credit quality and the amounts were still considered collectible. The Group did not hold any collateral or other credit enhancements over these balances nor did it have a legal right to offset against any amounts owed by the Group to counterparties.

 

Movement of the allowance for doubtful trade receivables

 

		Impaired Individually				Impaired Collectively				Total
		NT$				NT$				NT$
Balance at January 1, 2016		$	39,046			$	43,860			$	82,906
Impairment losses recognized (reversed)			(29,013	)			1,349				(27,664	)
Effect of foreign currency exchange difference			(691	)			(289	)			(980	)
Balance at September 30, 2016		$	9,342			$	44,920			$	54,262
Balance at January 1, 2017		$	16,453			$	37,256			$	53,709
Impairment losses recognized			11,084				24,683				35,767
Effect of foreign currency exchange difference			(741	)			(1,923	)			(2,664	)
Balance at September 30, 2017		$	26,796			$	60,016			$	86,812

		Impaired Individually				Impaired Collectively				Total
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Balance at January 1, 2017		$	543			$	1,228			$	1,771
Impairment losses recognized			365				814				1,179
Effect of foreign currency exchange difference			(25	)			(63	)			(88	)
Balance at September 30, 2017		$	883			$	1,979			$	2,862

 

b.

Transfers of financial assets

 

Except those factored receivables of US$41,849 thousand in prior years have been collected by Citi Bank during the nine months ended September 30, 2016, there was no receivables factored nor advances received for the nine months ended September 30, 2016 and 2017, respectively. The credit lines under the factoring agreements with Citi Bank were both US$66,000 thousand for the nine months ended September 30, 2016 and 2017.

 

Pursuant to the factoring agreement, losses from commercial disputes (such as sales returns and discounts) should be borne by the Company, while losses from credit risk should be borne by the banks. The Company also issued promissory notes to the banks for commercial disputes which remained undrawn since. The promissory notes both amounted to US$2,000 thousand as of December 31, 2016 and September 30, 2017. As of September 30, 2017, there was no significant losses from commercial disputes in the past and the Company does not expect any significant commercial dispute losses in the foreseeable future.

 

10.

INVENTORIES

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Finished goods		$	6,519,465			$	7,201,767			$	237,447
Work in process			2,822,687				4,829,192				159,222
Raw materials			10,850,062				13,147,432				433,479
Supplies			795,093				942,167				31,064
Raw materials and supplies in transit			450,755				651,105				21,467
		$	21,438,062			$	26,771,663			$	882,679

 

The cost of inventories recognized as operating costs for the nine months ended September 30, 2016 and 2017 were NT$158,494,249 thousand (retrospectively adjusted) and NT$168,241,535 thousand (US$5,547,034 thousand), respectively, which included write-down of inventories at NT$313,124 thousand and NT$274,917 thousand (US$9,064 thousand), respectively.

 

11.

INVENTORIES RELATED TO REAL ESTATE BUSINESS

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Land and buildings held for sale		$	263,526			$	110,174			$	3,632
Construction in progress			22,236,464				8,696,393				286,726
Land held for construction			1,687,525				1,687,525				55,639
		$	24,187,515			$	10,494,092			$	345,997

 

Land and buildings held for sale located in Kun Shan Qiandeng and Shanghai Zhangjiang, China were completed and successively sold. Construction in progress is mainly located on Hutai Road in Shanghai, China and Lidu Road in Kun Shan, China. The capitalized borrowing costs for the nine months ended September 30, 2016 and 2017 are disclosed in Note 24.

 

Construction in progress located on Caobao Road in Shanghai was completed in the third quarter of 2017 and immediately leased out for the lease business. As a result, the Group reclassified those buildings and land use right under the line item of “inventories related to real estate - construction in progress” to investment properties of NT$6,971,372 thousand (US$229,851 thousand) and long-term prepayments of NT$5,798,449 thousand (US$191,179 thousand), respectively. Please refer to Note 15.

 

As of December 31, 2016 and September 30, 2017, inventories related to real estate business of NT$12,076,154 thousand and NT$10,482,554 thousand (US$345,617 thousand), respectively, are expected to be recovered longer than twelve months.

 

Refer to Note 36 for the carrying amount of inventories related to real estate business that had been pledged by the Group to secure bank borrowings.

 

12.

OTHER FINANCIAL ASSETS

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Unsecured subordinate corporate bonds		$	1,000,000			$	1,000,000			$	32,971
Time deposits with original maturity over three months			480,736				503,276				16,593
Guarantee deposits			178,103				161,093				5,311
Pledged time deposits (Note 36)			206,530				63,099				2,080
Others (Note 36)			13,698				7,205				238
			1,879,067				1,734,673				57,193
Current			558,686				569,419				18,774
Non-current		$	1,320,381			$	1,165,254			$	38,419

 

The annual interest rate of unsecured subordinate corporate bonds was both 3.50 % as of December 31, 2016 and September 30, 2017.

 

13.

INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

 

		December 31, 2016 (Retrospectively Adjusted)				September 30, 2017
		NT$				NT$				US$ (Note 4)
Investments in associates		$	49,154,140			$	48,386,594			$	1,595,337
Investments in joint ventures			670,550				539,679				17,794
		$	49,824,690			$	48,926,273			$	1,613,131

a.

Investments in associates

 

1)

Investments in associates accounted for using the equity method consisted of the following:

 

						Carrying Amount
				Operating		December 31, 2016 (Retrospectively Adjusted)				September 30, 2017
Name of Associate		Main Business		Location		NT$				NT$				US$ (Note 4)
Material associate
Siliconware Precision Industries Co., Ltd. (“SPIL”)		Engaged in assembly, testing and turnkey services of integrated circuits		ROC		$	45,898,225			$	45,291,485			$	1,493,290
Associates that are not individually material
Deca Technologies Inc.（”DECA”）		Holding company and the group engaged in manufacturing, development and marketing of wafer level packaging and interconnect technology		British Cayman Islands			1,813,677				1,641,440				54,119
Hung Ching Development & Construction Co. (“HC”)		Engaged in the development, construction and leasing of real estate properties		ROC			1,156,833				1,218,475				40,174
Hung Ching Kwan Co. (“HCK”)		Engaged in the leasing of real estate properties		ROC			321,120				312,567				10,305
Advanced Microelectronic Products Inc. (“AMPI”)		Engaged in integrated circuit		ROC			264,434				222,776				7,345
							49,454,289				48,686,743				1,605,233
		Less: Deferred gain on transfer of land					300,149				300,149				9,896
						$	49,154,140			$	48,386,594			$	1,595,337

 

2)

At each balance sheet date, the percentages of ownership held by the Group were as follows:

 

		December 31, 2016				September 30, 2017
SPIL			33.29	%			33.29	%
DECA			22.07	%			22.07	%
HC			26.22	%			26.22	%
HCK			27.31	%			27.31	%
AMPI			38.76	%			38.76	%

 

3)

In July 2016, the Company acquired 98,490 thousand preferred shares issued by DECA at US$0.608 per share with a total consideration of NT$1,934,062 thousand. The percentage of ownership was 22.07% and the Company obtained significant influence over DECA. In addition, the Company's subsidiary, ASE Test, Inc., purchased 90,000 thousand ordinary share of AMPI in a private placement with NT$225,000 thousand paid in cash in November 2016. The private-placement ordinary shares were all restricted for disposal during a 3-year lock-up period.

 

4)

The Group has successively completed the identification of the difference between the cost of the investments and the Company’s share of the net fair value of DECA and AMPI’s identifiable assets and liabilities in the second quarter and the third quarter in 2017. Therefore, the Group has retrospectively adjusted the comparative consolidated financial statements for prior periods. As of December 31, 2016, the retrospective adjustments are summarized as follows:

 

		After Retrospectively Adjusted				Before Retrospectively Adjusted
		NT$				NT$
Investments accounted for using the equity method
December 31, 2016
DECA		$	1,813,677			$	1,820,329
AMPI		$	264,434			$	266,085

 

The aforementioned retrospective adjustments are accordingly recorded as a decrease of retained earnings as of December 31, 2016.

 

5)

Fair values (Level 1 inputs in terms of IFRS 13) of investments in associates with available published price quotation are summarized as follows:

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
SPIL		$	49,634,805			$	50,257,185			$	1,657,012
HC		$	1,310,829			$	1,317,692			$	43,445
AMPI		$	307,038			$	556,121			$	18,336

 

6)

Summarized financial information in respect of the Group’s material associate

 

The summarized financial information below represents amounts shown in SPIL’s consolidated financial statements prepared in accordance with IFRSs and adjusted by the Group for equity accounting purposes.

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Current assets		$	50,451,295			$	46,610,073			$	1,536,765
Non-current assets			107,573,251				105,401,342				3,475,151
Current liabilities			(41,088,439	)			(38,262,801	)			(1,261,550	)
Non-current liabilities			(17,518,410	)			(16,153,506	)			(532,592	)
Equity		$	99,417,697			$	97,595,108			$	3,217,774
Proportion of the Group’s ownership interest in SPIL			33.29	%			33.29	%			33.29	%
Net assets attributable to the Group		$	33,096,151			$	32,489,411			$	1,071,197
Goodwill			12,802,074				12,802,074				422,093
Carrying amount		$	45,898,225			$	45,291,485			$	1,493,290

		For the Nine Months Ended September 30
		2016				2017
		NT$				NT$				US$ (Note 4)
Operating revenue		$	62,934,405			$	61,931,600			$	2,041,925
Gross profit		$	10,886,891			$	9,066,839			$	298,940
Profit before income tax		$	5,057,322			$	3,503,617			$	115,517
Net profit for the period		$	4,018,435			$	2,554,429			$	84,221
Other comprehensive income(loss) for the period			(1,518,518	)			1,091,109				35,975
Total comprehensive income for the period		$	2,499,917			$	3,645,538			$	120,196
Cash dividends received from SPIL		$	3,941,740			$	1,815,275			$	59,851

 

7)

Aggregate information of associates that are not individually material

 

		For the Nine Months Ended September 30
		2016				2017
		NT$				NT$				US$ (Note 4)
The Group’s share of:
Net loss for the period		$	(13,186	)		$	(132,933	)		$	(4,383	)
Other comprehensive income (loss) for the period			(37,574	)			44,279				1,460
Total comprehensive loss for the period		$	(50,760	)		$	(88,654	)		$	(2,923	)

 

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income or loss of the investments in associates for the nine months ended September 30, 2016 and 2017 was based on the associates’ financial statements prepared in accordance with IFRSs and adjusted by the Group for equity method accounting purposes.

 

b.

Investments in joint ventures

 

1)

The joint venture that was not individually material and accounted for using the equity method was the Group’s investment in ASE Embedded Electronics Inc. (“ASEEE”). In May 2015, the Group and TDK Corporation (“TDK”) entered into an agreement to establish a joint venture to invest in ASEEE. The Group additionally participated in ASEEE’s cash capital increase with NT$146,903 thousand in September 2016. As of December 31, 2016 and September 30, 2017, the percentages of ownership were both 51%. ASEEE are located in ROC and engages in the production of embedded substrate. According to the joint arrangement, the Group and TDK must act together to direct the relevant operating activities and, as a result, the Group does not control ASEEE. The investment in ASEEE is accounted for using the equity method.

 

2)

Aggregate information of the joint venture that is not individually material

 

		For the Nine Months Ended September 30
		2016				2017
		NT$				NT$				US$ (Note 4)
The Group’s share of net loss and total comprehensive loss for the period		$	(57,252	)		$	(131,154	)		$	(4,324	)

 

 

3)

The investments accounted for using the equity method and the share of loss and other comprehensive loss as of and for the nine months ended September 30, 2016 and 2017, respectively, were based on the joint venture’s financial statements prepared in accordance with IFRSs and adjusted by the Group for equity method accounting purposes.

 

14.

PROPERTY, PLANT AND EQUIPMENT

 

The carrying amounts of each class of property, plant and equipment were as follows:

 

		December 31, 2016				September 30, 2017
		NT$				NT$				US$ (Note 4)
Land		$	3,365,013			$	3,274,238			$	107,954
Buildings and improvements			58,028,631				59,075,082				1,947,744
Machinery and equipment			72,700,762				68,825,847				2,269,233
Other equipment			2,089,581				1,658,113				54,670
Construction in progress and machinery in transit			7,696,254				4,148,701				136,785
		$	143,880,241			$	136,981,981			$	4,516,386

 

For the nine months ended September 30, 2016

 

		Land				Buildings and improvements				Machinery and equipment				Other equipment				Construction in progress and machinery in transit				Total
		NT$				NT$				NT$				NT$				NT$				NT$
Cost
Balance at January 1, 2016		$	3,381,300			$	94,447,932			$	243,283,607			$	7,722,408			$	6,397,760			$	355,233,007
Additions			-				(19,825	)			100,380				76,145				21,128,121				21,284,821
Disposals			-				(387,024	)			(8,033,648	)			(84,143	)			(215,773	)			(8,720,588	)
Reclassification			-				3,316,244				14,388,566				594,599				(18,299,584	)			(175	)
Acquisitions through business combinations			-				-				-				1,159				-				1,159
Effect of foreign currency exchange differences			(41,497	)			(2,534,611	)			(4,762,613	)			(194,188	)			(42,550	)			(7,575,459	)
Balance at September 30, 2016		$	3,339,803			$	94,822,716			$	244,976,292			$	8,115,980			$	8,967,974			$	360,222,765
Accumulated depreciation and impairment
Balance at January 1, 2016		$	-			$	34,646,878			$	164,568,298			$	5,907,414			$	113,342			$	205,235,932
Depreciation expense			-				3,845,108				17,236,723				612,940				-				21,694,771
Impairment losses recognized			-				620				876,153				5,564				4,509				886,846
Disposals			-				(332,480	)			(7,790,959	)			(76,588	)			(100,049	)			(8,300,076	)
Reclassification			-				(5,200	)			2,979				2,221				-				-
Acquisitions through business combinations			-				-				-				824				-				824
Effect of foreign currency exchange differences			-				(1,008,288	)			(3,316,339	)			(177,831	)			(1,929	)			(4,504,387	)
Balance at September 30, 2016		$	-			$	37,146,638			$	171,576,855			$	6,274,544			$	15,873			$	215,013,910

 

For the nine months ended September 30, 2017

 

		Land				Buildings and improvements				Machinery and equipment				Other equipment				Construction in progress and machinery in transit				Total
		NT$				NT$				NT$				NT$				NT$				NT$
Cost
Balance at January 1, 2017		$	3,365,013			$	96,258,175			$	248,200,756			$	8,474,661			$	7,713,542			$	364,012,147
Additions			-				293,069				78,465				78,411				18,135,298				18,585,243
Disposals			-				(535,891	)			(7,760,212	)			(646,613	)			(35,652	)			(8,978,368	)
Reclassification			(35,965	)			5,899,415				15,099,085				141,871				(22,235,980	)			(1,131,574	)
Effect of foreign currency exchange differences			(54,810	)			(2,059,053	)			(4,261,996	)			(167,199	)			571,493				(5,971,565	)
Balance at September 30, 2017		$	3,274,238			$	99,855,715			$	251,356,098			$	7,881,131			$	4,148,701			$	366,515,883

 

(Continued)

 

		Land				Buildings and improvements				Machinery and equipment				Other equipment				Construction in progress and machinery in transit				Total
		NT$				NT$				NT$				NT$				NT$				NT$
Accumulated depreciation and impairment
Balance at January 1, 2017		$	-			$	38,229,544			$	175,499,994			$	6,385,080			$	17,288			$	220,131,906
Depreciation expense			-				3,866,133				16,958,075				585,491				-				21,409,699
Impairment losses recognized			-				2,310				282,788				368				-				285,466
Disposals			-				(419,294	)			(6,839,759	)			(603,097	)			(17,288	)			(7,879,438	)
Reclassification			-				(210,046	)			24,625				(14,324	)			-				(199,745	)
Effect of foreign currency exchange differences			-				(688,014	)			(3,395,472	)			(130,500	)			-				(4,213,986	)
Balance at September 30, 2017		$	-			$	40,780,633			$	182,530,251			$	6,223,018			$	-			$	229,533,902

 

(Concluded)

 

		Land				Buildings and improvements				Machinery and equipment				Other equipment				Construction in progress and machinery in transit				Total
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Cost
Balance at January 1,2017		$	110,947			$	3,173,695			$	8,183,342			$	279,415			$	254,320			$	12,001,719
Additions			-				9,663				2,587				2,585				597,933				612,768
Disposals			-				(17,669	)			(255,859	)			(21,320	)			(1,175	)			(296,023	)
Reclassification			(1,186	)			194,508				497,827				4,677				(733,135	)			(37,309	)
Effect of foreign currency exchange differences			(1,807	)			(67,888	)			(140,521	)			(5,512	)			18,842				(196,886	)
Balance at September 30, 2017		$	107,954			$	3,292,309			$	8,287,376			$	259,845			$	136,785			$	12,084,269
Accumulated depreciation and impairment
Balance at January 1, 2017		$	-			$	1,260,453			$	5,786,350			$	210,520			$	570			$	7,257,893
Depreciation expense			-				127,469				559,119				19,304				-				705,892
Impairment losses recognized			-				76				9,324				12				-				9,412
Disposals			-				(13,824	)			(225,511	)			(19,885	)			(570	)			(259,790	)
Reclassification			-				(6,925	)			812				(473	)			-				(6,586	)
Effect of foreign currency exchange differences			-				(22,684	)			(111,951	)			(4,303	)			-				(138,938	)
Balance at September 30, 2017		$	-			$	1,344,565			$	6,018,143			$	205,175			$	-			$	7,567,883

 

Due to the Group’s future operation plans and capacity evaluation or production demands in segment of packaging and testing, the Group believed that a portion of property, plant and equipment does not qualify for the production needs and therefore recognized an impairment loss of NT$886,846 thousand and NT$285,466 thousand (US$9,412 thousand) under the line item of other operating income and expenses in the condensed consolidated statements of comprehensive income for the nine months ended September 30, 2016 and 2017, respectively. The recoverable amount of the impaired property, plant and equipment is determined on the basis of its value in use and the Group expects to derive zero future cash flows from these assets.

 

Each class of property, plant and equipment was depreciated on a straight-line basis over the following useful lives:

 

Buildings and improvements
Main plant buildings			10-40 years
Cleanrooms			10-20 years
Others			3-20 years
Machinery and equipment			2-10 years
Other equipment			2-20 years

 

The capitalized borrowing costs for the nine months ended September 30, 2016 and 2017, respectively, are disclosed in Note 24.

 

15.

INVESTMENT PROPERTIES

 

		Land				Buildings and improvements				Total
		NT$				NT$				NT$
Cost
Balance at January 1, 2017		$	-			$	-			$	-
Transfers from inventories related to real estate business and property, plant and equipment			35,965				8,114,110				8,150,075
Effects of foreign currency exchange differences			-				133,158				133,158
Balance at September 30, 2017		$	35,965			$	8,247,268			$	8,283,233
Accumulated depreciation and impairment
Balance at January 1, 2017		$	-			$	-			$	-
Depreciation expenses			-				30,479				30,479
Transfers from inventories related to real estate business and property, plant and equipment			-				199,745				199,745
Effects of foreign currency exchange differences			-				1,288				1,288
Balance at September 30, 2017		$	-			$	231,512			$	231,512

 

		Land				Buildings and improvements				Total
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Cost
Balance at January 1, 2017		$	-			$	-			$	-
Transfers from inventories related to real estate business and property, plant and equipment			1,186				267,528				268,714
Effects of foreign currency exchange differences			-				4,390				4,390
Balance at September 30, 2017		$	1,186			$	271,918			$	273,104
Accumulated depreciation and impairment
Balance at January 1, 2017		$	-			$	-			$	-
Depreciation expenses			-				1,005				1,005
Transfers from inventories related to real estate business and property, plant and equipment			-				6,586				6,586
Effects of foreign currency exchange differences			-				42				42
Balance at September 30, 2017		$	-			$	7,633			$	7,633

 

The investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

 

Main buildings			10-40 years
Others			3-20 years

 

The fair value of the investment properties was approximately NT$11,559,100 thousand (US$381,111 thousand) which was measured using level 3 inputs, the market approach and the income approach by independent professional appraisers.

 

Investment properties are held under freehold interests. Refer to Note 36 for the carrying amount of the investment properties that had been pledged by the Group to secure borrowings.

 

16.

GOODWILL

 

		Cost				Accumulated impairment				Carrying amount
		NT$				NT$				NT$
Balance at January 1, 2016		$	12,495,515			$	1,988,996			$	10,506,519
Acquisitions through business combinations  (Retrospectively Adjusted) (Note 28)			15,323				-				15,323
Effect of foreign currency exchange differences			(77,963	)			-				(77,963	)
Balance at September 30, 2016		$	12,432,875			$	1,988,996			$	10,443,879
Balance at January 1, 2017 (Retrospectively Adjusted) (Note 28)		$	12,479,305			$	1,988,996			$	10,490,309
Effect of foreign currency exchange differences			(101,594	)			-				(101,594	)
Balance at September 30, 2017		$	12,377,711			$	1,988,996			$	10,388,715

 

		Cost				Accumulated impairment				Carrying amount
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Balance at January 1, 2017 (Retrospectively Adjusted) (Note 28)		$	411,452			$	65,579			$	345,873
Effect of foreign currency exchange differences			(3,350	)			-				(3,350	)
Balance at September 30, 2017		$	408,102			$	65,579			$	342,523

 

17.

OTHER INTANGIBLE ASSETS

 

The carrying amounts of each class of other intangible assets were as follows:

 

		December 31, 2016 (Retrospectively Adjusted)				September 30, 2017
		NT$				NT$				US$ (Note 4)
Customer relationships (Note 28)		$	194,089			$	133,854			$	4,413
Computer software			943,527				845,973				27,892
Patents and acquired specific technology (Note 28)			359,227				329,266				10,856
Others			120,418				132,325				4,363
		$	1,617,261			$	1,441,418			$	47,524

 

 

For the nine months ended September 30, 2016 (Retrospectively Adjusted)

 

		Customer relationships				Computer software				Patents and acquired specific technology				Others				Total
		NT$				NT$				NT$				NT$				NT$
Cost
Balance at January 1, 2016		$	915,636			$	3,338,360			$	154,082			$	193,338			$	4,601,416
Additions			-				282,739				403,543				1,246				687,528
Disposals or derecognization			(41,099	)			(36,542	)			(30	)			-				(77,671	)
Acquisitions through business combinations			41,099				-				64,380				30				105,509
Effect of foreign currency exchange differences			-				(65,196	)			(4,318	)			(2,327	)			(71,841	)
Balance at September 30, 2016		$	915,636			$	3,519,361			$	617,657			$	192,287			$	5,244,941
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