familiarjinbaobo

TXCCorporationMinutesof2019AnnualGeneralShareholders'Meeting(Translation)Time:9:30a.
m.
,June12th,2019(Wendesday)Place:No.
4,KungYeh6thRd.
,PingzhenIndustrialDistrict,TaoyuanCity(MeetingRoom)Totalnumberofsharesissued:309,757,040Attendantshares:251,117,989(includingelectronicvoting163,235,363shares)accountedfor81.
06%oftotalsharesAttendantdirectors:Chairman:Lin,Chin-PaoDirector:Lin,Wan-Shing、Chen,ChuehShang-Hsin、Hsu,Der-JunIndependentDirector:Yu,Shang-Wu、Tsai,Song-Qi、Su,Yan-Syue、WangChuan-FenInattendance:CPA:Hsieh,Ming-ChungatDeloitte&ToucheLawyer:Liu,Wen-ChungatLIU&CO.
Chairman:Lin,Chin-PaoRecorder:Chuang,Wan-Chun1.
Callmeetingtoorder2.
Chairman'sAddress(Omitted)ReportMattersReportmatter(1)Subject:Toreportthebusinessof2018Description:1.
Thecompany's2018consolidatedrevenuewasNT$8,156,268thousand,adecreaseof7.
12%overlastyear.
NetincomewasNT$644,350thousand,adecreaseof33.
07%overlastyear.
2.
BusinessreportandrelatedfinancialstatementspleaserefertoAttachment(1)and(3).
Reportmatter(2)Subject:AuditCommittee'sreviewreportDescription:1.
TXC's2018financialStatementswerereviewedbyAuditCommitteeandauditedbyindependentauditors,Ms.
LinYiHuiandMr.
WongBoRenofDeloitte&Touche.
2.
RequestauditcommitteetoreadauditreportandpleaserefertoAttachment(2).
Reportmatter(3)Subject:Toreport2018employees'profitsharingbonusanddirectors'compensationDescription:1.
The2018pretaxprofitbeforedeductingemployees'profitsharingbonusanddirectors'compensationisNT$767,471,304,accordingtotheArticle19ofArticlesofIncorporation,theBoardofDirectorsapproved2018employees'profitsharingbonusisNT$69,072,417(9%)anddirectors'compensationisNT$11,512,070(1.
5%)whicharetobedistributedincash.
Theemployeeseligibletotheemployee'sremunerationincludethefulltimeemployeesofparentcompanyandsubsidiary.
2.
Theyarenodifferentfromtheexpensesacknowledgeof2018.
RecognitionMattersRecognitionmatter(1)ProposedbytheBoardofDirectorsSubject:Toaccept2018BusinessReportandFinancialStatementsDescription:1.
2018businessreportandfinancialstatementspleaserefertoAttachment(1)and(3).
2.
Theabovebusinessreportandfinancialstatementswereapprovedbytheboardofdirectionsandreviewedbyauditcommittee.
Thefinancialstatementswereauditedbyindependentauditors,Ms.
LinYiHuiandMr.
WongBoRenofDeloitte&Touche.
3.
Pleaseaccepttheaforementioned.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:244,574,000sharesaccountedfor97.
39%oftotalshares,disapprovalvotes:17,294shares,abstentionvotes/novotes:6,526,695shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
Recognitionmatter(2)ProposedbytheBoardofDirectorsSubject:Toapprovetheproposalofdistributionof2018earningsDescription:1.
Netprofitsfor2018wereNT$644,350,008.
Afterthelegalreserveandspecialreservewereallocatedaccordingtolawandtheundistributedprofitatthebeginningoftheyearwasadded,theprofitavailablefordistributionisNT$2,574,634,538.
Inconsiderationofcapitalutilizationandtoavoidcapitalinflation,ashareholderdividendissueofNT$619,514,080(acashdividendofNT$2.
0pershare)isproposed.
Afterdistribution,theundistributedprofitwillbeNT$1,955,120,458.
2.
Accordingtodistributionratio,cashdividendwascalculateduptodollar.
Totalamountofundistributedfractionalshareswouldberecognizedinnon-operatingincome.
3.
ThetotalamountofcommonsharesoutstandingissubjecttochangeandtheultimatecashdividendtobedistributedtoeachcommonsharewillbeadjustedaccordinglyshouldTXCsubsequentlybuybackofcompanysharesortransferorcancellationoftreasurystockorcapitalincreasebycash,aproposalshallbemadeattheshareholders'meetingtoauthorizetheboardofdirectorstohandlerelatedmatters.
4.
Theprofitdistributionproposalislistedasbelow.
Pleaseapprove.
Distributionof2018EarningsUnit:NT$ItemAmountSub-totalSumBeginningperiodundistributedprofitsEffectofretrospectiveapplicationAdjustedbeginningperiodundistributedprofitsDisposalofequityinstrumentsatfairvaluethroughothercomprehensiveincome.
Totalgainofdisposaltransferredfromotherequitytoretainedearnings.
AdjustedretainedearningsfrominvestmentsaccountedforusingequitymethodRemeasurementofdefinedemployeebenefitplanstoretainedearningsAdjustedundistributedprofitsNetprofitaftertaxforthisyearSettingaside10%legalreserveSettingasidespecialreserveProfitsavailablefordistributionDistributionItem:CashDividends(NT$2.
0pershare)Endperiodofundistributedprofits(619,514,080)1,896,725,285102,956,7221,999,682,00737,943,132(171,660)(10,619,972)2,026,833,507644,350,008(64,435,001)(32,113,976)2,574,634,538(619,514,080)1,955,120,458Note:(1)Allocationof2018undistributedprofitshallbegivenpriorityfortheaboveprofitdistribution.
Chairman:PaulLinManager:PeterLinAccountingSupervisor:HongGuan-wenResolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:245,097,902sharesaccountedfor97.
60%oftotalshares,disapprovalvotes:23,393shares,abstentionvotes/novotes:5,996,694shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
DiscussionMattersDiscussionMatter(1)ProposedbytheBoardofDirectorsSubject:ToRevisethe"ArticlesofIncorporation"Description:1.
ItisproposedthatcertainarticlesofTXC's''theArticlesofIncorporation''shouldberevisedtocomplywithruleNo.
1070037184issuedbyExecutiveYuanonOctober26th,2018.
2.
Thecomparisontablesforthe'aforementionedareattachedheretoas2019AnnualShareholders'MeetingProcedureAttachment(4)-Chineseversion.
3.
Pleasereferto2019AnnualShareholders'MeetingProcedureAttachment(10)-Chineseversionforthe"ArticlesofIncorporation"priortoamendments.
4.
Pleaseapprove.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:244,679,865sharesaccountedfor97.
43%oftotalshares,disapprovalvotes:441,323shares,abstentionvotes/novotes:5,996,801shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
DiscussionMatter(2)ProposedbytheBoardofDirectorsSubject:ToRevisethe"ProceduresforAcquisitionorDisposalofAssets"Description:1.
ItisproposedthatcertainarticlesofTXC's''ProceduresforAcquisitionorDisposalofAssets''shouldberevisedtocomplywithruleNo.
10703410725issuedbytheFinancialSupervisoryCommissionR.
O.
C(Taiwan)SecuritiesandFuturesBureauonNovember26th,2018.
2.
Thecomparisontablesfortheaforementionedareattachedheretoas2019AnnualShareholders'MeetingProcedureAttachment(5)-Chineseversion.
3.
Pleasereferto2019AnnualShareholders'MeetingProcedureAttachment(11)–Chineseversionforthe''ProceduresforAcquisitionorDisposalofAssets''priortoamendments.
4.
Pleaseapprove.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:245,102,878sharesaccountedfor97.
60%oftotalshares,disapprovalvotes:18,307shares,abstentionvotes/novotes:5,996,804shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
DiscussionMatter(3)ProposedbytheBoardofDirectorsSubject:Torevisethe''ProceduresforFinancialDerivativesTransactions''Description:1.
ItisproposedthatcertainarticlesofTXC's''ProceduresforFinancialDerivativesTransactions''shouldberevisedtocomplywithruleNo.
10703410725issuedbytheFinancialSupervisoryCommissionR.
O.
C(Taiwan)SecuritiesandFuturesBureauonNovember26th,2018.
2.
Thecomparisontablesfortheaforementionedareattachedheretoas2019AnnualShareholders'MeetingProcedureAttachment(6)-Chineseversion.
3.
Pleasereferto2019AnnualShareholders'MeetingProcedureAttachment(12)-ChineseversionforTXC's''ProceduresforFinancialDerivativesTransactions''priortoamendments.
4.
Pleaseapprove.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:245,096,472sharesaccountedfor97.
60%oftotalshares,disapprovalvotes:22,816shares,abstentionvotes/novotes:5,998,701shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
DiscussionMatter(4)ProposedbytheBoardofDirectorsSubject:Torevisethe''ProceduresforLendingFundstoOtherParties''Description:1.
ItisproposedthatcertainarticlesofTXC's''ProceduresforFinancialDerivativesTransactions''shouldberevisedtocomplywithruleNo.
1080304826issuedbytheFinancialSupervisoryCommissionR.
O.
C(Taiwan)SecuritiesandFuturesBureauonMarch7th,2019.
2.
Thecomparisontablesfortheaforementionedareattachedheretoas2019AnnualShareholders'MeetingProcedureAttachment(7)-Chineseversion.
3.
Pleasereferto2019AnnualShareholders'MeetingProcedureAttachment(13)-ChineseversionforTXC's''ProceduresforLendingFundstoOtherParties''priortoamendments.
4.
Pleaseapprove.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:245,089,872sharesaccountedfor97.
59%oftotalshares,disapprovalvotes:29,417shares,abstentionvotes/novotes:5,998,700shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
DiscussionMatter(5)ProposedbytheBoardofDirectorsSubject:Torevisethe''ProceduresforEndorsement&Guarantee''Description:1.
ItisproposedthatcertainarticlesofTXC's''ProceduresforFinancialDerivativesTransactions''shouldberevisedtocomplywithruleNo.
1080304826issuedbytheFinancialSupervisoryCommissionR.
O.
C(Taiwan)SecuritiesandFuturesBureauonMarch7th,2019.
2.
Thecomparisontablesfortheaforementionedareattachedheretoas2019AnnualShareholders'MeetingProcedureAttachment(8)-Chineseversion.
3.
Pleasereferto2019AnnualShareholders'MeetingProcedureAttachment(14)-ChineseversionforTXC's''ProceduresforEndorsement&Guarantee''priortoamendments.
4.
Pleaseapprove.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:245,091,470sharesaccountedfor97.
60%oftotalshares,disapprovalvotes:27,819shares,abstentionvotes/novotes:5,998,700shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
ElectionMattersElectionMatter(1)ProposedbytheBoardofDirectorsSubject:ToelectelevenDirectors(includingfourindependentdirectors)Description:1.
ThetermofdirectorsoftheCompanyisexpiringonJune6th2019anditisrequiredtore-electtotallypursuanttoClause195oftheCompanyAct.
2.
FollowingtheprovisionofArticlesofAssociationoftheCompany,thereshallbeelevendirectorselectedinthiselection(incl.
fourindependentdirectors).
TheelectionsystemisCandidatesNominationSystemandshareholdersshallelectdirectorsfromthelistofcandidatesandtheyareforatermof3years,fromJune12th2019toJune11th2022.
ListofCandidateforDirectorElection(includingindependentdirectors)hasbeenreviewedbyandpassedresolutioninBoardMeetingoftheCompany,andshareholdersshallelectthedirectorsfornexttermfromthelistofcandidates.
3.
ListofCandidatesforDirectors(includingIndependentDirectors)isgivenbelow.
4.
Pleasevote.
DirectorCandidateListAsof04/13/2019ReasonofcontinuingtonominatecandidateswhohaveservedconsecutivelyasindependentdirectorsforthreeconsecutivetermsasindependentdirectorsofthecompanyTitleNameEducationalbackgroundExperienceHoldingSharesDirectorLin,Jin-BaoMBA,WestTexasA&MUniversity,USAChairmanofTXCCorporation6,071,263DirectorLin,Wan-ShingMasterinManagement,NationalTaiwanUniversityofScienceandTechnologyDirectorandPresidentofTXCCorporation4,980,722DirectorChen,ChuehShang-HsinMasterofmanagement,ZhejiangUniversityDirectorandVicePresidentofTXCCorporation282,212DirectorKuo,Ya-PingBostonUniversity,MBAVicePresidentofManagementCenterofTXCCorporation300,000DirectorHsu,Hsing-HaoM.
S.
degree-ElectricalandComputerEngineering,ColoradoStateUniversityChairmanofKang-ShuoInvestmentCorporationR&DManagerofChan-YuCorporation2,601,352DirectorTLCCapitalCo.
,LTDNoneDirectorofTXCCorporation1,977,991DirectorHuang,Hsiang-LinStateUniversityofNewYorkatAlbany,MasterofBusinessAdministration(MBA)SalesDirectorofMarketingCenterofTXCCorporation4,097,399IndependentDirectorYu,Shang-WuPh.
D.
,BirminghamUniversityIndependentDirectorofTXCCorporationDirectorofbusinessandmanagementcollegeofJinwenUniversityofScienceandTechnology0IndependentDirectorTsai,Song-QiPh.
D.
,AccountingDepartmentofShanghaiUniversityIndependentDirectorofTXCCorporationCertifiedaccountantandExecutiveDirectorofKMPGTaiwan0IndependentDirectorSu,Yan-SyueMasterinIndustrialManagementofCarnegieMellonUniversity,USAIndependentDirectorofTXCCorporationCIOofPegatroncorporation0IndependentDirectorWang,Chuan-FenMasterinLawofColumbiaUniversity,USAIndependentDirectorofTXCCorporationPartnerofChen&Linlawfirm0ThecompanycontinuedtonominateYu,Shang-Wuasindependentdirectorcandidateforthefourthtermsforthefollowingreason:Yu,Shang-Wuisprofessionalinfinanceandindustrialmanagement,andisfamiliarwithbusinessandcorporategovernancelawsandpractices.
TXCwillrelyonhisrelevantknowledgeandmanagementvisiontocontinuouslyimprovethecorporategovernanceofboardofdirectorsandplaythesupervisoryfunctionoftheauditcommittee.
ResultofElection:Newly-electedlistofdirectorsandindependentdirectorsTypeAcct.
No.
(IDNO.
)NameSharesDirector6Lin,Wan-Shing215,303,668Director1Lin,Jin-Bao195,913,420Director44Chen,ChuehShang-Hsin152,252,649Director13173Hsu,Hsing-Hao151,964,374Director83Kuo,Ya-Ping149,833,776Director25055Huang,Hsiang-Lin149,187,786Director44269TLCCapitalCo.
,Ltd145,117,243IndependentDirectorJ120******Yu,Shang-Wu193,793,164IndependentDirectorF103******Tsai,Song-Qi191,950,707IndependentDirectorS221******Su,Yan-Syue191,870,219IndependentDirectorA220******Wang,Chuan-Fen150,521,160OtherMattersOtherMatter(1)ProposedbytheBoardofDirectorsSubject:Toremovetherestrictionofnon-competeagreementofnewlyelecteddirectorsDescription:1.
PursuanttoArticle209oftheCompanyAct,"adirectorengaging,eitherforhimselforonbehalfofanotherpersonthatarewithinthescopeofthecompany'sbusiness,shallexplaintothemeetingofshareholderstheessentialdetailsofsuchactivitiesandsecureitsapproval.
"2.
Itisproposedtheshareholders'meetingremovetherestrictionofnon-competeagreementofnewdirectors.
3.
Fornewlyelecteddirectors,pleaserefertoAttachment(9).
4.
Pleaseapprove.
Resolution:Thesubjectisvotingbypollandtheresultis:approvalvotes:244,679,032sharesaccountedfor97.
43%oftotalshares,disapprovalvotes:46,678shares,abstentionvotes/novotes:6,392,279shares,invalidvotes:0share.
Becausetheapprovalvotesexceededstatutoryvotes,thesubjectispassed.
SpecialMotionsNoneMeetingAdjournedTime:10:19a.
m.
,June12th,2019Attachment(1)TXCCorp.
BusinessReportIn2018,theglobaleconomywasalmostthemostturbulentyearsincethefinancialcrisis.
Inaddition,theUStariffpolicyandthecorrespondingretaliatorymeasuresofothereconomicentitieshavealsosloweddowntheoveralleconomicgrowth.
OnlytheUnitedStatesstillhasstrongeconomicperformance,beanimportantengineforglobalgrowth;inthecaseofJapan'sfailureofmonetarypolicy,theeconomyhasnotimprovedsignificantly;emergingcountrieshavebeenforcedtobearpressurewiththeappreciationofthedollar;intheEurozone,Brexit,theimpactofItaly'sconfrontationwiththeEU,somecrisisincrementallyemerged.
Theoveralleconomicenvironmentdoesnotseemoptimistic.
Therearealsomanyunfavorablechangesinthecompany'soperations.
Forexample,marketcompetitionhasledtoanincreaseinthevolumeofexistingproductmix,butpriceshavefallen,imbalancesinsupplyanddemandhaveledtounreasonablepricecutsandalternativecompetitionintheindustry,productapplicationtechnologyhasbeenacceleratereplaced,tariffdisputesimpactcustomers'strategyforproductionbase.
Thedemandofhandsetindustryhasstagnatedduetononewproductapplicationtostimulateconsumption,Networkingandinformationproductsmarketdemandisnotasexpected,tradewaraffectstheoverallautomotivesupplychainandconsumption,coupledwiththefailureofthecompany'snewproductstobedevelopedintimeandinlinewithcustomerneeds,hasledtoadeclineinourrevenueandprofitability.
I.
2018OperationResults1.
ConsolidatedrevenueandnetincomeThecompany's2018consolidatedrevenuewasNT$8,156,268thousand,adecreaseof7.
12%overlastyear,andthenresultedtoachievingtheoperationtargetof90.
38%.
NetincomewasNT$644,249thousand,adecreaseof33.
07%overlastyear.
ThebasicEPSisNT$2.
08,decreasedfromEPSNT$3.
11,-33.
12%frompreviousyear.
2.
ProductdevelopmentThecompanycontinuouslyenhancingTemperatureCompensatingControlQuartzOscillator(TCXO)、TemperatureSensingQuartzCrystal(TSX)、MiniatureConstantTemperatureControlQuartzCrystalOscillator(OCXO),MiniatureQuartzCrystal(XO)、MiniatureMobileDeviceCrystal(Crystal)、Lightsensors…etc.
Thedevelopmentofminiaturizedproductsfocusesonthetechnologiessuchaswaferdesignandmanufacturingandpackagingtesting,inresponsetothedemandforhigh-drive,high-frequencyandhigh-stabilityproducts.
ThedevelopmentofnewSensorproductswillbedevelopedtowardsminiaturization,integrationandfeatureoptimizationtomeettheneedsofcustomersandthemarket.
Intermsofmarketdevelopment,wewillfocusresourcesondevelopinghigh-endproductsincludingAOM(highfrequency),ACAP(vehicleproducts)andSensors(sensingcomponents),includingnewapplications,newindustries,newcustomers,andnewproductopportunities,inordertooptimizeproductmixandincreasegrowthmomentum,andactivelydeploytherelevantcustomersofthe5GindustryandtheInternetofThingsapplication,layingthefoundationforthesubsequentmarketgrowthmomentum.
.
II2019BusinessPlanSummary1Strengtheningindustrialdeploymentandincreasingmarketshare:Consolidateexistingmarketstoenhancecompetitivenessandmaintainmarketshare,activelydevelopnewmarkets,newindustries,newapplications,andnewproducts,deepenChinaandstrengthentheEuropean,AmericanandJapanesemarkets.
2Optimizeproductmixandincreaseprofitability:Combineproductioncostadvantagestoprovidethebestproductmixanddrivehigh-end,high-marginproductsales.
Throughintelligenttechnologyandbigdataanalysis,wecaninstantlyintegrateinformationfromvariousproductionbasestoimproveproductionyieldandreducequalitycosts.
3Technicalcooperation,strategicalliances,mergersandacquisitionsandintegration:Thefuturecompetitivemarket,shortenedproductlifecycle,technologytransferandlearningspeed,acceleratethetransferofkeytechnologiesorcapabilitiesandnewtechnologiesthroughtechnicalcooperation,strategicalliances,mergersandacquisitionsandintegrationThedevelopmentspeedofproductsandnewprocessescaneffectivelyenternewmarkets,enablingenterprisestohavecompetitiveadvantagesandexpandtheapplicationofexistingtechnologiesorproductstocreatesynergies.
Lookingforward2019,withintelligentproduction,leanmanagementandlightassetmanagement,thecompanyhopestofacethechallengesofthisyearwithinnovativethinkingandefficientexecution!
Althoughtheoveralleconomicenvironmentisstillsteep,weareconvincedthatthecompanywiththeeffortsofthemanagementteam,wewillbeabletobreakthroughthestatusquo,openupnewopportunities,andmoveforward.
Chairman:PaulLinManager:PeterLinAccountingSupervisor:HongGuan-wenAttachment(2)TXCCorporationAuditCommittee'sReviewReportBoardofDirectorsofthecompanyhasmadebusinessreportof2018,consolidatedfinancialstatements,theindividualfinancialstatementsandproposalofearningsdistribution,ofwhichtheconsolidatedfinancialstatementsandtheindividualfinancialstatementshavebeenauditedbyindependentauditorsMs.
LinYiHuiandMr.
WongBoRenofDeloitte&Touche.
Thebusinessreport,consolidatedfinancialstatements,theindividualfinancialstatementsandproposalofearningsdistributionhavebeenrecognizedbyAuditCommitteeaccordingtoArticle14-4oftheSecuritiesExchangeActandArticle219oftheCorporateAct.
Pleasexamine.
2019shareholdermeetingofthecompanyConvenerofAuditCommitteeYuShangWu2019,April25thAttachment(9)Directorcandidates'non-competitiveactivitieslistTitleNamePositionforOtherCompaniesDirectorLin,Jin-BaoLiangShingEcLifeCorp.
ChairmanTaiShingElectronicsComponentsCorporationDirectoruPISemiconductorCorpDirectorHanticprecisiontechnology,IncJuristic-persondirectorrepresentativeGodsmithSensorInc.
Juristic-persondirectorrepresentativeDirectorLin,Wan-ShingTaiShingElectronicsComponentsCorporationChairmanNanjingInformationCorporationDirectorDirectorChenChueh,Shang-HsinTSETechnology(Ningbo)CorporationChairmanTaiShingElectronicsComponentsCorporationDirectorWeiLidaTechnologyCo.
,LtdDirectorNingboLongyingSemiconductorCo.
,LtdViceChairmanandJuristic-persondirectorrepresentativeDirectorTLCCapitalCo.
,LTDSimploTechnologyCo.
,Ltd.
DirectorIndependentDirectorYu,Shang-WuTaisunInt'l(Holding)Corp.
IndependentDirectorIndependentDirectorSuYan-SyueKinsusInterconnectTechnologyCorp.
Juristic-persondirectorrepresentativeZhongYangTechnologyCo.
,LtdIndependentDirectorAttachment(17)TXCDirectors'Shareholdings&MinimumShareholdingsRequiredAsof04/13/2019TitleNameHoldingSharesChairmanLin,Jin-Bao6,071,263DirectorHsu,Der-Jun4,304,603DirectorLin,Wan-Shing4,980,722DirectorChenChueh,Shang-Hsin282,212DirectorGo,Tien-Chong823,608DirectorTLCCapitalCo.
,LTD1,977,991DirectorGoldenTalentInvestmentHoldingco.
,Limited1,588,000IndependentDirectorYu,Shang-Wu0IndependentDirectorTsai,Song-Qi0IndependentDirectorSuYan-Syue0IndependentDirectorWangChuan-Fen0Note:1.
TXC'slegalholdingofalldirectorsinnumberofsharesare12,390,281shares.
2.
AsofApril13th2019,thetotalshareholdingsofalldirectorsare20,028,399shares.
TXCCorporationandSubsidiariesConsolidatedFinancialStatementsfortheYearsEndedDecember31,2018and2017andIndependentAuditors'ReportAttachment(3)DECLARATIONOFCONSOLIDATIONOFFINANCIALSTATEMENTSOFAFFILIATESThecompaniesrequiredtobeincludedintheconsolidatedfinancialstatementsofaffiliatesinaccordancewiththe"CriteriaGoverningPreparationofAffiliationReports,ConsolidatedBusinessReportsandConsolidatedFinancialStatementsofAffiliatedEnterprises"fortheyearendedDecember31,2018areallthesameasthecompaniesrequiredtobeincludedintheconsolidatedfinancialstatementsofparentandsubsidiarycompaniesasprovidedinInternationalFinancialReportingStandards10"ConsolidatedandSeparateFinancialStatements".
Relevantinformationthatshouldbedisclosedintheconsolidatedfinancialstatementsofaffiliateshasallbeendisclosedintheconsolidatedfinancialstatementsofparentandsubsidiarycompanies.
Hence,wedonotprepareaseparatesetofconsolidatedfinancialstatementsofaffiliates.
Verytrulyyours,TXCCORPORATIONByPAULLINChairmanMarch27,2019INDEPENDENTAUDITORS'REPORTTheBoardofDirectorsandStockholdersTXCCorporationOpinionWehaveauditedtheaccompanyingconsolidatedfinancialstatementsofTXCCorporationanditssubsidiaries(theGroup),whichcomprisetheconsolidatedbalancesheetsasofDecember31,2018and2017,andtheconsolidatedstatementsofcomprehensiveincome,changesinequityandcashflowsfortheyearsthenended,andthenotestotheconsolidatedfinancialstatements,includingasummaryofsignificantaccountingpolicies.
Inouropinion,theaccompanyingconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,theconsolidatedfinancialpositionoftheGroupasofDecember31,2018and2017,anditsconsolidatedfinancialperformanceanditsconsolidatedcashflowsfortheyearsthenendedinaccordancewiththeRegulationsGoverningthePreparationofFinancialReportsbySecuritiesIssuers,andInternationalFinancialReportingStandards(IFRS),InternationalAccountingStandards(IAS),IFRICInterpretations(IFRIC),andSICInterpretations(SIC)endorsedandissuedintoeffectbytheFinancialSupervisoryCommissionoftheRepublicofChina.
BasisforOpinionWeconductedourauditsinaccordancewiththeRegulationsGoverningAuditingandAttestationofFinancialStatementsbyCertifiedPublicAccountantsandauditingstandardsgenerallyacceptedintheRepublicofChina.
OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors'ResponsibilitiesfortheAuditoftheConsolidatedFinancialStatementssectionofourreport.
WeareindependentoftheGroupinaccordancewithTheNormofProfessionalEthicsforCertifiedPublicAccountantoftheRepublicofChina,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.
KeyAuditMattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditoftheconsolidatedfinancialstatementsfortheyearendedDecember31,2018.
Thesematterswereaddressedinthecontextofourauditoftheconsolidatedfinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.
KeyauditmattersfortheCompany'sconsolidatedfinancialstatementsfortheyearendedDecember31,2018arestatedasfollows:KeyAuditMatterInventoryoftheGroupasofDecember31,2018wasNT$1,816,896thousands,accountedfor14%ofthetotalassetsintheconsolidatedfinancialstatements.
Thevaluationofinventoryissubjectedtofluctuationofmarketdemandandtechnologychangingrapidly.
Itmayresultintheimpairmentofinventory.
ThemanagementdeterminestheinventorybookvalueandtheallowanceforinventoriesatlowerofcostornetrealizevalueinaccordancewithIAS2"Inventory".
Sincethevalueofinventoryissubjecttomanagement'sjudgementandsignificantintheconsolidatedfinancialstatements,theinventoryvaluationisidentifiedasakeyauditmatter.
RefertoNotes4,5and15forasummaryofthesignificantaccountingpolicies.
Ourkeyauditproceduresperformedinrespectsoftheaboveareaincludedthefollowing:1.
Testedthenetrealizedvalueofinventoriesonthebalancesheetdate.
Sampledtestingthepriceonthelatestpurchaseorderandsalesordertoverifywhetherthenetrealizedvalueofinventoriesisreasonable.
2.
Verifiedtheaccuracyoftheinventoryagingreportbytestingtheinventory'sagingdetails.
Obtainedthelistofinferiorgoodsandspoilagetounderstandtheslowmovinginventoryandevaluatewhethertheimpairmentforinventoriesisappropriate.
3.
Performingphysicalcount,inordertoassesstheappropriatenessregardingwrite-downsoftheinventories.
OtherMatterWehaveauditedtheaccompanyingfinancialstatementsofTXCCorporationasofDecember31,2018and2017onwhichwehaveissuedanunmodifiedopinion.
ResponsibilitiesofManagementandThoseChargedwithGovernancefortheConsolidatedFinancialStatementsManagementisresponsibleforthepreparationandfairpresentationoftheconsolidatedfinancialstatementsinaccordancewiththeRegulationsGoverningthePreparationofFinancialReportsbySecuritiesIssuers,andInternationalFinancialReportingStandards(IFRS),InternationalAccountingStandards(IAS),IFRICInterpretations(IFRIC),andSICInterpretations(SIC)endorsedandissuedintoeffectbytheFinancialSupervisoryCommissionoftheRepublicofChina,andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Inpreparingtheconsolidatedfinancialstatements,managementisresponsibleforassessingtheGroup'sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessmanagementeitherintendstoliquidatetheGrouportoceaseoperations,orhasnorealisticalternativebuttodoso.
Thosechargedwithgovernance,includingtheauditcommittee,areresponsibleforoverseeingtheGroup'sfinancialreportingprocess.
Auditors'ResponsibilitiesfortheAuditoftheConsolidatedFinancialStatementsOurobjectivesaretoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors'reportthatincludesouropinion.
Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewiththeauditingstandardsgenerallyacceptedintheRepublicofChinawillalwaysdetectamaterialmisstatementwhenitexists.
Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseconsolidatedfinancialstatements.
AspartofanauditinaccordancewiththeauditingstandardsgenerallyacceptedintheRepublicofChina,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.
Wealso:1.
Identifyandassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.
Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
2.
Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup'sinternalcontrol.
3.
Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebymanagement.
4.
Concludeontheappropriatenessofmanagement'suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup'sabilitytocontinueasagoingconcern.
Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors'reporttotherelateddisclosuresintheconsolidatedfinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.
Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors'report.
However,futureeventsorconditionsmaycausetheGrouptoceasetocontinueasagoingconcern.
5.
Evaluatetheoverallpresentation,structureandcontentoftheconsolidatedfinancialstatements,includingthedisclosures,andwhethertheconsolidatedfinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
6.
ObtainsufficientandappropriateauditevidenceregardingthefinancialinformationofentitiesorbusinessactivitieswithintheGrouptoexpressanopinionontheconsolidatedfinancialstatements.
Weareresponsibleforthedirection,supervision,andperformanceofthegroupaudit.
Weremainsolelyresponsibleforourauditopinion.
Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.
Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.
Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditoftheconsolidatedfinancialstatementsfortheyearendedDecember31,2018andarethereforethekeyauditmatters.
Wedescribethesemattersinourauditors'reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
Theengagementpartnersontheauditresultinginthisindependentauditors'reportareYi-HuiLinandPo-JenWeng.
Deloitte&ToucheTaipei,TaiwanRepublicofChinaMarch27,2019NoticetoReadersTheaccompanyingconsolidatedfinancialstatementsareintendedonlytopresenttheconsolidatedfinancialposition,financialperformanceandcashflowsinaccordancewithaccountingprinciplesandpracticesgenerallyacceptedintheRepublicofChinaandnotthoseofanyotherjurisdictions.
Thestandards,proceduresandpracticestoauditsuchconsolidatedfinancialstatementsarethosegenerallyappliedintheRepublicofChina.
Fortheconvenienceofreaders,theindependentauditors'reportandtheaccompanyingconsolidatedfinancialstatementshavebeentranslatedintoEnglishfromtheoriginalChineseversionpreparedandusedintheRepublicofChina.
IfthereisanyconflictbetweentheEnglishversionandtheoriginalChineseversionoranydifferenceintheinterpretationofthetwoversions,theChinese-languageindependentauditors'reportandconsolidatedfinancialstatementsshallprevail.
TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDBALANCESHEETSDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017ASSETSAmount%Amount%CURRENTASSETSCashandcashequivalents(Note6)$1,305,40210$2,331,36618Financialassetsatfairvaluethroughprofitorloss-current(Note7)902,86971,007,1228Available-for-salefinancialassets-current(Note10)--39,657-Held-to-maturityfinancialassets-current(Note11)--45,680-Financialassetsatamortizedcost-current(Note9)189,5882--Notesreceivable(Note14)85,661165,6561Tradereceivables(Note14)2,631,163212,578,55219Tradereceivablesfromrelatedparties(Notes14and33)8,995-6,735-Otherreceivables112,4511147,0771Otherreceivablesfromrelatedparties(Note33)796-772-Currenttaxassets(Note28)5,245---Inventories(Note15)1,816,896151,504,06611Prepaymentforlease(Note21)2,323-2,371-Non-currentAssetsHeldforSale(Note16)--60,8161Debtinvestmentswithnoactivemarket-current(Note13)--39,200-Othercurrentassets55,900-154,1221Totalcurrentassets7,117,289577,983,19260NON-CURRENTASSETSFinancialassetsatfairvaluethroughprofitorloss-non-current(Note7)30,975---Financialassetsatfairvaluethroughothercomprehensiveincome-non-current(Note8)494,2424--Available-for-salefinancialassets-non-current(Note10)--512,9674Financialassetsmeasuredatcost-non-current(Note12)--197,2021Investmentsaccountedforusingequitymethod(Note18)396,390396,1891Property,plantandequipment(Note19)4,110,722334,369,81033Investmentproperties(Note20)160,088149,957-Otherintangibleassets21,831-8,013-Deferredtaxassets(Note28)36,574-48,199-Prepaymentforequipment87,174123,139-Long-termprepaymentforlease(Note21)93,868198,1841Othernoncurrentassets12,573-15,947-Totalnoncurrentassets5,444,437435,419,60740TOTAL$12,561,726100$13,402,799100LIABILITIESANDEQUITYCURRENTLIABILITIESShort-termloans(Note22)$30,715-$549-Financialliabilitiesatfairvaluethroughprofitorloss-current(Note7)--1,265-Notespayable--276-Tradepayables1,326,822111,226,9919Tradepayablestorelatedparties(Note33)97-24-Otherpayables(Note23)563,6764700,7436Otherpayablestorelatedparties(Note33)3,117-1,821-Currenttaxliabilities(Note28)3,647-30,043-Currentportionoflong-termborrowingsandbondspayable(Note22)139,0201286,3622Othercurrentliabilities21,766-28,728-Totalcurrentliabilities2,088,860162,276,80217NON-CURRENTLIABILITIESLong-termborrowings(Note22)1,482,346121,696,87513Deferredincometaxliabilities(Note28)145,4901182,3931Netdefinedbenefitliabilities-non-current(Note24)68,033162,0241Guaranteedepositsreceived26,157-20,114-Totalnon-currentliabilities1,722,026141,961,40615Totalliabilities3,810,886304,238,20832EQUITYATTRIBUTABLETOOWNERSOFTHEPARENT(Note25)SharecapitalOrdinaryshares3,097,570253,097,57023Capitalsurplus1,665,116131,665,22412RetainedearningsLegalreserve1,349,083111,252,8189Specialreserve222,7932222,7932Unappropriatedearnings2,671,184212,767,38321Totalretainedearnings4,243,060344,242,99432OtherequityExchangedifferencesontranslatingforeignoperations(359,923)(3)(264,137)(2)UnrealizedgainonFinancialassetsatfairvaluethroughothercomprehensiveincome105,0171--Unrealizedlossonavailable-for-salefinancialassets--381,0483Totalotherequity(254,906)(2)116,9111Totalequityattributabletoownersofthecompany8,750,840709,122,69968NON-CONTROLLINGINTERESTS--41,892-Totalequity8,750,840709,164,59168TOTAL$12,561,726100$13,402,799100Theaccompanyingnotesareanintegralpartoftheconsolidatedfinancialstatements.
TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCOMPREHENSIVEINCOMEFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars,ExceptEarningsPerShare)20182017Amount%Amount%SALES(Note26)$8,156,268100$8,781,552100COSTOFGOODSSOLD(Note27)(6,328,642)(77)(6,595,475)(75)GROSSPROFIT1,827,626232,186,07725OPERATINGEXPENSES(Note27)Sellingandmarketingexpenses442,4796466,2676Generalandadministrativeexpenses332,4534377,5054Researchanddevelopmentexpenses519,9066540,2496Expectedcreditlossreversedontradereceivables(513)---Totaloperatingexpenses1,294,325161,384,02116PROFITFROMOPERATIONS533,3017802,0569NON-OPERATINGINCOMEANDEXPENSESOtherincome(Note27)145,6292109,8351Othergainsandlosses(Note27)64,8411173,3612Financecosts(Note27)(20,400)(1)(21,937)-Shareofprofitsofassociatesandjointventure(Note18)10,126-11,618-Totalnon-operatingincomeandexpenses200,1962272,8773PROFITBEFOREINCOMETAX733,49791,074,93312INCOMETAXEXPENSE(Note28)(89,248)(1)(123,916)(1)NETPROFITFORTHEYEAR644,2498951,01711OTHERCOMPREHENSIVEINCOME(LOSS)Itemthatwillnotbereclassifiedsubsequentlytoprofitorloss:Remeasurementofdefinedbenefitplans(10,620)-(15,255)-Unrealizedlossoninvestmentsinequityinstrumentsatfairvaluethroughothercomprehensiveincome(140,093)(2)--Shareoftheothercomprehensiveincomeofassociatesaccountedforusingtheequitymethod(257)-(187)-(150,970)(2)(15,442)-(Continued)TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCOMPREHENSIVEINCOMEFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars,ExceptEarningsPerShare)20182017Amount%Amount%Itemthatmaybereclassifiedsubsequentlytoprofitorloss:Exchangedifferencesontranslatingforeignoperations$(94,043)(1)$(101,905)(1)Unrealizedlossonavailable-for-salefinancialassets--(573,997)(7)Shareoftheothercomprehensiveincomeofassociatesaccountedforusingtheequitymethod(1,743)-(944)-(95,786)(1)(676,846)(8)Othercomprehensivelossfortheyear,netofincometax(246,756)(3)(692,288)(8)TOTALCOMPREHENSIVEINCOMEFORTHEYEAR$397,4935$258,7293NETPROFITATTRIBUTABLETO:OwnersoftheCompany$644,3508$962,65511Non-controllinginterests(101)-(11,638)-$644,2498$951,01711TOTALCOMPREHENSIVEINCOMEATTRIBUTABLETO:OwnersoftheCompany$397,5945$270,3673Non-controllinginterests(101)-(11,638)-$397,4935$258,7293EARNINGSPERSHARE(Note29)FromcontinuinganddiscountedoperationsBasic$2.
08$3.
11Diluted$2.
06$3.
07Theaccompanyingnotesareanintegralpartoftheconsolidatedfinancialstatements.
(Concluded)TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCHANGESINEQUITYFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)EquityAttributabletoOwnersoftheParentOthersUnrealizedGain(Loss)onExchangeFinancialAssetsUnrealizedDifferencesonatFairValueGain(Loss)onRetainedEarningsTranslatingThroughOtherAvailable-for-Shares(InUnappropriatedForeignComprehensivesaleFinancialNon-controllingThousands)ShareCapitalCapitalSurplusLegalReserveSpecialReserveEarningsOperationsIncomeAssetsTotalInterestsTotalEquityBALANCEATJANUARY1,2017309,757$3,097,570$1,665,224$1,151,202$222,793$2,789,106$(161,346)$-$955,103$9,719,652$53,530$9,773,182Appropriationof2016earningsLegalreserve---101,616-(101,616)Cashdividendsdistributedbythecompany867,320)867,320)-(867,320)NetprofitfortheyearendedDecember31,2017962,655---962,655(11,638)951,017Othercomprehensiveincome(loss)fortheyearendedDecember31,2017,netofincometax15,442)(102,791)-(574,055)(692,288)-(692,288)Totalcomprehensiveincome(loss)fortheyearendedDecember31,2017947,213(102,791)-(574,055)270,367(11,638)258,729BALANCEATDECEMBER31,2017309,7573,097,5701,665,2241,252,818222,7932,767,383(264,137)-381,0489,122,69941,8929,164,591Effectofretrospectiveapplicationandretrospectiverestatement102,957-283,139(381,048)5,048-5,048BALANCEATJANUARY1,2018ASRESTATED309,7573,097,5701,665,2241,252,818222,7932,870,340(264,137)283,139-9,127,74741,8929,169,639Appropriationof2017earningsLegalreserve---96,265-(96,265)Cashdividendsdistributedbythecompany774,393)774,393)-(774,393)NetprofitforthefortheyearendedDecember31,2018644,350---644,350(101)644,249OthercomprehensivelossforthefortheyearendedDecember31,2018,netofincometax10,792)(95,786)(140,178)-(246,756)-(246,756)Totalcomprehensiveincome(loss)forthefortheyearendedDecember31,2018633,558(95,786)(140,178)-397,594(101)397,493Otherchangesincapitalsurplus41,791)(41,791)ActualdisposaloracquisitionofinterestinsubsidiariesDisposalofequityinstrumentsatfairvaluethroughothercomprehensiveincome37,944-(37,944)Changesincapitalsurplusfrominvestmentinassociatesandjointventuresaccountedforusingtheequitymethod--(108)108)-(108)BALANCEATDECEMBER31,2018309,757$3,097,570$1,665,116$1,349,083$222,793$2,671,184$(359,923)$105,017$-$8,750,840$-$8,750,840Theaccompanyingnotesareanintegralpartoftheconsolidatedfinancialstatements.
TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWSFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017CASHFLOWSFROMOPERATINGACTIVITIESIncomebeforeincometax$733,497$1,074,933Adjustmentsfor:Depreciationexpenses788,289808,352Depreciationexpensesofinvestmentproperties25,7423,973Amortizationexpenses2,1212,722Amortizationofprepaymentsforlease2,3542,338Expectedcreditlossreversedontradereceivables(513)-Impairmentlossreversedonaccountsreceivables-(2,437)Netgainonfairvaluechangeoffinancialassetsandliabilitiesatfairvaluethroughprofitorloss(29,802)(47,211)Financecosts20,40021,937Interestincome(21,088)(18,607)Dividendincome(1,527)(2,288)Shareofprofitofassociatesandjointventures(10,126)(11,618)Lossondisposalofproperty,plantandequipment(2,016)(1,754)Gainondisposalofinvestmentproperty(26,629)(50,061)Gainondisposalofnon-currentassetsheldforsales(3,152)-Gainondisposalofinvestment-(228,666)Impairmentlossrecognizedonfinancialassets-9,971Write-downofinventories6,763-Impairmentlossreversedonproperty,plantandequipment(2,961)(3,202)ChangesinoperatingassetsandliabilitiesFinancialassetsmandatorilyclassifiedasatfairvaluethroughprofitorloss123,407-Financialassetheldfortrading-306,430Notesreceivable(20,006)(14,414)Tradereceivables(51,997)447,529Tradereceivablesfromrelatedparties(2,288)2,914Otherreceivables(5,282)(1,914)Otherreceivablesfromrelatedparties(24)(63)Inventories(319,450)16,241Othercurrentassets52,241(37,444)Financialliabilitiesheldortrading-(13,445)Financialliabilitiesmandatorilyclassifiedasatfairvaluethroughprofitorloss(1,265)-Notespayable(276)(480)Tradepayables99,831(168,666)Tradepayablestorelatedparties73(1,578)Otherpayables(136,822)(174,648)Otherpayablestorelatedparties1,296849Othercurrentliabilities(6,962)(16,272)Netdefinedbenefitliabilities(4,611)(9,542)Cashgeneratedfromoperations1,209,2171,893,879(Continued)TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWSFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017Interestpaid$(20,645)$(21,902)Incometaxpaid(120,099)(208,503)Netcashgeneratedfromoperatingactivities1,068,4731,663,474CASHFLOWSFROMINVESTINGACTIVITIESPurchaseoffinancialassetsatfairvaluethroughprofitorloss-(2,246,052)Proceedsfromsaleoffinancialassetsatfairvaluethroughprofitorloss-2,824,366Proceedsfromsaleoffinancialassetsatfairvaluethroughothercomprehensiveincome53,886-Purchaseoffinancialassetsatamortizedcost(191,646)-Proceedsfromfinancialassetsatamortizedcost89,480-Proceedsfromsaleofdebtinvestmentswithnoactivemarket-(39,200)Proceedsfromsaleofavailable-for-salefinancialassets-214,181Purchaseofsaleoffinancialassetsmeasuredatcost-(161,587)Proceedsfromsaleoffinancialassetsmeasuredatcost-87,237Purchaseofinvestmentaccountedforusingequitymethod(294,842)(26,540)Paymentsforproperty,plantandequipment(774,529)(997,727)ProceedsfromInvestmentproperty38,89756,653Proceedsfromdisposalofproperty,plantandequipment58,1367,312Paymentsforintangibleassets(15,994)(1,281)Decreaseinothernoncurrentassets3,3743,972Increaseinprepaymentforequipment(15,126)-Proceedsfromdisposalofnon-currentassetsheldforsale97,837-Interestreceived21,70118,685Dividendsreceivedfromassociates3,2056,067Otherdividendsreceived1,5272,288Netcashusedininvestingactivities(924,094)(251,626)CASHFLOWSFROMFINANCINGACTIVITIESProceedsfromshort-termborrowings30,166-Repaymentsofshort-termborrowings-(19,731)Proceedsfromlong-termborrowings409,611500,000Repaymentsoflong-termborrowings(776,604)(693,535)Proceedsfromguaranteedepositsreceived6,043-Refundofguaranteedepositsreceived-(21,079)DividendspaidtoownersoftheCompany(774,393)(867,320)Decreaseinnon-controlling(41,791)-Netcashusedinfinancingactivities(1,146,968)(1,101,665)EFFECTOFEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS(23,375)(71,714)(Continued)TXCCORPORATIONANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWSFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017NETINCREASE(DECREASE)INCASHANDCASHEQUIVALENTS$(1,025,964)$238,469CASHANDCASHEQUIVALENTSATTHEBEGINNINGOFTHEYEAR2,331,3662,092,897CASHANDCASHEQUIVALENTSATTHEENDOFTHEYEAR$1,305,402$2,331,366Theaccompanyingnotesareanintegralpartoftheconsolidatedfinancialstatements.
(Concluded)TXCCorporationFinancialStatementsfortheYearsEndedDecember31,2018and2017andIndependentAuditors'ReportAttachment(3)INDEPENDENTAUDITORS'REPORTTheBoardofDirectorsandStockholdersTXCCorporationOpinionWehaveauditedtheaccompanyingfinancialstatementsofTXCCorporation(theCompany),whichcomprisethebalancesheetsasofDecember31,2018and2017,andthestatementsofcomprehensiveincome,changesinequityandcashflowsfortheyearsthenended,andthenotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies.
Inouropinion,theaccompanyingfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofDecember31,2018and2017,anditsfinancialperformanceanditscashflowsfortheyearsthenendedinaccordancewiththeRegulationsGoverningthePreparationofFinancialReportsbySecuritiesIssuers.
BasisforOpinionWeconductedourauditsinaccordancewiththeRegulationsGoverningAuditingandAttestationofFinancialStatementsbyCertifiedPublicAccountantsandauditingstandardsgenerallyacceptedintheRepublicofChina.
OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors'ResponsibilitiesfortheAuditoftheFinancialStatementssectionofourreport.
WeareindependentoftheCompanyinaccordancewithTheNormofProfessionalEthicsforCertifiedPublicAccountantoftheRepublicofChina,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.
KeyAuditMattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthefinancialstatementsfortheyearendedDecember31,2018.
Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.
KeyAuditMatterInventoryoftheCompanyasofDecember31,2018wasNT$997,780thousands,accountedfor8.
3%ofthetotalassetsinthefinancialstatements.
Thevaluationofinventoryissubjectedtofluctuationofmarketdemandandtechnologychangingrapidly.
Itmayresultintheimpairmentofinventory.
ThemanagementdeterminestheinventorybookvalueandtheallowanceforinventoriesatlowerofcostornetrealizevalueinaccordancewithIAS2"Inventory".
Sincethevalueofinventoryissubjecttomanagement'sjudgementandsignificantinthefinancialstatements,theinventoryvaluationisidentifiedasakeyauditmatter.
RefertoNotes4,5and15forasummaryofthesignificantaccountingpoliciesandrefertoNote15fortheamountoftheallowanceforinventories.
Ourkeyauditproceduresperformedinrespectsoftheaboveareaincludedthefollowing:1.
Testedthenetrealizedvalueofinventoriesonthebalancesheetdate.
Sampledtestingthepriceonthelatestpurchaseorderandsalesordertoverifywhetherthenetrealizedvalueofinventoriesisreasonable.
2.
Verifiedtheaccuracyoftheinventoryagingreportbytestingtheinventory'sagingdetails.
Obtainedthelistofinferiorgoodsandspoilagetounderstandtheslowmovinginventoryandevaluatewhethertheimpairmentforinventoriesisappropriate.
3.
Performingphysicalcount,inordertoassesstheappropriatenessregardingwrite-downsoftheinventories.
ResponsibilitiesofManagementandThoseChargedwithGovernancefortheFinancialStatementsManagementisresponsibleforthepreparationandfairpresentationofthefinancialstatementsinaccordancewiththeRegulationsGoverningthePreparationofFinancialReportsbySecuritiesIssuers,andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Inpreparingthefinancialstatements,managementisresponsibleforassessingtheCompany'sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessmanagementeitherintendstoliquidatetheCompanyortoceaseoperations,orhasnorealisticalternativebuttodoso.
Thosechargedwithgovernance,includingtheauditcommittee,areresponsibleforoverseeingtheCompany'sfinancialreportingprocess.
Auditors'ResponsibilitiesfortheAuditoftheFinancialStatementsOurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors'reportthatincludesouropinion.
Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewiththeauditingstandardsgenerallyacceptedintheRepublicofChinawillalwaysdetectamaterialmisstatementwhenitexists.
Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
AspartofanauditinaccordancewiththeauditingstandardsgenerallyacceptedintheRepublicofChina,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.
Wealso:1.
Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.
Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
2.
Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany'sinternalcontrol.
3.
Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebymanagement.
4.
Concludeontheappropriatenessofmanagement'suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany'sabilitytocontinueasagoingconcern.
Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors'reporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.
Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors'report.
However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.
5.
Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
6.
ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheCompanytoexpressanopiniononthefinancialstatements.
Weareresponsibleforthedirection,supervisionandperformanceoftheaudit.
Weremainsolelyresponsibleforourauditopinion.
Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.
Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.
Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsfortheyearendedDecember31,2018andarethereforethekeyauditmatters.
Wedescribethesemattersinourauditors'reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
Theengagementpartnersontheauditresultinginthisindependentauditors'reportareYiHuiLin.
andPo-JenWeng.
Deloitte&ToucheTaipei,TaiwanRepublicofChinaMarch27,2019NoticetoReadersTheaccompanyingconsolidatedfinancialstatementsareintendedonlytopresenttheconsolidatedfinancialposition,financialperformanceandcashflowsinaccordancewithaccountingprinciplesandpracticesgenerallyacceptedintheRepublicofChinaandnotthoseofanyotherjurisdictions.
Thestandards,proceduresandpracticestoauditsuchconsolidatedfinancialstatementsarethosegenerallyappliedintheRepublicofChina.
Fortheconvenienceofreaders,theindependentauditors'reportandtheaccompanyingconsolidatedfinancialstatementshavebeentranslatedintoEnglishfromtheoriginalChineseversionpreparedandusedintheRepublicofChina.
IfthereisanyconflictbetweentheEnglishversionandtheoriginalChineseversionoranydifferenceintheinterpretationofthetwoversions,theChinese-languageindependentauditors'reportandfinancialstatementsshallprevail.
TXCCORPORATIONBALANCESHEETSDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017ASSETSAmount%Amount%CURRENTASSETSCashandcashequivalents(Notes4and6)$557,4425$798,7616Financialassetsatfairvaluethroughprofitorloss-current(Notes4and7)86---Available-for-salefinancialassets-current(Notes4and10)--39,657-Held-to-maturityfinancialassets-current(Notes4,5and11)--45,6801Financialassetsatamortizedcost-current(Note9)68,9461--Notesreceivable(Notes4,5and14)1,293-1,083-Tradereceivables(Notes4,5and14)2,121,827182,072,53216Tradereceivablesfromrelatedparties(Notes4,5,14and30)110,001169,9391Otherreceivables(Notes4and14)17,784-14,425-Otherreceivablesfromrelatedparties(Notes4and30)6,458-19,782-Currenttaxassets(Note25)5,245---Inventories(Notes4and15)997,7808956,1538Debtinvestmentswithnoactivemarket-current(Note13)--39,200-Othercurrentassets9,352-11,721-Totalcurrentassets3,896,214334,068,93332NON-CURRENTASSETSFinancialassetsatfairvaluethroughprofitorloss-non-current(Notes4and7)30,975---Financialassetsatfairvaluethroughothercomprehensiveincome-non-current(Notes4and8)330,9253--Available-for-salefinancialassets-non-current(Notes4and10)--512,9674Financialassetsmeasuredatcost-non-current(Notes4and12)--37,322-Investmentsaccountedforusingequitymethod(Notes4and16)5,604,216475,786,88646Property,plantandequipment(Notes4and17)1,894,487162,109,11217Investmentproperties(Notes4and18)115,4741137,1321Otherintangibleassets(Note4)170-543-Deferredtaxassets(Notes4,5and25)28,654-42,271-Prepaymentforequipment50,827-6,940-Refundabledeposits1,008-2,728-Totalnon-currentassets8,056,736678,635,90168TOTAL$11,952,950100$12,704,834100LIABILITIESANDEQUITYCURRENTLIABILITIESShort-termloans(Note19)549-Financialliabilitiesatfairvaluethroughprofitorloss-current(Notes4and7)--1,265-Notespayable--276-Tradepayables577,2665428,4133Tradepayablestorelatedparties(Note30)635,9935702,5316Otherpayables(Note22)354,4043395,7783Otherpayablestorelatedparties(Note30)3,221-2,974-Currenttaxliabilities(Notes4and25)--23,239-Currentportionoflong-termborrowingsandbondspayable(Note19)46,875162,5001Othercurrentliabilities8,486-10,984-Totalcurrentliabilities1,626,245141,628,50913NON-CURRENTLIABILITIESLong-termborrowings(Note19)1,350,000111,696,87513Deferredtaxliabilities(Notes4and25)145,4901182,3931Netdefinedbenefitliabilities-non-current(Notes4and21)68,033162,0241Guaranteedepositsreceived12,342-12,334-Totalnon-currentliabilities1,575,865131,953,62615Totalliabilities3,202,110273,582,13528EQUITY(Note22)SharecapitalOrdinaryshares3,097,570263,097,57024Capitalsurplus1,665,116141,665,22413RetainedearningsLegalreserve1,349,083111,252,81810Specialreserve222,7932222,7932Unappropriatedearnings2,671,184222,767,38322Totalretainedearnings4,243,060354,242,99434OtherequityExchangedifferencesontranslatingforeignoperations(359,923)(3)(264,137)(2)UnrealizedgainonFinancialassetsatfairvaluethroughothercomprehensiveincome105,0171--Unrealizedgainorlossonavailable-for-salefinancialassets--381,0483Totalotherequity(254,906)(2)116,9111Totalequity8,750,840739,122,69972TOTAL$11,952,950100$12,704,834100Theaccompanyingnotesareanintegralpartofthefinancialstatements.
TXCCORPORATIONSTATEMENTSOFCOMPREHENSIVEINCOMEFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars,ExceptEarningsPerShare)20182017Amount%Amount%OPERATINGREVENUE(Note23)Sales$6,657,254101$7,158,878101Less:Salesreturns17,427-20,397-Less:Salesallowances82,921183,5171Netoperatingrevenue6,556,9061007,054,964100COSTOFGOODSSOLD(Notes15and24)5,542,656845,800,25982GROSSPROFIT1,014,250161,254,70518UNREALIZEDINTER-COMPANYGAIN(1,064)-(2,634)-REALIZEDGAINONINTERAFFILIATEACCOUNTS2,634-4,718-REALIZEDGROSSPROFIT1,015,820161,256,78918OPERATINGEXPENSES(Notes4and24)Sellingandmarketingexpenses245,3754283,2044Generalandadministrativeexpenses119,3972152,8212Researchanddevelopmentexpenses327,1195367,9485Expectedcreditlossreversedontradereceivables(513)---Totaloperatingexpenses691,37811803,97311PROFITFROMOPERATIONS324,4425452,8167NON-OPERATINGINCOMEANDEXPENSESOtherincome(Notes4and24)54,715149,9771Othergainsandlosses(Note24)6,580-176,8952Financecosts(Notes4and24)(12,443)-(15,267)-Shareofprofitofassociatesandjointventures313,5935361,2495Totalnon-operatingincomeandexpenses362,4456572,8548PROFITBEFOREINCOMETAX686,887111,025,67015INCOMETAXEXPENSE(Note25)42,537163,0151NETPROFITFORTHEYEAR644,35010962,65514(Continued)TXCCORPORATIONSTATEMENTSOFCOMPREHENSIVEINCOMEFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars,ExceptEarningsPerShare)20182017Amount%Amount%OTHERCOMPREHENSIVEINCOME(LOSS)Itemsthatwillnotbereclassifiedsubsequentlytoprofitorloss:Remeasurementofdefinedbenefitplans$(10,620)-$(15,255)-Unrealizedlossoninvestmentsinequityinstrumentsatfairvaluethroughothercomprehensiveincome(146,774)(2)--Shareoftheothercomprehensiveincomeofassociatesaccountedforusingtheequitymethod6,424-(187)-(150,970)(2)(15,442)-Itemsthatmaybereclassifiedsubsequentlytoprofitorloss:Exchangedifferencesontranslatingforeignoperations(94,043)(2)(101,905)(2)Shareoftheothercomprehensiveincomeofassociatesaccountedforusingtheequitymethod(1,743)-(944)-Unrealizedlossonavailable-for-salefinancialassets--(573,997)(8)(95,786)(2)(676,846)(10)Othercomprehensive(loss)incomefortheyear,netofincometax(246,756)(4)(692,288)(10)TOTALCOMPREHENSIVE(LOSS)INCOMEFORTHEYEAR$397,5946$270,3674EARNINGSPERSHARE(Note26)FromcontinuinganddiscontinuedoperationsBasic$2.
08-$3.
11-Diluted$2.
06-$3.
07-Theaccompanyingnotesareanintegralpartofthefinancialstatements.
(Concluded)TXCCORPORATIONSTATEMENTSOFCHANGESINEQUITYFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)OthersUnrealizedGain(Loss)onFinancialAssetsatFairExchangeValueThroughUnrealizedGainRetainedEarningsDifferencesonOther(Loss)onShares(InUnappropriatedTranslatingComprehensiveAvailable-for-saleThousands)ShareCapitalCapitalSurplusLegalReserveSpecialReserveEarningsForeignOperationsIncomeFinancialAssetsTotalEquityBALANCEATJANUARY1,2017309,757$3,097,570$1,665,224$1,151,202$222,793$2,789,106$(161,346)$-$955,103$9,719,652Appropriationof2016earningsCashdividendsdistributedbytheCompany867,320)867,320)Legalreserve---101,616-(101,616)Othercomprehensiveincome(loss)fortheyearendedDecember31,2017,netofincometax15,442)(102,791)-(574,055)(692,288)NetprofitfortheyearendedDecember31,2017962,655---962,655TotalcomprehensivelossfortheyearendedDecember31,2017947,213(102,791)-(574,055)270,367BALANCEATDECEMBER31,2017309,7573,097,5701,665,2241,252,818222,7932,767,383(264,137)-381,0489,122,699Effectofretrospectiveapplicationandretrospectiverestatements102,957-283,139(381,048)5,048BALANCEATJANUARY1,2018ASRESTATED309,7573,097,5701,665,2241,252,818222,7932,870,340(264,137)283,139-9,127,747Appropriationof2017earningsLegalreserve---96,265-(96,265)CashdividendsdistributedbytheCompany774,393)774,393)NetprofitforthefortheyearendedDecember31,2018644,350---644,350OthercomprehensivelossforthefortheyearendedDecember31,2018,netofincometax10,792)(95,786)(140,178)-(246,756)Totalcomprehensiveincome(loss)fortheyearendedDecember31,2018633,558(95,786)(140,178)-397,594Disposalofequityinstrumentsatfairvaluethroughothercomprehensiveincome37,944-(37,944)--Changesincapitalsurplusfrominvestmentinassociatesandjointventuresaccountedforusingtheequitymethod--(108)108)BALANCEATDECEMBER31,2018309,757$3,097,570$1,665,116$1,349,083$222,793$2,671,184$(359,923)$105,017$-$8,750,840Theaccompanyingnotesareanintegralpartofthefinancialstatements.
TXCCORPORATIONSTATEMENTSOFCASHFLOWSFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017CASHFLOWSFROMOPERATINGACTIVITIESIncomebeforeincometax$686,887$1,025,670Adjustmentsfor:Depreciationexpenses294,404367,396Depreciationexpensesofinvestmentproperties21,65822,255Amortizationexpenses5581,255Expectedcreditlossreversedontradereceivables(513)-Impairmentlossrecognizedonaccountsreceivables-(2,223)Net(gain)lossonfairvaluechangeoffinancialassetsandliabilitiesdesignatedasatfairvaluethroughprofitorloss(1,414)306Financecosts12,44315,267Interestincome(8,103)(7,217)Dividendincome(1,527)(2,288)Shareofprofitofassociatesandjointventures(313,593)(361,249)Gainondisposalofproperty,plantandequipment(1,232)(66)Gainondisposalofinvestmentproperty-(50,061)Gainondisposalofinvestment-(228,666)Impairmentlossrecognizedonfinancialassets-9,971Write-downofinventories4,995-Unrealizedgainonthetransactionswithsubsidiaries,associatesandjointventures1,0642,634Realizedgainonthetransactionswithsubsidiaries,associatesandjointventures(2,634)(4,718)Changesinoperatingassetsandliabilities:Financialassetsmandatorilyclassifiedasatfairvaluethroughprofitorloss10,010-Notesreceivable(211)1,281Tradereceivables(48,753)351,689Tradereceivablesfromrelatedparties(40,090)25,480Otherreceivables(9,217)17,074Otherreceivablesfromrelatedparties13,324(18,765)Inventories(46,622)(28,808)Othercurrentassets2,36947,073Decreaseinfinancialliabilitiesmandatorilyclassifiedasatfairvaluethroughprofitorloss(1,265)-Financialliabilitiesheldortrading-(13,445)Notespayable(276)(480)Tradepayables148,853(176,762)Tradepayablestorelatedparties(66,538)5,278Otherpayables(42,186)(184,867)Otherpayablestorelatedparties2472,711(Continued)TXCCORPORATIONSTATEMENTSOFCASHFLOWSFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017Othercurrentliabilities$(2,498)$(14,407)Definedbenefitliabilities-non-current(4,611)(9,542)Cashgeneratedfromoperations605,529791,776Interestpaid(12,931)(14,828)Incometaxespaid(64,010)(143,870)Netcashgeneratedfromoperatingactivities528,588633,078CASHFLOWSFROMINVESTINGACTIVITIESProceedsfromsaleoffinancialassetsatfairvaluethroughothercomprehensiveincome53,886-Purchaseoffinancialassetsatamortizedcost(71,004)-Proceedsonsaleoffinancialassetsatamortizedco89,480-Increaseinotherfinancialassets-(39,200)Proceedsfromsaleofavailable-for-salefinancialassets-214,181Proceedsonsaleoffinancialassetsatfairvaluethroughprofitorloss-110,911Purchaseoffinancialassetsmeasuredatcost-(1,772)Proceedsfromsaleoffinancialassetsmeasuredatcost-87,237Acquisitionofassociates(234,302)(26,540)Netcashoutflowonacquisitionofassociates(Note16)(1,746)-Netcashinflowondisposalofassociates(Note16)641,205-Paymentsforproperty,plantandequipment(104,393)(340,765)Proceedsfromdisposalofproperty,plantandequipment25,8461,272Proceedsfromdisposalofinvestmentproperty-56,674Decreaseinrefundabledeposits1,72011Paymentsforintangibleassets(185)-Increaseinprepaymentforequipment(43,887)-Interestreceived8,7167,295Dividendreceivedfromassociates3,20566,487Otherdividendsreceived1,5272,288Netcashgeneratedfrominvestingactivities370,068138,079CASHFLOWSFROMFINANCINGACTIVITIESDecreaseinshort-termborrowings(549)(19,731)Proceedsfromlong-termborrowings400,000500,000Repaymentsoflong-termborrowings(762,500)(512,500)Proceedsfromguaranteedepositsreceived8-Refundsofguaranteedepositsreceived-(13,973)DividendspaidtoownersoftheCompany(774,393)(867,320)Netcashusedinfinancingactivities(1,137,434)(913,524)EFFECTSOFEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS(2,541)4,534(Continued)TXCCORPORATIONSTATEMENTSOFCASHFLOWSFORTHEYEARSENDEDDECEMBER31,2018AND2017(InThousandsofNewTaiwanDollars)20182017NETDECREASEINCASHANDCASHEQUIVALENTS$(241,319)$(137,833)CASHANDCASHEQUIVALENTSATTHEBEGINNINGOFTHEYEAR798,761936,594CASHANDCASHEQUIVALENTSATTHEENDOFTHEYEAR$557,442$798,761Theaccompanyingnotesareanintegralpartofthefinancialstatements.
(Concluded)