CHLITINA HOLDING LIMITED AND SUBSIDIARIES · 2018-12-25 · CHLITINA HOLDING LIMITED AND...
Transcript of CHLITINA HOLDING LIMITED AND SUBSIDIARIES · 2018-12-25 · CHLITINA HOLDING LIMITED AND...
CHLITINA HOLDING LIMITED AND
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT ACCOUNTANTS
JUNE 30, 2018 AND 2017
------------------------------------------------------------------------------------------------------------------------------------
For the convenience of readers and for information purpose only, the auditors’ report and the accompanying
financial statements have been translated into English from the original Chinese version prepared and used in
the Republic of China. In the event of any discrepancy between the English version and the original Chinese
version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and
financial statements shall prevail.
~1~
REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE
To the Board of Directors and Shareholders of Chlitina Holding Limited
Introduction
We have reviewed the accompanying consolidated balance sheets of Chlitina Holding Limited and
subsidiaries (the “Group”) as at June 30, 2018 and 2017, and the related consolidated statements of
comprehensive income for the three-month and six-month periods then ended, as well as the
consolidated statements of changes in equity and of cash flows for the six-month periods then ended,
and notes to the consolidated financial statements, including a summary of significant accounting
policies. Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by
Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed
by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these
consolidated financial statements based on our reviews.
Scope of Review
We conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of
Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A
review of consolidated financial statements consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
~2~
Conclusion
Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying
consolidated financial statements do not present fairly, in all material respects, the consolidated financial
position of the Group as at June 30, 2018 and 2017, and of its consolidated financial performance for
the three-month and six-month periods then ended and its consolidated cash flows for the six-month
periods then ended in accordance with “Regulations Governing the Preparation of Financial Reports by
Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed
by the Financial Supervisory Commission.
Lin, Chun-Yao Chang, Shu-Chiung
For and on behalf of PricewaterhouseCoopers, Taiwan
August 9, 2018
------------------------------------------------------------------------------------------------------------------------------------------------- The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.
Asset Notes CNY TWD % CNY TWD % CNY TWD %
Current Assets
1100 Cash and cash equivalents 6(1) 820,171$ 3,767,045$ 62 749,780$ 3,422,746$ 63 780,098$ 3,499,519$ 64
1136 Amortised cost of a financial asset - current 6(2) 22,229 102,098 2 - - - - - -
1170 Accounts receivable, net 6(3) 847 3,890 - 310 1,415 - 170 763 -
1180 Accounts receivable-related parties, net 6(3)and7 195 896 - 144 658 - 455 2,041 -
1200 Other receivables 2,304 10,582 - 1,393 6,359 - 14,089 63,203 1
1210 Other receivables-related parties 7 168 772 - 261 1,191 - 220 987 -
130X Inventories 6(4) 113,688 522,169 9 98,658 450,374 8 111,211 498,893 9
1410 Prepayments 7 16,096 73,929 1 20,334 92,825 2 21,970 98,557 2
1476 Other current financial assets 6(1)and8 22,548 103,563 2 45,630 208,300 4 23,292 104,488 2
1479 Other current assets 923 4,239 - 338 1,543 - 275 1,233 -
11XX Total current assets 999,169 4,589,183 76 916,848 4,185,411 77 951,780 4,269,684 78
Non-current assets
1550 Investment accounted for using equity method 6(5) 5,368 24,655 - 6,006 27,417 1 - - -
1600 Property, plant and equipment, net 6(6) 231,318 1,062,444 17 231,575 1,057,140 20 208,781 936,592 17
1780 Intangible assets, net 6(7) 13,252 60,866 1 12,894 58,861 1 14,759 66,209 1
1840 Deferred income tax assets 7,855 36,078 1 8,363 38,177 1 6,226 27,930 1
1990 Other non-current assets 6(6)and7 71,283 327,403 5 5,432 24,798 - 34,169 153,282 3
15XX Total non-current assets 329,076 1,511,446 24 264,270 1,206,393 23 263,935 1,184,013 22
1XXX Total assets 1,328,245$ 6,100,629$ 100 1,181,118$ 5,391,804$ 100 1,215,715$ 5,453,697$ 100
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(The consolidated balance sheets as of June 30, 2018 and 2017 are reviewed, not audited)
(Expressed in thousands dollars)
June 30, 2018
( Adjusted )
June 30, 2017December 31, 2017
- Continued -
~3~
Liabilities and Equity Notes CNY TWD % CNY TWD % CNY TWD %
Current liabilities
2100 Short-term loans 6(8) 147,558$ 677,734$ 11 156,460$ 714,240$ 13 -$ -$ -
2120 Financial liabilities at fair value through profit or loss-current 6(9) - - - - - - 6,761 30,330 1
2130 Current contract liabilities 6(17) 72,965 335,128 5 - - - - - -
2170 Accounts payable 22,047 101,262 2 12,118 55,319 1 10,623 47,655 1
2180 Accounts payable-related parties 7 9,553 43,877 1 3,253 14,851 - 6,855 30,752 1
2219 Other payables 6(10) 219,405 1,007,727 17 96,015 438,309 8 186,447 836,401 15
2220 Other payables-related parties 7 1,393 6,398 - 1,528 6,975 - 1,873 8,402 -
2230 Current income tax liabilities 23,952 110,012 2 15,119 69,018 2 13,195 59,192 1
2310 Advance receipts 70 322 - 72,309 330,091 6 39,125 175,515 3
2321 Long-term liabilities – current portion 6(11) 410 1,883 - 409 1,865 - 194,988 874,718 16
2645 Guarantee deposits 61,861 284,127 5 58,829 268,554 5 55,168 247,483 5
21XX Total current liabilities 559,214 2,568,470 43 416,040 1,899,222 35 515,035 2,310,448 43
Non-current liabilities
2570 Deferred income tax liabilities 1,469 6,747 - 1,439 6,569 - 4,902 21,990 -
2640 Net defined benefit liabilities 917 4,212 - 922 4,210 - 960 4,307 -
25XX Total non-current liabilities 2,386 10,959 - 2,361 10,779 - 5,862 26,297 -
2XXX Total liabilities 561,600 2,579,429 43 418,401 1,910,001 35 520,897 2,336,745 43
Equity attributable to shareholders of the parent
Share Capital 6(14)
3110 Common stock 161,772 794,924 13 161,772 794,924 15 161,772 794,924 14
Capital surplus 6(15)
3200 Capital surplus 271,792 1,351,932 22 294,208 1,456,484 27 294,208 1,456,484 26
Retained earnings 6(16)
3310 Legal reserve 89,826 426,489 7 77,313 368,193 7 77,313 368,193 7
3320 Special Reserve 55,390 258,063 4 - - - - - -
3350 Unappropriated retained earnings 183,945 991,090 16 236,154 1,236,828 23 163,146 905,628 17
Other equity
3410 Financial statements translation differences of foreign operations 17,925 239,580)( 4)( 19,719 258,063)( 5)( 24,828 291,714)( 5)(
3500 Treasury stocks 6(14) 14,005)( 61,718)( 1)( 26,449)( 116,563)( 2)( 26,449)( 116,563)( 2)(
3XXX Total Equity 766,645 3,521,200 57 762,717 3,481,803 65 694,818 3,116,952 57
Significant contingent liabilities and unrecognised contract
commitments9
3X2X Total liabilities and equity 1,328,245$ 6,100,629$ 100 1,181,118$ 5,391,804$ 100 1,215,715$ 5,453,697$ 100
December 31, 2017( Adjusted )
June 30, 2017
The accompanying notes are an integral part of these consolidated financial statements.
June 30, 2018
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(The consolidated balance sheets as of June 30, 2018 and 2017 are reviewed, not audited)
(Expressed in thousands dollars)
~4~
Items Notes CNY TWD % CNY TWD % CNY TWD % CNY TWD %
4000 Operating revenue 6(17)and7 232,761$ 1,086,601$ 100 173,144$ 764,670$ 100 452,666$ 2,100,054$ 100 331,922$ 1,482,761$ 100
5000 Operating costs6(4)(21)and
742,500)( 198,440)( 18)( 32,460)( 143,476)( 19)( 83,803)( 388,788)( 19)( 60,040)( 268,210)( 18)(
5900 Gross profit 190,261 888,161 82 140,684 621,194 81 368,863 1,711,266 81 271,882 1,214,551 82
Operating expenses 6(21)and7
6100 Selling expenses 74,646)( 348,694)( 32)( 71,558)( 315,980)( 41)( 152,475)( 707,377)( 34)( 138,043)( 616,665)( 42)(
6200 Administrative expenses 32,434)( 151,468)( 14)( 24,954)( 110,078)( 14)( 64,874)( 300,970)( 14)( 50,139)( 223,980)( 15)(
6000 Total operating expenses 107,080)( 500,162)( 46)( 96,512)( 426,058)( 55)( 217,349)( 1,008,347)( 48)( 188,182)( 840,645)( 57)(
6900 Operating profit 83,181 387,999 36 44,172 195,136 26 151,514 702,919 33 83,700 373,906 25
Non-operating income and expenses
7010 Other income 6(18) 3,459 16,676 2 8,842 39,340 5 23,948 111,102 5 11,720 52,356 4
7020 Other gains and losses 6(9)(19) 1,696)( 7,773)( 1)( 695)( 2,551)( - 1,409 6,537 - 10,689)( 47,750)( 3)(
7050 Finance costs 6(20) 988)( 4,611)( - 994)( 4,388)( 1)( 1,885)( 8,745)( - 1,959)( 8,753)( 1)(
7060Share of loss of associates and joint ventures
accounted for under equity method6(5)
235)( 1,102)( - - - - 638)( 2,960)( - - - -
7000 Total non-operating income and expenses 540 3,190 1 7,153 32,401 4 22,834 105,934 5 928)( 4,147)( -
7900 Profit before tax 83,721 391,189 37 51,325 227,537 30 174,348 808,853 38 82,772 369,759 25
7950 Income tax expense 6(22) 24,834)( 115,916)( 11)( 15,470)( 68,503)( 9)( 47,751)( 221,532)( 11)( 26,380)( 117,845)( 8)(
8200 Profit for the period 58,887$ 275,273$ 26 35,855$ 159,034$ 21 126,597$ 587,321$ 27 56,392$ 251,914$ 17
Other comprehensive income(loss)
Components of other comprehensive income
that will be reclassified to profit or loss
8361Financial statement translation differences of
foreign operations 2,006$ 32,061)($ 3)( 1,555)($ 54,450$ 7 1,794)($ 18,483$ 1 1,125)($ 109,908)($ 7)(
8500 Total comprehensive income (loss) for the period 60,893$ 243,212$ 23 34,300$ 213,484 28 124,803$ 605,804$ 28 55,267$ 142,006 10
Earnings per share(in dollars) 6(23)
9750 Basic earnings per share 0.74$ 3.48$ 0.46$ 2.02$ 1.60$ 7.45$ 0.72$ 3.20$
9850 Diluted earnings per share 0.74$ 3.48$ 0.45$ 1.99$ 1.60$ 7.44$ 0.71$ 3.17$
The accompanying notes are an integral part of these consolidated financial statements.
2018
2017
( Adjusted ) 2018
2017
( Adjusted )
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands dollars, except earnings per share data)
(REVIEWED, NOT AUDITED)
Three month ended June 30, Six month ended June 30,
~5~
~6~
Notes CNY TWD CNY TWD CNY TWD CNY TWD CNY TWD CNY TWD CNY TWD CNY TWDSix-month ended June 30, 2017 (Adjusted)
Balance at January 1, 2017 $ 161,772 $ 794,924 $ 294,208 $ 1,456,484 $ 60,972 $ 295,114 $ - $ - $ 237,478 $ 1,238,313 $ 25,953 181,806)($ 9,358)($ 43,207)($ $ 771,025 $ 3,559,822
Profit for the period - - - - - - - - 56,392 251,914 - - - - 56,392 251,914
Other comprehensive income(loss) for theperiod - - - - - - - - - - 1,125)( 109,908)( - - 1,125)( 109,908)(
Total omprehensive income(loss) for the - - - - - - - - 56,392 251,914 1,125)( 109,908)( - - 55,267 142,006
Appropriations of 2016 earnings 6(16)
Legal reserve - - - - 16,341 73,079 - - 16,341)( 73,079)( - - - - - -
Cash dividends - - - - - - - - 114,383)( 511,520)( - - - - 114,383)( 511,520)(
Purchase of treasury stocks 6(14) - - - - - - - - - - - - 17,091)( 73,356)( 17,091)( 73,356)(
Balance at June 30, 2017 $ 161,772 $ 794,924 $ 294,208 $ 1,456,484 $ 77,313 $ 368,193 $ - $ - $ 163,146 $ 905,628 $ 24,828 291,714)($ 26,449)($ 116,563)($ $ 694,818 $ 3,116,952
Six-month ended June 30, 2018
Balance at January 1, 2018 $ 161,772 $ 794,924 $ 294,208 $ 1,456,484 $ 77,313 $ 368,193 $ - $ - $ 236,154 $ 1,236,828 $ 19,719 258,063)($ 26,449)($ 116,563)($ $ 762,717 $ 3,481,803
Profit for the period - - - - - - - - 126,597 587,321 - - - - 126,597 587,321
Other comprehensive income(loss) for theperiod - - - - - - - - - - 1,794)( 18,483 - - 1,794)( 18,483
Total omprehensive income(loss) for the - - - - - - - - 126,597 587,321 1,794)( 18,483 - - 124,803 605,804
Appropriations of 2017 earnings 6(16)
Legal reserve - - - - 12,513 58,296 - - 12,513)( 58,296)( - - - - - -
Special Reserve - - - - 55,390 258,063 55,390)( 258,063)( - - - - - -
Cash dividends - - - - - - - - 110,903)( 516,700)( - - - - 110,903)( 516,700)(
Cash dividends from Capital surplus 6(16) - - 25,593)( 119,238)( - - - - - - - - - - 25,593)( 119,238)(
Share-based compensation payment 6(13) - - 3,177 14,686 - - - - - - - - - - 3,177 14,686
Purchase of treasury stocks - - - - - - - - - - - - 12,444 54,845 12,444 54,845
Balance at June 30, 2018 $ 161,772 $ 794,924 $ 271,792 $ 1,351,932 $ 89,826 $ 426,489 $55,390 $258,063 $ 183,945 $ 991,090 $ 17,925 239,580)($ 14,005)($ 61,718)($ $ 766,645 $ 3,521,200
Retained earnings
CHLITINA HOLDING LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in thousands dollars)(REVIEWED, NOT AUDITED)
Equity attributable to shareholders of the parent
Total equity
The accompanying notes are an integral part of these consolidated financial statements.
Common stock Capital surplus Legal reserveUnappropriated retained
earnings
Financial statementtranslation differences of
foreign operations Treasury stocks Special Reserve
Notes CNY TWD CNY TWD
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax 174,348$ 808,853$ 82,772$ 369,759$
Adjustment
Adjustment to reconcile profit (loss)
Depreciation 6(6)(21) 10,715 49,710 9,416 42,063
Amortization 6(7)(21) 1,912 8,870 1,527 6,821
Net gain (loss) on financial 6(9)(19) 2,338)( 10,847)( 1,363 6,089
assets at fair value
through profit or loss
Interest expense 6(20) 1,885 8,745 1,959 8,753
Interest income 6(18) 6,851)( 31,785)( 5,570)( 24,882)(
Compensation cost of share-based payments 6(13) 3,177 14,686 - -
Share of profit of associates and 6(5) 638 2,960 - -
joint venture accounted for
under equity method
Losses on disposal of investments 6(19) - - 1,262 5,708
Losses on disposal of property, 6(19) 84 390 65 290
plant and equipment
Change in operating assets and liabilities
relating to operating activities
Changes in operating assets
Financial assets and liabilities at 2,338 10,847 914 4,083
fair value through profit or loss
Accounts receivable 537)( 2,491)( 342 1,528
Accounts receivable-related parties 51)( 237)( 1,446 6,460
Other receivables 964)( 4,472)( 895 3,998
Other receivables-related parties 93 431 364 1,626
Inventories 15,030)( 69,729)( 11,302)( 50,488)(
Prepayments 4,238 19,661 1,255)( 5,606)(
Other non-current assets 9,963)( 46,221)( - -
Changes in operating liabilities
Accounts payable 9,929 46,064 6,183)( 27,621)(
Accounts payable-related parties 6,300 29,228 2,447 10,931
Other payables 13,106)( 60,803)( 38,613)( 172,492)(
Other payables-related parties 135)( 626)( 81)( 362)(
Advance receipts - - 5,571)( 24,887)(
Current contract liabilities 656 3,043 - -
Guarantee deposits 3,102 14,391 3,621 16,176
Cash provided by operating activities 170,440 790,668 39,818 177,947
Interest paid 1,881)( 8,727)( - -
Income tax paid 38,380)( 178,056)( 37,570)( 167,833)(
Net cash provided by operating activities 130,179 603,885 2,248 10,114
(REVIEWED, NOT AUDITED)
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands dollars)
Six-month period ended June
30, 2018
( Adjusted )
Six-month period ended June
30, 2017
- Continued -
~7~
Notes CNY TWD CNY TWD
CASH FLOWS FROM INVESTING
ACTIVITIES
Decrease (increase) in other current financial assets 513$ 2,379$ 170)($ 759)($
Proceeds from disposal of amortised cost of a financial asset 1,236 5,734 - -
Decrease (increase) in other current assets 47)( 218)( 2,468 11,025
6(5)(26) - - 25,000 110,175
Acquisition of property, plant and equipment 6(6) 13,422)( 62,268)( 9,378)( 41,893)(
Proceeds from disposal of property, plant and equipment 70 324 3,218 14,375
Acquisition of subsidiary 6(26) - - 1,945)( 8,725)(
Acquisition of intangible assets 6(7) 192)( 890)( - -
Increase in other non-current assets 55,888)( 259,281)( 1,691)( 7,554)(
Interest received 6,904 32,030 5,465 24,413
Net cash provided by (used in) investing activities 60,826)( 282,190)( 22,967 101,057
CASH FLOWS FROM FINANCING
ACTIVITIES
Decrease in short-term borrowings 6(27) 10,979)( 50,934)( - -
Purchase of treasury stocks 6(14) - - 17,091)( 73,356)(
Treasury stock transferred to employees 6(14) 12,444 54,845 - -
Net cash flows provided by (used in) financing activities 1,465 3,911 17,091)( 73,356)(
Effects due to changes in exchange rates 427)( 18,693 3,544 86,137)(
(Decrease) increase in cash and cash equivalents 70,391 344,299 11,668 48,322)(
Cash and cash equivalents at beginning of period 749,780 3,422,746 768,430 3,547,841
Cash and cash equivalents at end of period 820,171$ 3,767,045$ 780,098$ 3,499,519$
The accompanying notes are an integral part of these consolidated financial statements.
Proceeds from disposal of investments accounted for
under equity method
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands dollars)
(REVIEWED, NOT AUDITED)
Six-month period ended June
30, 2018
( Adjusted )
Six-month period ended June
30, 2017
~8~
~9~
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2018 AND 2017
(Expressed in thousands of dollars, except as otherwise indicated)
(REVIEWED NOT AUDITED)
1. HISTORY AND ORGANIZATION
Chlitina Holding Limited (the “Company”) was incorporated in Cayman Islands on July 3, 2012, as a
corporation limited by shares in accordance with Article 22 of the Company Act of the Cayman Islands.
In order to issue the stock in the Taiwan Stock Exchange, the subsidiaries were reorganised by share
exchange. The Company is a holding company with no corporate income tax that should be imposed
according to the local law and has limited liability. The Company and its subsidiaries (collectively
referred herein as the “Group”) are mainly engaged in the development, manufacture and sale of
cosmetics. On November 27, 2013, the Company was approved and listed on Taiwan Stock Exchange.
2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND PROCEDURES FOR AUTHORISATION
These consolidated financial statements were reported to the Board of Directors on August 9, 2018.
3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting
Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
New standars, interpretations and amendments endorsed by the FSC effective from 2018 are as
follows:
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IFRS 2, ‘Classification and measurement of
share-based payment transactions’
January 1, 2018
Amendments to IFRS 4, ‘Applying IFRS 9 Financial instruments with
IFRS 4 Insurance contracts’
January 1, 2018
IFRS 9, ‘Financial instruments’ January 1, 2018
IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018
Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from
contracts with customers’
January 1, 2018
Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017
Amendments to IAS 12, ‘Recognition of deferred tax assets for
unrealised losses’
January 1, 2017
Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018
IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 1, ‘First-time adoption of International Financial Reporting
Standards’
January 1, 2018
~10~
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment.
A. IFRS 9, ‘Financial instruments’
(a) Classification of debt instruments is driven by the entity’s business model and the contractual
cash flow characteristics of the financial assets, which would be classified as financial asset at
fair value through profit or loss, financial asset measured at fair value through other
comprehensive income or financial asset measured at amortised cost. Equity instruments
would be classified as financial asset at fair value through profit or loss, unless an entity makes
an irrevocable election at inception to present in other comprehensive income subsequent
changes in the fair value of an investment in an equity instrument that is not held for trading.
(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’
approach. An entity assesses at each balance sheet date whether there has been a significant
increase in credit risk on that instrument since initial recognition to recognise 12-month
expected credit losses or lifetime expected credit losses (interest revenue would be calculated
on the gross carrying amount of the asset before impairment losses occurred); or if the
instrument has objective evidence of impairment, interest revenue after the impairment would
be calculated on the book value of net carrying amount (i.e. net of credit allowance). The
Group shall always measure the loss allowance at an amount equal to lifetime expected credit
losses for trade receivables that do not contain a significant financing component.
(c) The Group has elected not to restate prior period financial statements using the modified
retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018,
please refer to Notes 12(4)B and C.
B. IFRS 15, ‘Revenue from contracts with customers’ and amendments
(a) IFRS 15, ‘Revenue from contracts with customers’ replaces IAS 11, ‘Construction contracts’,
IAS 18, ‘Revenue’ and relevant interpretations. IFRS 15 includes a set of comprehensive
disclosure requirements that requires an entity to disclose sufficient information to enable
users of financial statements to understand the nature, amount, timing and uncertainty of
revenue and cash flows arising from contracts with customers.
(b) The Group has elected not to restate prior period financial statements and recognised the
cumulative effect of initial application as retained earnings at January 1, 2018, using the
modified retrospective approach under IFRS 15. The significant effects of adopting the
modified transition as of January 1, 2018 are summarised below:
Under IFRS 15, liabilities in relation to sales of goods contracts are recognised as contract
liabilities-current, but were previously presented as advance sales receipts in the balance sheet.
As of January 1, 2018, the balance amounted to CNY $72,239 (TWD$329,771).
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 12, ‘Disclosure of interests in other entities’
January 1, 2017
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IAS 28, ‘Investments in associates and joint ventures’
January 1, 2018
~11~
(c) Please refer to Note 12(5)C. for other disclosures in relation to the first application of IFRS
15.
C. Amendments to IAS 7, ‘Disclosure initiative’
This amendment requires that an entity shall provide more disclosures related to changes in
liabilities arising from financing activities, including both changes arising from cash flows and
non-cash changes.
The Group expects to provide additional disclosure to explain the changes in liabilities arising
from financing activities.
(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Group
New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as
follows:
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment. The
quantitative impact will be disclosed when the assessment is complete.
IFRS 16, ‘Leases’
IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard
requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with
terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors,
which is to classify their leases as either finance leases or operating leases and account for those two
types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
In the first quarter of 2018, the Group has reported to the Board of Directors that the impact of IFRS
16, ‘Leases’ is insignificant to the Group.
Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative
compensation’
January 1, 2019
IFRS 16, ‘Leases’ January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019
Amendments to IAS 28, ‘Long-term interests in associates and
joint ventures’
January 1, 2019
IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle January 1, 2019
~12~
(3) IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as
endorsed by the FSC are as follows:
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted are consistent with Note 4 in the consolidated financial
statements for the year ended December 31, 2017, except for the compliance statement, basis of
preparations, basis of consolidation and additional policies as set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
(1) Compliance statement
A. The consolidated financial statements of the Group have been prepared in accordance with the
“Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the
International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated
financial statements for the year ended December 31, 2017.
(2) Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under
the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through
profit or loss.
(b) Defined benefit liabilities recognised based on the net amount of pension fund assets less
present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting
Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as
endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 5.
Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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
International Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2021
~13~
C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Group has elected to apply
modified retrospective approach whereby the cumulative impact of the adoption was recognised
as retained earnings or other equity as of January 1, 2018 and the financial statements for the year
ended December 31, 2017 and for the second quarter of 2017 was not restated. The financial
statements for the year ended December 31, 2017 and for the second quarter of 2017 were prepared
in compliance with International Accounting Standard 39 (‘IAS 39’), International Accounting
Standard 11 (‘IAS 11’), International Accounting Standard 18 (‘IAS 18’) and related financial
reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting
policies and detail of significant accounts.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
The basis for preparation of consolidated financial statements are consistent with those of the year
ended December 31, 2017.
B. Subsidiaries included in the consolidated financial statements:
Name of Name of Main business
investor subsidiary activities June 30, 2018 December 31, 2017 June 30, 2017 Description
The Company Chlitina Group
Limited (Chlitina
Group)
Investing 100 100 100
Chlitina Group Chlitina International
Limited (Chlitina
International)
Investing 100 100 100
Chlitina Group Chlitina Intelligence
Limited (Chlitina
Intelligence)
Investing 100 100 100 Note 1
Chlitina Group W-Amber
International Limited
(W-Amber
International)
Investing 100 100 100
Chlitina Group W-Champion
International Limited
(W-Champion
International)
Investing 100 100 100
Chlitina Group C-Asia International
Limited (C-Asia
International)
Investing 100 100 100
Chlitina
International
Hong Kong
Chlitina International
Limited
(Hong Kong Chlitina)
Investing and
trading of
skincare
products
100 100 100
Chlitina
International
Chlitina Marketing
Limited (Chlitina
Marketing)
Investing 100 100 100 Note 2
Chlitina
International
Centre de Recherche
et de Developpement
de CHLITINA
FRANCE EURL
(Chlitina France
EURL)
Research and
development
center
100 100 100
Ownership(%)
~14~
Name of Name of Main business
investor subsidiary activities June 30, 2018 December 31, 2017 June 30, 2017 Description
Hong Kong
Chlitina
Chlitina (China)
Trade Limited
(Chlitina China)
Dealer of
skincare
products and
supplementary
health care
products
100 100 100
Hong Kong
Chlitina
Weishuo (Shanghai)
Daily Product
Limited (Weishuo)
Production
and trading
of skincare
products
100 100 100
W-Amber
International
W-Amber Marketing
Limited (W-Amber
Marketing)
Investing 100 100 100
W-Amber
Marketing
- - 100
Hong Kong
Chlitina
100 100 -
Hong Kong
W-Amber
Weihu (Shanghai)
Trade Limited
(Weihu Shanghai)
Investing, dealer
of skincare
products and
supplementary
health care
products
100 100 100
Hong Kong
W-Amber
Crystal Asia
(Shanghai) Limited
(Crystal Asia
Shanghai)
Dealer of
skincare
products and
supplementary
health care
products
100 100 100
W-Champion
International
W-Champion
Marketing Limited
(W-Champion
Marketing)
Investing 100 100 100
W-Champion
Marketing
- - 100
Hong Kong
Chlitina
100 100 -
Hong Kong
W-Champion
Wuguan (Shanghai)
Trade Limited
(Wuguan Shanghai)
Dealer of
skincare
products and
supplementary
health care
products
100 100 100
C-Asia
International
- - 100
Hong Kong
Chlitina
100 100 -
Ownership(%)
Note 4
Note 5
Note 6
Hong Kong
W-Amber
International Limited
(Hong Kong
W-Amber)
Investing
Hong Kong
W-Champion
International Limited
(Hong Kong
W-Champion)
Investing
Hong Kong Crystal
Asia International
Limited (Hong Kong
Crystal Asia)
Investing
~15~
Note 1:Chlitina Intelligence established British Virgin Is. Chlitina Intelligence Limited Taiwan
Branch (Chlitina Intelligence Taiwan Branch) which is primarily engaged in
management of intellectual property.
Note 2:Chlitina Marketing established British Virgin Is. Chlitina Marketing Limited Taiwan
Branch (Chlitina Marketing Taiwan Branch) which is the research and development
center and trading of skincare products.
Note 3:The Group acquired 100% of the share capital of Beijing Aobaojia on April 19, 2017 and
thus includes Beijing Aobaojia as an entity in the consolidated financial statements.
Note 4:In August 2017, W-Amber Marketing transferred 100% equity shares of Hong Kong W-
Amber to Hong Kong Chlitina.
Note 5:In August 2017, W-Champion Marketing transferred 100% equity shares of Hong Kong
W-Champion to Hong Kong Chlitina.
Note 6:In August 2017, C-Asia International transferred 100% equity shares of Hong Kong
Crystal Asia to Hong Kong Chlitina.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the “functional
currency”). Both of the Company’s functional and presentation currency are TWD, however, the
functional currency of the significant operating components of the Group is CNY, thus the
consolidated financial statements are presented in CNY.
A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions are
recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are
Name of Name of Main business
investor subsidiary activities June 30, 2018 December 31, 2017 June 30, 2017 Description
Weihu
Shanghai
Shanghai Yuanshuo
Management
Consulting Limited
(Shanghai Yuanshuo)
Enterprise
management
consulting
100 100 100
Shanghai
Yuanshuo
Beijing Aobaojia
Medical Cosmetology
Clinic Limited
(Beijing Aobaojia)
Medical
Cosmetology
Services
100 100 100
Hong Kong
Crystal Asia
Cui Jie (Shanghai)
Trading Co. Ltd.
Dealer of health
food and daily
necessities
100 100 -
Ownership(%)
Note 3
~16~
retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences
arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value
through profit or loss are re-translated at the exchange rates prevailing at the balance sheet
date; their translation differences are recognised in profit or loss. Non-monetary assets and
liabilities denominated in foreign currencies held at fair value through other comprehensive
income are re-translated at the exchange rates prevailing at the balance sheet date; their
translation differences are recognised in other comprehensive income. However, non-
monetary assets and liabilities denominated in foreign currencies that are not measured at fair
value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive income
within ‘other gains and losses’.
B. Translation of foreign operations
The operating results and financial position of all the group entities and associates that have a
functional currency different from the presentation currency are translated into the presentation
currency as follows:
(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange
rate at the date of that balance sheet;
(b) Income and expenses for each statement of comprehensive income are translated at average
exchange rates of that period; and
(c) All resulting exchange differences are recognised in other comprehensive income.
C. On June 30, 2018 and 2017, the spot exchange rates of CNY to TWD were CNY $1=TWD $4.5930
and CNY $1=TWD $4.4860, and the average exchange rates of CNY to TWD were CNY
$1=TWD $4.6393 and CNY $1=TWD $4.4672. On December 31, 2017, the exchange rate of
CNY to TWD was $1 to $4.5650.
(5) Financial assets at fair value through profit or loss
Effective 2018
A. Financial assets at fair value through profit or loss are financial assets that are not measured at
amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are
recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the
transaction costs in profit or loss. The Group subsequently measures the financial assets at fair
value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future
economic benefits associated with the dividend will flow to the Group and the amount of the
dividend can be measured reliably.
~17~
(6) Financial assets at amortised cost
Effective 2018
A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Group’s business model is achieved by collecting contractual cash flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and
derecognised using trade date accounting.
C. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity
period and are measured at initial investment amount as the effect of discounting is immaterial.
(7) Accounts and notes receivable
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange
for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
(8) Impairment of financial assets
For financial assets at amortised cost including accounts receivable that have a significant financing
component, at each reporting date, the Group recognises the impairment provision for 12 months
expected credit losses if there has not been a significant increase in credit risk since initial recognition
or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit
risk has increased since initial recognition after taking into consideration all reasonable and verifiable
information that includes forecasts. On the other hand, for accounts receivable or contract assets that
do not contain a significant financing component, the Group recognises the impairment provision for
lifetime ECLs.
(9) Notes and accounts payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes
payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at
initial invoice amount as the effect of discounting is immaterial.
(10) Financial liabilities at fair value through profit or loss
A. Financial liabilities are classified in this category of held for trading if acquired principally for
the purpose of repurchasing in the short-term. Derivatives are also categorised as financial
liabilities held for trading unless they are designated as hedges.
B. At initial recognition, the Group measures the financial liabilities at fair value. All related
transaction costs are recognised in profit or loss. The Group subsequently measures these
financial liabilities at fair value with any gain or loss recognised in profit or loss.
(11) Employee share-based payment
For the equity-settled share-based payment arrangements, the employee services received are
measured at the fair value of the equity instruments granted at the grant date, and are recognised as
compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value
of the equity instruments granted shall reflect the impact of market vesting conditions and non-
market vesting conditions. Compensation cost is subject to adjustment based on the service
~18~
conditions that are expected to be satisfied and the estimates of the number of equity instruments
that are expected to vest under the non-market vesting conditions at each balance sheet date.
Ultimately, the amount of compensation cost recognised is based on the number of equity
instruments that eventually vest.
(12) Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or
loss, except to the extent that it relates to items recognised in other comprehensive income or
items recognised directly in equity, in which cases the tax is recognised in other comprehensive
income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in accordance with applicable tax regulations. It establishes provisions
where appropriate based on the amounts expected to be paid to the tax authorities.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is
provided on temporary differences arising on investments in subsidiaries and associates, except
where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the related deferred tax asset is realised or the
deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised. At each balance sheet
date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance
sheet when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally
enforceable right to offset current tax assets against current tax liabilities and they are levied by
the same taxation authority on either the same entity or different entities that intend to settle on
a net basis or realise the asset and settle the liability simultaneously.
F. If a change in tax rate is enacted or substantively enacted in the interim period, the Group
recognizes the effect of the change immediately in the interim period in which the change occurs.
The effect of the change on items recognized outside profit or loss is recognized in other
comprehensive income or equity while the effect of the change on items recognized in profit or
loss is recognized in profit or loss.
(13) Revenue recognition
A. Sales of goods
(a) The Group manufactures and sells skincare products, health care products and other products.
Sales are recognised when control of the products has transferred, being when the products
are delivered to the customers, the customers has full discretion over the channel and price
~19~
to sell the products, and there is no unfulfilled obligation that could affect the customers’
acceptance of the products. Delivery occurs when the products have been shipped to the
specific location, the risks of obsolescence and loss have been transferred to the customers,
and either the customers have accepted the products in accordance with the sales contract, or
the Group has objective evidence that all criteria for acceptance have been satisfied.
(b) The skincare products and health care products are often sold with volume discounts based
on aggregate sales over a 1-month period. Revenue from these sales is recognised based on
the price specified in the contract, net of the estimated volume discounts and sales discounts
and allowances. The Group calculates sales discounts and allowances based on the actual
sales in current month. Revenue is only recognised to the extent that it is highly probable that
a significant reversal will not occur, and is settled at each reporting date. The sales usually
are made with a credit term of advance receipts before goods shipped to customers, which is
consistent with market practice. As the time interval between the transfer of committed goods
or service and the payment of customer does not exceed one year, the Group does not adjust
the transaction price to reflect the time value of money.
(c) A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the
payment is due.
B. The Group manages franchises and provides employee training services. Revenue from
providing services is recognised in the accounting period in which the services are rendered.
Franchise contract include multiple deliverables that shall be rendered by the Group, such as
store equipment, employee training and others. In most cases, the employee training can be
provided by another party, therefore employee training is accounted for us a separate
performance obligation. The transaction price will be allocated to each performance obligation
based on the stand-alone selling prices. Where these are not directly observable, they are
estimated based on expected cost plus margin. If contracts include the sales of store equipment,
revenue for the store equipment is recognised at a point in time when the store equipment is
delivered, the legal title has passed and the customer has accepted the store equipment.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION
UNCERTAINTY
There was no significant change in the reporting period. Please refer to Note 5 in the consolidated
financial statements for the year ended December 31, 2017.
6. DETAILS OF SIGNIFICANT ACCOUNTS
(1) Cash and cash equivalents
A. As of June 30, 2018, December 31, 2017 and June 30, 2017, the Group’s cash equivalents referred
to fixed rate financial instruments registered by Shanghai Stock Exchange with maturities of 1 to
28 days.
CNY TWD CNY TWD CNY TWD
Cash on hand 414$ 1,901$ 411$ 1,876$ 410$ 1,839$
Demand deposits 461,832 2,121,194 285,562 1,303,591 335,618 1,505,582
Time deposits 20,000 91,860 93,653 427,526 177,245 795,121
Cash equivalents 337,925 1,552,090 370,154 1,689,753 266,825 1,196,977
820,171$ 3,767,045$ 749,780$ 3,422,746$ 780,098$ 3,499,519$
June 30, 2018 December 31, 2017 June 30, 2017
~20~
B. As of June 30, 2018, the Group’s time deposits with maturity term of over three months amounted
to CNY $22,229 (TWD $102,098), which were reclassified as financial assets at amortised cost-
current. As of December 31, 2017 and June 30, 2017, the Group’s time deposits with maturity
term of over three months amounted to CNY $23,465 (TWD $107,116) and CNY $23,292 (TWD
$104,488), respectively, which were reclassified as other financial assets-current.
C. As of June 30, 2018 and December 31, 2017, cash and cash equivalents amounting to CNY
$22,548 (TWD $103,563) and CNY $22,165 (TWD $101,184) were pledged to others as collateral,
and were classified as other financial assets - current. Cash and cash equivalents did not pledged
to others as collateral as of June 30, 2017. Please refer to Note 8 for information on pledged assets.
D. The Group transacts with a variety of financial institutions all with high credit quality to disperse
credit risk, so it expects that the probability of counterparty default is remote.
(2) Financial assets at amortised cost
Effective 2018
A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed
below:
B. As at June 30, 2018, without taking into account any collateral held or other credit enhancements,
the maximum exposure to credit risk in respect of the amount that best represents the financial
assets at amortised cost held by the Group was CNY $22,229 (TWD $102,098).
C. The Group has no financial assets at amortised cost pledged to others as collateral.
D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).
E. Information on other current financial assets-current for the year ended December 31, 2017 and
for the second quarter of 2017 is provided in Note 12 (4).
(3) Accounts receivable
A. The Group does not hold any collateral as security and has no accounts receivable pledged to
others.
Items CNY TWD
Current items:
Time deposits with maturity term of over
three months 22,229$ 102,098$
June 30, 2018
CNY TWD CNY
Interest income 170$ 793$ 284$
Three months ended June 30, 2018 Six months ended June 30, 2018
CNY TWD CNY TWD CNY TWD
Accounts receivable 847$ 3,890$ 310$ 1,415$ 170$ 763$
Accounts receivable-
related parties 195 896 144 658 455 2,041
1,042$ 4,786$ 454$ 2,073$ 625$ 2,804$
June 30, 2018 December 31, 2017 June 30, 2017
~21~
B. As at June 30, 2018, December 31, 2017 and June 30, 2017, without taking into account any
collateral held or other credit enhancements, the maximum exposure to credit risk in respect of
the amount that best represents the Group’s accounts receivable was CNY $1,042 (TWD $4,786),
CNY $454 (TWD $2,073) and CNY $625 (TWD $2,804), respectively.
C. Information relating to credit risk of accounts receivable is provided in Note 12(2).
(4) Inventories
A. For the three months and six months ended June 30, 2018 and 2017, the cost of inventories
recognised as expenses are as follows:
CNY TWD CNY TWD CNY TWD
Finished goods 67,390$ 309,522$ 4,764)($ 21,881)($ 62,626$ 287,641$
Work in process 14,180 65,129 1,042)( 4,786)( 13,138 60,343
Raw materials 41,614 191,133 3,690)( 16,948)( 37,924 174,185
123,184$ 565,784$ 9,496)($ 43,615)($ 113,688$ 522,169$
CNY TWD CNY TWD CNY TWD
Finished goods 58,958$ 269,143$ 3,793)($ 17,315)($ 55,165$ 251,828$
Work in process 9,535 43,527 248)( 1,132)( 9,287 42,395
Raw materials 42,473 193,889 8,267)( 37,738)( 34,206 156,151
110,966$ 506,559$ 12,308)($ 56,185)($ 98,658$ 450,374$
CNY TWD CNY TWD CNY TWD
Finished goods 67,472$ 302,679$ 2,801)($ 12,565)($ 64,671$ 290,114$
Work in process 7,485 33,578 512)( 2,297)( 6,973 31,281
Raw materials 41,099 184,370 1,532)( 6,872)( 39,567 177,498
116,056$ 520,627$ 4,845)($ 21,734)($ 111,211$ 498,893$
June 30, 2018
Allowance for
Cost inventory valuation losses Book value
Allowance for
December 31, 2017
June 30, 2017
Allowance for
Cost inventory valuation losses Book value
Cost inventory valuation losses Book value
CNY TWD CNY TWD
Cost of goods sold 40,233$ 187,898$ 30,613$ 135,212$
Loss on decline in market value 2,267 10,542 1,847 8,264
42,500$ 198,440$ 32,460$ 143,476$
2018 2017
Three months ended June 30,
~22~
B. The Group has no inventories pledged to others.
(5) Investments accounted for using equity method
A. Associates using equity method are all individually immaterial and the Group’s share of the
operating results are summarized below:
B. The Group has no investments accounted for using equity method pledged to others.
C. On March 15, 2017, the Group entered into a contract with non-related party, Sinoexcelsior
Investment Incorporation, to sell all the equity interest in associate, Beijing Yujiachengyue
Investment & Management Limited, for a total price of CNY $37,300 (TWD $164,380).
CNY TWD CNY TWD
Cost of goods sold 80,757$ 374,656$ 58,450$ 261,108$
Loss on decline in market value 3,046 14,132 1,590 7,102
83,803$ 388,788$ 60,040$ 268,210$
Six months ended June 30,
2018 2017
CNY TWD CNY TWD CNY TWD
Associates 5,368$ 24,655$ 6,006$ 27,417$ -$ -$
June 30, 2018 December 31, 2017 June 30, 2017
CNY TWD CNY TWD
Loss for the period 235)($ 1,102)($ -$ -$
Other comprehensive loss - - - -
Total comprehensive loss 235)($ 1,102)($ -$ -$
CNY TWD CNY TWD
Loss for the period 638)($ 2,960)($ -$ -$
Other comprehensive loss - - - -
Total comprehensive loss 638)($ 2,960)($ -$ -$
2018 2017
Three months ended June 30,
Six months ended June 30,
2018 2017
~23~
(6) Property, plant and equipment
(In thousands of CNY)
Buildings Transportation Machinery
Office
and other
Construction
in progress and
equipment
Land and structures equipment equipment equipment to be inspected Total
At January 1, 2018
Cost 23,150$ 212,840$ 4,815$ 13,426$ 70,585$ 4,129$ 328,945$
Accumulated depreciation
and impairment - 42,474)( 3,690)( 5,619)( 45,587)( - 97,370)(
23,150$ 170,366$ 1,125$ 7,807$ 24,998$ 4,129$ 231,575$
2018
Balance at January 1 23,150$ 170,366$ 1,125$ 7,807$ 24,998$ 4,129$ 231,575$
Additions - - 740 30 10,094 2,558 13,422
Disposals - 70)( - 8)( 77)( - 155)(
Reclassifications - 844 - - 1,204 4,681)( 2,633)(
Depreciation charge - 4,881)( 274)( 575)( 4,985)( - 10,715)(
Net exchange differences 138)( - 1 - 39)( - 176)(
Balance at June 30 23,012$ 166,259$ 1,592$ 7,254$ 31,195$ 2,006$ 231,318$
At June 30, 2018
Cost 23,012$ 213,614$ 5,559$ 13,433$ 81,083$ 2,006$ 338,707$
Accumulated depreciation
and impairment - 47,355)( 3,967)( 6,179)( 49,888)( - 107,389)(
23,012$ 166,259$ 1,592$ 7,254$ 31,195$ 2,006$ 231,318$
~24~
(In thousands of CNY)
Buildings Transportation Machinery
Office
and other
Construction
in progress and
equipment
Land and structures equipment equipment equipment to be inspected Total
At January 1, 2017
Cost 22,893$ 183,727$ 4,815$ 13,134$ 64,720$ 3,154$ 292,443$
Accumulated depreciation
and impairment - 33,802)( 3,128)( 4,496)( 39,774)( - 81,200)(
22,893$ 149,925$ 1,687$ 8,638$ 24,946$ 3,154$ 211,243$
2017
Balance at January 1 22,893$ 149,925$ 1,687$ 8,638$ 24,946$ 3,154$ 211,243$
Additions - - - 67 6,819 2,492 9,378
Disposals - - - 41)( 3,242)( - 3,283)(
Reclassifications - 13)( - 166 2,894 3,047)( -
Depreciation charge - 4,227)( 311)( 567)( 4,311)( - 9,416)(
Net exchange differences 668 - - - 191 - 859
Balance at June 30 23,561$ 145,685$ 1,376$ 8,263$ 27,297$ 2,599$ 208,781$
At June 30, 2017
Cost 23,561$ 183,714$ 4,815$ 13,313$ 69,268$ 2,599$ 297,270$
Accumulated depreciation
and impairment - 38,029)( 3,439)( 5,050)( 41,971)( - 88,489)(
23,561$ 145,685$ 1,376$ 8,263$ 27,297$ 2,599$ 208,781$
~25~
(In thousands of TWD)
Buildings Transportation Machinery
Office
and other
Construction
in progress and
equipment
Land and structures equipment equipment equipment to be inspected Total
At January 1, 2018
Cost 105,680$ 971,615$ 21,980$ 61,290$ 322,221$ 18,849$ 1,501,635$
Accumulated depreciation
and impairment - 193,895)( 16,845)( 25,650)( 208,105)( - 444,495)(
105,680$ 777,720$ 5,135$ 35,640$ 114,116$ 18,849$ 1,057,140$
2018
Balance at January 1 105,680$ 777,720$ 5,135$ 35,640$ 114,116$ 18,849$ 1,057,140$
Additions - - 3,433 139 46,829 11,867 62,268
Disposals - 325)( - 37)( 357)( - 719)(
Reclassifications - 3,917 - - 5,586 21,717)( 12,214)(
Depreciation charge - 22,644)( 1,271)( 2,668)( 23,127)( - 49,710)(
Net exchange differences 14 4,960 15 244 231 215 5,679
Balance at June 30 105,694$ 763,628$ 7,312$ 33,318$ 143,278$ 9,214$ 1,062,444$
At June 30, 2018
Cost 105,694$ 981,130$ 25,532$ 61,698$ 372,414$ 9,214$ 1,555,682$
Accumulated depreciation
and impairment - 217,502)( 18,220)( 28,380)( 229,136)( - 493,238)(
105,694$ 763,628$ 7,312$ 33,318$ 143,278$ 9,214$ 1,062,444$
~26~
(In thousands of TWD)
Buildings Transportation Machinery
Office
and other
Construction
in progress and
equipment
Land and structures equipment equipment equipment to be inspected Total
At January 1, 2017
Cost 105,696$ 848,268$ 22,231$ 60,640$ 298,813$ 14,562$ 1,350,210$
Accumulated depreciation
and impairment - 156,064)( 14,442)( 20,758)( 183,637)( - 374,901)(
105,696$ 692,204$ 7,789$ 39,882$ 115,176$ 14,562$ 975,309$
2017
Balance at January 1 105,696$ 692,204$ 7,789$ 39,882$ 115,176$ 14,562$ 975,309$
Additions - - - 299 30,462 11,132 41,893
Disposals - - - 183)( 14,483)( - 14,666)(
Reclassifications - 58)( - 742 12,928 13,612)( -
Depreciation charge - 18,883)( 1,389)( 2,533)( 19,258)( - 42,063)(
Net exchange differences 1)( 19,720)( 227)( 1,139)( 2,371)( 423)( 23,881)(
Balance at June 30 105,695$ 653,543$ 6,173$ 37,068$ 122,454$ 11,659$ 936,592$
At June 30, 2017
Cost 105,695$ 824,141$ 21,600$ 59,722$ 310,736$ 11,659$ 1,333,553$
Accumulated depreciation
and impairment - 170,598)( 15,427)( 22,654)( 188,282)( - 396,961)(
105,695$ 653,543$ 6,173$ 37,068$ 122,454$ 11,659$ 936,592$
~27~
A. The Group has entered into an agreement with non-related party to buy a building in Sichuan,
China, on March 17, 2016. The amount of the contract was CNY $27,431 (TWD $136,387), of
which the Group has paid CNY $28,387 (TWD $127,920). The ownership of property was
transferred in October 2017. The property was reclassified from other non-current assets into
property, plant and equipment thereafter.
B. On June 29, 2018, the Group entered into an agreement with the related party, Zhaocang (Shunghai)
Trading Co., Ltd., to acquire the building and parking space located at Huaihai West Road,
Changning district, Shanghai City, which have been recognised as other non-current assets since
the transfer has not been completed. The total amount of the contract is CNY $107,856 (TWD
$500,377) and the Group has paid the amount of CNY $54,678 (TWD $253,668).
(7) Intangible assets
CNY TWD CNY TWD CNY TWD CNY TWD
At January 1
Cost 1,684$ 7,687$ 6,060$ 27,664$ 14,213$ 64,882$ 21,957$ 100,233$
Accumulated amortisation
and impairment - - 303)( 1,383)( 8,760)( 39,989)( 9,063)( 41,372)(
1,684$ 7,687$ 5,757$ 26,281$ 5,453$ 24,893$ 12,894$ 58,861$
Balance at January 1 1,684$ 7,687$ 5,757$ 26,281$ 5,453$ 24,893$ 12,894$ 58,861$
Reclassifications - - - - 2,095 9,719 2,095 9,719
Additions-acquired
separately
- - - - 192 890 192 890
Amortisation charge - - 202)( 937)( 1,710)( 7,933)( 1,912)( 8,870)(
Net exchange differences - 48 - 170 17)( 48 17)( 266
Balance at June 30 1,684$ 7,735$ 5,555$ 25,514$ 6,013$ 27,617$ 13,252$ 60,866$
At June 30
Cost 1,684$ 7,735$ 6,060$ 27,834$ 16,478$ 75,683$ 24,222$ 111,252$
Accumulated amortisation
and impairment - - 505)( 2,320)( 10,465)( 48,066)( 10,970)( 50,386)(
1,684$ 7,735$ 5,555$ 25,514$ 6,013$ 27,617$ 13,252$ 60,866$
2018
Goodwill Other TotalLicences
~28~
A. Goodwill is allocated to the Group’s cash-generating units identified according to operating
segment. The recoverable amount of all cash-generating units has been determined based on value-
in-use calculations. These calculations use pre-tax cash flow projections based on financial
budgets approved by the management.
B. Management determined budgeted gross margin based on past performance and its expectations
of market development. The weighted average growth rates used are consistent with the forecasts
included in industry reports. The discount rates used are pre-tax and reflect specific risk relating
to the relevant operating segments.
(8) Short-term borrowings
A. There had no bank borrowings as at June 30, 2017.
CNY TWD CNY TWD CNY TWD CNY TWD
At January 1
Cost -$ -$ -$ -$ 14,209$ 65,607$ 14,209$ 65,607$
Accumulated amortisation
and impairment - - - - 5,754)( 26,570)( 5,754)( 26,570)(
-$ -$ -$ -$ 8,455$ 39,037$ 8,455$ 39,037$
Balance at January 1 -$ -$ -$ -$ 8,455$ 39,037$ 8,455$ 39,037$
Additions-acquired
through business
combinations
1,684 7,554 6,060 27,185 - - 7,744 34,739
Amortisation charge - - - - 1,527)( 6,821)( 1,527)( 6,821)(
Net exchange differences - - - - 87 746)( 87 746)(
Balance at June 30 1,684$ 7,554$ 6,060$ 27,185$ 7,015$ 31,470$ 14,759$ 66,209$
At June 30
Cost 1,684$ 7,554$ 6,060$ 27,185$ 14,321$ 64,244$ 22,065$ 98,983$
Accumulated amortisation
and impairment - - - - 7,306)( 32,774)( 7,306)( 32,774)(
1,684$ 7,554$ 6,060$ 27,185$ 7,015$ 31,470$ 14,759$ 66,209$
2017
Goodwill Other TotalLicences
Interest
Type of borrowings CNY TWD rate range
Bank borrowings
Secured borrowings 112,741$ 517,819$ 2.27%
Unsecured borrowings 34,817 159,915 1.97%
147,558$ 677,734$
Interest
Type of borrowings CNY TWD rate range
Bank borrowings
Secured borrowings 110,830$ 505,939$ 2.27%
Unsecured borrowings 45,630 208,301 1.97%
156,460$ 714,240$
June 30, 2018
December 31, 2017
~29~
B. For the three months and six months ended June 30, 2018, interest expense recognised in profit or
loss amounting to CNY $986 (TWD $4,601) and CNY $1,881 (TWD $8,727), respectively.
C. Please refer to Note 8 for information on pledged assets.
(9) Financial liabilities at fair value through profit or loss
A. The Group recognised net gain of CNY $1,581(TWD $7,358), net loss of CNY $1,319 (TWD
$5,890), net gain of CNY $2,338 (TWD $10,847) and net loss of CNY $1,363 (TWD $6,089) on
financial liabilities held for trading for the three months and six months ended June 30, 2018 and
2017, respectively.
B. Please refer to Note 6(11) for details of derivative financial instrument- corporate bonds (put
option and call option).
(10) Other payables
(11) Bonds payable
A. The terms of the first domestic unsecured convertible bonds issued by the Company in November
2015 are as follows:
(a) The Group issued $900,000, 0% first domestic unsecured convertible bonds. The bonds mature
three years from the issue date (November 13, 2015~ November 13, 2018) and will be
redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei
Exchange on November 13, 2015.
Items
Current items: CNY TWD CNY TWD CNY TWD
Derivative financial
instrument - corporate
bonds (put option and
call option) -$ -$ -$ -$ 6,761$ 30,330$
June 30, 2018 December 31, 2017 June 30, 2017
CNY TWD CNY TWD CNY TWD
Dividend payable 136,496$ 635,938$ -$ -$ 114,383$ 511,520$
Tax payable 13,872 63,714 11,849 54,091 8,547 38,344
Other 69,037 308,075 84,166 384,218 63,517 286,537
219,405$ 1,007,727$ 96,015$ 438,309$ 186,447$ 836,401$
June 30, 2018 December 31, 2017 June 30, 2017
CNY TWD CNY TWD CNY TWD
Bonds payable 380$ 1,900$ 380$ 1,900$ 180,180$ 900,000$
Less: discount on
bonds payable
4)( 17)( 8)( 35)( 5,636)( 25,282)(
Net exchange
differences 34 - 37 - 20,444 -
410 1,883 409 1,865 194,988 874,718
Less: Corporate
bonds payable
current portion ( 410) ( 1,883) ( 409) ( 1,865) ( 194,988) ( 874,718)
-$ -$ -$ -$ -$ -$
June 30, 2018 December 31, 2017 June 30, 2017
~30~
(b) The bondholders have the right to ask for conversion of the bonds into common shares of the
Company during the period from the date after one month of the bonds issue (December 14,
2015) to 10 days before the maturity date, except for the stop transfer period as specified in
the terms of the bonds or the laws/regulations. The rights and obligations of the new shares
converted from the bonds are the same as the issued and outstanding common shares.
(c) The conversion price of the bonds is set up based on the pricing model in the terms of the
bonds, the conversion price is TWD $288 (in dollars) per share as issuance, and is subject to
adjustments if the condition of the anti-dilution provisions occurs subsequently. The
conversion price amounted to TWD $250.9 (in dollars) per share after the dividends and rights
distribution have been adjusted on July 12, 2018.
(d) The Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any
time if the closing price of the Company’s common shares is above the then conversion price
by 30% (including 30%) for 30 consecutive trading days during the period from the date after
one month of the bonds issue (December 14, 2015) to 40 days before the maturity date, the
Company will send a ‘Notice of Withdrawal’ by registered mail to creditor (the effective date
is based on the final date of the period starting from the mail date ) who holds the convertible
bonds, bulletin and send a letter to the Taipei Exchange.
The Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any
time if the outstanding balance of the bonds is less than 10% of total initial issue amount during
the period from the date after one months of the bonds issue (December 14, 2015) to 40 days
before the maturity date, the Company will send a ‘Notice of Withdrawal’ by registered mail
to creditor (the effective date is based on the final date of the period starting from the mail
date ) who holds the convertible bonds, bulletin and send a letter to the Taipei Exchange.
(e) The Company set the date after two years of the issuance (November 13, 2017) as the effective
date, at the 40 days before the effective date, the Company shall send a ‘Notice of put option’
by registered mail to creditors, and send a letter to the Taipei Exchange to bulletin the put
option is exercisable. The creditors could inform the Company’s agency in document form to
demand that the Company repurchase bonds at face value and interest premium (2.25% of the
face value after over two years) in 30 days before the effective date.
(f) Under the terms of the bonds, all bonds redeemed, matured and converted are retired and not
to be re-issued; all rights and obligations attached to the bonds are also extinguished.
B. Regarding the issuance of convertible bonds, the equity conversion options amounting to CNY
$7,258 (TWD $37,021) were separated from the liability component and were recognised in
‘capital surplus—share options’ in accordance with IAS 32. The call options and put options
embedded in bonds payable were separated from their host contracts and were recognised in
‘financial assets or liabilities at fair value through profit or loss’ in net amount in accordance with
IAS 39 because the economic characteristics and risks of the embedded derivatives were not
closely related to those of the host contracts. The effective interest rate of the bonds payable after
such separation was 2.013%.
C. Since the bondholders are entitled to request the Company to redeem the bonds at the agreed price
two years after the bond issuance (November 13, 2017), the Company booked all convertible
bonds as current liability. However, it does not imply that such current liability shall be fully
redeemed within the year. As of June 30, 2018, the Company has redeemed bonds of CNY
$179,800 (TWD $898,100) at face value upon bondholders’ request.
~31~
(12) Pensions
A. (a) Taiwan branches have a defined benefit pension plan in accordance with the Labor Standards
Law, covering all regular employees’ service years prior to the enforcement of the Labor
Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue
to be subject to the pension mechanism under the Law. For employees eligible under Labor
Standards Law, pension benefits are based on the number of units accrued and the average
monthly salaries and wages of the last 6 months prior to retirement.
(b) The pension costs under defined contribution pension plans of the Group for the three months
and six months ended June 30, 2018 and 2017, were both CNY $0 (TWD $0).
B. (a) Effective July 1, 2005, Taiwan branches established a defined contribution pension plan (the
“New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with
R.O.C. nationality. Under the New Plan, Taiwan branches contribute monthly an amount
based on not less than 6% of the employees’ monthly salaries and wages to the employees’
individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid
monthly or in lump sum upon termination of employment.
(b) The subsidiaries in Mainland China have a defined contribution plan. Monthly contributions
to an independent fund administered by the government in accordance with the pension
regulations in the People’s Republic of China (PRC) are based on certain percentage of
employees’ monthly salaries and wages. Other than the monthly contributions, the Group has
no further obligations. The details of defined contribution plans are as follows:
(c) Subsidiary-Hong Kong Chlitina established a compulsory pension program, which allocates
a fixed amount of money for pension benefit, and is managed by an independent trustee based
on Hong Kong employee Act. In addition, according to the regulation of that program, both
employer and employee have to distribute 5% of the employee’s salary, respectively. From
June 2014, the maximum relevant salary per month increased from HKD $25,000 to HKD
$30,000. Other than the monthly contributions, the Group has no further obligations.
(d) The pension costs under defined contribution pension plans of the Group for the three months
and six months ended June 30, 2018 and 2017, were CNY $2,788 (TWD $13,013), CNY
$2,597 (TWD $11,461), CNY $5,349 (TWD $24,816) and CNY $5,144 (TWD $22,980),
respectively.
(13) Share-based payment
A. The Group’s share-based payment arrangements were as follows:
The abovementioned share-based payment arrangements is settled by equity.
Administration Beneficiary Pension appropriation
Each municipal government
in Mainland China
Employees of Chlitina (China)
and its branch, and Weishuo
20%
Type of Quantity granted Vesting
arrangement Grant date (thousands) conditions
Treasury stock
transferred to employees
March 9, 2018 797 Vested immediately
~32~
B. Details of the share-based payment arrangements are as follows:
C. The fair value of stock options granted on March 9, 2018 is measured using the Black-Scholes
option-pricing model. Relevant information is as follows:
Note: Expected price volatility rate was estimated by using the stock prices of the most recent
period with length of this period approximate to the length of the stock options’ expected
life, and the standard deviation of return on the stock during this period.
D. Expenses incurred on share-based payment transactions are shown below:
(14) Share capital
A. As of June 30, 2018, the Company’s authorized capital was TWD $2,000,000, and the paid-in
capital was CNY $161,772 (TWD $794,924) with a par value of TWD $10 (in dollars) per share,
consisting of 79,492 thousand shares of ordinary stock. All proceeds from shares issued have
been collected.
B. Movements in the number of the Company’s ordinary shares (thousand shares) outstanding are
as follows:
No. of options Weighted-average
(thousands) exercise price (NTD)
Options outstanding at January 1 - -$
Options granted 797 146.25
Options exercised 797)( 146.25
Options outstanding at June 30 - -
Options exercisable at June 30 - -$
2018
(TWD)
Type of Grant Stock Exercise
Expected
price
Expected
option life Expected Risk-free Fair value
arrangement date price price volatility (years) dividends interest rate per unit
Treasury
stock
transferred
to employees
March 9, 2018 $ 154 $ 146.25 51.61%~
70.08%
0.0667~
0.3056
0.00% 0.60%~
0.63%
$15.17~
$21.32
CNY TWD CNY TWD
Equity-settled -$ -$ 3,177$ 14,686$
Three months ended June 30, 2018 Six months ended June 30, 2018
2018 2017
At January 1 78,695 79,192
Purchase of treasury share - 497)(
Treasury shares sold to employees 375 -
At June 30 79,070 78,695
~33~
C. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury
shares are as follows:
(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as
treasury share should not exceed 10% of the number of the Company’s issued and outstanding
shares and the amount bought back should not exceed the sum of retained earnings, paid-in
capital in excess of par value and realised capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged
as collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the
employees within three years from the reacquisition date and shares not reissued within the
three-year period are to be retired. Treasury shares to enhance the Company’s credit rating
and the stockholders’ equity should be retired within six months of acquisition.
(15) Capital surplus
A summary of the Company’s capital surplus are as follows:
Number of
Name of company Reason for shares
holding the shares reacquisition (in thousand) CNY TWD
The Company To be reissued to employees 422 14,005$ 61,718$
Number of
Name of company Reason for shares
holding the shares reacquisition (in thousand) CNY TWD
The Company To be reissued to employees 797 26,449$ 116,563$
Number of
Name of company Reason for shares
holding the shares reacquisition (in thousand) CNY TWD
The Company To be reissued to employees 797 26,449$ 116,563$
June 30, 2018
December 31, 2017
June 30, 2017
CNY TWD CNY TWD CNY TWD CNY TWD CNY TWD
At January 1 289,153$ 1,407,306$ 809$ 3,924$ 15$ 78$ 4,231$ 45,176$ 294,208$ 1,456,484$
Cash dividends
from capital
surplus
25,593)( 119,238)( - - - - - - 25,593)( 119,238)(
Share-based
compensation
payment
- - 3,177 14,686 - - - - 3,177 14,686
Treasury
shares transferred
to employees - - 1,224)( 5,689)( - - 1,224 5,689 - -
At June 30 263,560$ 1,288,068$ 2,762$ 12,921$ 15$ 78$ 5,455$ 50,865$ 271,792$ 1,351,932$
2018
Share premium Employee stock options Stock options Others Total
~34~
(16) Retained earnings
A. The Company’s Articles of Incorporation require that the Company’s net earnings from the
current year shall be used to offset prior years’ deficits, pay income tax, provide 10% as legal
reserve, provide or reverse a special reserve in accordance with applicable laws. After the
abovementioned appropriations, the distribution of the remaining earnings, if any, should be
proposed by the Board of Directors and is subject to the stockholders’ approval.
B. The Company’s business cycle is in the constant growth stage. In consideration of the
Company’s future capital requirements, its long-term financial plan and shareholders’
satisfaction as to cash inflow, the Company’s Articles of Incorporation stipulate that the Board
of Directors may propose 10% or more of the distributable earnings as dividends, of which at
least 10% should be distributed as cash dividends. However, such distribution depends on the
current earnings and the capital condition, and is subject to the approval of stockholders.
C. In accordance with the regulations, the Company shall set aside special reserve from the debit
balance on other equity items at the balance sheet date before distributing earnings. When debit
balance on other equity items is reversed subsequently, the reversed amount could be included
in the distributable earnings.
D. The appropriations of earnings for 2017 and 2016 as resolved by the shareholders at their
meetings on June 5, 2018 and June 28, 2017, respectively, are as follows:
In the distribution of earnings for 2017, cash dividends was distributed at TWD $6.5658 (in
dollars) per share based on the outstanding shares of 78,695,350 shares as of March 8, 2018. If
the cash dividend was distributed based on the total issued shares of 79,492,350 shares, the cash
dividends will be distributed at TWD $6.50 (in dollars) per share.
E. On June 5, 2018, the shareholders during their meeting approved to distribute cash dividends
from capital surplus-additional paid-in capital amounted to CNY $25,593 (TWD $119,238).
Cash dividends was distributed at TWD $1.5152 per share based on the outstanding shares of
78,695,350 shares as of March 8, 2018. If the cash dividend was distributed based on the total
issued shares of 79,492,350 shares, the cash dividends will be distributed at TWD $1.50 (in
dollars) per share.
F. For the information relating to employees’ compensation and directors’ remuneration, please
refer to Note 6(21).
CNY TWD CNY TWD CNY TWD CNY TWD CNY TWD
At January 1
(June 30) 289,153$ 1,407,306$ 809$ 3,924$ 7,258$ 37,021$ 3,012)($ 8,233$ 294,208$ 1,456,484$
2017
Share premium Employee stock options Stock options Others Total
Dividends Dividends
per share per share
(New Taiwan (New Taiwan
CNY TWD dollars) CNY TWD dollars)
Special reserve 55,390$ 258,063$ -$ -$ -$ -$
Legal reserve 12,513 58,296 - 16,341 73,079 -
Cash dividends 110,903 516,700 6.50 114,383 511,520 6.50
Total 178,806$ 833,059$ 6.50$ 130,724$ 584,599$ 6.50$
2017 2016
~35~
(17) Operating revenue
A. Disaggregation of revenue from contracts with customers
The Group’s revenue is disaggregated in the following major product lines:
The Group derives revenue from the transfer of goods at a point in time.
B. Contract liabilities
(a) The Group has recognized the following revenue-related contract liabilities:
(b) Revenue recognized that was included in the contract liability balance at the beginning of the
period
C. Related disclosures for the three months and six months ended June 30, 2017 operating revenue
are provided in Note 12(5) B.
CNY TWD CNY
Revenue from contracts with
customers 232,761$ 1,086,601$ 452,666$
Three months ended June 30, 2018 Six months ended June 30, 2018
CNY TWD CNY TWD
Net sale of goods 218,917$ 1,022,134$ 431,012$ 1,999,594$
Special affiliate income 12,652 58,894 19,051 88,384
OEM income 84 406 631 2,927 Skincare service from company-
operated salon and other
income 1,108 5,167 1,972 9,149
232,761$ 1,086,601$ 452,666$ 2,100,054$
Three months ended June 30, 2018 Six months ended June 30, 2018
CNY TWD
Contract liabilities-advance sales receipts
from customers 72,965$ 335,128$
June 30, 2018
CNY TWD CNY TWD
Contract liabilities advance
sales receipts from
customers at the begging
of the period -$ -$ 72,239$ 335,138$
Three months ended June 30, 2018 Six months ended June 30, 2018
~36~
(18) Other income
(19) Other gains and losses
CNY TWD CNY TWD
Interest income 734$ 3,425$ 2,866$ 12,653$
Interest income from bank deposits 170 793 - -
Interest income from financial
assets measured at amortised
cost
2,337 10,930 - -
Other interest income - 516 5,650 25,240
Government grants revenue 218 1,012 326 1,447
Others 3,459$ 16,676$ 8,842$ 39,340$
CNY TWD CNY TWD
Interest income 1,387$ 6,435$ 5,570$ 24,882$
Interest income from bank deposits 284 1,318 - -
Interest income from financial
assets measured at amortised
cost
5,180 24,032 - -
Other interest income 16,821 78,037 5,650 25,240
Government grants revenue 276 1,280 500 2,234
Others 23,948$ 111,102$ 11,720$ 52,356$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
CNY TWD CNY TWD
Losses on disposal of property,
plant and equipment
6)($ 30)($ 55)($ 245)($
Foreign exchange (losses) gains 3,835)( 17,710)( 921 4,584
Net gains (losses) on financial
assets and financial liabilities at
fair value through profit or loss
1,581 7,358 1,319)( 5,890)(
Other 564 2,609 242)( 1,000)(
1,696)($ 7,773)($ 695)($ 2,551)($
Three months ended June 30,
2018 2017
~37~
(20) Finance cost
(21) Employee benefit expense, depreciation and amortization
CNY TWD CNY TWD
Losses on disposal of property,
plant and equipment
84)($ 390)($ 65)($ 290)($
Losses on disposal of investments - - 1,262)( 5,708)(
Foreign exchange losses 1,149)( 5,331)( 7,559)( 33,768)(
Net gains (losses) on financial
assets and financial liabilities at
fair value through profit or loss
2,338 10,847 1,363)( 6,089)(
Other 304 1,411 440)( 1,895)(
1,409$ 6,537$ 10,689)($ 47,750)($
Six months ended June 30,
2018 2017
CNY TWD CNY TWD
Interest expense-Convertible bond 2$ 10$ 994$ 4,388$
Interest expense-Bank borrowings 986 4,601 - -
988$ 4,611$ 994$ 4,388$
CNY TWD CNY TWD
Interest expense-Convertible bond 4$ 18$ 1,959$ 8,753$
Interest expense-Bank borrowings 1,881 8,727 - -
1,885$ 8,745$ 1,959$ 8,753$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
CNY TWD CNY TWD CNY TWD
Employee benefit
expense
Wages and salaries $ 1,526 $ 7,122 $ 28,012 $ 130,749 $ 29,538 $ 137,871
Labour and health
insurance fees
95 444 1,655 7,727 1,750 8,171
Pension costs 163 761 2,625 12,252 2,788 13,013
Other employee
benefit expense
91 425 1,985 9,266 2,076 9,691
Depreciation 270 1,263 5,025 23,468 5,295 24,731
Amortisation 73 341 884 4,128 957 4,469
Three months ended June 30, 2018
Operating costs Operating expenses Total
~38~
CNY TWD CNY TWD CNY TWD
Employee benefit
expense
Wages and salaries $ 1,434 $ 6,314 $ 23,135 $ 102,155 $ 24,569 $ 108,469
Labour and health
insurance fees
102 449 1,613 7,118 1,715 7,567
Pension costs 164 723 2,433 10,738 2,597 11,461
Other employee
benefit expense
96 423 1,780 7,843 1,876 8,266
Depreciation 326 1,438 4,294 18,935 4,620 20,373
Amortisation 57 251 710 3,133 767 3,384
Three months ended June 30, 2017
Operating costs Operating expenses Total
CNY TWD CNY TWD CNY TWD
Employee benefit
expense
Wages and salaries $ 2,917 $ 13,533 $ 53,905 $ 250,081 $ 56,822 $ 263,614
Labour and health
insurance fees
186 863 3,268 15,161 3,454 16,024
Pension costs 314 1,457 5,035 23,359 5,349 24,816
Other employee
benefit expense
175 812 3,837 17,801 4,012 18,613
Depreciation 597 2,770 10,118 46,940 10,715 49,710
Amortisation 146 677 1,766 8,193 1,912 8,870
CNY TWD CNY TWD CNY TWD
Employee benefit
expense
Wages and salaries $ 3,107 $ 13,880 $ 44,693 $ 199,653 $ 47,800 $ 213,533
Labour and health
insurance fees
223 996 3,192 14,259 3,415 15,255
Pension costs 350 1,564 4,794 21,416 5,144 22,980
Other employee
benefit expense
189 844 3,738 16,698 3,927 17,542
Depreciation 651 2,908 8,765 39,155 9,416 42,063
Amortisation 114 509 1,413 6,312 1,527 6,821
Six months ended June 30, 2018
Operating costs Operating expenses Total
Six months ended June 30, 2017
Operating costs Operating expenses Total
~39~
A. In accordance with the Company’s Articles of Incorporation, the Company should contribute
1%~5% of the profit as employees’ compensation and less than 3% as directors’ remuneration
when there is profit for the year. However, if the Company has accumulated deficits, the profit
should be reserved to offset the deficit. Employees entitled to receive the above mentioned
employees’ compensation, in shares or cash, includes the employees of the subsidiaries of the
Company who meet certain specific requirements.
B. For the three months and six months ended June 30, 2018 and 2017, employees’ compensation
was accrued at CNY $1,284 (TWD $5,999), CNY $784 (TWD $3,475), CNY $2,675 (TWD
$12,410) and CNY $1,266 (TWD $5,655), respectively; directors’ remuneration was accrued at
CNY $642 (TWD $2,999), CNY $392 (TWD $1,738), CNY $1,338 (TWD $6,207) and CNY
$633 (TWD $2,828), respectively. Those were estimated based on the net income before tax
deducted employees’ compensation and directors’ remuneration and then multiply the
distribution ratio as regulated in the Company’s Articles of Incorporation, and recognised as
salary expenses.
The amount of employees’ ended June 30, 2018 and 2017, compensation and directors’
remuneration approved by the Board of Directors on April 20, 2018 were in agreement with those
on the financial statements for the year ended December 31, 2017, and were CNY $2,798 (TWD
$12,608) and CNY $1,399 (TWD $6,304), respectively. Aforementioned employees’
compensation will be distributed in cash, however, the compensation had not been distributed.
C. Information about employees’ compensation and directors’ remuneration of the Company as
resolved at the meeting of Board of Directors will be posted in the “Market Observation Post
System” at the website of the Taiwan Stock Exchange.
(22) Income tax
A. Income tax expense
Components of income tax expense:
CNY TWD CNY TWD
Current tax:
Current tax on profits for the
period
23,260$ 108,620$ 12,275$ 53,978$
Prior year income tax
underestimation 833 3,865 859 3,837
Total current tax 24,093 112,485 13,134 57,815
Deferred tax:
Origination and reversal of
temporary differences
741 3,435 2,336 10,688
Impact of change in tax rate - 4)( - -
Income tax expense 24,834$ 115,916$ 15,470$ 68,503$
Three months ended June 30,
2018 2017
~40~
B. Chlitina Marketing Taiwan Branch’s and Chlitina Intelligence Taiwan Branch’s income tax
returns through 2016 have been assessed and approved by the Tax Authority.
C. Under the amendments to the Income Tax Act which was promulgated by the President of the
Republic of China in February, 2018, the applicable income tax rate of the Group’s branch
company in Taiwan was raised from 17% to 20% effective from January 1, 2018. The Group has
assessed the impact of the change in income tax rate.
(23) Earnings per share
CNY TWD CNY TWD
Current tax:
Current tax on profits for the
period
46,380$ 215,171$ 27,737$ 123,907$
Prior year income tax
underestimation 833 3,865 859 3,837
Total current tax 47,213 219,036 28,596 127,744
Deferred tax:
Origination and reversal of
temporary differences
717 3,326 2,216)( 9,899)(
Impact of change in tax rate 179)( 830)( - -
Income tax expense 47,751$ 221,532$ 26,380$ 117,845$
Six months ended June 30,
2018 2017
Weighted average
number of ordinary
(In thousand (In thousand shares outstanding
of CNY) of TWD) (share in thousands) (CNY dollars) (TWD dollars)
Basic earnings per share
Profit attributable to
ordinary shareholders
of the parent 58,887$ 275,273$ 79,070 0.74$ 3.48$
Diluted earnings per share
Profit attributable to
ordinary shareholders
of the parent
58,887$ 275,273$ 79,070
Assumed conversion of all
dilutive potential ordinary
shares
Conversion bonds 2 10 7
Employees’ compensation - - 56
Profit attributable to
ordinary shareholders
of the parent plus
assumed conversion
of all dilutive potential
ordinary shares 58,889$ 275,283$ 79,133 0.74$ 3.48$
Three months ended June 30, 2018
Amount after tax
Earnings per share
~41~
Weighted average
number of ordinary
(In thousand (In thousand shares outstanding
of CNY) of TWD) (share in thousands) (CNY dollars) (TWD dollars)
Basic earnings per share
Profit attributable to
ordinary shareholders
of the parent 35,855$ 159,034$ 78,695 0.46$ 2.02$
Diluted earnings per share
Profit attributable to
ordinary shareholders
of the parent
35,855$ 159,034$ 78,695
Assumed conversion of all
dilutive potential ordinary
shares
Conversion bonds 994 4,388 3,312
Employees’ compensation - - 82
Profit attributable to
ordinary shareholders
of the parent plus
assumed conversion
of all dilutive potential
ordinary shares 36,849$ 163,422$ 82,089 0.45$ 1.99$
Three months ended June 30, 2017
Amount after tax
Earnings per share
Weighted average
number of ordinary
(In thousand (In thousand shares outstanding
of CNY) of TWD) (share in thousands) (CNY dollars) (TWD dollars)
Basic earnings per share
Profit attributable to
ordinary shareholders
of the parent 126,597$ 587,321$ 78,886 1.60$ 7.45$
Diluted earnings per share
Profit attributable to
ordinary shareholders
of the parent
126,597$ 587,321$ 78,886
Assumed conversion of all
dilutive potential ordinary
shares
Conversion bonds 4 18 7
Employees’ compensation - - 80
Profit attributable to
ordinary shareholders
of the parent plus
assumed conversion
of all dilutive potential
ordinary shares 126,601$ 587,339$ 78,973 1.60$ 7.44$
Six months ended June 30, 2018
Amount after tax
Earnings per share
~42~
(24) Operating leases
The Group leases in offices and plant under operating lease agreements. The lease terms are between
1 and 5 years. The Group recognized rental expenses of CNY $8,378 (TWD $39,078), CNY $8,461
(TWD $37,425), CNY $15,228 (TWD $70,647) and CNY $15,170 (TWD $67,767) for the three
months and six months ended June 2018 and 2017, respectively. The future aggregate minimum
lease payments under non-cancellable operating leases are as follows:
Weighted average
number of ordinary
(In thousand (In thousand shares outstanding
of CNY) of TWD) (share in thousands) (CNY dollars) (TWD dollars)
Basic earnings per share
Profit attributable to
ordinary shareholders
of the parent 56,392$ 251,914$ 78,748 0.72$ 3.20$
Diluted earnings per share
Profit attributable to
ordinary shareholders
of the parent
56,392$ 251,914$ 78,748
Assumed conversion of all
dilutive potential ordinary
shares
Conversion bonds 1,959 8,753 3,312
Employees’ compensation - - 116
Profit attributable to
ordinary shareholders
of the parent plus
assumed conversion
of all dilutive potential
ordinary shares 58,351$ 260,667$ 82,176 0.71$ 3.17$
Six months ended June 30, 2017
Amount after tax
Earnings per share
CNY TWD CNY TWD CNY TWD
Not later than one year 24,469$ 112,386$ 25,523$ 116,512$ 20,822$ 93,016$
Later than one year
but not later than
five years 29,455 135,287 38,849 177,346 23,794 106,293
53,924$ 247,673$ 64,372$ 293,858$ 44,616$ 199,309$
June 30, 2018 December 31, 2017 June 30, 2017
~43~
(25) Business combinations
A. On April 19, 2017, the Group acquired 100% of the share capital of Beijing Aobaojia for CNY
$6,500 and obtained the control of Beijing Aobaojia, a medical cosmetology clinic operating in
Beijing. As a result of the acquisition, the Group is expected to increase its presence in these
markets.
B. The following table summarises the consideration paid for Beijing Aobaojia and the fair values
of the assets acquired and liabilities assumed at the acquisition date:
C. The operating revenue included in the consolidated statement of comprehensive income since
April 19, 2017 contributed by Beijing Aobaojia was CNY $0 (TWD $0). Beijing Aobaojia also
contributed loss before income tax of CNY $556 (TWD $2,484) over the same period. Had
Beijing Aobaojia been consolidated from January 1, 2017, the consolidated statement of
comprehensive income would show operating revenue of CNY $331,922 (TWD $1,482,761) and
profit before income tax of CNY $82,772 (TWD $369,759).
D. In the end of 2017, the Group obtained the report in relation to the purchase price allocation. The
Group retrospectively adjusted the second quarter of 2017 financial statements based on the
purchase price allocation report. Intangible assets-licenses and deferred tax liabilities would be
increased by CNY $6,060 (TWD $27,185) and CNY $1,515 (TWD $6,796), respectively, and
intangible assets-goodwill would be decreased by CNY $4,545 (TWD $20,389).
(26) Supplemental cash flow information
A. Investing activities with partial cash received
For the six months ended June 30, 2018:None.
CNY TWD
Purchase consideration
Cash paid 6,500$ 29,159$
Fair value of the identifiable assets acquired
and liabilities assumed
Cash 5$ 22$
Other receivables 266 1,194
Licenses 6,060 27,185
Deferred tax liabilities 1,515)( 6,796)(
Total identifiable net assets 4,816$ 21,605$
Goodwill 1,684$ 7,554$
April 19, 2017
CNY TWD
Proceeds from disposal of investments
accounted for using equity method
37,300$ 164,380$
Less: Unreceived payment at end of period 12,300)( 54,205)(
Cash received during the period 25,000$ 110,175$
Six months ended June 30, 2017
~44~
B. Financing activities with no cash flow effects
C. Assets and liabilities relating to the control over subsidiaries acquired are as follows:
For the six months ended June 30, 2018: None.
(27) Changes in liabilities from financing activities
7. RELATED PARTY TRANSACTIONS
(1) Names of related parties and relationship
CNY TWD CNY TWD
Dividends payable 136,496$ 635,938$ 114,383$ 511,520$
June 30, 2018 June 30, 2017
CNY TWD
Cash and cash equivalents 5$ 22$
Other receivables 266 1,194
Goodwill 6,229 27,943
6,500$ 29,159$
Price of subsidiary acquisition 6,500 29,159
Subsidiary cash balance 5)( 22)(
Not yet paid for the acquisition 4,550)( 20,412)(
Net cash inflow 1,945$ 8,725$
Six months ended June 30, 2017
CNY NTD
At January 1, 2018 156,460$ 714,240$
Changes in cash flow from financing activities 10,979)( 50,934)(
Impact of changes in foreign exchange rate 2,077 14,428
At June 30, 2018 147,558$ 677,734$
Short-term borrowings
Names of related parties Relationship with the Group
Kelti International Trading Corp. (Kelti International) Other related parties
Kelti (China) Daily Product Co.,Ltd (Kelti China) Other related parties
Healthmate Biotech Co., Ltd. (Healthmate Biotech) Other related parties
Charming Biotech Corp., Ltd (Charming Biotech) Other related parties
Sagittarius Life Science Corp. (Sagittarius Life) Other related parties
Lee, Tsai & Partners Attorneys-at-Law (Lee, Tsai & Partners) Other related parties
Modern Pearl Holdings Limited (Modern Pearl) Other related parties
Jing Yung Gi Co., Ltd (Jing Yung Gi) Other related parties
Shanghai Guangqiao Biosciences Co., Ltd (Guangqiao Biosciences) Other related parties
Mc. Reene Co., Ltd (Mc. Reene) Other related parties
Kelti International (HK) Limited Taiwan Branch Other related parties
Kelti International (HK) Limited Other related parties
~45~
(2) Significant related party transactions and balances
A. Operating revenue:
There were no significant differences in the price between related parties and other customers. The
collection term for related parties is two months. For other customers, advance payment is required.
B. Purchases:
Names of related parties Relationship with the Group
Hunzas Co.,Ltd Other related parties
TI,LI-SHIH Health Corporation Other related parties
Full Blooming Investment Co., Ltd. Other related parties
Shanghai Zhe Mei Technology Training Co., Ltd
(Shanghai Zhe Mei)
Other related parties
Harvest Era Co., Ltd (Harvest Era) Other related parties
Zhaocang (Shanghai) Trading Co., Ltd.(Zhaocang Trading) Other related parties
Shanghai Cheng Yang Trading Co., Ltd Other related parties
SHANGHAI ZHONGYE TRADE CO.,LTD Associates
CNY TWD CNY
Sales of goods and OEM income:
Other related parties
Kelti China 86$ 423$ 351$
Other 70 329 79
156$ 752$ 430$
CNY TWD CNY
Sales of goods and OEM income:
Other related parties
Kelti China 865$ 4,013$ 3,172$
Other 240 1,113 208
1,105$ 5,126$ 3,380$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
CNY TWD CNY TWD
Other related parties
Charming Biotech 6,639$ 30,974$ 4,118$ 18,240$
Other 4,478 20,900 5,107 22,648
11,117$ 51,874$ 9,225$ 40,888$
Three months ended June 30,
2018 2017
~46~
The purchase price from related parties was based on the mutual agreement, the credit term was
60 days after monthly billings, and there was no significant difference with transactions of non-
related parties.
C. Receivables from related parties:
D. Payables to related parties:
The payables to related parties have no collateral and bear no interest.
E. Prepayments:
F. Property transactions:
CNY TWD CNY TWD
Other related parties
Charming Biotech 12,291$ 57,022$ 6,870$ 30,688$
Other 8,563 39,726 8,118 36,266
20,854$ 96,748$ 14,988$ 66,954$
Six months ended June 30,
2018 2017
CNY TWD CNY TWD CNY TWD
Accounts receivable:
Other related parties
Kelti China 66$ 303$ 141$ 642$ 416$ 1,865$
Other 129 593 3 16 39 176
195$ 896$ 144$ 658$ 455$ 2,041$
Other receivables:
Other related parties 168$ 772$ 261$ 1,191$ 220$ 987$
June 30, 2018 December 31, 2017 June 30, 2017
CNY TWD CNY TWD CNY TWD
Accounts payable:
Other related parties
Charming Biotech 6,223$ 28,582$ 3,068$ 14,005$ 3,049$ 13,677$
Other 3,330 15,295 185 846 3,806 17,075
9,553$ 43,877$ 3,253$ 14,851$ 6,855$ 30,752$
Other payables:
Other related parties
Kelti China 1,243$ 5,709$ 1,313$ 5,994$ 1,716$ 7,697$
Other 150 689 215 981 157 705
1,393$ 6,398$ 1,528$ 6,975$ 1,873$ 8,402$
June 30, 2018 December 31, 2017 June 30, 2017
CNY TWD CNY TWD CNY TWD
Other related parties 167$ 767$ 843$ 3,848$ 173$ 776$
June 30, 2018 December 31, 2017 June 30, 2017
~47~
Acquisition of property, plant and equipment
In May, 2018, the Group entered into an agreement to acquire the building and parking space
located at Huaihai West Road, Changning district, Shanghai City from the related party, Zhaocang
Trading, and the amount of the contract is CNY $107,856 (TWD $500,377) which was made based
on the appraisal report issued by Shanghai Shenwei Assets Appraisal Co., Ltd. The Group has paid
the amount of CNY $54,678 (TWD $253,668), and recognised the prepayment as other non-
current assets. As of June 30, 2018, the transfer of the building and parking space has not been
completed.
G. Services expense:
For the services provided by the related parties, price and terms were determined in accordance
with mutual agreements.
H. Lease expense
The lease contracts refer to the market price and normal payment terms.
CNY TWD CNY TWD
Other related parties
Harvest Era -$ -$ 8$ -$
Other 179 838 279 1,208
179$ 838$ 287$ 1,208$
CNY TWD CNY TWD
Other related parties
Harvest Era -$ -$ 610$ 2,724$
Other 422 1,958 999 4,464
422$ 1,958$ 1,609$ 7,188$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
CNY TWD CNY TWD
Other related parties
Kelti China 1,086$ 5,073$ 1,372$ 6,074$
Other 1,325 6,187 1,171 5,173
2,411$ 11,260$ 2,543$ 11,247$
CNY TWD CNY TWD
Other related parties
Kelti China 2,222$ 10,308$ 2,320$ 10,363$
Other 2,626 12,183 2,305 10,298
4,848$ 22,491$ 4,625$ 20,661$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
~48~
I. Training expense
(3) Key management compensation
8. PLEDGED ASSETS
The Group’s assets pledged as collateral are as follows:
June 30, 2017:None.
CNY TWD CNY TWD
Other related parties
Shanghai Zhe Mei 2,356$ 10,981$ -$ -$
CNY TWD CNY TWD
Other related parties
Shanghai Zhe Mei 4,009$ 18,599$ -$ -$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
CNY TWD CNY TWD
Salaries and other short-term employee
benefits
2,972$ 13,884$ 1,828$ 8,034$
Post-employment benefits 11 52 22 97
2,983$ 13,936$ 1,850$ 8,131$
CNY TWD CNY TWD
Salaries and other short-term employee
benefits
6,108$ 28,337$ 4,196$ 18,744$
Post-employment benefits 26 121 43 192
6,134$ 28,458$ 4,239$ 18,936$
Three months ended June 30,
2018 2017
Six months ended June 30,
2018 2017
Pledged asset Pledged purpose CNY TWD CNY
Time deposits
(shown as ‘other
current financial
assets’)
Short-term
borrowings
22,548$ 103,563$ 22,165$
Book value
June 30, 2018 December 31, 2017
~49~
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS
(1) Contingencies
None.
(2) Commitments
A. Capital expenditure:
B. Operating lease agreements: Please see Note 6(24).
C. In June 2017, the Group had signed a donation agreement with Shanghai Tongji University
Education Development Foundation, committing to donate CNY $2,000 every year to reach the
total amount of CNY $10,000 from 2017 to 2022. This donation will be used to help to establish
Shanghai Tongji University and Chlitina Holding Limited Education Foundation to support the
School of Medicine’s recruitment and the School of Economics and Management’s development
of scientific research.
D. In September 2017, the Group had signed a collaboration agreement with Shanghai Tongji
University Lifeng Institute of Regenerative Medicine, committing to pay the research expenses
amounting to CNY $10,000 every year to reach the total amount of CNY $50,000 from 2017 to
2021. The funds of Tongji University Lifeng Institute of Regenerative Medicine will be used to
help the establishment, operations and research expenses of Lifeng Institute of Regenerative
Medicine.
10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
None.
12. OTHERS
(1) Capital management
There was no significant change in the reporting period. Please refer to Note 12 in the consolidated
financial statements for the year ended December 31, 2017.
CNY TWD CNY TWD CNY TWD
Contract signed 54,680$ 251,145$ 2,058$ 9,395$ 746$ 3,347$
June 30, 2018 December 31, 2017 June 30, 2017
~50~
(2) Financial instruments
A. Financial instruments by category
B. Financial risk management policies
There was no significant change in the reporting period. Please refer to Note 12 in the
consolidated financial statements for the year ended December 31, 2017.
C. Significant financial risks and degrees of financial risks
CNY TWD CNY TWD CNY TWD
Financial assets
Financial assets at amortised
cost
Cash and cash equivalents 820,171$ 3,767,045$ 749,780$ 3,422,746$ 780,098$ 3,499,519$
Financial assets at amortised
cost
22,229 102,098 - - - -
Accounts receivable
(including related parties)
1,042 4,786 454 2,073 625 2,804
Other receivables
(including related parties)
2,472 11,354 1,654 7,550 14,309 64,190
Other financial assets 22,548 103,563 45,630 208,300 23,292 104,488
868,462$ 3,988,846$ 797,518$ 3,640,669$ 818,324$ 3,671,001$
June 30, 2018 December 31, 2017 June 30, 2017
CNY TWD CNY TWD CNY TWD
Financial liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities
designated as at fair value
through profit or loss
-$ -$ -$ -$ 6,761$ 30,330$
Financial liabilities at
amortised cost
Short-term borrowings 147,558 677,734 156,460 714,240 - -
Accounts payable
(including related parties)
31,600 145,139 15,371 70,170 17,478 78,407
Other payables
(including related parties)
220,798 1,014,125 97,543 445,284 188,320 844,803
Bonds payable
(including current portion)
410 1,883 409 1,865 194,988 874,718
Guarantee deposits received 61,861 284,127 58,829 268,554 55,168 247,483
462,227$ 2,123,008$ 328,612$ 1,500,113$ 462,715$ 2,075,741$
June 30, 2018 December 31, 2017 June 30, 2017
~51~
(a) Market risk
Foreign exchange risk
A. The Group operates internationally and is exposed to foreign exchange rate risk arising
from the transactions of the Company and its subsidiaries used in various functional
currency, primarily with respect to the USD and CNY. Foreign exchange rate risk arises
from future commercial transactions and recognised assets and liabilities.
B. Management has set up a policy to require group companies to manage their foreign
exchange risk against their functional currency. The group companies are required to
hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate
risk is measured through a forecast of highly probable USD and CNY expenditures.
Natural hedging are adopted to minimise the volatility of the exchange rate affecting cost
of held foreign assets or liabilities.
C. The Group’s businesses involve some non-functional currency operations (the
Company’s and certain subsidiaries’ functional currency: TWD; other certain subsidiaries’
functional currency: CNY, USD and HKD). The information on assets and liabilities
denominated in foreign currencies whose values would be materially affected by the
exchange rate fluctuations is as follows:
Foreign
(Foreign currency: currency amount Exchange
functional currency) (In thousands) rate CNY TWD
June 30, 2018
Financial assets
Monetary items
USD:CNY 2,532$ 6.6318 16,792$ 77,126$
USD:TWD 12,641 30.4600 83,833 385,045
USD:HKD 5,516 7.8485 36,581 168,017
CNY:TWD 8,845 4.5930 8,845 40,625
CNY:USD 4,942 0.1508 4,942 22,699
CNY:HKD 1,824 1.1834 1,824 8,378
EUR:CNY 205 7.7074 1,580 7,257
EUR:USD 154 1.1622 1,187 5,452
Financial liabilities
Monetary items
USD:CNY 2,579$ 6.6318 17,103$ 78,554$
USD:TWD 22,250 30.4600 147,558 677,734
USD:HKD 344 7.8485 2,281 10,477
~52~
D. The total exchange gains (losses), including realised and unrealised arising from
significant foreign exchange variation on the monetary items held by the Group for the
three months and six months ended June 30, 2018 and 2017, amounted to losses of CNY
$3,835 (TWD $17,710), gains of CNY $921 (TWD $4,584), loss of CNY $1,149 (TWD
$5,331) and loss of CNY $7,559 (TWD $33,768), respectively.
Foreign
(Foreign currency: currency amount Exchange
functional currency) (In thousands) rate CNY TWD
December 31, 2017
Financial assets
Monetary items
USD:CNY 3,783$ 6.5192 24,662$ 112,582$
USD:TWD 8,535 29.7600 55,641 254,001
USD:HKD 9,139 7.8172 59,579 271,978
CNY:TWD 15,762 4.5650 15,762 71,954
CNY:USD 4,933 0.1534 4,933 22,519
CNY:HKD 2,721 1.1991 2,721 12,421
Financial liabilities
Monetary items
USD:CNY 1,719$ 6.5192 11,207$ 51,160$
USD:TWD 24,000 29.7600 156,460 714,240
USD:HKD 508 7.8172 3,312 15,119
Foreign
(Foreign currency: currency amount Exchange
functional currency) (In thousands) rate CNY TWD
June 30, 2017
Financial assets
Monetary items
USD:CNY 5,273$ 6.7811 35,757$ 160,406$
USD:TWD 14,434 30.4200 97,878 439,081
USD:HKD 14,782 7.8060 100,238 449,668
CNY:TWD 13,653 4.4860 13,653 61,247
CNY:USD 4,923 0.1475 4,923 22,085
CNY:HKD 2,425 1.1511 2,425 10,879
Financial liabilities
Monetary items
USD:CNY 1,400$ 6.7811 9,494$ 42,590$
USD:HKD 217 7.8060 1,471 6,599
~53~
E. Analysis of foreign currency market risk arising from significant foreign exchange
variation:
(Foreign currency: Degree of
functional currency) variation CNY TWD CNY TWD
Financial assets
Monetary items
USD:CNY 3% 504$ 2,314$ -$ -$
USD:TWD 3% 2,515 11,551 - -
USD:HKD 3% 1,097 5,041 - -
CNY:TWD 3% 265 1,219 - -
CNY:USD 3% 148 681 - -
CNY:HKD 3% 55 251 - -
EUR:CNY 3% 47 218 - -
EUR:USD 3% 36 164 - -
Financial liabilities
Monetary items
USD:CNY 3% 513$ 2,357$ -$ -$
USD:TWD 3% 4,427 20,332 - -
USD:HKD 3% 68 314 - -
Six months ended June 30, 2018
Sensitivity analysis
Effect on profit or loss comprehensive income
Effect on other
(Foreign currency: Degree of
functional currency) variation CNY TWD CNY TWD
Financial assets
Monetary items
USD:CNY 3% 1,073$ 4,812$ -$ -$
USD:TWD 3% 2,936 13,172 - -
USD:HKD 3% 3,007 13,490 - -
CNY:TWD 3% 410 1,837 - -
CNY:USD 3% 148 663 - -
CNY:HKD 3% 73 326 - -
Financial liabilities
Monetary items
USD:CNY 3% 285$ 1,278$ -$ -$
USD:HKD 3% 44 198 - -
Sensitivity analysis
Effect on profit or loss comprehensive income
Six months ended June 30, 2017
Effect on other
~54~
Price risk
The Group’s equity securities, which are exposed to price risk, are the held financial assets
at fair value through profit or loss. To manage its price risk arising from investments in equity
securities, the Group diversifies its portfolio. Diversification of the portfolio is done in
accordance with the limits set by the Group.
Cash flow and fair value interest rate risk
The Group’s main interest rate risk arises from short-term borrowings with variable rates,
which expose the Group to cash flow interest rate risk. As of June 30, 2018 and December
31, 2017, the Group’s borrowings at variable rate were mainly denominated in US Dollars.
(b) Credit risk
Effective 2018
i. Credit risk refers to the risk of financial loss to the Group arising from default by the
clients or counterparties of financial instruments on the contract obligations. The main
factor is that counterparties could not repay in full the accounts receivable based on the
agreed terms, and the contract cash flows of debt instruments stated at amortised cost.
ii. The Group manages their credit risk taking into consideration the entire group’s concern.
According to the Group’s credit policy, each local entity in the Group is responsible for
managing and analysing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered. Internal risk control assesses the
credit quality of the customers, taking into account their financial position, past
experience and other factors. Individual risk limits are set based on internal or external
ratings in accordance with limits set by the Board of Directors. The utilisation of credit
limits is regularly monitored.
iii. The Group adopts the assumptions under IFRS 9, the default occurs when the contract
payments are past due over 90 days.
iv. The Group adopts following assumptions under IFRS 9 to assess whether there has been
a significant increase in credit risk on that instrument since initial recognition:
If the contract payments were past due over 30 days based on the terms, there has been
a significant increase in credit risk on that instrument since initial recognition.
v. The following indicators are used to determine whether the credit impairment of debt
instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial
reorganization due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial
difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to
cause a default.
vi. The Group classifies customers’ accounts receivable in accordance with customer types.
The Group applies the simplified approach to estimate expected credit loss under the
provision matrix basis.
~55~
vii. The Group wrote-off the financial assets, which cannot be reasonably expected to be
recovered, after initiating recourse procedures. However, the Group will continue
executing the recourse procedures to secure their rights. On June 30, 2018, the Group
has no written-off financial assets that are still under recourse procedures.
viii. The Group’s accounts receivable is generated from the customers who have optimal
credit rating, and the expected credit loss rate is 0.03%. As of June 30, 2018, the carrying
amount of accounts receivable (including related-parties) amounted to CNY $1,042
(TWD $4,786). Because the Group expect that the impairment of expected credit is
insignificant, therefore, loss allowance is $0.
ix. For investments in debt instruments at amortised cost, the credit rating levels are
presented below:
The financial assets at amortised cost held by the Group are the time deposits with
maturity term of over three months, and no material issues of credit rating levels incurred.
x. Credit risk information in the second quarter of 2017 and for the year ended December
31, 2017 is provided in Note 12(4).
(c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated
by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs on its mature
liabilities on general and stressful conditions so that the Group approach the risk target
that does not occur the unacceptable losses or breach their reputation.
ii. Surplus cash held by the operating entities over and above balance required for working
capital management are invested in interest bearing demand deposits, time deposits and
marketable securities, choosing instruments with appropriate maturities or sufficient
liquidity to provide sufficient head-room as determined by the above-mentioned
forecasts.
iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled
or gross-settled derivative financial liabilities into relevant maturity groupings based on
the remaining period at the balance sheet date to the contractual maturity date for non-
derivative financial liabilities and to the expected maturity date for derivative financial
liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
CNY TWD CNY TWD CNY TWD CNY TWD
22,229$ 102,098$ -$ -$ -$ -$ 22,229$ 102,098$
Financial
assets at
amortised
cost
Significant increase
June 30, 2018
Lifetime
12 months in credit risk Impairment of credit Total
~56~
Non-derivative
financial liabilities: Between 1
June 30, 2018 Less than 1 year and 2 years Over 2 years
Short-term borrowings 147,558$ -$ -$ Accounts payable
(including related parties)
31,600 - -
Other payables
(including related parties)
220,798 - -
Guarantee deposits received 61,861 - -
Bonds payable 414 - -
Non-derivative
financial liabilities: Between 1
December 31, 2017 Less than 1 year and 2 years Over 2 years
Short-term borrowings 156,460$ -$ -$ Accounts payable
(including related parties)
15,371 - -
Other payables
(including related parties)
97,543 - -
Guarantee deposits received 58,829 - -
Bonds payable 417 - -
Non-derivative
financial liabilities: Between 1
June 30, 2017 Less than 1 year and 2 years Over 2 years
Accounts payable
(including related parties)
17,478$ -$ -$
Other payables
(including related parties)
188,320 - -
Guarantee deposits received 55,168 - -
Bonds payable 200,624 - -
Derivative
financial liabilities: Between 1
June 30, 2017 Less than 1 year and 2 years Over 2 years
Financial liabilities at fair
value through profit or loss
6,761$ -$ -$
(In thousands of CNY)
~57~
iv. The Group does not expect the timing of occurrence of the cash flows estimated through
the maturity date analysis will be significantly earlier, nor expect the actual cash flow
amount will be significantly different.
Non-derivative
financial liabilities: Between 1
June 30, 2018 Less than 1 year and 2 years Over 2 years
Short-term borrowings 677,734$ -$ -$ Accounts payable
(including related parties)
145,139 - -
Other payables
(including related parties)
1,014,125 - -
Guarantee deposits received 284,127 - -
Bonds payable 1,900 - -
Non-derivative
financial liabilities: Between 1
December 31, 2017 Less than 1 year and 2 years Over 2 years
Short-term borrowings 714,240$ -$ -$ Accounts payable
(including related parties)
70,170 - -
Other payables
(including related parties)
445,284 - -
Guarantee deposits received 268,554 - -
Bonds payable 1,900 - -
Non-derivative
financial liabilities: Between 1
June 30, 2017 Less than 1 year and 2 years Over 2 years
Accounts payable
(including related parties)
78,407$ -$ -$
Other payables
(including related parties)
844,803 - -
Guarantee deposits received 247,483 - -
Bonds payable 900,000 - -
Derivative
financial liabilities: Between 1
June 30, 2017 Less than 1 year and 2 years Over 2 years
Financial liabilities at fair
value through profit or loss
30,330$ -$ -$
(In thousands of TWD)
~58~
(3) Fair value information
A. The different levels that the inputs to valuation techniques are used to measure fair value of
financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. A market is regarded as active where a market
in which transactions for the asset or liability take place with sufficient frequency and
volume to provide pricing information on an ongoing basis. The fair value of the
Group’s investment in listed stocks and beneficiary certificates is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
B. Financial instruments not measured at fair value
The carrying amounts of cash and cash equivalents, accounts receivable (including related
parties), other receivables(including related parties), financial assets at amortised cost, other
financial assets, short-term borrowings, accounts payable(including related parties), other
payables(including related parties), bonds payable (current portion) and guarantee deposits
received are approximate to their fair values.
C. The related information of financial and non-financial instruments measured at fair value by level
on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:
(a) The related information of natures of the assets and liabilities are as follows:
At June 30, 2018 and December 31, 2017:None.
June 30, 2017 Level 1 Level 2 Level 3 Total
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Derivative financial instruments -
corporate bonds put option and call option -$ -$ 6,761$ 6,761$
(In thousands of CNY)
June 30, 2017 Level 1 Level 2 Level 3 Total
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Derivative financial instruments -
corporate bonds put option and call option -$ -$ 30,330$ 30,330$
(In thousands of TWD)
~59~
(b) The methods and assumptions the Group used to measure fair value are as follows:
i. The instruments the Group used market quoted prices as their fair values (that is, Level 1)
are listed below by characteristics:
ii For high-complexity financial instruments, the fair value is measured by using self-
developed valuation model based on the valuation method and technique widely used
within the same industry. The valuation model is normally applied to derivative financial
instruments, debt instruments with embedded derivatives or securitised instruments.
Certain inputs used in the valuation model are not observable at market, and the Group
must make reasonable estimates based on its assumptions. The effect of unobservable
inputs to the valuation of financial instruments is provided in Note 12(3)H.
D. For the six months ended June 30, 2018 and 2017, there was no transfer between Level 1 and
Level 2.
E. The following chart is the movement of Level 3 for the six months ended June 30, 2018 and 2017:
F. For the six months ended June 30, 2018 and 2017, there was no transfer into or out from Level
3.
G. Investment segment is in charge of valuation procedures for fair value measurements being
categorised within Level 3, which is to verify independent fair value of financial instruments.
Such assessment is to ensure the valuation results are reasonable by applying independent
information to make results close to current market conditions, confirming the resource of
information is independent, reliable and in line with other resources and represented as the
exercisable price, and frequently calibrating valuation model, updating inputs used to the
valuation model and making any other necessary adjustments to the fair value.
Listed shares Open-end fund
Market quoted price Closing price Net asset value
CNY TWD CNY TWD
At January 1 -$ -$ 4,366)($ 20,160)($
Losses recognised in profit or loss - - 2,277)( 10,170)(
Net exchange difference - - 118)( -
At June 30 -$ -$ 6,761)($ 30,330)($
Movement of unrealised gain or
loss in profit or loss of assets and
liabilities held at balance sheet date -$ -$ 2,277)($ 10,170)($
2018 2017
Derivative instruments Derivative instruments
Six months ended June 30,
~60~
H. The following is the qualitative information of significant unobservable inputs and sensitivity
analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair
value measurement:
June 30, 2018 and December 31, 2017: None.
I. The Group has carefully assessed the valuation models and assumptions used to measure fair
value. However, use of different valuation models or assumptions may result in difference
measurement. The following is the effect of profit or loss or of other comprehensive income from
financial assets categorised within Level 3 if the inputs used to valuation models have changed:
June 30, 2018 and December 31, 2017: None.
(4) Effects on initial application of IFRS 9 and information on application of IAS 39 in 2017
A. Summary of significant accounting policies adopted in 2017 and the second quarter of 2017:
(a) Financial assets at fair value through profit or loss
i. They are financial assets held for trading or financial assets designated as at fair value
through profit or loss on initial recognition. Financial assets are classified in this category
of held for trading if acquired principally for the purpose of selling in the short-term.
Derivatives are also categorized as financial assets held for trading unless they are
designated as hedges.
Significant Range Relationship
Valuation unobservable (weighted of inputs to
technique input average) fair value
CNY TWD
Hybrid instrument:
Convertible
corporate bonds -
put option and
call option
6,761)($ 30,330)($ Binomial
model
Volatility 33.93%~44.97% The higher the
volatility, the
higher the fair
value
Fair value at
June 30, 2017
Favourable Unfavourable Favourable Unfavourable
Input Change change change change change
Financial liabilities
Hybrid instrument Volatility ±5% 85$ 72)($ -$ -$
June 30, 2017
Recognised in profit or loss comprehensive income
Recognised in other
(In thousands of CNY)
Favourable Unfavourable Favourable Unfavourable
Input Change change change change change
Financial liabilities
Hybrid instrument Volatility ±5% 380$ 320)($ -$ -$
(In thousands of TWD)
June 30, 2017
Recognised in other
Recognised in profit or loss comprehensive income
~61~
ii. On a regular way purchase or sale basis, financial assets at fair value through profit or loss
are recognised and derecognised using trade date accounting.
iii. Financial liabilities at fair value through profit or loss are initially recognised at fair value.
Related transaction costs are expensed in profit or loss. These financial liabilities are
subsequently remeasured and stated at fair value, and any changes in the fair value of these
financial liabilities are recognised in profit or loss.
(b) Loans and receivables
Accounts receivable are receivables originated by the entity. They are created by the entity
by selling goods or providing services to customers in the ordinary course of business. They
are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. However, short-term accounts
receivable without bearing interest are subsequently measured at initial invoice amount as the
effect of discounting is immaterial.
(c) Impairment of financial assets
i. The Group assesses at each balance sheet date whether there is objective evidence that a
financial asset or a group of financial assets is impaired as a result of one or more events
that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event
(or events) has an impact on the estimated future cash flows of the financial asset or group
of financial assets that can be reliably estimated.
ii. The criteria that the Group uses to determine whether there is objective evidence of an
impairment loss is as follows:
(i) Significant financial difficulty of the issuer or debtor;
(ii) A breach of contract, such as a default or delinquency in interest or principal
payments;
(iii) The Group, for economic or legal reasons relating to the borrower’s financial
difficulty, granted the borrower a concession that a lender would not otherwise
consider;
(iv) It becomes probable that the borrower will enter bankruptcy or other financial
reorganisation;
(v) The disappearance of an active market for that financial asset because of financial
difficulties;
(vi) Observable data indicating that there is a measurable decrease in the estimated future
cash flows from a group of financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial asset in
the group, including adverse changes in the payment status of borrowers in the group
or national or local economic conditions that correlate with defaults on the assets in
the group;
(vii) Information about significant changes with an adverse effect that have taken place
in the technology, market, economic or legal environment in which the issuer
operates, and indicates that the cost of the investment in the equity instrument may
not be recovered;
(viii) A significant or prolonged decline in the fair value of an investment in an equity
instrument below its cost.
~62~
iii. When the Group assesses that there has been objective evidence of impairment and an
impairment loss has occurred, the amount of the impairment loss is measured as the
difference between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the financial asset’s original effective interest rate, and is
recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the
impairment loss was recognised, the previously recognised impairment loss is reversed
through profit or loss to the extent that the carrying amount of the asset does not exceed
its amortised cost that would have been at the date of reversal had the impairment loss not
been recognised previously. Impairment loss is recognised and reversed by adjusting the
carrying amount of the asset through the use of an impairment allowance account.
B. The reconciliations of carrying amount of financial assets transfered from December 31, 2017,
IAS 39, to January 1, IFRS 9, were as follows:
Under IAS 39, because the cash flows of debt instruments, which were classified as other
financial assets-current amounting to CNY $23,465 (TWD $107,116), meet the condition that it
is intended to settle the principal and interest on the outstanding principal balance, and the Group
has the right to receive cash flows, they were reclassified as "financial assets at amortised cost"
on initial application of IFRS 9.
C. Credit risk information for the year ended December 2017 and the second quarter of 2017 are as
follows:
(a) Credit risk refers to the risk of financial loss to the Group arising from default by the clients
or counterparties of financial instruments on the contract obligations. According to the
Group’s credit policy, each local entity in the Group is responsible for managing and
analysing the credit risk for each of their new clients before standard payment and delivery
terms and conditions are offered. Internal risk control assesses the credit quality of the
customers, taking into account their financial position, past experience and other factors.
Credit risk arises from cash and cash equivalents and deposits with banks and financial
institutions, as well as credit exposures to wholesale and retail customers, including
outstanding receivables.
(b) The Group’s treasury department manages the credit risk of bank deposits and other financial
instruments in accordance with the Group’s policies. For the six months ended June 30, 2017,
because the counterparties of the Group are determined by the Group’s internal control
procedures, the counterparties are banks or companies with high credit quality and had no
material issues of overusing the credit line. The management does not expect losses from
counterparty default; thus, there is no significant credit risk.
CNY TWD CNY TWD CNY TWD
IAS 39 45,630$ 208,300$ -$ -$ 236,154$ 1,236,828$ Transferred into
and measured at
amortised cost 23,465)( 107,116)( 23,465 107,116 - -
IFRS 9 22,165$ 101,184$ 23,465$ 107,116$ 236,154$ 1,236,828$
Effects
Other financial assets Measured at amortised cost Retained earnings
~63~
(5) Effects of initial application of IFRS 15 and information on application of IAS 11 and IAS 18 in
2017
A. The significant accounting policies applied on revenue recognition for the year ended December
31, 2017 and the second quarter of 2017 are set out below.
(a) Sale of goods
i. The Group manufactures and sells skincare products, health food and other products.
Revenue is measured at the fair value of the consideration received or receivable taking
into account of value added tax, rebates and discounts for the sale of goods to external
customers in the ordinary course of the Group’s activities. Revenue arising from the sales
of goods should be recognised when the Group has delivered the goods to the customer,
the amount of sales revenue can be measured reliably and it is probable that the future
economic benefits associated with the transaction will flow to the entity. The delivery of
goods is completed when the significant risks and rewards of ownership have been
transferred to the customer, the Group retains neither continuing managerial involvement
to the degree usually associated with ownership nor effective control over the goods sold,
and the customer has accepted the goods based on the sales contract or there is objective
evidence showing that all acceptance provisions have been satisfied.
ii. The Group manages franchises and provides employee training, skincare salon, OEM, and
other related services. One-off franchise income is recognised upon the newly-opened
stores’ signing of the franchise contract to join the salon channel. The service revenue
from company-operated salon is recognised upon the completion of the services. OEM
income is recognised when processing is completed. Revenue received prior to the
rendition of the services is recognized as advance receipts.
B. The revenue recognised by using above accounting policies for the second quarter of 2017 are as
follows:
CNY TWD CNY TWD
Net sale of goods 165,819$ 732,359$ 317,174$ 1,416,878$
Special affiliate income 5,420 23,977 9,659 43,149
OEM income 325 1,308 2,925 13,067 Skincare service from
company-operated salon
and other income 1,580 7,026 2,164 9,667
173,144$ 764,670$ 331,922$ 1,482,761$
Three months ended June 30, 2017 Six months ended June 30, 2017
~64~
C. For the six months ended June 30, 2018, the effects and description of current balance sheets
items if the Group continues adopting above accounting policies are as follows:
Under IFRS 15, contract liabilities in relation to the sales contract of products were previously
presented at advance receipts in the balance sheet, and had no effects to the current revenue and
profit.
13. SUPPLEMENTARY DISCLOSURES (1) Significant transactions information
A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates
and joint ventures): None.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or
20% of the Company’s paid-in capital: Please refer to table 2.
E. Acquisition of real estate reaching TWD $300 million or 20% of paid-in capital or more: Please
refer to table 3.
F. Disposal of real estate reaching TWD $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching TWD $100 million or 20% of
paid-in capital or more: Please refer to table 4.
H. Receivables from related parties reaching TWD $100 million or 20% of paid-in capital or more:
Please refer to table 5.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 6.
(2) Information on investees
Names, locations and other information of investee companies (not including investees in Mainland
China):Please refer to table 7.
(3) Information on investments in Mainland China
A. Basic information: Please refer to table 8.
B. Significant transactions, either directly or indirectly through a third area, with investee companies
in the Mainland Area: Please refer to table 6.
Balance
sheet items CNY TWD CNY TWD CNY TWD
Advance receipts -$ -$ 72,965$ 335,128$ 72,965)($ 335,128)($
Contract liabilities
-current
72,965 335,128 - - 72,965 335,128
June 30, 2018
Balance by using IFRS 15 accounting polices in accounting policy
Balance by using previous Effects from changes
~65~
14. SEGMENT INFORMATION
(1) General information
The Group is engaged in manufacturing, distributing, and business operations of beauty products
under the brand of Chlitina. For the six months ended June 30, 2018 and 2017, the operating revenue,
net profit and assets of the company-operated salon business were all less than 10% of their
respective totals in the consolidated financial statements. In addition, management considers that
the separate list of direct-operational salon business have no reference value. Hence, the information
on assets, liabilities and capital expenditures were not disclosed.
(2) Measurement of segment information
The reportable operating segment information provided to the Chief Operating Decision-Maker are
operating revenue and profit or loss of the segment.
The Group has only one reportable operating segment, for related information, please refer to
statement of comprehensive income.
(3) Reconciliation for segment income (loss)
The profit and loss before tax of the reportable operating segment provided to the Chief Operating
Decision-Maker was the same with the statement of comprehensive income, so there was no
reconciliation needed.
Item Value
0 Chlitina Holding
Limited
Hong Kong Chlitina
International Limited
Other
receivables
Yes 560,000$ 560,000$ -$ Lower 10%
of loan
market rate
2 -$ Operating
capital
-$ None -$ 352,120$ 1,408,480$ Note 3, 5
0 Chlitina Holding
Limited
Chlitina (China)
Trade Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 352,120 1,408,480 Note 3, 5
0 Chlitina Holding
Limited
Weishuo (Shanghai)
Daily Product
Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 352,120 1,408,480 Note 3, 5
0 Chlitina Holding
Limited
Weihu (Shanghai)
Trade Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 352,120 1,408,480 Note 3, 5
0 Chlitina Holding
Limited
Hong Kong W-
Amber International
Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 352,120 1,408,480 Note 3, 5
0 Chlitina Holding
Limited
Wuguan (Shanghai)
Trade Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 352,120 1,408,480 Note 3, 5
1 Hong Kong Chlitina
International Limited
Chlitina (China)
Trade Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 4,105,552 4,105,552 Note 4, 6
1 Hong Kong Chlitina
International Limited
Weishuo (Shanghai)
Daily Product
Limited
Other
receivables
Yes 560,000 560,000 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 4,105,552 4,105,552 Note 4, 6
2 Chlitina (China)
Trade Limited
Weihu (Shanghai)
Trade Limited
Other
receivables
Yes 232,350 229,650 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 2,404,396 3,404,396 Note 4, 7
2 Chlitina (China)
Trade Limited
Wuguan (Shanghai)
Trade Limited
Other
receivables
Yes 92,940 91,860 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 2,404,396 2,404,396 Note 4, 7
3 Hong Kong W-
Amber International
Limited
Weihu (Shanghai)
Trade Limited
Other
receivables
Yes 23,235 22,965 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 287,891 287,891 Note 4, 8
Allowance
for
bad debt
Collateral
Financing
Limits
for each
borrowing
company
Financing
company's
total
financing
Amount
Limits
Amount
Actually
Drawn
Interest
rate
Nature
of loan
(Note 2)
Transaction
Amounts
Reason
for short-
term
financing
Related
Party
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Loans to others
Six months ended June 30, 2018
Table 1 Expressed in thousands of TWD
(Except as otherwise indicated)
No.
(Note 1) Creditor Borrower
General
ledger
account Footnote
Maximum
Balance
for the period
Ending
Balance
Table 1, Page 1
Item Value
Allowance
for
bad debt
Collateral
Financing
Limits
for each
borrowing
company
Financing
company's
total
financing
Amount
Limits
Amount
Actually
Drawn
Interest
rate
Nature
of loan
(Note 2)
Transaction
Amounts
Reason
for short-
term
financing
Related
Party
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Loans to others
Six months ended June 30, 2018
Table 1 Expressed in thousands of TWD
(Except as otherwise indicated)
No.
(Note 1) Creditor Borrower
General
ledger
account Footnote
Maximum
Balance
for the period
Ending
Balance
3 Hong Kong W-
Amber International
Limited
Wuguan (Shanghai)
Trade Limited
Other
receivables
Yes 23,235$ 22,965$ -$ Lower 10%
of loan
market rate
2 -$ Operating
capital
-$ None -$ 287,891$ 287,891$ Note 4, 8
4 Weihu (Shanghai)
Trade Limited
Beijing Aobaojia
Medical
Cosemetology Clinic
Limited
Other
receivables
Yes 92,940 91,860 - Lower 10%
of loan
market rate
2 - Operating
capital
- None - 168,236 168,236 Note 4, 9
5 Weishuo (Shanghai)
Daily Product
Limited
Wuguan (Shanghai)
Trade Limited
Other
receivables
Yes 92,940 91,860 45,930 Lower 10%
of loan
market rate
2 - Operating
capital
- None - 1,236,005 1,236,005 Note 4,
10
Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:
(1)The Company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: The column of ‘Nature of loan’ shall fill in‘1’as‘Buiness transaction’or‘2’as‘Short-term financing’.
Note 3: The limit on total financing and financing to a single entity shall not be more than 40%, except for inter-company transaction, and 20% of the Company’s stockholders’ equity, respectively. In addition,
if the Board of Directors of a public company has authorized the chairman to loan funds in instalments or in revolving within certain lines to the same counter party, the limit shall not be more than 10% of the Company’s net asset.
Note 4: Based on the Company's guidelines, when the Group directly or indirectly owns 100% of the controlling power, the allowable aggregate of financing provided to others cannot exceed 40% of the Company's stockholders'
equity, the maximum financing provided to an individual counterparty cannot be exceed 100% of the Company's stockholders' equity.
Note 5: The shared line of credit to Hong Kong Chlitina International Limited, Chlitina (China) Trade Limited, Weishuo (Shanghai) Daily Product Limited, Weihu (Shanghai) Trade Limited, Hong Kong W-Amber International
Limited and Wuguan (Shanghai) Trade Limited amounted to TWD$560,000.
Note 6: The shared line of credit to Chlitina (China) Trade Limited and Weishuo (Shanghai) Daily Product Limited amounted to TWD$560,000.
Note 7: Weihu (Shanghai) Trade Limited amounted to CNY$50,000; Wuguan (Shanghai) Trade Limited amounted to CNY$20,000.
Note 8: The shared line of credit to Weihu (Shanghai) Trade Limited and Wuguan (Shanghai) Trade Limited amounted to CNY$5,000.
Note 9: The line of credit to Beijing Aobaojia Medical Cosemetology Clinic Limited amounted to CNY$20,000.
Note 10: The line of credit to Wugan (Shanghai) Trade Limited amounted to CNY$20,000.
Table 1, Page 2
Table 2
Number of
shares Amount
Number of
shares Amount
Number of
shares Selling price Book value
Gain (loss) on
disposal
Number of
shares Amount
Weishuo
(Shanghai) Daily
Product Limited
Southern cash
Zengli money
B
Financial assets at
fair value through
profit or loss-current
- - - -$ 110,000,000 $ 510,323 110,000,000 $ 511,552 $ 510,323 $ 1,229 - -$
Weishuo
(Shanghai) Daily
Product Limited
China
Universal Cash
Express
Money Market
Fund
Financial assets at
fair value through
profit or loss-current
- - - - 212,710,000 986,826 212,710,000 989,189 986,826 2,363 - -
Chlitina (China)
Trade Limited
Southern cash
Zengli money
B
Financial assets at
fair value through
profit or loss-current
- - - - 102,500,000 475,528 102,500,000 476,663 475,528 1,135 - -
Chlitina (China)
Trade Limited
ICBCCS
Money Market
Fund
Financial assets at
fair value through
profit or loss-current
- - - - 300,000,000 1,391,790 300,000,000 1,395,117 1,391,790 3,327 - -
Chlitina (China)
Trade Limited
GF Money
Market Fund B
Financial assets at
fair value through
profit or loss-current
- - - - 201,870,000 936,535 20,187,000 938,787 936,535 2,252 - -
Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.
Note 2: The exchange difference of translating to presentation currency was included in book value.
Beginning Balance Acquisition Disposal Ending Balance
Investor
Marketable
securities
(Note1)
General
ledger account Counterparty
Relationship
with
the investor
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Table 2, Page 1
Table 3
Original owner who
sold the real estate to
the counterparty
Relationship
between the
original owner and
the acquirer
Date of the original
transaction Amount
Chlitina
(China)
Trade Limited
Buildings 2018.5.10 500,377$ 253,668$ Zhaocang
(Shanghai)
Trading
Co., Ltd.
The second
degree of
kinship of the
Company's.
representative
Shanghai Action
Education
Technology CO.,
LTD.
Non-related parties 2016.11.8 470,137$ Real estate
appraisal report
Extension of
office
Based on the
agreement
Note 1: Above stated amounts arose by CNY, and have been exchanged based on the exchange rate.
Note 2: The transfer of the buildings has not been completed, therefore, it was recorded at other non-current assets.
Other
commitments
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Real estate
acquired by
Real
estate
acquired
Date of
the event
Transaction
amount
Status of
payment Counterparty
Relationship
with the
counterparty
If the counterparty is a related party, information as to
the last transaction of the real estate is disclosed below:
Basis or
reference used
in setting the
price
Reason for
acquisition
of real estate
and status of
the real estate
Table 3, Page 1
Table 4
Purchases
(sales) Amount
Percentage of
total purchases
(sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable)
Chlitina (China) Trade
Limited
Weishuo (Shanghai) Daily
Product Limited
Subsidiary Purchases 314,783$ 73% 60 days after
monthly billings
- - 125,815)($ 88% Note 1
British Virgin IS.
Chlitina Intelligence
Limited Taiwan Branch
Chlitina (China) Trade
Limited
Subsidiary Trademark
licences
103,434 100% Note 2 - - 34,248 100% Note 1
Note 1: The transactions have been eliminated upon consolidation.
Note 2: The credit term is 2 months, and the payment should be settled within 60 days after the invoice date.
Notes/accounts receivable (payable)
FootnotePurchaser/seller Counterparty
Relationship with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transactions
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Table 4, Page 1
Table 5
Creditior Counterparty
Relationship
with the
counterparty Ending Balance Turnover rate Amount Action taken
Amount collected
subsequent to the
balance sheet date
Allowance for
bad debt Footnote
Weishuo (Shanghai)
Daily Product Limited
Chlitina (China)
Trade Limited
Subsidiary 125,815$ 5.35 -$ - 54,180$ -$ Note
Note: the transactions were eliminated when preparing the consolidated financial statements.
Overdue receivables
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Receivables from related parties reaching NT100 million or 20% of paid-in capital or more
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Table 5, Page 1
Table 6
General ledger account Amount Transaction terms
Percentage of consolidated total operating
revenues or total assets (Note 3)
1 Weishuo (Shanghai) Daily Product
Limited
Chlitina (China) Trade
Limited
3 Sales 314,783$ 60 days
after monthly billings
15%
1 Weishuo (Shanghai) Daily Product
Limited
Chlitina (China) Trade
Limited
3 Accounts receivable 125,815 60 days
after monthly billings
2%
1 Weishuo (Shanghai) Daily Product
Limited
Wuguan (Shanghai) Trade
Limited
3 Other receivable 45,930 Loans 1%
2 British Virgin IS. Chlitina Intelligence
Limited Taiwan Branch
Chlitina (China) Trade
Limited
3 Trademark right income 103,434 In accordance with mutual
agreements
5%
2 British Virgin IS. Chlitina Intelligence
Limited Taiwan Branch
Chlitina (China) Trade
Limited
3 Accounts receivable 34,248 In accordance with mutual
agreements
1%
3 Hong Kong Chlitina International
Limited
Weishuo (Shanghai) Daily
Product Limited
3 Sales 39,523 60 days
after monthly billings
2%
3 Hong Kong Chlitina International
Limited
Weishuo (Shanghai) Daily
Product Limited
3 Accounts receivable 25,113 60 days
after monthly billings
0%
4 British Virgin Is. Chlitina Marketing
Limited Taiwan Branch
Hong Kong Chlitina
International Limited
3 Sales 40,905 60 days
after monthly billings
2%
4 British Virgin Is. Chlitina Marketing
Limited Taiwan Branch
Hong Kong Chlitina
International Limited
3 Accounts receivable 20,729 60 days
after monthly billings
0%
Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
(1)Parent company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:
(1)Parent company to subsidiary.
(2)Subsidiary to parent company.
(3)Subsidiary to subsidiary.
Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and
based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.
Note 4: Separate amounts lower than $20,000 are not disclosed, so is its counter transaction.
Transaction
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Significant inter-company transactions during the reporting periods
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Number
(Note 1) Company name Counterparty Relationship
Table 6, Page 1
Table 7
Balance as at
June 30, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Chlitina Holding
Limited
Chlitina Group Limited British
Virgin IS.
Investing 665,908$ 665,908$ 2,116,707,348 100.00 4,567,945$ 629,004$ 629,004$
Chlitina Group
Limited
Chlitina International
Limited
British
Virgin IS.
Investing 511,274 511,274 17,000,001 100.00 4,317,616 568,815 - Note
Chlitina Group
Limited
Chlitina Intelligence Limited British
Virgin IS.
Investing - - 1 100.00 187,301 60,308 - Note
Chlitina Group
Limited
W-Amber International
Limited
British
Virgin IS.
Investing 50,880 50,880 1,150,000 100.00 548 131)( - Note
Chlitina Group
Limited
W-Champion International
Limited
British
Virgin IS.
Investing 34,518 34,518 930,000 100.00 162 88)( - Note
Chlitina Group
Limited
C-Asia International Limited British
Virgin IS.
Investing 920 920 20,000 100.00 311 6 - Note
Chlitina International
Limited
Hong Kong Chlitina
International Limited
Hong Kong Investing and
trading of skincare
products
245,947 245,947 62,150,001 100.00 4,105,552 572,627 - Note
Chlitina International
Limited
Chlitina Marketing Limited British
Virgin IS.
Investing, trading
of skincare
products and
research and
development
349,851 349,851 11,622,882 100.00 180,948 3,360)( - Note
Chlitina International
Limited
Centre de Recherche et de
Developpement de
CHLITINA FRANCE EURL
France Research and
development
center
188 188 500 100.00 - - - Note
Hong Kong Chilitina
International Limited
Hong Kong Crystal-Asia
International Limited
Hong Kong Investing 69,642 69,642 2,300,000 100.00 66,548 2,867)( - Note
Hong Kong Chilitina
International Limited
Hong Kong W-Champion
International Limited
Hong Kong Investing 61,865 61,865 2,950,000 100.00 63,727 4,692 - Note
Hong Kong Chilitina
International Limited
Hong Kong W-Amber
International Limited
Hong Kong Investing 327,025 327,025 92,800,000 100.00 287,891 24,412)( - Note
Balance as at June 30, 2018
Net profit (loss)
of the investee
Share of profit (loss)
of investee Footnote Investor Investee Location
Main business
activities
Initial investment amount
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Information on investees
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Table 7, Page 1
Table 7
Balance as at
June 30, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Balance as at June 30, 2018
Net profit (loss)
of the investee
Share of profit (loss)
of investee Footnote Investor Investee Location
Main business
activities
Initial investment amount
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Information on investees
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
W-Champion
International Limited
W-Champion Marketing
Limited
British
Virgin IS.
Investing 31,783$ 31,783$ 930,000 100.00 162$ 88)($ - Note
W-Amber
International Limited
W-Amber Marketing
Limited
British
Virgin IS.
Investing 56,280 56,280 1,150,000 100.00 252 43)( - Note
Note: The 'share of profit (loss) of investee' column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised
investment income (loss) of its investee accounted for under the equity method for this period.
Table 7, Page 2
Table 8
Remitted to
Mainland China
Remitted back
to Taiwan
Chlitina (China)
Trade Limited
Dealer of skincare
products and
health food
255,923$ 2 -$ -$ -$ -$ 552,036$ 100.00 552,036$ 2,404,396$ -$
Weishuo (Shanghai)
Daily Product Limited
Production and
trading of skincare
products
64,207 2 - - - - 50,298 100.00 50,298 1,236,005 -
Weihu (Shanghai)
Trade Limited
Investing, dealer
of skincare and
supplementary
health care products
259,223 2 - - - - 24,689)( 100.00 24,689)( 168,236 -
Crystal Asia
Shanghai Limited
Dealer of skincare
products and
supplementary
health care products
6,455 2 - - - - 49)( 100.00 49)( 5,865 -
Wuguan (Shanghai)
Trade Limited
Dealer of skincare
products and
supplementary
health care products
64,193 2 - - - - 4,284 100.00 4,284 33,986 -
Shanghai Yuanshuo
Management
Consulting Limited
Enterprise
management
consulting
95,772 2 - - - - 17,176)( 100.00 17,176)( 84,694 -
Beijing Aobaojia
Medical Cosmetology
Clinic Limited
Medical
cosmetology
services
64,139 2 - - - - 10,546)( 100.00 10,546)( 61,409 -
Cui Jei (Shanghai)
Trading Co. Ltd.
Dealer of health
food and daily
necessities
6,055 2 - - - - 59 100.00 59 5,989 -
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Information on investments in Mainland China
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Accumulated
amount
of investment
income
remitted back
to Taiwan Footnote
Amount remitted from Taiwan to
Mainland China/
Amount remitted back
to Taiwan for the period
Ending balance
of accumulated
amount
of investment
from Taiwan
Investee in Mainland
China
Main business
activities Paid-in capital
Investment
method
(Note 1)
Net income
(loss)
of the
investee
company
Ownership
held by
the
Company
(direct or
indirect)
Investment
income (loss)
(Note 2(2)B)
Book value
as of June
30, 2018
Beginning
balance of
accumulated
amount of
investment from
Taiwan
Table 8, Page 1
Table 8
Remitted to
Mainland China
Remitted back
to Taiwan
CHLITINA HOLDING LIMITED AND SUBSIDIARIES
Information on investments in Mainland China
Six months ended June 30, 2018
Expressed in thousands of TWD
(Except as otherwise indicated)
Accumulated
amount
of investment
income
remitted back
to Taiwan Footnote
Amount remitted from Taiwan to
Mainland China/
Amount remitted back
to Taiwan for the period
Ending balance
of accumulated
amount
of investment
from Taiwan
Investee in Mainland
China
Main business
activities Paid-in capital
Investment
method
(Note 1)
Net income
(loss)
of the
investee
company
Ownership
held by
the
Company
(direct or
indirect)
Investment
income (loss)
(Note 2(2)B)
Book value
as of June
30, 2018
Beginning
balance of
accumulated
amount of
investment from
Taiwan
SHANGHAI
ZHONGYE TRADE
CO., LTD
Production
and trading
of cosmetics
29,258$ 2 -$ -$ -$ -$ 9,874)($ 30.00 2,960)($ 24,655$ -$
Company name
Ending blance of
Accumulated
remittance from
Taiwan to Mainland
China
Investment
amount authorized
by the Investment
Commission of
the Ministry of
Economic Affairs
(MOEA)
Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA
Not applicable to foreign
issuer.
$ - $ - Note 4
Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:
(1)Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.( the investee in the third area is Chlitina Group Limited)
(3) Others
Note 2: In the ‘share of profit (loss)’ column:
(1)It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
A.The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
B.The financial statements that are reviewed and attested by R.O.C. parent company’s CPA.
C.Others.
Note 3: The numbers in this table are expressed in New Taiwan Dollars.
Note 4: The Company was primary listing by foreign issuer and was not restricted to the ceiling of investment of investors in Mainland China regulated by Investment Commission, Ministry of Economic Affairs.
Table 8, Page 2