26.

PROFIT BEFORE INCOME TAX

Other operating income and expenses, net

	For the Year Ended December 31
	2016			2017			2018
	NT$			NT$			NT$			US$ (Note 4)

Rental income	$	51,607		$	131,570		$	182,411		$	5,959
Gains (losses) on disposal of property, plant and equipment and other assets		(127,159	)		367,110			(14,644	)		(479	)
Impairment losses on property, plant and equipment and goodwill		(888,231	)		(714,675	)		(133,071	)		(4,347	)
Loss on damages and claims		(12,778	)		(85,585	)		(24,114	)		(788	)
Others		176,281			410,136			361,001			11,794

	$	(800,280	)	$	108,556		$	371,583		$	12,139

Other income

	For the Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$		US$ (Note 4)

Government subsidy	$	332,758	$	341,844	$	435,950	$	14,242
Interest income		230,067		306,871		466,211		15,231
Dividends income		26,411		59,039		190,397		6,220

	$	589,236	$	707,754	$	1,092,558	$	35,693

Other gains, net

	For the Year Ended December 31
	2016			2017			2018
	NT$			NT$			NT$			US$ (Note 4)

Gain on remeasurement of investments accounted for using the equity method (Note 15)	$	-		$	-		$	7,421,408		$	242,451
Net gains on financial assets mandatorily at FVTPL		-			-			3,388,485			110,699
Gain on disposal of subsidiaries (Note 31)		-			5,589,457			-			-
Net gains (losses) arising on financial instruments held for trading		224,446			(3,111,253	)		(1,398,995	)		(45,704	)
Net gains on financial assets designated as at FVTPL		223,113			327,351			-			-
Foreign exchange gains (losses), net		1,928,384			3,502,586			(1,015,615	)		(33,180	)
Impairment losses on financial assets		(91,886	)		(50,206	)		(521,010	)		(17,021	)
Others		(7,513	)		1,518			-			-

	$	2,276,544		$	6,259,453		$	7,874,273		$	257,245

Finance costs

	For the Year Ended December 31
	2016			2017			2018
	NT$			NT$			NT$			US$ (Note 4)

Total interest expense for financial liabilities measured at amortized cost	$	2,510,197		$	2,016,298		$	3,597,932		$	117,541
Less: Amounts included in the cost of qualifying assets
Inventories related to real estate business		(238,469	)		(190,137	)		(11,648	)		(381	)
Property, plant and equipment		(54,191	)		(51,262	)		(50,309	)		(1,643	)
Investment properties		-			(13	)		(89	)		(3	)
		2,217,537			1,774,886			3,535,886			115,514
Other finance costs		43,538			24,608			32,355			1,057

	$	2,261,075		$	1,799,494		$	3,568,241		$	116,571

Information relating to the capitalized borrowing costs was as follows:

	For the Year Ended December 31
	2016	2017	2018

Annual interest capitalization rates
Inventories related to real estate business (%)	4.35-6.00	4.35-5.39	4.35
Property, plant and equipment (%)	1.15-4.42	1.26-5.49	1.84-4.52
Investment properties (%)	-	1.26-1.97	1.84-2.23

Depreciation and amortization

	For the Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$		US$ (Note 4)

Property, plant and equipment	$	28,961,614	$	28,625,287	$	39,893,786	$	1,303,293
Investment properties		-		122,231		392,667		12,828
Intangible assets		508,823		457,666		2,402,450		78,486

Total	$	29,470,437	$	29,205,184	$	42,688,903	$	1,394,607

Summary of depreciation by function
Operating costs	$	26,948,106	$	26,731,714	$	37,903,050	$	1,238,257
Operating expenses		2,013,508		2,015,804		2,383,403		77,864

	$	28,961,614	$	28,747,518	$	40,286,453	$	1,316,121

Summary of amortization by function
Operating costs	$	152,987	$	140,175	$	1,394,664	$	45,562
Operating expenses		355,836		317,491		1,007,786		32,924

	$	508,823	$	457,666	$	2,402,450	$	78,486

Operating expenses directly related to investment properties

	For the Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$		US$ (Note 4)

Direct operating expenses of investment properties that generated rental income	$	-	$	465,458	$	1,276,751	$	41,710

Employee benefits expense

	For the Year Ended December 31
	2016		2017		2018
	NT$		NT$		NT$		US$ (Note 4)

Post-employment benefits
Defined contribution plans	$	2,356,416	$	2,340,826	$	2,965,054	$	96,865
Defined benefit plans		394,741		266,267		291,333		9,518
		2,751,157		2,607,093		3,256,387		106,383
Equity-settled share-based payments		470,788		438,765		215,648		7,045
Other employee benefits		49,525,940		51,043,198		63,940,430		2,088,874

	$	52,747,885	$	54,089,056	$	67,412,465	$	2,202,302

Summary of employee benefits expense by function
Operating costs	$	35,588,529	$	35,978,403	$	45,363,170	$	1,481,972
Operating expenses		17,159,356		18,110,653		22,049,295		720,330

	$	52,747,885	$	54,089,056	$	67,412,465	$	2,202,302

Employees’ compensation and the remuneration to directors

The Articles stipulates to distribute employees’ compensation and remuneration of directors at the rates in 0.01%-1.00% and no higher than 0.75%, respectively, of net profit before income tax, employees’ compensation and remuneration of directors. For the period from April 30, 2018 to December 31, 2018, the employees’ compensation and the remuneration of directors were NT$45,430 thousand (US$1,484 thousand) and NT$34,073 thousand (US$1,113 thousand) which were accrued based on 0.20% and 0.15%, respectively, of net profit before income tax, employees’ compensation and remuneration to directors.

If there is a change in the proposed amounts after the consolidated financial statement authorized for issue, the differences are recorded as a change in accounting estimate and will be adjusted in the following year.