Stock Code:2612

$\mathbf{1}$

CHINESE MARITIME TRANSPORT LTD.

Parent Company Only Financial Statements With Independent Auditors' Report For the Years Ended December 31, 2019 and 2018

4F., NO15, Sec. 1, Jinan Rd., Taipei City, Taiwan (R.O.C) Address: Telephone: $(02)2396 - 3282$

The independent auditors' report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' report and parent company only financial statements, the Chinese version shall prevail.

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors' Report	3
4. Balance Sheets	4
5. Statements of Comprehensive Income	5
6. Statements of Changes in Equity	6
7. Statements of Cash Flows	7
8. Notes to the Financial Statements
(1) Company history	8
(2) Approval date and procedures of the financial statements	8
New standards, amendments and interpretations adopted (3)	$8 - 11$
Summary of significant accounting policies (4)	$12 - 26$
(5) Significant accounting assumptions, and judgments and major sources of estimation uncertainty	26
Explanation of significant accounts (6)	$27 - 52$
Related-Party Transactions (7)	$52 - 56$
(8) Pledged Assets	56
(9) Significant Commitments and Contingencies	$56 - 57$
(10) Losses Due to Major Disasters	57
(11) Subsequent Events	57
$(12)$ Other	57
(13) Other Disclosures
(a) Information on significant transactions	$58 - 60$
(b) Information on investees	61
(c) Information on investment in mainland China	62
(14) Segment Information	62
9. Statement of significant accounts	$63 - 69$

KPMG

台北市11049信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 (2) 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City 11049, Taiwan (R.O.C.)

Fax 傳真 + 886 (2) 8101 6667 Internet 網址 kpmg.com/tw

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In our judgment, the key audit matters that should be communicated in the audit report are as follows:

Recognition of freight revenue–container hauling

Refer to Note(4)(o) "Revenue" and to Note (6) (n) "Revenue from contracts with customers" for income details.

Description of key audit matters:

The main activities of the Company are container hauling and related business. Freight revenue container hauling is one of the significant items in the financial statements, and the amounts and changes may affect the users' understanding on the entire financial statements. Therefore, the testing over freight revenue container hauling recognition is considered a key matter in our audit.

Audit Procedure:

Our principal audit procedures included testing related control over sale and receipts cycle, executing the confirmation process used to examine accounts receivable and revenue of major clients, and evaluating if the Company's timing of revenue recognition are in accordance with related accounting standards.

Freight revenue-vessel chartering, using equity method investment, subsidiary

Refer to Note(4)(h) "Investment in subsidiary", and to Note $(6)(d)$ for "Investment accounted for using equity method".

Description of key audit matters:

The main activity of the subsidiaries, accounted for using equity method investment, is operating bulk carrier. Freight revenue vessel chartering is one of the significant items in the financial statements, and the amounts and changes may affect the users' understanding on the entire financial statements. Therefore, the testing over freight revenue vessel chartering recognition is considered a key matter in our audit.

Audit procedure:

Our principal audit included testing related control over sale and receipts cycle of subsidiaries, which are investments using equity method, executing substantive analytical procedures of freight revenue-vessel chartering, assessing contract liabilities, and evaluating the timing of revenue recognition is in accordance with related accounting standards.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Supervisors) are responsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors' report are I-Wen Wang and Jui-Lan Lo.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2020

Notes to Readers

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

The independent auditors' audit report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' audit report and parent company only financial statements, the Chinese version shall prevail.

(English Translation of Financial Statements Originally Issued in Chineso	CHINESE MARITIME TRANSPORT LTD	alance Shee

December 31, 2019 and 2018 מוסטונט סטוונו

(Expressed in thousands of New Taiwan Dollars)

		December 31, 2019		December 31, 2018
	Current assets: Assets	Amount	$\approx$	Amount	$\mathcal{S}$		Liabilities and Equity Current liabilities:
$\frac{8}{2}$	Cash and cash equivalents (note (6)(a))	328,263 69	$\mathbf{\hat{c}}$	229,607		2100	Short-term borrowings (note (6)(h))
$\frac{1}{10}$	Current financial assets at fair value through profit or loss (note (6)(b))			38,389		2150	Notes and accounts payable
150	Notes and accounts receivable, net (note (6)(c))	177,086		174,579		2181	Accounts payable to related parties (note (7))
1470	Other current assets (notes (7))	6,276		8,146		2300	Other current liabilities (note (7))
1476	Other current financial assets (notes $(6)(g),(7)$ and $(8))$	514		7,450		2322	Long-term borrowings, current portion (note (6)(h))
		512,139		458.171
	Non-current assets:						Non-Current liabilities:
510	Non-current financial assets at fair value through profit or loss (note (6)(b))	56,591		25,788		2530	Bonds payable (note (6)(h))
1550	Investments accounted for using equity method, net (note (6)(d))	13,642,006	93	13,454,442	93	2570	Deferred tax liabilities (note (6)(k))
1600	$(6)(e)$ and $(8))$ Property, plant and equipment (notes	509,573		510,927		2640	Net defined benefit liability, non-current (note (6)(j))
1760	Investment property, net (notes (6)(f))	20,173		20,240		2670	Other non-current liabilities, others
1780	Intangible assets	11,659		12,655
1840	Deferred tax assets (note (6)(k))	3,976		3,215			Total liabilities
900	Other non-current assets	1,800		2,766		3100	Common stock(note (6)(l))
980	Other non-current financial assets(note $(6)(g)$ and $(8))$	5,456	ı	5,671		3200	Capital surplus(note (6)(l))
		14,251,234	5	14,035,704	$\mathbb{Z}$		Retained earnings:(note (6)(l))
						3310	Legal reserve
						3320	Special reserve
						3350	Unappropriated retained earnings
							Other equity:
						3400	Other equity interest

Total assets

$\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\$

S 14,763,373 100 14,493,875 100

Total equity
Total liabilities and equity

					ត	$\mathfrak{g}$		≀≀	녧	ສ	4	п,	$\overline{c}$	₹	A,	$\frac{58}{2}$	ମ୍ବ	$\Xi$	휇
5,967	100,294	63,260		969,358	3,100,000	220,470	16,716	516	3,337,702	4,307,060	1,974,846	53,411	1,664,166	621,623	6,151,652	8,437,441	(278, 883)	10,186,815	14,493,875
				Ξ	≌	2		٠	$\approx$	င္ကာ	긔	П	12	C	$\frac{43}{2}$	57	€	ଗ	뤸
3,690	107,019	77,983	400,000	1,888,575	2,700,000	230,872	9,155	408	2,940,435	4,829,010	1,974,846	53,411	1,715,537	359,487	6,366,772	8,441,796	(535, 690)	9,934,363	14,763,373

$\overline{4}$

799,837 6

$8$ 1,299,883 9

$\frac{\text{December 31, 2019} }{\text{Amount}} \underbrace{\frac{\text{December 31, 2018}}{\text{Amount}}}_{\text{%}}$

(English Translation of Financial Statements Originally Issued in Chinese)
CHINESE MARITIME TRANSPORT LTD.

Statements of Comprehensive Income

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan dollars, Except earnings per share)

		2019		2018
		Amount	%	Amount	%
4000	Operating Revenues (notes (6)(n), and (7))
4621	Freight revenue-vessel chartering	\$ 61,046	5	60.990	-5
4622	Freight revenue-container hauling, net and logistics revenue	1,219,685	93	1,170,487	90
4623	Freight revenue-airline agent and others	32,628	$\overline{2}$	68,673	$\overline{2}$
		1,313,359	100	1,300,150	100
5000	Total operating costs (notes $(6)(i)$ , $(7)$ and $(12)$ )	1,181,189	90	1,147,651	88
5900	Gross profit	132,170	10	152,499	12
	Operating expenses:
6000	Operating expenses (notes $(6)(i)$ , $(i)$ , $(p)$ , $(7)$ and $(12)$ )	155,850	12	157,604	12
6450	Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9 (notes $(6)(c)$ )			(1,790)	$\sim$
6900	Net operating income	155,850 (23,680)	12 (2)	155,814 (3,315)	12
	Non-operating income and expenses:				$\sim$
7010	Other income (note $(6)(b)$ and $(i)$ )	11,950	1	11,887	-1
7050	Finance costs-interest expense (note $(6)(o)$ )	(64,261)	(5)	(61, 947)	(5)
7070	Share of profit (loss) of associates and joint ventures accounted for using equity method, net (note $(6)(d)$ )	438,270	33	600,934	46
7100	Interest income	3,274	L.	3,197	ä,
7210	Gains on disposals of property, plant and equipment (note $(6)(e)$ )	(11)	ä,
7235	Gains on financial assets (liabilities) at fair value through profit or $loss(note (6)(b))$	(7.585)	$\blacksquare$	(10, 855)	$\Box$ (1)
	Total non-operating income and expenses	381,637	29	543,216	41
7900	Profit (loss) from continuing operations before tax	357,957	27	539,901	41
7950	Less: Income tax expenses(note(6)(k))	34,115		26,190	$\overline{2}$
	Profit	323,842	25	513,711	39
8300	Other comprehensive income:
8310	Components of other comprehensive income that will not be reclassified to profit or loss
8311	Gains (losses) on remeasurements of defined benefit plans( $note(6)(i)$ )	(2.776)		758
8330	Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	19,549	$\mathbf{1}$	(10, 669)	(1)
8349	Income tax related to components of other comprehensive income that will not be reclassified to profit or $loss(note(6)(k))$	(555)		$12\phantom{.0}$
		17,328		(9, 923)	(1)
8360	Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361	Exchange differences on translation of foreign financial statements	(243, 373)	(18)	307,783	24
8380	Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method. components of other comprehensive income that will be reclassified to profit or loss	(34, 453)	(3)	40,113	3
8399	Income tax related to components of other comprehensive income that will be reclassified to profit or $loss(not(6)(k))$	(179)	$\bullet$	193
	Components of other comprehensive income that will be reclassified to profit or loss	$(277, 647)$ $(21)$		347,703	27
8300	Other comprehensive income	(260,319)	(20)	337,780	26
8500	Comprehensive income	63,523	5	851,491	65
	Earnings per share (note $(6)(m)$ )
9750	Basic net income per share (NT dollars)		1.64		2.60
9850	Diluted net income per share (NT dollars)		1.64		2.60

								Total other equity interest
								Unrealized
								gains
								(losses) from
							Exchange	financial assets
							differences on	measured at
	Share capital				Retained earnings		translation of	fair value
					Unappropriated		foreign	through other	Total other
	Ordinary	Capital	Legal	Special	retained	Total retained	financial	comprehensive	equity	Total
	shares	surplus	reserve	reserve	earnings	earnings	statements	income	interest	equity
Balance at January 1, 2018 after adjustment	1,974,846 S	53,411	1,654,360	359,487	6,007,349	8.021.196	(611, 199)	(4, 188)	(615,387)	9,434,066
Appropriation and distribution of retained earnings:
Legal reserve appropriated			9,806		$(9, 806)$ $(262, 136)$
Special reserve appropriated				262,136
Cash dividends of ordinary share					(98, 742)	(98, 742)				(98, 742)
			9.806	262,136	(370.684)	(98.742)				(98, 742)
Net income for the year ended December 31, 2018					513,711	513,71				513,711
Other comprehensive income for the year ended December 31, 2018					.276	,276	347,703	1.199	336,504	337,780
Total comprehensive income for the year ended December 31, 2018					514,987	514.98	347.703	1.199	336,504	851,491
Balance at December 31, 2018	,974,846	레 $\frac{534}{5}$	1,664,166	621,623	6,151,652	8,437,441	(263, 496)	15,387	(278, 883)	10,186,815
Appropriation and distribution of retained earnings:
Legal reserve appropriated			51,371		$(51,371)$ $262,136$
Special reserve appropriated				(262, 136)
Cash dividends of ordinary share					315,975	(315,975)				(315,975)
			51.37	(262, 136)	105,210	(315,975)				(315, 975)
Net income for the year ended December 31, 2019					323,842	323,842				323,842
Other comprehensive income for the year ended December 31, 2019					(3.512)	(3,512)	(277, 647	20,840	(256, 807)	260,319
Total comprehensive income for the year ended December 31, 2019					320.330	320.330	(277, 647)	20,840	(256, 807)	63,523
Balance at December 31, 2019	,974,846	$\frac{1}{2}$	1,715,537	359,487	6,366,772	8,441,796	(541, 143)	5,453	(535, 690)	9,934,363

(English Translation of Financial Statements Originally Issued in Chinese)
CHINESE MARITIME TRANSPORT LTD.

Statements of Changes in Equity

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan dollars)

(English Translation of Financial Statements Originally Issued in Chinese) CHINESE MARITIME TRANSPORT LTD.

Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan dollars)

		2019	2018
Cash flows from (used in) operating activities:
Profit before tax	S	357,957	539,901
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation and amortization expense		9,717	9,328
Expected credit loss (gain)			(1,790)
Net loss on financial assets or liabilities at fair value through profit or loss		7,585	10,855
Interest expense		64,261	61,947
Interest income		(3,274)	(3,197)
Dividend income		(336)
Share of loss (profit) of subsidiaries, associates and joint ventures accounted for using equity method		(438, 270)	(600, 934)
Loss (gain) on disposal of property, plant and equipment		11
Total adjustments to reconcile profit (loss)		(360, 306)	(523, 791)
Changes in operating assets:
lincrease in notes and accounts receivable (including related parties)		(2,507)	(13, 719)
Decrease (increase) in other current assets		1,870	(961)
Decrease (increase) in other financial assets		6,606	(6, 653)
		5,969	(21, 333)
Changes in operating liabilities:
Decrease in notes and accounts payable		4,448	(21,993)
Decrease in net defined benefit liability		(10, 337)	(445)
Increase (decrease) in other payable and other current liabilities		(1,182)	4,664
		(7.071)	(17, 774)
Total changes in operating assets and liabilities		(1, 102)	(39, 107)
Total adjustments		(361, 408)	(562, 898)
Cash inflow generated from operations		(3, 451)	(22,997)
Interest received		3,261	3,198
Dividends received		322,781	197,464
Interest paid		(64, 019)	(62,007)
Income taxes paid		(7, 733)	(590)
Net cash flows from operating activities		250,839	115,068
Cash flows from (used in) investing activities:
Acquisition of investments accounted for using equity method		(350,000)	(20,000)
Proceeds from capital reduction of investments accounted for using equity method		19,984
Acquisition of property, plant and equipment (including prepayment for equipment)		(5,220)	(5,624)
Proceeds from disposal of property, plant and equipment		98
Increase in other non-current assets		(1,223) 215
Decrease (increase) in other non-current financial assets			(144)
Net cash flows used in investing activities		(336, 146)	(25, 768)
Cash flows from (used in) financing activities:		500,046	188
Increase (decrease) in short-term loans
Cash dividends paid		(315,975) (108)	(98, 742)
Other financing activities		183,963	(98, 554)
Net cash flows from (used in) financing activities
Net increase (decrease) in cash and cash equivalents		98,656 229,607	(9,254) 238,861
Cash and cash equivalents at beginning of period	S	328,263	229,607
Cash and cash equivalents at end of period

(English Translation of Financial Statements Originally Issued in Chinese) CHINESE MARITIME TRANSPORT LTD.

Notes to the Financial Statements

For the years ended December 31, 2019 and 2018

(expressed in thousands of New Taiwan dollars, unless otherwise specified)

(1) Company history

CHINESE MARITIME TRANSPORT LTD. (the "Company"), previously named Associated Transport Inc., was incorporated as a company limited by shares on January 31, 1978, in the Republic of China. The Company's common shares were listed on the Taiwan Stock Exchange (TWSE). The main activities of the Company are bulk-carrier transportation through its 100%-owned overseas subsidiaries; domestic container hauling, vessel transportation, warehousing, and related business; and acting as the general sales agent for Saudi Arabian Airlines. The Company also owns investment companies to engage in the business of investment.

(2) Approval date and procedures of the financial statements

These financial statements were authorized for issuance by the board of directors on March 23, 2020.

(3) New standards, amendments and interpretations adopted

The impact of the International Financial Reporting Standards ("IFRSs") endorsed by the Financial $(a)$ Supervisory Commission, R.O.C. ("FSC") which have already been adopted.

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2019.

New, Revised or Amended Standards and Interpretations	Effective date per IASB
IFRS 16 "Leases"	January 1, 2019
IFRIC 23 "Uncertainty over Income Tax Treatments"	January 1, 2019
Amendments to IFRS 9 "Prepayment features with negative compensation"	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
Annual Improvements to IFRS Standards 2015–2017 Cycle	January 1, 2019

Except for the following items, the Company believes that the adoption of the above IFRSs would not have any material impact on its financial statements. The extent and impact of signification changes are as follows:

$(i)$ IFRS 16"Leases"

IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

The Company applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognized in retained earnings on January 1, 2019. The details of the changes in accounting policies are disclosed below,

$1)$ Definition of a lease

Previously, the Company determined at contract inception whether an arrangement is or contains a lease under IFRIC 4. Under IFRS 16, the Company assesses whether a contract is or contains a lease based on the definition of a lease, as explained in Note $(4)(k)$ .

On transition to IFRS 16, the Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Company applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after January 1, 2019.

$2)$ As a lessee

As a lessee, the Company previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Company. Under IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases $-$ i.e. these leases are on-balance sheet.

There were no recognition exemptions to short-term leases.

Leases classified as operating leases under IAS 17

At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Company's incremental borrowing rate as at January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

In addition, the Company used the following practical expedients when applying IFRS 16 to leases.

Applied a single discount rate to a portfolio of leases with similar characteristics.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term.
Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

As a lessor $3)$

The Company is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor. The Company accounted for its leases in accordance with IFRS 16 from the date of initial application.

4) Impacts on financial statements

The explanation of differences between operating lease commitments disclosed at the end of the annual reporting period immediately preceding the date of initial application. and lease liabilities recognized in the statement of financial position at the date of initial application disclosed as follows:

	January 1, 2019
Operating lease commitment at December 31, 2018 as disclosed in the Company's financial statements	436
The contracts that were previously not identified as lease under IAS $17 \text{ no.}4$	.436

(ii) IFRIC 23 "Uncertainty over Income Tax Treatments"

In assessing whether and how an uncertain tax treatment affects the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits, as well as tax rates, an entity shall assume that a taxation authority will examine the amounts it has the right to examine and have a full knowledge on all related information when making those examinations.

If an entity concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the entity shall determine the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits, as well as tax rates consistently with the tax treatment used or planned to be used in its income tax filings. Otherwise, an entity shall reflect the effect of uncertainty for each uncertain tax treatment by using either the most likely amount or the expected value, depending on which method the entity expects to better predict the resolution of the uncertainty.

There was no material impact to deferred tax liabilities and retained earnings at the date of initial application.

(iii) Amendments to IAS 19 "Plan Amendment, Curtailment or Settlement"

The amendments clarify that:

on amendment, curtailment or settlement of a defined benefit plan, a company now uses updated actuarial assumptions to determine its current service cost and net interest for the remainder of the reporting period after the change to the plan; and
the effect of the asset ceiling is disregarded when calculating past service cost and the gain or loss on settlement. Any change in that effect is recognized in other comprehensive income.

There was no material impact to other comprehensive income at the date of initial application.

$(b)$ The impact of IFRS endorsed by FSC but not yet effective

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2020 in accordance with Ruling No. 1080323028 issued by the FSC on July 29, 2019:

New, Revised or Amended Standards and Interpretations	LITECTIVE GATE per LASB
Amendments to IFRS 3 "Definition of a Business"	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7 "Interest Rate Benchmark Reform"	January 1, 2020
Amendments to IAS 1 and IAS 8 "Definition of Material"	January 1, 2020

The amendments to IAS 1 and IAS 8 "Definition of Material clarify the definition of material and how it should be applied by including in the definition guidance that until now has featured elsewhere in IFRS Standards. In addition, the explanations accompanying the definition have been improved. Finally, the amendments ensure that the definition of material is consistent across all IFRS Standards. The Company will continued to assess the impacts of this amendment on its consolidated financial position and financial performance.

$(c)$ The impact of IFRS issued by IASB but not yet endorsed by the FSC

As of the date, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

New, Revised or Amended Standards and Interpretations	Effective date per IASB
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture"	Effective date to be determined by IASB
IFRS 17 "Insurance Contracts" Amendments to IAS 1 "Classification of Liabilities as Current or Non-current"	January 1, 2021 January 1, 2022

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

$\mathbf{r}$ or $\mathbf{r}$

$\mathbf{r}$

$(4)$ Summary of significant accounting policies

The significant accounting policies presented in the financial statements are summarized follows. Except for those specifically indicated, the following accounting policies were applied consistently throughout the presented periods in the financial statements.

$(a)$ Statement of compliance

These financial statement have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of preparation $(b)$
Basis of measurement $(i)$

Except for the following significant accounts, the annual financial statements have been prepared on the historical cost basis:

Financial instruments measured at fair value through profit or loss are measured at fair $\overline{1}$ value;
$2)$ The defined benefit liabilities (assets) are measure at fair value of the pension assets less the present value of the defined benefit obligation, limited as explained in note $(4)(p)$ .
$(ii)$ Functional and presentation currency

The functional currency of each Company entities is determined based on the primary economic environment in which the entities operate. The financial statements are presented in New Taiwan Dollar, which is the Company's functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

$(c)$ Foreign currencies
$(i)$ Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for an investment in equity securities designated as fair value through other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into NTD at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into NTD at average rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interest. When the Company disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planed nor likely in the foreseeable future, exchange differences arising thereon from part of a net investment in the foreign operation and are recognized in other comprehensive income.

Classification of current and non-current assets and liabilities $(d)$

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

$(i)$ It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
$(ii)$ It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

An entity shall classify a liability as current when:

It is expected to be settled in the normal operating cycle; $(i)$
$(ii)$ It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

Cash and cash equivalents $(e)$

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits and Commercial paper with reverse repurchase agreement which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

$(f)$ Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Financial assets $(i)$

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

$\left| \right|$ Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows: and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Fair value through profit or loss (FVTPL) $2)$

All financial assets not classified as amortized cost described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Impairment of financial assets $3)$

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost. (including cash and cash equivalents, notes and accounts receivable, other receivable, guarantee deposit paid and other financial assets).

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and

other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivables are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company's historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 180 days past due or the borrower is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of 'investment grade which is considered to be BBB- or higher per Standard & Poor's, Baa3 or higher per Moody's or twA or higher per Taiwan Ratings. The time deposits and commercial paper with reverse repurchase agreement held by the Company were considered to have low credit risk because the Company's transaction counter parties and the contractually obligated counter parties are financial institutions with credit ratings beyond investment grade.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

significant financial difficulty of the borrower or issuer:

a breach of contract such as a default or being more than 180 days past due:

the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider:
it is probable that the borrower will enter bankruptcy or other financial reorganization; $\alpha$ ^r

the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company's procedures for recovery of amounts due.

$4)$ Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

$(ii)$ Financial liabilities and equity instruments
$1)$ Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instrument $2)$

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

Financial liabilities $3)$

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

Derecognition of financial liabilities $4)$

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

$5)$ Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

Investment in associates $(g)$

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies. Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The financial statements include the Company's share of the profit or loss and other comprehensive income of those equity-accounted investees after adjustments to align the accounting policies with those of the Company from the date on which significant influence commences until the date on which significant influence ceases.

Gains and losses resulting from the transactions between the Company and an associate are recognized only to the extent unrelated the Company's interest in the associate.

When the Company's share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

Investment in subsidiary $(h)$

When preparing financial statement, the Company used equity method to account for its investments in subsidiary. Under the equity method, the profit and loss and other comprehensive income in financial statement is as same as the profit and loss and other comprehensive income that belongs to parent company equity in financial statement.

Changes in the Company's ownership interest in a subsidiary, do not result in the Company losing control of the subsidiary are equity transactions.

Investment property $(i)$

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

Property, plant and equipment $(i)$

Recognition and measurement $(i)$

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from internal use to investment use.

(iii) Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iv) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

Buildings: $24 \sim 55$ years $1)$
$(2)$ Building improvements: $3\neg 16$ years
$3)$ Transportation equipment: $5 \sim 6$ years
Furniture, fixtures and other equipment: $1 \sim 9$ years $4)$

Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.

(k) Lease

Applicable from January 1, 2019

$(i)$ Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

$1)$ the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
$2)$ the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
the customer has the right to direct the use of the asset throughout the period of use only 3) if either:
the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or
the relevant decisions about how and for what purpose the asset is used are predetermined and:
- the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; _or
- the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.
(ii) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date. plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments; including in-substance fixed payments.
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee; or
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

(iii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

Applicable before January 1, 2019

$(i)$ As a lessor

Lease income from an operating lease is recognized in income on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease income. Incentives granted to the lessee to enter into the operating lease are spread over the lease term on a straight-line basis so that the lease income received is reduced accordingly.

(ii) As a lessee

Operating leases are not recognized in the Company's balance sheet.

Payments made under operating lease (excluding insurance and maintenance expenses) are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense on a straight-line basis, over the term of the lease.

$(1)$ Intangible assets

$(i)$ Recognition and measurement

Other intangible assets that are acquired by the Company are measured at cost, less, accumulated amortization and any accumulated impairment losses.

Subsequent Expenditure $(ii)$

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

(iii) Amortization

The amortizable amount is the cost of an asset, less its residual value, and is recognized in profit or loss on a straight line basis over the estimated useful lives of intangible assets, from the date that they are available for use.

The intangible asset that the Company possesses is software. The estimated useful lives of computer software is $3~1$ years.

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU_s.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Provisions $(n)$

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

Revenue $(0)$

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company's main types of revenue are explained below.

Freight revenue $(i)$

Container hauling revenue is recognized when the goods are delivered to the customers' premises; vessel management and commission revenue are recognized when the service is provided.

(ii) Rental income from investment property

Rental income from investment property is recognized in income on a straight-line basis over the lease term. Incentives granted to the lessee to enter into an operating lease are considered as part of rental income which is spread over the lease term on a straight-line basis so that the rental income received are recognized periodically.

(iii) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

Employee benefits $(p)$
Defined contribution plans $(i)$

Obligations for contributions to the defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Company's net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

$(q)$ Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

temporary differences on the initial recognition of assets and liabilities in a transaction that is (i) not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
temporary differences related to investments in subsidiaries, associates and joint arrangements $(ii)$ to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

$(i)$ the Company has a legally enforceable right to set off current assets against current tax liabilities; and
the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same $(ii)$ taxation authority on either:
the same taxable entity; or $1)$

different taxable entities which intend to settle current tax assets and liabilities on a net $(2)$ basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

$(r)$ Earnings per share

The Company discloses the basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjusting the effects of all potential dilutive ordinary shares. Potential dilutive ordinary shares comprise employee stock options and employee bonuses that are yet to be resolved by the shareholders and approved by the board of directors.

$(s)$ Operating segments

The Company has already provided the operating segments disclosure in the consolidated financial statements.

$(5)$ Significant accounting assumptions, and judgments and major sources of estimation uncertainty

The preparation of the financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

There are no critical judgments in applying accounting policies that have significant effect on amounts recognized in the financial statements.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

	December 31, 2019	December 31, 2018
Petty cash, checking accounts and demand deposits	318,731	229,607
$\text{Cash equivalents}$ - commercial paper and reverse repurchase
agreement	9.532
	328,263	229,607

Please refer to note $(6)(q)$ for the exchange rate risk, the interest rate risk and, the fair value sensitivity analysis of the financial assets and liabilities of the Company.

$(b)$ Financial asset at fair value through profit or loss

$(i)$ Information is as follow:

		December 31, 2019	December 31, 2018
Current financial assets mandatorily measured as at fair value through profit or loss:
Non-derivative instruments not use for hedging
Convertible bond	S		38,389
Non-current financial assets mandatorily measured as at fair value through profit or loss:
Non-derivative financial instrument
Domestic listed common shares under private placement		31,046
Domestic unlisted common shares		25,545	25,788
		56,59	64.177

The gain or loss on financial assets at fair value through profit or loss for the years ended December 31, 2019 and 2018 were a loss of \$7,585, and a profit of \$10,855, respectively.

During the years ended December 31, 2019 and 2018, the dividends of \$336 and \$0, respectively, related to debt investment at fair value through profit or loss held on December 31, 2019 and 2018, were recognized.

The Company did not provide any aforementioned financial assets as collateral as of December 31, 2019 and 2018, respectively.

Debt investment and fixed rate deposit $(ii)$

The carrying amounts of debt and fixed rate deposit as of December 31, 2019 and 2018 were \$0 and \$38,389, respectively.

The convertible bond held by the Company was due on June 27, 2019, and converted to \$4,798 thousand shares of common shares under private placement at \$\$20.84 per share. The equity investments were held for trading, therefore, they were classified as non-current financial assets at fair value through profit or loss as of December 31, 2019.

(iii) The Company has assessed that the domestic unlisted common shares are held within a business model whose objective is achieved by both collecting the contractual cash flows and by selling securities; therefore, they have been classified as non-current financial assets mandatorily measured value through profit or loss.
(c) Notes and accounts receivable

	December 31, 2019	December 31, 2018
Notes receivable	45 S	1,568
Accounts receivable	177,041	173,011
Less: Loss allowance
	7,086	174,579

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision were determined as follows:

		December 31, 2019
		Weighted-
	Gross carrying amount	average loss rate	Loss allowance provision
Current	\$ 177,085
1 to 30 days past due
	177,086
		December 31, 2018
		Weighted-
	Gross carrying	average	Loss allowance
	amount	loss rate	provision
Current	\$ 174,571
1 to 30 days past due	8
	174,579

The movement in the allowance for notes and accounts receivable was as follows:

	2019	2018
Balance on January 1		.790
Impairment losses recognized	-	.790)
Balance on December 31		$\overline{\phantom{0}}$

The Company did not provide any aforementioned notes and accounts receivable as collaterals as of December 31, 2019 and 2018.

Please refer to note $(6)(q)$ for credit risk of other receivables.

Investments accounted for using equity method $(d)$

A summary of the Company's financial information for equity-accounted investees at the reporting date is as follows:

	2019	December 31, December 31, 2018
Subsidiaries	12,245,014	12,043,185
Associates	1.396.992	1,411,257
	13,642,006	13,454,442

Subsidiaries $(i)$
Please refer to the 2019 consolidated financial statement. $1)$
$2)$ According to IAS36 "Impairment of Assets", the Company conducted assessment of impairment losses, and there was no impairment losses recognized in 2019 and 2018.
$(ii)$ The Company's share of the net income of associates was as follows:

	December 31, 2019	December 31, 2018
Subsidiaries	390,837 \$	507,190
Associates	47.433	93,744
	438,270	600,934

The losses on investment in associate recognized for the years ended December 31, 2019 and 2018 including the amortization of investment premium are \$0 and \$2,548, respectively. As of December 31, 2019 and 2018, the balance of unamortized investment premium both amounted to \$0.

(iii) Details of the material associate was as follows:

		Principal place of business/	Effective ownership interest and voting right
Name	Nature of the relationship	Country of incorporation	December 31, 2019	December 31, 2018
Ltd. (TNCL)	Taiwan Navigation Co., Entity in which the Group has significant influence and in which its main activities are sea shipping services and construction subcontractor, leasing and sales of commercial and residential buildings	Taiwan	7.459%	7.459 %
Taiwan Global Energy Maritime Co., Ltd (TGEM)	A significant investee company of Group, in which its main activities are shipping transportation	Taiwan	Note	$12 \%$

Note: TGEM was classified as non-significant associate in 2019.

The fair value of the shares of the listed material associate of the Company was as follows:

	2019	December 31, December 31, 2018
TNCL	552.469	591,375

The following table summarizes the information of the Company's material associate adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Company's interest in the associate.

Summarized financial information of TNCL $1)$

		December 31, 2019	December 31, 2018
Current assets	\$	1,592,523	1,255,739
Non-current assets		13,521,227	13,880,162
Current liabilities		(505,748)	(939, 806)
Non-current liabilities		(4,366,773)	(3,776,103)
Net assets (Belongs to the investee)	S	10,241,229	10,419,992

		December 31, 2019	December 31, 2018
Revenue	\$	3,113,990	3,367,236
Profit from continuing operations		601,096	957,635
Other comprehensive income		(237, 376)	137,550

(Continued)

			December 31, 2019	December 31, 2018
	Beginning balance of Company's share of net assets	$\mathsf S$	777,227	712,855
	Adjustment on initial application of IFRS 9			4,470
	Beginning balance of Company's share of net
	assets after adjustment		777,227	717,325
	Company's share of total comprehensive income		27,129	81,690
	Dividends received by associates		(40, 463)	(21, 788)
	Ending balance of Company's share of net assets	S	763,893	7 77,227
2)	Summarized financial information of TGEM
				December 31, 2018
	Current assets			\$ 2,106,095
	Non-current assets			9,506,736
	Current liabilities			(388, 800)
	Non-current liabilities			(5,940,452)
	Net assets (Belongs to the investee)			5,283,579
				2018
	Revenue			\$ 1,207,767
	Profit from continuing operations			207,177
	Other comprehensive income			110,867
	Total comprehensive income (Belongs to the investee)			318,044
				2018
	Beginning balance of Company's share of net assets			\$ 610,299
	Company's share of total comprehensive income			38,165
	Dividends received by associates			(14, 434)
	Ending balance of Company's share of net assets			\$ 634,030

TGEM was classified as individually insignificant associates in 2019, please refer to note $(6)(d)(iv).$

(iv) Summarized financial information of insignificant associate

The summarized financial information of insignificant associate using the equity-accounted method is as follows:

	December 31, 2019
Ending balance of the carrying amounts of insignificant associates		633,099
		2019
Group's share of results:
Profit from continuing operations	\$	2,599
Other comprehensive income		(11,160)
Total comprehensive income		(8,561

(v) In 2019 and 2018, the Company was allocated with cash dividends of \$322,445 and \$197,464, respectively, from the aforementioned investee companies.
(vi) As of December 31, 2019 and 2018, the Company did not provide investment accounted for using equity method as collateral.
Property, plant and equipment $(e)$

The cost depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2019 and 2018 were as follows:

		Land	Buildings and construction	Transportation Equipment	Other equipment	Total
Cost or deemed cost:
Balance on January 1, 2019	\$	483,451	44,875	2,050	54,688	585,064
Additions		754	923		3,543	5,220
Disposals					(3,748)	(3,748)
Reclassifications			(5,735)		5,735
Balance on December 31, 2019		484,205	40,063	2,050	60,218	586,536
Balance on January 1, 2018	\$.	483,451	44,111	2,050	44,695	574,307
Additions			764		3,819	4,583
Reclassifications					6,174	6,174
Balance on December 31, 2018		483,451	44,875	2,050	54,688	585,064
Depreciation and impairments loss:
Balance on January 1, 2019	\$		32,024	2,050	40,063	74,137
Depreciation for the year			1,357		5,108	6,465
Disposals					(3,639)	(3,639)
Reclassifications			(5,735)		5,735
Balance on December 31, 2019			27,646	2,050	47,267	76,963

	Land	Buildings and construction	Transportation Equipment	Other equipment	Total
Balance on January 1, 2018		30,709	2,050	35,558	68,317
Depreciation for the year		1.315		4.685	6.000
Disposals
Reclssifications				(180)	(180)
Balance on December 31, 2018		32,024	2,050	40,063	74,137
Carrying amounts:
Balance on December 31, 2019	484,205	12,417		12,951	509,573
Balance on December 31, 2018	483,451	12,851		14,625	510,927
Balance on January 1, 2018	483,451	13,402		9,137	505,990

The Company disposed of the other equipment in 2019 for \$98. The cost of aforementioned other equipment amounted to \$109, and the related losses of disposal amounted to \$11. The registration procedures of the property have been completed and related receivable have been collected.

There was no disposal of property, plant and equipment in 2018.

As of December 31, 2019 and 2018, the pledge information is summarized in note (8).

(f) Investments property

Investment property comprises office buildings that are leased to third parties under operating leases that are owned by the Company. The leases of investment properties contain an initial noncancellable lease term of 1 to 5 years. For all investment property leases, the rental income is fixed under the contracts.

Land	Building	Total

\$ 19,094	3,769	22,863
\$ 19,094	3,769	22,863

\$	2,623	2,623
	67	67
\$	2,690	2,690
\$	2,555	2,555
	68	68
\$	2,623	2,623

\$ 19,094	1,079	20,173
19,094	1,146	20,240
19,094	1,214	20,308

		63,368
		44,113

The fair value of investment properties was based on a valuation by a qualified independent appraiser who has recent valuation experience in the location and category of the investment property being valued.

Investment property comprises a number of commercial properties that are leased to third parties. Each of the lease contract contains an initial non-cancellable period. Subsequent renewals are negotiated with the lessee. No contingent rents are charged. For more information (including rent revenue and operating expenses occurred directly), please refer to note $(6)(i)$ .

As of December 31, 2019 and 2018, the Investment property of the Company were not pledged as collateral or restricted.

Other financial assets $(g)$

		December 31, 2019	December 31, 2018
Other receivables	S	514	808
Other receivables-related parties			6,642
Guarantee deposits		406	621
Pledged assets-time deposits		5,050	5,050
		5,970	13,121
Other current financial assets	\$	514	7,450
Other non-current financial assets		5,456	5,671
		5,970	13,121

As of December 31, 2019 and 2018, the Group provided other financial assets as collateral. Please refer to note $(8)$ .

$(h)$ Loans

The Company's detail of loans was as follows:

Short-term loans and commercial paper payable, net $(i)$

	December 31, 2019	December 31, 2018
Bank loans	\$ 950,000	550,000
Commercial paper payable	350,000	250,000
Less: discount on commercial paper payable	(117)	(163)
	1,299,883	799,837
Unused credit lines	1,650,000	2,100,000
Range of interest rate during the year	$0.9\%$ ~1.15%	$0.938\%$ ~1.100%

(ii) Bonds Payable

The Company issued secured bonds at face value. The interest is calculated and paid annually from the date of issuance. The bonds payable on December 31, 2019 and 2018, were as follows:

	Guarantee bank	Interest rate	Due	December 31, 2019	December 31, 2018
2016
The first secured bonds payable	Bank of Taiwan		0.88 % March 2021 \$	900,000	900,000
The second secured bonds payable Mega Bank			1.00 % March 2021	1,400,000	1,400,000
2017
The first secured bonds payable	Shanghai Commercial Bank	$1.13\%$	April 2020	400,000	400,000
$^{\prime\prime}$	$^{\prime\prime}$	$1.13\%$	April 2022	400,000	400,000
				3.100.000	3,100,000
Current portion				(400,000)
				\$2,700,000	3,100,000

(iii) Refer to note 6(q) for the information of exposure to liquidity risk. The Company provided assets as collaterals for credit line of short-term and long-term borrowing, please refer to note $(8).$
Operating lease $(i)$
$(i)$ Leases as lessee
- Non-cancellable operating lease rentals payable on December 31, 2018, were as follows: $1)$

	December 31, 2018
Less than one year	436
Between one and five years	$\overline{\phantom{0}}$
	436

The Company leases office and parking space under operating leases. The leases of typically run for a period of 1 to 5 years.

As of 2018, the operating rental expenses were \$3,413.

Leases as lessor $(ii)$

The Company leases out its investment property. The Company has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Please refer to note $6(f)$ sets out information about the operating leases of investment property.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date were as follows:

	December 31, 2019
Less than one year		8,606
Between one and five years		794
		10,400

The future minimum lease payments under non-cancellable lease on December 31, 2018 were as follows:

	December 31, 2018
Less than one year	8,270
Between one and five years
	12,725

The rental income earned by lease investment property both amounted \$2,919 in 2019 and 2018, respectively.

Employee benefits $(i)$

Defined benefit plans $(i)$

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

		2018
Present value of defined benefit obligations	42.778	51,854
Fair value of plan assets	(33,623)	(35, 138)
Recognized liabilities for defined benefit obligations	9,155	16,716

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

$1)$ Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures. Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final consolidated financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

The Company's Bank of Taiwan labor pension reserve account balance amounted to \$33,623 at the end of the reporting period. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

Movements in present value of the defined benefit obligations $2)$

The movements in present value of defined benefit obligations for the Company were as follows:

	2019	2018
Defined benefit obligation at 1 January	\$ 51,854	60,594
Benefits paid from the plan	(4,181)	(10, 976)
Benefits paid by the Company	(10, 282)
Current service costs and interest	1,093	1,530
Remeasurement of the net defined benefit liability (asset)	4.294	706
Defined benefit obligation at 31 December	42,778	51,854

Movements of the fair value of defined benefit plan assets $3)$

The movements in the present value of the defined benefit plan assets for the Company were as follows:

	2019	2018
Fair value of plan assets at 1 January	\$ 35,138	42,675
Contributions made	882	1,664
Benefits paid from the plan assets	(4,181)	(10, 976)
Expected return on plan assets	266	311
Remeasurement of the net defined benefit liability (asset)	1,518	1,464
Fair value of plan assets at 31 December	33,623	35,138

$4)$ Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

	2019	2018
Service cost	662	1,044
Interest cost	431	486
Expected rate of return on plan assets	(266)	(311)
Operating expense	827	.219

Actuarial assumptions $5)$

The following is the Company's principal actuarial assumptions of defined benefit obligations on the reporting date:

	December 31, December 31, 2019	2018
Discount rate	$0.750\%$	$1.000\%$
Future salary increasing rate	3.500 %	3.500 $%$

In accordance with Paragraph 2 of Article 56 of the Labor Standards Act, before the end of each year, employers shall assess the balance in the designated labor pension reserve funds account. If the amount is inadequate to pay pensions for workers retiring in the same year according to Article 53 or subparagraph 1 of Paragraph 1 of Article 54, the employer is required to make up the difference. The difference as of December 31, 2018 and 2017 were \$456 and \$1,076, respectively, and already allocated to the designated labor pension reserve funds account of Taiwan Bank during year 2019 and 2018.

The expected allocation payment made by the Company to the defined benefit plans for the one year period after the reporting date was \$423.

The weighted-average lifetime of the defined benefit plan is 9.64 years.

6) Sensitivity analysis

The impact of the present value of the defined benefit obligations affected by the actuarial assumption for December 31, 2019 and 2018 were as follows:

	Influences of defined benefit obligation
	Increased 0.25%	Decreased 0.25%
December 31,2019
Discount rate	(668)	687
Future salary increasing rate	731	(626)
December 31,2018
Discount rate	(778)	801
Future salary increasing rate	854	(727)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2019 and 2018.

(ii) Defined contribution plans

The Company allocates 6% of each employee's monthly wages to the labor pension personal account at Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligations.

The Company recognized pension costs under the defined contribution method amounting to \$3,099 and \$2,664 for the years ended December 31, 2019 and 2018, respectively. Payment was made to the Bureau of Labor Insurance.

$(k)$ Income taxes

$(i)$ Income tax expenses

The amounts of income tax for 2019 and 2018 were as follows:

	2019	2018
Current tax expense	23,740	(186)
Deferred tax expense
Adj sutment in tax rate	-	21,370
Recognition and reversal of temporary differences	10,375	5,006
	10,375	26,376
	34,115	26,190

The amounts of income tax recognized in other comprehensive income for 2019 and 2018 were as follows:

	2019	2018
Items that may not be reclassified subsequently to profit or loss
Remeasurement in defined benefit plans	(555)	12
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign financial
statements	(179	193

Reconciliation of income tax and profit before tax for 2019 and 2018 was as follows:

	2019	2018
Profit excluding income tax	357,957	539,901
Income tax using the Company's domestic tax rate	71,591	107,980
Tax exemption for investment income under the equity method	(87, 654)	(120, 187)
Adjustment in tax rate		21,370
Dividend revenue - overseas	26,612	9,240
Underestimation (Overestimation) in prior periods		(186)
Unappropriated earnings tax	11,507
Movements of unrecognized temporary differences and others	12,054	7,973
	34,115	26,190

(Continued)

(ii) Deferred tax assets and liabilities

$1)$ Unrecognized deferred tax liabilities

The company entity is able to control the timing of the reversal of the temporary differences associated with investments in subsidiaries as at December 31, 2019 and 2018. Also, management considered it probable that the temporary differences will not be reversed in the foreseeable future. Hence, such temporary differences were not recognized under deferred tax liabilities. Details were as follows:

	December 31, 2019	December 31, 2018
Aggregate amount of temporary differences related to investments in subsidiaries
	9,045,845	9,241,525
Unrecognized deferred tax liabilities	1,809,169	1,848,305

$2)$ Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2019 and 2018 were as follows:

		Defined benefit Plans	Investment income overseas recognized under the equity method	Land revaluation increment	Others	Total
Deferred tax liabilities:
Balance on January 1, 2019	S		149,897	70,792	(219)	220,470
Recognized in profit or loss			10,589		(8)	10,581
Recognized in other comprehensive income					(179)	(179)
Balance on December 31, 2019	S		160,486	70,792	(406)	230,872
Balance on January 1, 2018	\$		129,335	70,792	(422)	199,705
Recognized in profit or loss			20,562		10	20,572
Recognized in other comprehensive income					193	193
Balance on December 31, 2018			149,897	70,792	(219)	220,470
Deferred tax assets:
Balance on January 1, 2019	\$	2,677			538	3,215
Recognized in profit or loss		(11)			217	206
Recognized in other comprehensive income		555				555
Balance on December 31, 2019	S	3,221			755	3,976
Balance on January 1, 2018	\$	2,476			6,555	9,031
Recognized in profit or loss		213			(6,017)	(5,804)
Recognized in other comprehensive income		(12)				(12)
Balance on December 31, 2018	s	2,677			538	3,215

$3)$ Assessment of tax

The Company's tax returns for the years through 2017 were assessed by the Taipei National Tax Administration.

$(1)$ Capital and other equities
Ordinary shares $(i)$

As of December 31, 2019 and 2018, the authorized common stocks amounted to \$3,600,000 with a par value of 10 New Taiwan dollars per share. All the ordinary shares were common stocks, and of which 197,485 thousand shares. All issued shares were paid upon issuance.

(ii) Capital surplus

In accordance with the ROC Company Act, realized capital reserves are distributed according to shareholding rates and can only be distributed as share dividends or cash dividends after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

The balances of capital surplus were as follows:

	December 31, 2019	December 31, 2018
Gain or loss on disposal of subsidiary	42,503	42,503
Changes in equity of associates for using equity method	10.908	10,908
	53,411	53,411

(iii) Retained Earning

In accordance with the Company's articles of incorporation, net earnings should first be used to offset the prior years' deficits, if any, before paying any in income taxes, of the remaining balance, 10% is to be appropriated as legal reserve, and when there is a reduction in stockholders' equity at the end of the year, the Company should appropriate the same amount as special reserve from retained earnings. The remainder and the accumulated unappropriated earnings of prior years are distributable as dividends to stockholders. The distribution rate is based on the proposal of the Company's board of directors and should be approved in the stockholders' meeting.

Dividends are paid in cash or stock from retained earnings, and the amount of cash dividends should not be less than 10% of total dividends.

$1)$ Legal reserve

When the Company has no accumulated deficits on the books, the legal reserve can be converted to share capital or distributed as cash dividends, and only the portion of legal reserve that exceeds 25% of issued share capital may be distributed.

$(2)$ Special reserve

By choosing to apply the exemptions granted under IFRS 1 "First-time Adoption of International Financial Reporting Standards" during the Company's first-time adoption of the International Financial Reporting Standards approved by the Financial Supervisory Commission (IFRSs), unrealized revaluation gains recognized under shareholders' equity. The increase in retained earnings occurring before the adoption date, due to the first-time adoption of IFRSs in accordance with Ruling No. 1010012865 issued by the Financial Supervisory Commission on 6 April 2012, shall be reclassified as a special earnings reserve during earnings distribution. The carrying amount of special earnings reserve amounted to \$359,487 on December 31, 2019 and 2018.

In accordance with the guidelines of the above Ruling, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current-period reduction of other shareholders' equity resulting from the first-time adoption of IFRSs and the carrying amount of special earnings reserve as stated above. Similarly, a portion of undistributed prior period earnings shall be reclassified as a special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders' equity pertaining to prior periods due to the first-time adoption of IFRSs. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

$3)$ Earnings distribution

Based on the resolutions of the annual stockholders' meetings held on June 18, 2019 and May 30, 2018 the earning distribution to ordinary shareholders for the fiscal years 2017 and 2016 were as follows:

			2017	2016
Dividends distributed to ordinary shareholders
Cash		S	315,975	98,742
Other Equity (After tax)
	Exchange differences on translation of foreign financial Statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
January 1, 2019	\$ (263, 496)		(15, 387)	(278, 883)
Subsidiaries	(243, 194)		22,158	(221, 036)
Associates	(34, 453)		(1,318)	(35, 771)
December 31, 2019	(541, 143)		5,453	(535, 690)

$(iv)$

(Continued)

	Exchange differences on translation of foreign financial Statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
January 1, 2018	\$ (611, 199)	(4,188)	(615, 387)
Subsidiaries	307,590	241	307,831
Associates	40,113	(11, 440)	28,673
December 31, 2018	(263, 496)	(15, 387)	(278, 883)

(m) Earnings per share

$(ii)$

Basic earnings per share $(i)$

The calculation of basic earnings per share at December 31, 2019 and 2018 were based on the profit attributable to ordinary shareholders of the Company and the weighted-average number of ordinary shares outstanding, calculated as follows:

Profit attributable to ordinary shareholders of the Company $1)$

			2019	2018
	Profit attributable to ordinary shareholders of the Company		323,842	513,711
2)	Weighted-average number of ordinary shares (thousands)
	Weighted-average number of ordinary shares (basic)		2019 197,485	2018 197,485
3)	Basic earnings per share (NTD)
	Basic earnings per share	ς	2019 1.64	2018 2.60
	Diluted earnings per share

The calculation of diluted earnings per share at December 31, 2019 and 2018 were based on profit attributable to ordinary shareholders of the Company and the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, calculated as follows:

Profit attributable to ordinary shareholders of the Company (diluted) $1)$

	2019	2018
Profit attribute to ordinary shareholder of the Company	323,842	513,711

Weighted-average number of ordinary shares (diluted) (thousands)

2018 2019 $197,485$ Weighted-average number of ordinary shares (basic) 168 Effect on the employee stock bonuses Weighted-average number of ordinary shares 197,653 (diluted) $3)$ Diluted earnings per share (TWD) 2019 2018 1.64 Diluted earnings per share

$(n)$ Revenue from contracts with customers

Disaggregation of revenue $(i)$

$2)$

	2019	2018
Freight revenue-vessel chartering	61.046	60,990
Freight revenue-container hauling and logistics revenue	1,219,685	1,170,487
Freight revenue-airline agent and others	32,628	68,673
	1,313,359	1,300,150

(ii) Contract balances

	December 31, 2019	December 31, 2018
Notes and accounts receivable (including related parties) \$	177,086	174,579
Less: allowance for impairment	$\overline{\phantom{a}}$
Total	177,086	174,579

For details on notes and accounts receivable and allowance for impairment, please refer to note $(6)(c).$

Financial cost-Interest expense $(0)$

The financial cost-interest expense in 2019 and 2018 were as follows:

	2019	2018
Bank loan	10,476	8,122
Bonds payable	53,785	53,825
	64,261	61,947

197,485

197,669

184

$2.60$

Employee compensation and directors' and supervisors' remuneration $(p)$

In accordance with the Company's articles of incorporation, earnings shall first be used to offset against any deficit, then a range from 0.5% to 2% will be distributed as employee compensation, and a maximum of 2% will be allocated as director's and supervisors' remuneration.

As of December 31, 2019 and 2018, the Company recognized its employee compensation of \$3,653 and \$5,509, respectively, and its directors' and supervisors' remuneration of \$3,653 and \$5,509, respectively. The employee compensation and directors' and supervisors' remuneration were recorded as operation expenses and were estimated based on the net profit before tax, excluding the employee compensation, and director's and supervisors' remuneration of each period, multiplied by the percentage of remuneration to employees, directors and supervisors as specified in the Company's articles. If there is difference between the aforementioned distribution approved in the board of directors and the estimation, it will be deal with changes in accounting estimation, and will be recognized in profit or loss next year.

As of December 31, 2018 and 2017, the Company recognized its employee compensation of \$5,509 and \$952, respectively, and its directors' and supervisors' remuneration of \$5,509 and \$952, respectively. There was no difference between the aforementioned distribution approved in the board of directors and the estimation in the 2018 and 2017 consolidated financial statements. Relative information is available on the MOPS.

Financial Instruments $(a)$
Credit risk $(i)$
- $\overline{1}$ Exposure to credit risk

The carrying amount of financial assets represents the maximum amount exposed to credit risk. As of December 31, 2019 and 2018, the maximum amount exposed to credit risk amounted to \$567,910 and \$481,484, respectively.

The aggregation of sales to the Company's major customers exceeding 10% of the Company's total sales accounted for 66% and 76% of the total net sales for the years ended December 31, 2019 and 2018, respectively. In order to reduce credit risk, the Company assesses the financial status of the customers and the possibility of collection of receivables in order to estimate an adequate allowance for doubtful accounts on a regular basis. The customers have had a good credit and profit record. The Company has never suffered any significant credit loss.

$2)$ Receivables

For credit risk exposure of notes and accounts receivable, please refer to note $(6)(c)$ .

Other financial assets at amortized cost includes other receivables, other receivablesrelated parties, guarantee deposits, pledged assets-time deposit.

All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses.

The loss allowance provision as of December 31, 2019 and 2018 were determined as follows:

	Other receivables
Balance on January 1, 2019 (equal to balance on December 31, 2019)	$\blacksquare$
Balance on January 1, 2018 (equal to balance on December 31, 2018)	$\blacksquare$

(ii) Liquidity Risk

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

	Carrying Amount	Contractual cash flows	Within a year	$1\sim2$ vears	Over 2 years
December 31, 2019
Non-derivative financial liabilities:
Short-term borrowings	\$ 1,299,883	(1,300,000)	(1,300,000)
Notes and accounts payable (including related parties)	110,709	(110,709)	(110,709)
Bonds payable	3,100,000	(3,100,000)	(400,000)	(2,300,000)	(400,000)
Accrued expenses and other payables (recorded as other current liabilities)	29,352 4,539,944	(29, 352) (4,540,061)	(29, 352) (1,840,061)	(2,300,000)	(400,000)
December 31, 2018
Non-derivative financial liabilities:
Short-term borrowings	\$ 799,837	(800,000)	(800,000)
Notes and accounts payable (including related parties)	106,261	(106, 261)	(106, 261)
Bonds payable	3,100,000	(3,100,000)		(400,000)	(2,700,000)
Accrued expenses and other payables (reorded as other current liabilities)	29,995	(29.995)	(29.995)
	4,036,093	(4,036,256)	(936, 256)	(400.000)	(2,700,000)

The Company is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amount.

(iii) Exchange rate risk

The Company do not have significant exposure to foreign currency risk.

(iv) Interest Rate analysis

The following sensitivity analysis is based on the risk exposure to interest rate on the derivative and non-derivative financial instruments on the reporting date. Regarding the liabilities with variable interest rates, the analysis is on the basis of the assumption that the amount of assets and liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents management of the Company's assessment on the reasonably possible interval of interest rate change.

If the interest rate had increased or decreased by 0.25%, the net profit before tax would have decrease or increased for the years ended December 31, 2019 and 2018 as follows:

	2019		2018
Increased $0.25\%$		(2, 453)	(1, 426)
Decreased 0.25%		2,453	1.426

$(v)$ Fair value

$1)$ The kinds of financial instruments and fair value

The Company's financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are based on repeatability measured by fair value. The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy. It shall not include fair value information of the financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of the fair value and lease liability.

	December 31, 2019
			Fair Value
	Book value	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss Non derivative non-current
financial assets mandatorily at fair value through profit or
loss	\$ 25,545			25,545	25,545
Domestic listed common shares under private placement	31,046 56,591 S		31,046		31,046
Financial assets measured at amortized cost
Cash and cash equivalents	\$ 328,263
Notes and accounts receivable (including related parties)	177,086
Other receivables(including related parties)	514
Guarantee deposits	406
Pledged assets-time deposits	5,050
Total	511,319 Ъ
Financial liabilities measured at amortized cost
Short-term borrowings	\$ 1,299,883
Notes and accounts payable	3,690
Accounts payable to related parties	107,019
Bonds payable	3,100,000		3,100,000		3,100,000
Accrued expenses and other payables (recorded as other current liabilities)	29,352
Total	4,539,944

(Continued)

	December 31, 2018
				Fair Value
		Book value	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit and loss
Derivative financial assets	\$	38,389		38,389		38,389
Non derivative current financial assets mandatorily at fair value through profit or loss		25,788			25,788	25,788
Total	S	64,177
Financial assets measured at amortized cost
Cash and cash equivalents	\$	229,607
Notes and accounts receivables(including related parties)		174,579
Other receivables (including related party)		7,450
Guarantee deposits		621
Pledged assets-time deposits		5,050
Total	S.	417,307
Financial liabilities measured at amortized cost
Short-term borrowings	\$	799,837
Notes and accounts payable		5,967
Accounts payable-related party		100,294
Bonds payable		3,100,000		3,100,000		3,100,000
Accrued expenses and other payables(recorded as other current liabilities)		29,995
Total	S	4,036,093

Valuation techniques for financial instruments measured at fair value $2)$
A. Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm³ s-length basis. Whether transactions are taking place 'regularly' is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date.

B. Derivative financial instruments

Measurement of the fair value of derivative instruments is based on the valuation techniques generally accepted by market participants such as the discounted cash flow or option pricing models.

$3)$ Transfers between Level 1 and Level 2

There was no transfer from Level 1 to Level 2 of fair value of the asset in the years ended December 31, 2019 and 2018.

Statement of changes in level 3 $4)$

Measured of fair value through profit or loss Non derivative mandatorily measured at fair value through profit or loss


	(243)
	25,545
\$	26,118

	(330)
ς	25,788

The aforementioned total gains and losses were recorded as gains (losses) on financial assets at fair value through profit or loss.

Financial risk management $(r)$
$(i)$ Briefings

The Company is exposed to the following risks arising from financial instruments:

Credit risk $1)$
Liquidity risk $2)$
Market risk $3)$

In this note expressed the information on risk exposure and objectives, policies and process of risk measurement and management. For detailed information, please refer to the related notes of each risk.

(ii) Structure of risk management

The Company's finance department provides business services for the overall internal department. It sets the objectives, policies and processes for managing the risk and the methods used to measure the risk arising from both the domestic and international financial market operations.

The Company minimizes the risk exposure through financial instruments. The Board of Directors regulated the use of financial instruments in accordance with the Company's policy about risks arising from financial instruments, such as interest rate risk, credit risk, the use of non-derivative financial instruments, and the investments of excess liquidity. The internal auditors of the Company continue with the review of the amount of the risk exposure in accordance with the Company's policy and the risk management policies and procedures. The Company has no transactions in financial instruments (including derivative financial instruments) for the purpose of speculation.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investment securities.

$1)$ Accounts receivable and other receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk.

The Company has established a credit policy. Credit limits are established for each customer. Customers that fail to meet the Company's benchmark creditworthiness may transact with the Company only on a prepayment basis.

$2)$ Investment

The credit risk exposure in the bank deposits, fixed income investments and other financial instruments are measured and monitored by the Company's management. Since the Company's transaction counterparties and contractually obligated counterparties are banks, financial institutes and corporate organizations with good credits, there are no compliance issues, and therefore no significant credit risk.

$3)$ Guarantees

The Company is only permissible to provide financial guarantees to subsidiaries. Please refer to note $(7)$ and $(13)(a)$ for the information as of December 31, 2019 and 2018.

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company's management supervises the banking facilities and ensures in compliance with the terms of the loan agreements.

The loans from the bank and the bonds payable are important sources of liquidity for the Company. Please refer to note $(6)(h)$ for unused short-term bank facilities as of December 31, 2019 and 2018.

$(v)$ Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

$1)$ Currency risk

The Company is exposed to currency risk on its investments that are denominated in US Dollars (USD). The Company uses natural hedging strategy in exposing the current and future currency risk that arises from cash flows of foreign currency asset and liability. Foreign currency gains (losses) from assets and liabilities are subsequently offset by foreign currency losses (gains) to hedge the foreign currency risk.

$2)$ Interest rate risk

The Company borrows funds on interest rate, which has risk exposure to cash flow. The bonds payable are fixed-interest-rate debts. Changes in market interest rates lower the effect on future cash flow.

Other market price risk 3)

The Company is exposed to equity price risk due to the investments in non-listing equity securities, corporate banks, listing equity securities that measure the fair value of the publicly quoted price, and quoted open-ended fund at fair value.

Capital management $(s)$

The Company maintains the capital based on the current operating characteristics of the industry. future development, and changes in external environment, to assure there is financial resource and operating plan to support working capital, capital expenditures, and debt redemption and dividend payment and so on. The management decides the optimized capital by using appropriate debt-toasset ratio. To maintain a strong capital base, the Company enhances the return on equity by optimizing debt-to-assets ratio. As of December 31, 2019 and 2018, the Company's debt-to-assets ratio at the end of the reporting date was as follows:

	December 31, December 31, 2019
Total liabilities	4,829,010	4,307,060
Total assets	14,763,373	14,493,875
Debt-to-equity ratio	33 %	$30\%$

Investing and financing activities not affecting current cash flow $(t)$

The Company's investing activities which did not affect the current cash flow in the years ended December 31, 2019 and 2018.

Reconciliation of liabilities arising from financing activities were as follows:

				Non-cash changes Foreign
		January 1,2019	Cash flows	exchange movement	December 31, 2019
Short-term borrowings	\$	799,837	500,046		1,299,883
Bonds payable		3,100,000			3,100,000
Guarantee deposits (recorded as other non-current liabilities-others) Total liabilities from financial activities	S.	516 3,900,353	(108) 499,938		408 4,400,291
		January 1,2018	Cash flows	Non-cash changes Foreign exchange movement	December 31, 2018
Short-term borrowings	$\mathbf S$	799,649	188		799,837
Bonds payable		3,100,000			3,100,000
Guarantee deposits (recorded as other non-current liabilities-others) Total liabilities from financial activities	S	516 3,900,165	188		516 3,900,353

(7) Related-Party Transactions

Parent company and ultimate controlling party $(a)$

CMT investment is the ultimate controlling party of the Company and owns 60.77% percent and 58.49% percent of all shares outstanding of the Company on December 31, 2019 and 2018, respectively. The Company has issued the consolidated financial statements available for public use.

(b) Names and relationship with related parties

The followings are subsidiaries and entities that have had transactions with related parties during the periods covered in the financial statements:

Name of related party	Relationship with the Group
Chinese Maritime Transport (S) Pte. Ltd. (CMTS)	Subsidiary
Chinese Maritime Transport (Hong Kong), Limited (CMT HK)	Subsidiary
CMT Logistics Co., Ltd. (CMTL)	Subsidiary
AGM Investment Ltd. (AGMI)	Subsidiary
Hope Investment Ltd. (HIL)	Subsidiary
Mo Hsin Investment Ltd. (MHI)	Subsidiary
Associated Transport Inc. (ATI)	Subsidiary
CMT Travel Service Ltd. (CMTTSL)	Subsidiary
United Nan Hai Petroleum Inc. (UNH)	Subsidiary
United Nan Hai Development Inc. (NHD)	Subsidiary
CMT Leasing Co., Ltd. (CMTLL) (Note 2)	Subsidiary
China Fortune Shipping Ptd Ltd. (CFR)	Sub-subsidiary
China Enterprise Shipping PTE.Ltd. (CEP)	Sub-subsidiary
China Prosperity Shipping Ltd. (CPS)	Sub-subsidiary
China Peace Shipping Ltd. (CPC)	Sub-subsidiary
China Progress Shipping Ltd. (CPG)	Sub-subsidiary
China Pioneer Shipping Ltd. (CPN)	Sub-subsidiary
China Pride Shipping Ltd. (CPD)	Sub-subsidiary
CMT Chartering Ltd. (CHT)	Sub-subsidiary
China Triumph Shipping Ltd. (CTU)	Sub-subsidiary
China Trade Shipping Ltd. (CTD)	Sub-subsidiary
China Harmony Shipping LTD. (CHM)	Sub-subsidiary
China Honour Shipping Ltd. (CHN)	Sub-subsidiary
CMT Investment Co., Limited (CHI)	Sub-subsidiary
Chinese Maritime Transport Ship Management(Hong Kong) Limited (CIM)	Sub-subsidiary
Chang-Shun Transport Co., Ltd. (CST)	Sub-subsidiary
Huang-Yuen Transport Co., Ltd. (HYT)	Sub-subsidiary
Mao-Hwa Transport Co., Ltd. (MHT)	Sub-subsidiary

Name of related party	Relationship with the Group
AG Prosperity Transport Co., Ltd. (APT)	Sub-subsidiary
Pioneer Transport Co., Ltd. (PTL)	Sub-subsidiary
Associated International INC. (AII)	The entity with significant influence over the Company
Associated Development INC. (ADI)	A subsidiary of AII
CMT Development INC. (CMD)	A subsidiary of AII
OOCL (TAIWAN) Co., LTD (OTWL) (Note 1)	Substantial associate
OOCL LOGISTICS (TAIWAN) LIMITED (LOTWL) (Note $1$ )	Substantial associate
Associated Group Motors Corp. (AGM)	Associate

Note 1: The COSCO SHIPPING (HK) Co., Ltd.'s subsidiary company in Taiwan has accomplished the merger of OTWL since August 2018. OTWL and LOTWL are no longer the Company's substantial associates.
Note 2: Dissolution completed in February, 2019.
Significant related party transactions $(c)$
$(i)$ Freight revenue

The amounts of significant sales transactions and accounts receivable between the Company and its related parties were as follows:

		Revenue		Accounts Receivable- related-parties
		2019	2018	December 31, 2019	December 31, 2018
Other relates parties
OTWL(Note)	S	$\qquad \qquad \blacksquare$	448,694	-
Others			22,087
			470,781

Note: transactions as of August 2018

The collection periods of inland trucking transactions are within 30 to 60 days after consignment, which are similar to those of the ordinary customers. If the contracts have similar terms and conditions, the selling prices for related parties and ordinary customers shall not have any significant different. Amounts receivable from related parties were uncollateralized, and no expected credit loss were required after the assessment by the management.

$(ii)$ Freight cost

2019	2018
Amount	Amount
1,156,914 ۰D	1,092,944

(Continued)

The Company entrusts its subsidiaries to engage in container hauling business. The selling price is based on the market conditions and is paid according to the financial needs of the subsidiaries. Accounts payable to related parties due to the above transactions were as follows:

	December 31,	December 31,
	2019	2018
	Amount	Amount
$Subsidiary-ATI$	107.019 ۰υ	100,294

(iii) Vessel management and related collection and payment

The Company collects vessel management income from its subsidiaries (USD 10 thousand per vessel per month) and receives a commission of 1.25% on their monthly vessel chartering.

Vessel management revenue and unclear balances were as follows: $1)$

	Revenue		Accounts Receivable- related-parties
	2019	2018	December 31, December 31, 2019	2018
Subsidiaries	36,873	36,051	-	6.642

Amounts receivable from related parties were uncollateralized, and no expected credit loss (provisions for doubtful debt) were required after the assessment by the management.

$2)$ Commission

	2019	901 O 2018
Subsidiaries	---- 23.333	.386 74.

Due to the above-mentioned business, the Company collected and paid the miscellaneous expenses in ROC, and received income of vessel management from subsidiaries in advance. The amounts were as follows:

		2019	2018
Other current liabilities
Subsidiaries		4.175	4,866
Other current assets
Subsidiaries	٠п		1,621

(iv) Operating expense-rental expense

	Operating expense
	2019	2018
The entities with significant influence over the Company $\mathbf S$	2,628	3,234

The Company entered into service agreements with its related parties from March 2019 to February 2024. The prices are similar to those of the market prices, and they are being paid monthly.

(v) Guarantees and endorsements

The information of the Company as guarantors was as follows:

		December 31.	December 31,
Guarantees	Guaranteed subjects	2019	2018
Subsidiaries	Bank loans	4,130,811	4,229,633

The subsidiaries provided insurance contracts with collaterals to banks with the Company as guarantors.

The information of the Company as guarantees was as follows:

Guarantors	Guaranteed subjects	December 31. 2019	December 31, 2018
Subsidiaries	Bank loans	3.897	3,993

$(d)$ Key management personnel compensation

Key management personnel compensation comprised:

		2019	2018
Short-term employee benefits		41,982	42,854
Post-employment benefits		10.909	7,076
	S	52,891	49,930

(8) Pledged Assets

The carrying values of pledged assets were as follows:

Assets	Subject	December 31, 2019	December 31, 2018
Other non-current financial assets (guarantee deposits and pledged)	Guarantee for construction payment and import duty
assets-time deposits)		\$ 5,456	5,671
Land	Short-term loans and credit line	277,293	277,293
		282,749	282,964

(9) Significant Commitments and Contingencies

The Company had issued guarantee promissory notes amounting to \$3,130,960 as of December 31, $(a)$ 2019 and 2018, respectively, as guarantee for bonds payable.

As of December 31, 2019 and 2018, the subsidiaries of the Company still had several long-term $(b)$ leases of its ships with customers in effect. The ending periods of the contracts are from January 2020 to November 2020.

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

$(12)$ Other

A summary of current-period employee benefits, depreciation and amortization, by function, is as follows:

		2019			2018
By function By item	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits
Salary		77,817	77,817		74,804	74,804
Labor and health insurance		5,611	5,611		5,157	5,157
Pension		3,926	3,926		3,883	3,883
Remuneration of directors		15,245	15,245		17,142	17,142
Others		4,714	4,714		4,403	4,403
Depreciation (Note 1)		6,392	6,392		5,928	5,928
Amortization		3,185	3,185		3,260	3,260

Note1: excluding the deduction of rental income of \$140 and \$140 for the years ended December 31, 2019 and 2018, respectively.

The information on the numbers of employees and employee benefits of the Company in 2019 and 2018 was as follows:

	2019	2018
Employee number		58
Numbers of directors not as employee
Average employee benefits	1,674	1.604
Average salary	1,415	1,360
Growth of average salary	4.04 %

(13) Other Disclosures:

Information on significant transactions: $(a)$

The following is the information on significant transactions required by the "Regulations Governing" the Preparation of Financial Reports by Securities Issuers" for the Company:

$(i)$ Loans to other parties:

																(In Thousands of New Taiwan Dollars)
N ₀	Name of lender	Name of borrower	name	d party	Highest balance of financing to other parties Account Relate during the Ending period	balance	Actual usage amount during the period	interest rates during the period	Range of Purposes of fund financing for the borrower (note 1)	Transaction amount for business between two short-term parties	Reasons for financing	Allowance for bad debt	Collateral Item Value	Individual funding loan limits (note 2)	Maximum limit of fund financing (note 3)	Note
$\overline{1}$	CMT HK	CPN	Other receivable due from related parties	Y	102,532	102,532	102,532		$\overline{2}$		Operating	$\sim$		9,879,372		9,879,372 Transactions in the lleft column had been written off during the preparation of consolidated financial statements
	1 CMT HK	CHN	$\boldsymbol{u}$	Υ	149,900	149,900	149,900		$\overline{2}$		$^{\prime}$	$\qquad \qquad \blacksquare$	$\sim$	9,879,372	9,879,372	$\boldsymbol{\mathcal{H}}$
	$1$ CMT HK	CPD	$\boldsymbol{\eta}$	Y	225,111	45,231	45,231		$\overline{2}$		$\boldsymbol{\eta}$	$\ddot{\phantom{0}}$	$\tilde{\phantom{a}}$	9,879,372	9,879,372	$\eta$
	$\frac{1}{2}$ CMT HK	CPC	$\eta$	Ÿ		314,790 314,790 314,790			$\overline{2}$		$\boldsymbol{\eta}$	$\sim$		9,879,372	9,879,372	$^{\prime\prime}$
	1 CMT HK	CHM	$\boldsymbol{\eta}$	Y		334,577 334,577 334,577			$\overline{2}$		$\boldsymbol{u}$	$\blacksquare$		9,879,372	9,879,372
	1 CMT HK CMTS		$\boldsymbol{\eta}$	Y	359,760	$\sim$			$\overline{2}$		$\eta$	$\blacksquare$		9,879,372	9,879,372
	1 CMT HK CPG		$\boldsymbol{\eta}$	Y	389,740		389,740 389,740		$\overline{2}$		$\boldsymbol{\eta}$	۰	$\blacksquare$	9,879,372	9,879,372
	1 CMT HK CTD		$\eta$	Y	676,049		676,049 676,049		$\overline{2}$		$\boldsymbol{\eta}$			9,879,372	9,879,372	$\boldsymbol{\eta}$
$\mathbf{1}$	CMT HK CTU		$^{\prime\prime}$	Y	706,029	706,029	706,029		$\overline{2}$		$^{\prime\prime}$			9,879,372	9,879,372	$_{II}$
	$2$ ATI	CST	$\boldsymbol{\eta}$	Y	15,000	10,000	10,000	1.20%		122,040	$\boldsymbol{\mathcal{H}}$	٠		122,040	244,713
	2 ATI	MHT	$\eta$	Y	6,000	$\blacksquare$	$\blacksquare$	1.20%	$\mathbf{1}$	95,975	$^{\prime\prime}$	$\overline{a}$		95,975	244,713
	$2$ ATI	APT	$\boldsymbol{\eta}$	Y	61,000	54,000	54,000	1.20%	$\mathbf{1}$	113,253	$^{\prime\prime}$	۰		113,253	244,713
	$2$ ATI	PTL	$\eta$	Y	31,000	22,000	22,000	1.20%	$\mathbf{1}$	56,110	$\boldsymbol{\eta}$			56,110	244,713	$\boldsymbol{H}$

Note 1: 1. Represents entities with business dealings. 2. Represents where an inter-company or inter-firm short-term financing facility is necessary.
Note 2: For entities who have business with the Company, the amount of e

$(ii)$ Guarantees and endorsements for other parties:

		Counter-party of							Ratio of
		guarantee and		Limitation	Highest	Balance of			accumulated				Endorsements
		endorsement		011	balance for	guarantees			amounts of		Parent	Subsidiary	guarantees to
				amount of	guarantees	and	Actual		eguarantees and		company	endorsements/	guarantees to
				guarantees and	and	lendorsements	usage	Property	ndorsements to		endorsements/	guarantees	third parties
				endorsements	endorsements	as of	amount	pledged for	net worth of the	Maximum	guarantees to	to third parties	on behalf of
			Relationshi	for a specific	during	reporting		during the guarantees and	latest	amount for	third parties on	on behalf of	companies in
	Name of		p with the	enterprise	the period	date	period	endorsements	financial	guarantees and	behalf of	parent	Mainland
	No. guarantor	Name	Company	(note2, note3)	(note 4)	(note 4)	(note 4)	(Amount)	statements	endorsements	subsidiary	company	China
$\mathbf{0}$	THE	ATI	Subsidiary	14,901,545	100,000	100,000			1.00 %	14,901,545	Y
	COMPANY
0	$\boldsymbol{u}$	lctu	Sub- subsidiary	14,901,545	674.550	674,550	269,820		6.79%	14,901,545	Y
0	$\boldsymbol{\mu}$	ICTD		14,901,545	674,550	674,550	337,275		6.79%	14,901,545
$\Omega$		ICFR.		14,901,545	1,332,611	1,332,611	694,360		13.41 %	14,901,545	Y
$\Omega$	$\boldsymbol{u}$	CPN		14,901,545	1,349,100	1,349,100	650,163		13.58 %	14,901,545	Y
	CMT HK	CPD	Subsidiary	14,819,058	425,716				%	14,819,058
	$\boldsymbol{n}$	CHN		14,819,058	908,094	908,094	777,381		9.14%	14,819,058
		CEP		14 819 058 l	958 760	958.760	782.147		9.65%	14.819.058

58

(Continued)

(In Thousands of New Taiwan Dollars)

Counter-party of guarantee and endorsement Name	Relationshil n with the Company	Limitation on amount of lguarantees andl endorsements for a specific enterorise $ $ (note2, note3) $ $	Highest balance for guarantees and l endorsements during the period (note 4)	Balance of guarantees and lendorsements as of reporting date (note 4)	Actual usage amount period (note 4)	Ratio of accumulated amounts of leguarantees and l ndorsements to net worth of the latest financial statements	Maximum amount for euarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary

CHM		14,819,058	977.948	977.948	535,590	9.84%	14,819,058	-
THE COMPANY	Parent company	14,819,058	3,897	3,897	3.897	0.04%	14,819,058

Note]: The total amount of external endorsements and/or guarantees shall worth no more than 150% of the Company's net worth. Among which the amount of endorsements/
guarantees for any single (1) whose voting shares are 100

(iii) Securities held as of December 31, 2019 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

						Ending balance
Name of holder	Category and name of security	Relationship with company	Account title	Shares/Units (thousands)	Carrying value	percentage of ownership (%)	Fair value	Note
THE COMPANY	Yang Ming Marine Transport Corporation		Non-current financial assets at fair value through profit or loss	4,798	31,046	0.18%	31,046
$\boldsymbol{\eta}$	Asia Pacific Emerging Industry Venture Capital Co., Ltd.		Non-current financial assets at fair value through profit or loss	2,500	25,545	2.78 %	25,545
HIL.	CHINA CONTAINER TERMINAL CORP.		Non-current financial assets at fair value through other comprehensive income	21,919	313,447	14.77 %	313,447
$\boldsymbol{\eta}$	SEA & LAND INTERATED CORP.		Non-current financial assets at fair value through profit or loss	5,522	62,951	7.05 %	62,951
$\eta$	DIMERCO EXPRESS CORPORATION		Current financial assets at fair value through profit or loss	500	14,050	$\frac{6}{6}$ ۰	14,050
MН	SEA & LAND INTERATED CORP.		Non-current financial assets at fair value through profit or loss		12	$\frac{0}{2}$ ۰	12
$\boldsymbol{\eta}$	CHINA CONTAINER TERMINAL CORP.		Non-current financial assets at fair value through other comprehensive income	118	1,687		1,687

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT\$300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

	Category and			Name of Relationship		Beginning Balance		Purchases			Sales				Ending Balance
Name of	name of	Account	counter-	with the								Gain (loss) on
company	security	name	party	company	Shares	Amount	Shares	Amount	Shares	Price	Cost	disposal	Other	Shares	Amount	Note
CHK	CMTS	Investments laccounted for	Notel	Notel	49,288	1,121,252 (USD37,400)	13.630	310.580 (USD10,000)		۰			100,776 (USD3.721)	62.918	1,532,068 (USD51.076)	Note 2
		using equity method, net

Note 1: Subsidiary increased capital by cash

Note 1. Substitute the field of the state.
Note 2: Transactions in the left column had been written off during the preparation of the consolidated financial statements.
Note 3: The amount was translated to the NTD at the e

Acquisition of individual real estate with amount exceeding the lower of NT\$300 million or $(v)$ 20% of the capital stock: None
(vi) Disposal of individual real estate with amount exceeding the lower of NT\$300 million or 20% of the capital stock: None

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT\$100 million or 20% of the capital stock:

								(In Thousands of New Taiwan Dollars)
					Transaction details			Transactions with terms different from others		Notes/Accounts receivable (payable)
Name of company	Related party	Nature of relationship	Purchase/ Sale	Amount	Percentage of total purchases/ sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accoun ts receivable (payable)	Note
THE COMPANY	ATI	Subsidiary	Freight cost	1,156,914	98 %	Depending on the demand for ffunding of subsidiaries			(107, 019)	(97)%	Note 1
lati	THE COMPANY	Subsidiary	Freight revenue	(1, 156, 914)	$(85) \%$	$\prime\prime$			107,019	73%	$^{\prime\prime}$
CST	ATI	Subsidiary	Freight revenue	(113, 344)	(97) %	$\prime\prime$			9,866	90%	$\boldsymbol{\mathit{II}}$
ATI	CST	Subsidiary	Freight cost	113,344	9 $\frac{0}{0}$	$^{\prime\prime}$			(9,866)	$(6)\%$	$\boldsymbol{\mathcal{H}}$
HYT	ATI	Subsidiary	Freight revenue	(121, 504)	(100)%	$\prime$			11,263	100%	$\prime\prime$
ÍАTI	HYT	Subsidiary	Freight cost	121,504	$10 \frac{9}{6}$	$\boldsymbol{\mu}$			(11, 263)	(7)%	$\prime\prime$
MHT	İАTI	Subsidiary	Freight revenue	(102, 169)	(98) %	$\boldsymbol{n}$			8,989	97%	$\prime\prime$
Ati	MHT	Subsidiary	Freight cost	102,169	8 $\frac{0}{0}$	$\boldsymbol{\mathcal{U}}$			(8,989)	$(6)\%$
[APT	ÍATI	Subsidiary	Freight revenue	(118,050)	(100)%	$\prime\prime$			11,118	100%	$\boldsymbol{\mathcal{U}}$
ATI	APT	Subsidiary	Freight cost	118,050	% 9	Rent received in ladvance			(11, 118)	(7)%	$\boldsymbol{\mathit{II}}$

$(In The example of Now Toivon$ $Dellone)$

Note1: Transactions in the left column had been written off during the preparation of consolidated financial statements.

(viii) Receivables from related parties with amounts exceeding the lower of NT\$100 million or 20% of the capital stock:

Name of		Nature of	Ending	Turnover	Overdue		Amounts received in	Allowance
company	Counter-party	relationship	balance	rate	Amount	Action taken	subsequent period	for bad debts	Note
CMT HK	CTD	Subsidiarv	676,049	Note1					Note 2
$^{\prime\prime}$	ICTU	Subsidiary	706,029	$\eta$					$^{\prime\prime}$
$^{\prime\prime}$	CHM	Subsidiary	334,577	$\boldsymbol{n}$					$^{\prime\prime}$
$\boldsymbol{\eta}$	ICPC	Subsidiarv	314,790	$\boldsymbol{\eta}$					$^{\prime\prime}$
$^{\prime\prime}$	CHN	Subsidiary	149,900	$\boldsymbol{\eta}$					11
"	lCPG.	Subsidiary	389,740	$\boldsymbol{n}$					$\boldsymbol{n}$
$^{\prime\prime}$	ICPN	Subsidiary	102,532	$\prime$					$^{\prime\prime}$
ATI	THE COMPANY	Parent Company	107,019	11.16			107,019		$^{\prime\prime}$

(In Thousands of New Taiwan Dollars)

Note1: They are accounts receivable from related parties.
Note2: Transactions in the left column had been written off during the preparation of consolidated financial statements.

(ix) Trading in derivative instruments: None

Information on investees: $(b)$

The following is the information on investees for the years ended December 31, 2019:

											(In Thousands of Shares)
				Original Investment							(In Thousands of New Taiwan Dollars)
			Main	Amount			Balance as of December 31, 2019		Net Income
Name of investor	Name of investee	Location	Businesses and Products	December 31, 2019	December 31, 2018	Shares (thousands)	Percentage of Ownership	Carrying Value	(Losses) of the Investee	Share of profits/losses of investee
The Company	CMTS	Singapore	Investment holding of ship-owning companies	4,282	4,282	217	0,34 %	5,229	41.906	156	Note1 · Note4
$\boldsymbol{\mu}$	CMT HK	Hong Kong	Investment holding of ship-owning companies	34,356	34,356	12,000	100 %	9,879,372	290,720	290,720
	CMTL	Taiwan	Warehouse management	689,558	689,558	19,200	100 %	1,054,169	46,543	46,543	n
	AGMI	$\boldsymbol{r}$	Investment	1,000	1,000	100	100 %	1,014	(44)	(44)	$\mu$
	HIL	Ĥ		785,000	565,000	78.500	100 %	584,516	23,631	23,631	$\overline{a}$
	Mнı	$\boldsymbol{v}$		101.300	1,300	10.130	100 %	101.213	(43)	(43)	n
	ATI	n	Container trucking	500,000	500,000	50,000	100 %	611,782	31,142	31,142	$\theta$
	TNCL	$\theta$	Bulk-carrier transportation	1,007,412	1,007,412	31.125	7.459 %	763,893	601,096	44,834	Note ₂
	CMTTSL	$\boldsymbol{\theta}$	Travel	20,000	20,000	2,000	100 %	5,761	(1, 254)	(1, 254)	Notel · Note4
	TGEM	$\boldsymbol{\eta}$	Bulk-carrier transportation	601,200	601,200	61.623	$12\%$	604.722	35,181	4,222	Note2
	UNH	N	Gasoline international rade	1,000	1,000	100	100 %	982	(1)	(1)	Notel · Note4
	UHD		Investment	1,000	1,000	100	100 %	976	(1)	(1)	$\boldsymbol{u}$
	CMTLL		Car rental		20,000		$\%$		(12)	(12)	$\theta$
	AGM	$\mu$	Automobile and its parts manufacturing	30,000		3,000	30 %	28,377	(5, 410)	(1.623)	Note ₂
CMTS	CFR	Singapore	Bulk-carrier transportation	689,540	689,540	29,900	100 %	750,841		34,517 Has been recognized as investment incomes(losses) by CMTS	Votel > Note3 Note4
	CEP	$\boldsymbol{u}$		692,538	692,538	23,100	100 %	689,108	17,901
CMT _HK	CPS	Hong Kong		59,960	59,960	2,000	100 %	60,246	411	Has been recognized as investment incomes(losses) by CMT HK	n
	CPG	Hong Kong		179,880	179,880	6,000	100 %	242,219	73,270
	CPC	$\overline{v}$		164,890	164,890	5,500	100 %	191,209	16,370	$\boldsymbol{H}$
	CHT	$\boldsymbol{h}$	Bulk-chartering services	300	300	10	100 %	5,793	(76)
	CPN	$\boldsymbol{h}$	Bulk-carrier transportation	719,520	719,520	240	100 %	773,790	67,865
	CPD			1,259,160	1,259,160	420	100 %	1,243,068	(1, 352)	$\overline{u}$
	CTD			389,740	389,740	13,000	100 %	409,218	(13, 886)	$\theta$
	CTU			389,740	389,740	13,000	100 %	437,284	26,777	$\boldsymbol{\eta}$	A
	CHM			449,700	449,700	150	100 %	456,061	43,655	$\boldsymbol{u}$	$\overline{a}$
	CHN			449,700	449,700	150	100 %	466,674	35,452	$\boldsymbol{u}$
	CHI	$\theta$	Investment management	300	300		100 %	(384)	(100)	$\boldsymbol{n}$	$\overline{D}$
	CM			29,980	29,980	10.0	100 %	30,430	663		$\boldsymbol{u}$
	CMTS	Singapore	Investment holding of ship-owning companies	1,421,052	1,121,252	62,918	100 %	1,532,608	41,906	$\boldsymbol{\eta}$	$\boldsymbol{H}$
ŀШ	TNCL	Taiwan	Bulk-carrier transportation	321,956	321,956	12,297	3%	301,809		601,096 Has been recognized as investment incomes(losses)	Note ₂
ATI	CST		Container trucking	86,642	86,642	8,200	100 %	92,101		by HIL (22) Has been recognized as investment incomes(losses) by ATI	Notel - Note4
	HYT			28,932	28,932	3,000	100 %	34,986	(3, 468)
	MHT			30,568	30,568	3,000	100 %	50,769	8,434
	APT			30,719	30,719	3,000	100 %	37,814	1,929
	þπ.			30,000	30,000	3,000	100 %	28,942	(1, 121)

$\ddot{\phantom{a}}$

Notel: Subsidiaries controlled by the parent company.
Note2: Investees affected by the comprehensive shareholdings of the Group.
Note3: The amount was translated to the NTD at the exchange rates at the reporting date.
Not

(14) Segment Information

Please refer to the 2019 consolidated financial statements.

Statement of Cash and Cash Equivalents

December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Petty cash		\$ 305
Demand deposits	New Taiwan Dollars	61,642
	Foregin currency(USD3,122thousand dollars, Excange rate 29.98)	93,611
	Foregin currency(CNY17thousand dollars, Excange rate 4.305)	74
Time deposits		163,099
Commercial paper	New Taiwan Dollars	9,532
Total		328,263

Statement of Notes and Accounts Receivable-Non related Parties

Client Name	Description		Amount
Notes receivable:
Others (Note)	Operating revenue from non-related parties	\$	45
Accouts receivable:
OTWL	$^{\prime\prime}$		79,306
APL	$^{\prime\prime}$		30,505
ONE	$^{\prime\prime}$		16,483
Maersk	$^{\prime\prime}$		16,221
Others (Note)	$\prime$		34,526
			177,041
Total		S	177,086

Notes: The balance of each client does not exceed 5% of the amount of the account, and will not be separately listed.

Statement of Changes in Investments Accounted for Using the Equity Method

For the year ended December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

			Increase during period		Decrease during period		accounted for of associates using equity Profit (loss)	Other changes				2019.12.31
	Beginning balance		(Notel)		(Note2)		method	(Note3)		Ending balance		fair value or
Name	Shares	Amount	Shares	Amount	Shares	Amount	Amount	Amount	Shares	Shareholding ratio	Amount	net worth Net total	Collateral
CMTS	217\$	3,938					156	(198)	217	$0.34\%$	3,896	5,229	None
CMT HK	12,000	10,275,652				191,238	290,720	198	12,000	$100\%$	10,375,332	9,879,372	None
且	56,500	411,897	22,000	220,000			23,631	21,747	78,500	100%	677,275	584,516	None
CMTL	19,200	1,056,877				48,050	46,543	(1, 201)	19,200	100 %	,054,169	1,054,169	None
HE	130	1,243	10,000	100,000			$\left( 43\right)$	$\mathbf{r}$	10,130	100%	101,213	101,213	None
AGMI	$\approx$	1,058					(44)		$\frac{100}{2}$	100 %	1,014	1,014	None
TNCL	31,125	798,214				40,463	44,834	(1,010)	31,125	7.459 %	801,575	763,893	None
AП	50,000	600,965				20,325	31,142		50,000	$100\,$ %	611,782	611,782	None
Ě	100	983					$\widehat{=}$		100	100 %	982	982	None
QHN	100	977					$\widehat{z}$		$\approx$	$100\%$	976	976	None
CMTTSL	2,000	7,015					(1, 254)		2,000	$100\%$	5,761	5,761	None
TGEM	61,623	644,386				22,369	4,222		61,623	12%	626,239	604,722	None
CMTLL	2,000	19,996			2,000	19,984	$\widetilde{(-1)}$			$\aleph$			None
AGM			3,000	30,000			(1,623)		3,000	30.00 %	28,377	28,377	None
Subtotal		13,823,201		350,000		342,429	438,270	19,549			14,288,591
Excange differences on translation of foreign financial statements		(368,759)		ı.		٠	ı	(277.826)			(646, 585)
Total		$S = 13,454,442$		350,000		342,429	438,270	(258, 277)			13,642,006
Note 1: The cash capital increase of subsidiary amounted to \$320,000, and the investment of the newly established associate amounted to \$30,000. Note 2: Acquired cash dividend of \$322.455, and the capital return due to capital reduction amounted to \$19.984 from the investee company.

Aone 2. Acquire casa urbent of a series of the replies received recordion anomine to 17,300 in the first comprehensive income amounted to \$20,840; exchange differences on translation of foreign financial statements amounte

Statement of Changes in Property, Plant and Equipment For the year ended December 31, 2019 (Expressed in thousands of New Taiwan Dollars)

Please refer to note( $6$ )(e).

Statement of Changes in Investment Property

Please refer to note(6)(f).

$\mathcal{A}^{\mathcal{A}}$

Statement of short-term borrowings

December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

		Ending
Type of loan	Description	balance	Contract period	Interest rate	Credit lines	Collateral
Financial institution	Credit loan	\$ 100,000	2019.05.22~ 2020.05.22	1.000 %	100,000	None
$\prime\prime$	$\eta$	100,000	$2019.07.31-$ 2020.07.31	0.985 %	100,000	$\prime\prime$
$^{\prime\prime}$	$\ensuremath{\mathnormal{H}}$	100,000	2019.08.28~ 2020.08.28	1.000 %	120,000	$\boldsymbol{\mathit{II}}$
$^{\prime\prime}$	$\prime\prime$	100,000	2019.12.12~ 2020.12.08	0.970 %	100,000	$\boldsymbol{\mathit{II}}$
$\eta$	$\boldsymbol{\eta}$	100,000	2019.01.04~ 2019.12.28	1.000 %	100,000	$\prime\prime$
$\prime\prime$	$^{\prime\prime}$	100,000	2019.01.10~ 2020.01.10	0.970 %	100,000	$\prime\prime$
$\prime\prime$	$\prime\prime$	100,000	$2019.03.11-$ 2020.03.11	1.000 %	100,000	$\prime\prime$
$^{\prime\prime}$	Guaranted loan	250,000	2019.11.23~ 2021.11.12	0.980 %	250,000	Land
$\prime\prime$	Commercial paper	99,942	$2019.09.01-$ 2020.08.31	1.008 %	100,000	None
$\prime\prime$	$\prime\prime$	99,975	2019.11.11~ 2020.11.10	0.998 %	150,000	$\prime\prime$
$\boldsymbol{\mathit{II}}$	$\prime\prime$	99,988	$109.02.11-$ 2020.02.10	0.968 %	100,000	$\prime\prime$
$\prime\prime$	$\eta$	49,978	$109.02.15-$ 2020.02.14	1.008 %	150,000	$\boldsymbol{\eta}$
		\$1,299,883

$\hat{\mathcal{A}}$

Statement of Other Payables

December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Interest payable	Short-term borrowings and bonds interest payable	\$ 24,328
Employee compensation and directors' and supervisors' remuneration and year-end bonuses payable	Estimated employee compensation and directors' and supervisors' remuneration and year-end bonuses	21,354
Incme tax payable	Labor and health insurance and labor expense	15,663
Others(Note)	Estimated income tax	8,493
Total		69,838
Notes: The balance of each item does not exceed 5% of the amount of the account, and will not be separately

listed.

Statement of Bonds Payable

Please refer to note( $6$ )(h).

Statement of Operating Revenue

For the year ended December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

Please refer to note( $6$ )(n).

Statement of Operating Costs

Item

Freight and repair cost Airline agent cost Total

	Amount
\$	1,157,120
	24,069
X	1,181,189

Statement of Operating expense

For the year ended December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

98,753
9,577
5,971
6,946
34,603
155,850

Note: The balance of each item does not exceed 5% of the amount or five million dollars of the account, and will not be separately listed.

AI assistant

CMT — Audit Report / Information 2019

52166_rns_2019-11-13_424e19c2-582c-45d1-9f68-5275e3630796.pdf

CHINESE MARITIME TRANSPORT LTD.

Table of contents

Key Audit Matters

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

Auditors' Responsibilities for the Audit of the Financial Statements

Notes to Readers

December 31, 2019 and 2018 מוסטונט סטוונו

(Expressed in thousands of New Taiwan Dollars)

(English Translation of Financial Statements Originally Issued in Chinese)CHINESE MARITIME TRANSPORT LTD.

Statements of Comprehensive Income

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan dollars, Except earnings per share)

(English Translation of Financial Statements Originally Issued in Chinese) CHINESE MARITIME TRANSPORT LTD.

Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(Expressed in thousands of New Taiwan dollars)

(English Translation of Financial Statements Originally Issued in Chinese) CHINESE MARITIME TRANSPORT LTD.

For the years ended December 31, 2019 and 2018

(expressed in thousands of New Taiwan dollars, unless otherwise specified)

(1) Company history

(2) Approval date and procedures of the financial statements

(3) New standards, amendments and interpretations adopted

$(4)$ Summary of significant accounting policies

(ii) Foreign operations

Cash and cash equivalents $(e)$

$(f)$ Financial instruments

$5)$ Offsetting of financial assets and liabilities

Property, plant and equipment $(i)$

(k) Lease

Applicable from January 1, 2019

(iii) As a lessor

Applicable before January 1, 2019

$(1)$ Intangible assets

$(r)$ Earnings per share

$(5)$ Significant accounting assumptions, and judgments and major sources of estimation uncertainty

(6) Explanation of significant accounts

$(b)$ Financial asset at fair value through profit or loss

Summarized financial information of TNCL $1)$

(iv) Summarized financial information of insignificant associate

(ii) Bonds Payable

Employee benefits $(i)$

Actuarial assumptions $5)$

$(k)$ Income taxes

(ii) Deferred tax assets and liabilities

$2)$ Recognized deferred tax assets and liabilities

$(2)$ Special reserve

(m) Earnings per share

Profit attributable to ordinary shareholders of the Company $1)$

$(n)$ Revenue from contracts with customers

(ii) Contract balances

Financial cost-Interest expense $(0)$

(ii) Liquidity Risk

(iii) Exchange rate risk

$(v)$ Fair value

$1)$ The kinds of financial instruments and fair value

(iv) Liquidity risk

(7) Related-Party Transactions

(b) Names and relationship with related parties

(iv) Operating expense-rental expense

$(d)$ Key management personnel compensation

(8) Pledged Assets

(9) Significant Commitments and Contingencies

(10) Losses Due to Major Disasters: None

$(12)$ Other

(13) Other Disclosures:

58

(Continued)

Information on investees: $(b)$

(14) Segment Information

Statement of Cash and Cash Equivalents

December 31, 2019

(Expressed in thousands of New Taiwan Dollars)

Statement of Notes and Accounts Receivable-Non related Parties

Statement of Changes in Investments Accounted for Using the Equity Method

(Expressed in thousands of New Taiwan Dollars)

Statement of Changes in Property, Plant and Equipment For the year ended December 31, 2019 (Expressed in thousands of New Taiwan Dollars)

Statement of Changes in Investment Property

CMT Audit Report / Information 2019

(English Translation of Financial Statements Originally Issued in Chinese)
CHINESE MARITIME TRANSPORT LTD.