EITC - Annual Report 2017 | FinancialReports.eu

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HEAD OFFICE

ADDRESS：899, Ching Kuo Road, Taoyuan, Taiwan PHONE：(886)3-325-2060

STOCK DEPARTMENT

ADDRESS：2F, 166, Sec. 2, Minsheng East Road, Taipei, Taiwan PHONE：(886)2-2500-1668

WEBSITE：stock.evergreen.com.tw

SPOKESPERSON

NAME：Wey, Maw-Jiunn TITLE：President PHONE：(886)3-325-2060 E-Mail：[email protected]

DEPUTY SPOKESPERSON

NAME：Chen, Cheng-Pang TITLE：Financial Officer PHONE：(886)3-325-2060 E-Mail：[email protected]

AUDITORS

Pricewaterhouse Coopers AUDITORS：Lai, Chung-Hsi，Chih, Ping-Chiun ADDRESS：27F, 333, Keelung Road, Sec. 1, Taipei, Taiwan PHONE：(886)2-2729-6666 WEBSITE：www.pwc.com/tw

CORPORATE WEBSITE

http:// www.evergreen-eitc.com.tw

Ⅰ. Letter to Shareholders-----------------------------------------------------------------------------	1
1.1 Performance in 2016--------------------------------------------------------------------------------------	1
1.2 Operation Strategy for 2017------------------------------------------------------------------------------	2
1.3 Future Development Strategy----------------------------------------------------------------------------	5
1.4 Effects of External Competitive Environment, Law and Macroenvironment---------------------	5
Ⅱ. Company Profile--------------------------------------------------------------------------------------	8
2.1 Date of Incorporation--------------------------------------------------------------------------------------	8
2.2 Company History------------------------------------------------------------------------------------------	8
Ⅲ. Corporate Governance Report-----------------------------------------------------------------	9
3.1 Organization------------------------------------------------------------------------------------------------	9
3.2 Directors, Supervisors and Management Team--------------------------------------------------------	10
3.3 Implementation of Corporate Governance-------------------------------------------------------------	15
Ⅳ. Capital Overview-------------------------------------------------------------------------------------	20
4.1 Capital and Shares-----------------------------------------------------------------------------------------	20
Ⅴ. Operatonal Highlights---------------------------------------------------------------------------	26
5.1 Business Activities-----------------------------------------------------------------------------------------	26
5.2 Human Resources------------------------------------------------------------------------------------------	28
VⅠ. Financial Information-----------------------------------------------------------------------------	29
6.1 Five-Year Financial Summary ---------------------------------------------------------------------------	29
6.2 Five-Years Financial Analysis----------------------------------------------------------------------------	33
6.3 Supervisors’ Report ---------------------------------------------------------------------------------------	35
6.4 Consolidated Financial Statements for the Years Ended December 31,2016 and 2015, and
Independent Auditors’ Report ---------------------------------------------------------------------------	36

Ⅰ. Letter to Shareholders

1.1 Performance in 2016

1. Business Fulfilment in 2016

The company’s consolidated revenue of 2016 is NT$7.472 billion, 99.68% of target. The net income after tax is NT$809 million, a decrease of NT$34 million (4.06%) over the same period the previous year. Earnings per share is NT$0.76.

To sum up the year 2016, developed countries, including the US and Japan, did not perform as well as expected in the first quarter. Emerging markets and developing countries did not show outstanding performance either. Although the recovery of the Euro zone is stable, the impact of Brexit on EU countries and the global economy is still unfolding. Therefore, the overall economic situation in 2016 is strongly affected by continual uncertainty and high risk.

Looking back on the year 2016, the company faced double pressure from market decline and upstream industries’ demands for price reductions. Through strong leadership, the company took a positive attitude toward its operations, ascertained market changes, adjusted operational goals accordingly, and made efforts to expand its business and explore new opportunities. Moreover, to maintain high operational efficiency and satisfy clients’ demands for optimal service, the company continued its equipment rejuvenation efforts.

Thanks to falling international oil prices in 2016 and greater investment in technology, which helped improve performance and efficiency, we achieved our cost reduction target. An overview of the company’s business areas follows:

(1) Land Transportation Service

Continuing development of CY/CL haulage service and expansion of intercity and tour coach services, which cater to the domestic tourism market.

(2) Container Depot Service

Strengthening the canvassing of empty/laden container handling business, as well as repair and cleaning business, from shipping companies. Strategic alliances with freight forwarders and customs brokers. Development of inbound and bonded warehouse devanning services. Comprehensive examination and correction of outdated operational fees and warehouse rental rates and adjustment of the rates for new operational models in order to effectively enhance container depot performance.

(3) International Marine Service

Continual investment in the container leasing and ship leasing businesses in response to market demands and to improve the company’s profit.

Business Targets and Performance Overview

The company’s forecasted consolidated revenue for 2016 is NT$7.496 billion; the actual revenue is NT$7.472 billion. The achievement rate is 99.68%. The forecasted EBT is NT$1.006 billion. Actual EBT is NT$1.013 billion. The achievement rate is 100.63%.

Financial Revenue and Profit Analysis
(1) Financial Revenue

The company’s consolidated revenue for 2016 is NT$7.472 billion, a year-on-year increase of 1.68%. Operational costs are NT$6.201 billion, a year-on-year increase of 1.58%. Other net expenses are NT$3 million, a year-on-year decrease of NT$81 million. EAT is NT$809 million, a year-on-year decrease of NT$34 million.

(2) Profit Analysis

2016’s return on assets is 2.77%; return on equity is 3.73%; net profit margin is 10.83%; and earnings per share is NT$0.76.

Research and Development
(1) Environmentally-Friendly Fleet

In the area of freight transport, the company continues the rejuvenation of its fleet by phasing out old tractors and purchasing new vehicles with Euro 5 rated engines to help improve air quality and save fuel. In terms of coach services, our buses are fitted with Euro 5 rated engines for environmental protection. We adjust highway bus service timetables and increase the number of shuttle buses to meet market demands and lower CO2 emissions.

(2) Rejuvenation of Equipment at Shichih and Taoyuan Inland Depots

Replacing five old rubber-tired gantry cranes (RTG) and three empty container handlers with new ones to improve operational safety.

(3) Re-planning of Storage Area at Taoyuan and Shichih Inland Depots

Reconstructing rubber-tired gantry crane (RTG) tracks, renovating floor structures, replanning container slots, and improving the computer management system to make more efficient use of the limited space of the depots.

1.2 Operation Strategy for 2017

1. Operation Direction

Due to the international situation, Taiwan’s export/import container business showed negative growth for 16 consecutive months in 2015-2016. Taiwan’s overall economic momentum showed no significant improvement from 2015. In addition to weak economic prospects, the continued reliance of shipping exports on the Mainland Chinese market is an important cause. Therefore, in the short term, improvement of the export/import shipping business will remain limited. In 2017, the US economy is expected to be stable, but the new

president’s policies will increase risks to our country’s trade strategies. The European economic situation is stable but there are new risks caused by the rise of populism following Brexit. The capital risks resulting from the slowdown of long-term Mainland Chinese economic growth and the US interest rate hike will continue.

According to many forecasts, the domestic and international economic performance in 2017 will remain the same level as in the second half of 2016. However, the company will take market opportunities offered by economic recovery. In addition to stabilizing its market share in the container freight station, logistics, and transportation businesses, the company will seek to build cross-industry alliances for the development of new business opportunities. At the same time, the company will strengthen and improve its cost structure and enhance its performance. Details of operational directions are as follows:

(1) Business Diversification and Steady Growth

The company’s business areas include container transportation, container freight station services, warehousing, container repair and cleaning, container leasing, ship leasing, container port stevedoring, national highway bus services, tour coach services, gas station services, vehicle maintenance and repair, and contracted vehicle inspections. The diversified business model ensures that, even in a bleak market climate, the company maintains stable profit. In terms of business expansion, the company’s freight transport business will adjust the transportation fee structure reasonably in line with operational cost increases caused by the government’s “one fixed day off, one flexible day off” personnel policy while actively pursuing new container yard business. In terms of passenger transportation services, the company will make adjustments to its current highway bus services in response to the launch of the Taoyuan Airport MRT, while continuing the promotion of tour coach and shuttle bus services. In terms of the container yard business, due to the rejuvenation of container yard equipment and the renovation of the Shichih container yard warehouse, we will strengthen our effort to canvass inbound and outbound empty and laden container and inbound bonded warehouse logistics business. Regarding the international marine business, the company will keep promoting its container leasing business, Kaohsiung Container Terminal 5 free trade port warehousing business, and Port of Taichung berthing business to shipping companies involved in cross-strait trade.

(2) Reduce Costs and Improve Business Performance

The company values operational streamlining and occupational safety measures. By gradually phasing out old machinery and introducing new equipment, we reduce the chance of abnormal occurrences and prevent occupational accidents. The integration of the computer systems of different departments improves internal document processing. Regular auditing and monitoring help to create a safe and comfortable work environment for employees, and assures safe and quality services for clients.

(3) Increase Awareness of Environment Protection and Social Responsibility

The company has large tractor and coach fleets that fully comply with the government’s environmental regulations. We purchase the latest Euro 5 rated environmentally-friendly vehicles, maintain carbon-reduction and energy-saving practices, improve air quality, actively improve wastewater treatment, and reuse and recycle wherever possible in an effort to reduce environmental impact and fulfil our corporate social responsibility.

2. Forecast of Business Performance

According to the forecasts of specialized institutions, Taiwan’s actual GDP growth rate for 2017 will rise to 1.78%. Moreover, international oil and raw materials prices are expected to level off, so a mood of optimism will continue. Regarding Mainland China, the GDP for 2017 is forecast to be 6.5%, a 0.3% rise over 2016, which means that Mainland China’s economic growth will remain in the target zone, and economic reforms will yield excellent results. The Euro zone will suffer the local political impact of Brexit. The European Central Bank (ECB) has announced changes to its monetary policy: its quantitative easing bond-buying program was cut in scale but extended until the end of December 2017.

The free trade zone and multi-country consolidation business promoted by various Taiwanese ports in recent years are expected to increase Taiwan’s export/import trade volume, which will lead to stable growth of land transportation and container yard business in terms of both quality and volume. If international oil prices remain low, we believe that we can make further improvement and innovation in our original business and continue raising service quality while lowering costs. We expect to improve profitability in the year 2017 to live up to stockholders’ expectations.

3. Key Marketing Policy

(1) Inland Transportation Business

In recent years, the company has consistently implemented the strategy of diversification in its container transportation business and continued investing in asset renewal and improvement, while canvassing haulage business from big retailers, and actively bidding for major import and export business plus special transportation projects from the government and non-governmental bodies. Moreover, the company allocates an annual budget for fleet rejuvenation in order to offer fast, timely, safe, and high-quality transportation services. In 2017, the passenger transportation business will adjust its national highway bus service schedule in response to the launch of the Taoyuan Airport MRT in an effort to increase revenue. At the same time, the company will continue expanding its tour coach and shuttle bus services to improve performance of its passenger transportation business.

(2) Container Depot Business

In compliance with the precise requirements for outbound containers by the International Maritime Organization’s International Convention for the Safety of Life at Sea (IMOSOLAS), we offer outbound clients reasonable weighing rates in accordance with Container

Weight Verification Requirement (VGM). Moreover, the renovation of the Shichih container yard warehouse will significantly increase revenues from inbound and bonded cargo inspection operations. The inauguration of the new rubber-tired gantry cranes in the Taoyuan and Shichih depots will effectively reduce maintenance costs and provide safe and efficient depot services, while increasing performance.

(3) International Marine Business

The company began investing in the container rental market in recent years with growing profit performance. The company will increase investment in 2017 if there is an increase in market demand. The Taichung Port container depot will improve equipment and machinery, actively expand its free trade zone and multi-country consolidation business, and seize opportunities to win more business from regional shipping companies.

(4) Gas Station Business

The company will actively develop its self-service filling station business while working on cross-industry alliances.

1.3 Future Development Strategy

In recent years, the momentum for global economic growth has been slowing. The imbalance between supply and demand has led to the weakening of ocean freight rates. As shipping companies lower rates, there is pressure on inland container transportation and container depot services. The gradual recovery of international oil prices adds to the increase in operational costs. Therefore, the company continually improves operational procedures and promotes risk monitoring and management measures in order to lower operational costs. At the same time, we are actively improving service quality to develop new business in an effort to pursue revenue stability and growth.

In terms of future development strategy, the company will continue improving its competitive advantage, strengthening training, raising employees’ professional capabilities and service quality, using new and safer machinery and equipment, expanding business with high-quality services, and using assets to the best effect.

Going forward, the company will seize the opportunity offered by the global economic recovery and expand business, strengthen corporate governance, operational management, and risk management capabilities, while carrying out corporate social responsibility, with the goal of achieving sustainable development.

1.4 Effects of External Competitive Environment, Laws and Macroenvironment

External Competitive Environment
(1) As container port operators actively try to increase “blue way” business through greater port usage, inland container depot and transportation businesses feel a tremendous impact.
(2) The growth in ship size and the slowdown of the Mainland Chinese economy has led to excess capacity of carriers and a slide in ocean freight rates. Because of operational costs,

downstream container depot and transportation businesses face pressure to reduce rates.

(3) The inauguration of the Airport MRT line puts significant pressure on the company’s national highway bus services.
Laws
(1) As the trend of economic globalization continues, countries around the world try to strengthen their competitiveness by speeding up the processes of trade liberalization and internationalization. The slow pace with which Taiwan proceeds with its free trade agreements (FTAs) will have the effect of dampening Taiwanese companies’ ability to compete internationally in external trade.
(2) In compliance with the new requirements by the International Convention for the Safety of Life at Sea (SOLAS), shipping companies demand that shippers provide Container Weight Verification Requirement (VGM) to ensure the precise gross weight of containers, in order to facilitate slot arrangements and ensure vessel stability and personnel safety. The company complies with the requirement and offers shippers convenience by providing on-site weighing services.
(3) The enactment of the revised Labor Standards Act will increase personnel costs for businesses. Some occupations, such as coach and truck drivers, will have an increased demand for personnel.
(4) Following a fire involving a tour bus carrying Mainland Chinese visitors, the Ministry of Transportation and Communications’ Vehicle Safety Certification Center revised inspections of large passenger vehicles and tightened safety testing criteria for newly manufactured large passenger vehicles.
Macroenvironment
(1) Due to the slowdown in the growth of the European and US economies, the slump in demand from Mainland China and other emerging markets, and the significant increase in the number of new container vessels, the global shipping industry has faced operational difficulties over the last two years. According to a report by international shipping research institute Alphaliner, the slot supply and demand gap in 2017 went down from 3.2% to 1.8%. The narrowing of the gap provides important support for shipping rates. Although the global shipping industry has not completely solved the problem of oversupply, the industry raised operational efficiency through strategic alliances between companies. Moreover, with the decrease in supply and demand gap, there is a bright outlook for the shipping market.
(2) Britain is the second-largest economy of the EU. Brexit has the direct consequence of reducing political and economic strength and increasing uncertainty for bilateral free movement of trade and personnel. Brexit could cause a decline in the economic growth of the EU and negatively affect Taiwan’s economic relations with the EU.
(3) The new US President Donald Trump announced the US’ withdrawal from the Trans-Pacific Partnership (TPP) immediately after his inauguration. The move boosted US trade

protectionism and might lead to a global spread of trade protectionism and thus hinder global trade and economic growth.

This year, all major research institutes have forecasted better economic growth rates globally and for Taiwan. Although the new US government’s trade and economic policies, anti-establishment trend in European politics, and debt crisis in emerging markets all exert a negative influence on global economic performance, the company keeps its finger on the pulse of the market to adjust its strategies to meet new trends. We pursue steady growth while carrying out our social and environmental responsibilities, in order to realize our ideal of sustainable development.

Ⅱ. Company Profile

2.1 Date of Incorporation

Registration Date of the Company：October 5, 1973

2.2 Company History

Evergreen International Storage and Transport Corporation

Incorporated in 1973, Evergreen International Storage and Transport Corporation (the“Company”) was initially operated under the name of “Everglory Transport Corporation”. In July 1986, the Company was renamed as “Evergreen Transport Corportaion”. Shares of the Company have been traded on the Taiwan Stock Exchange since 1990. In September 2001, the Company was renamed again and is currently known as the “Evergreen International Storage and Transport Corporation”.

The Company merged with Evergreen Container Terminal Corporation (EGCT) and Uniglory Marine Corporation (UGMC) on March 31, 2002 and November 1, 2002, respectively, with the Company being the surviving entity. The mergers were conducted through exchange of 0.8 common share of EGCT and 1.15 common shares of UGMC for 1 common share of the Company. On March 3, 2003, the Company’s Board of Directors resolved to merge with Evervoyage Transportation Corporation (Evervoyage), a wholly-owned subsidiary of the Company, with Evervoyage being the dissolved company. The merger was conducted in accordance with Article 19 of the Business Mergers and Acquisitions Law and became effective on May 1, 2003.

The company is primarilly engaged in container trucking, operation of container distribution centers, ship chartering, operation of gasoline station and passenger transportation.

Gaining Enterprise S.A.

Incorporated in Panama on December 16, 1993 and is primarily engaged in ship trading, transportation and chartering, operation and investments of container yards, leases and investment of overseas container terminals and marine transportation related business.

Shun An Enterprise Corporation

Incorporated on November 10, 2008, and is primarily engaged in management consulting and employment agency.

Ⅲ. Corporate Governance Report

3.1 Organization

3.1.1 Organizational Chart

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HUMAN RESOURCES DEPT.
G ENERAL AFFAIRS DEPT.
OCCUPATIONAL SAFETY &
HEALTH DEPT.
FINANCE DEPT.
STOCKS DEPT.
COMPUTER DEPT.
PROJECT DEPT.
BUSINESS DEPT.
TRUCKING DEPT.
BUS DEPT.
MAINTENANCE DEPT.
GAS DEPT.
TAOYUAN CONTAINER
TERMINAL
SHICHIH CONTAINER
TERMINAL
TCG PORT CONTAINER
TERMINAL
TAICHUNG OFFICE
KAOHSIUNG OFFICE
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STOCKHOLDERS
MEETING
SUPERVISORS
BOARD OF
DIRECTORS
REMUNERATION
COMMITTEE
CHAIRMAN
AUDITING DEPT.
PRESIDENT
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3.2 Directors, Supervisors and Management Team

3.2.1 Directors and Supervisors

											As of April 30,2017	As of April 30,2017	As of April 30,2017	As of April 30,2017
Til		N	Gd
							Shareholding		Current		Spouse & Minor		Shareholding by
													Nominee
	Nationality /C f					Date Fi	when Elected		Shareholding		Shareholding
				Date	Term								Arrangement
te	ountry o Origin	ame	ener	Elected	(Years)	rst Elected
							Shares	%	Shares	%	Shares	%	Shares	%


Chairman	R.O.C.	Evergreen Marine Corp. (Taiwan) Ltd.	-	2014.06.12	3 Years	1984.12.07	424,061,830	39.74	424,061,830	39.74	-		0	0
	R.O.C.	Representative：Hung, Ping-Kun	Male	2016.03.25	1.2 Years	2016.03.25	0	0	0	0	0	0	0	0
Director	R.O.C.	Chang Yung-Fa Charity Foundation	-	2014.06.12	3 Years	2011.06.15	100,000	0.01	100,000	0.01	-		0	0
	R.O.C.	Representative：Ko, Lee-Ching	Female	2014.06.12	3 Years	1990.06.15	0	0	17,740	0	0	0	0	0
	R.O.C.	Representative：Wey, Maw-Jiunn	Male	2016.03.16	1.2 Years	2011.06.15	0	0	0	0	0	0	0	0
Director	R.O.C.	Evergreen Marine Corp. (Taiwan) Ltd.	-	2014.06.12	3 Years	1984.12.07	424,061,830	39.74	424,061,830	39.74	-		0	0
	R.O.C.	Representative：Chang, Kuo-Hua	Male	2016.03.25	1.2 Years	1980.10.07	0	0	19,390,231	1.82	11,012,833	1.03	0	0
	R.O.C.	Representative：Tai, Jiin-Chyuan	Male	2014.06.12	3 Years	2014.06.12	0	0	160,374	0.02	0	0	0	0
Independent Director	R.O.C.	Yu, Fang-Lai	Male	2014.06.12	3 Years	2014.06.12	0	0	0	0	0	0	0	0
	R.O.C.	Chang, Ching-Ho	Male	2014.06.12	3 Years	2014.06.12	0	0	0	0	0	0	0	0
	R.O.C.	Szu, Wen-Chang	Male	2014.06.12	3 Years	2014.06.12	0	0	0	0	0	0	0	0

											As of April 30,2017	As of April 30,2017	As of April 30,2017	As of April 30,2017
													Shareholding
							Shareholding		Current		Spouse & Minor		by
	Nationality					Date	When Elected		Shareholding		Shareholding		Nominee
Title	/Country of	Name	Gender	Date	Term	First							Arrangement
	Origin			Elected	(Years)	Elected
							Shares	%	Shares	%	Shares	%	Shares	%


Supervisor	R.O.C.	Evergreen International Corp.	-	2014.06.12	3 Years	1993.02.13	90,220,968	8.45	90,220,968	8.45	-		0	0
	R.O.C.	Representative：Wu, Kuang-Hui	Male	2014.06.12	3 Years	2010.12.01	0	0	128	0	0	0	0	0
	R.O.C.	Representative：Yeh, Jia-Chyuan	Male	2016.03.16	1.2 Years	2016.03.16	0	0	0	0	0	0	0	0

3.2.2 Remuneration for Directors , Supervisors, President, and Vice President

Remuneration for Directors

December 31, 2016 Unit: NT$ thousands

Titl	Name				Remu	neration				Ratio of Total	Ratio of Total	Relevant Remuner	Relevant Remuner	ation Rec	eived by Direct	ors Who are Also Employees	ors Who are Also Employees	ors Who are Also Employees	ors Who are Also Employees	Ratio of Total	Ratio of Total
						Rem	neration to			Remuneration										Compensation(A+
		Base Compensation		Sev	erance Pay	D	irectors	Allowances(D)		(A+ B+C+D) to Net		Salary, Bonuses,and		Sever	ance Pay(F)	Profit Sharing-Employee				B+C+D+E+F+G) to		Compensation id
			(A) All		(B)		(C)			Income(%)		Allowances(E)				Compensation(G) companies in				Net Income(%)		pa to Directors from an Invested
e		EITC	companies in the lidd	EITC	companies in the consolidated	EITC	companies in the consolidated	EITC	companies in the consolidated	EITC	companies in the consolidated	EITC	companies in the consolidated	EITC	companies in the consolidated	EI	TC	t conso fina	he lidated ncial	EITC	companies in the consolidated	Company Other than the Company’s Subsidiary
			consoate financial		financial		financial		financial		financial		financial		financial			state	ments		financial
			statements		statements		statements		statements		statements		statements		statements	Cash	Stock	Cash	Stock		statements

Chairman	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Hung,Ping-Kun(1)	6,032	6,032	15	15	4,600	4,600	246	246	1.3433	1.3433	2,889	2,889	344	344	3	0	3	0	1.7424	1.7424	36
Chairman	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Chen,Ching-Piao
Director	Chang Yung-Fa Charity Foundation Representative: Ko,Lee-Ching
Director	Chang Yung-Fa Charity Foundation Representative: Wey,Maw-Jiunn(3)
Director	Chang Yung-Fa Charity Foundation Representative: Chang,Kuo-Wei
Director	Chang Yung-Fa Charity Foundation Representative: Hsieh,Chih-Chien(4)
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Chang,Kuo-Hua(2)
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Loh,Yao-Fon
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Tai,Jiin-Chyuan
Independent Director	Yu, Fang-Lai
Independent Director	Chang, Ching-Ho
Independent Director	Szu, Wen-Chang

Note(1)：Mr. Hung, Ping-Kun was appointed by Evergreen Marine Corp. (Taiwan) Ltd.on March 25, 2016. Note(2)：Mr. Chang, Kuo-Hua was appointed by Evergreen Marine Corp. (Taiwan) Ltd.on March 25, 2016. Note(3)：Mr. Wey, Maw-Jiunn was appointed by Chang Yung-Fa Charity Foundation on March 16, 2016. Note(4)：Mr. Hsieh, Chih-Chien was terminated assignment by Chang Yung-Fa Charity Foundation on June 23, 2016.

Remuneration for Supervisors

								December 31, 2016 Unit: NT$thousands Ratio of Total Remuneration(A+B+C) to Net Income(%) Compensation paid to Supervisors from an Invested Company Other than the Company’s Subsidiary EITC Companies in the consolidated financial statements 0.1815 0.1815 -	December 31, 2016 Unit: NT$thousands Ratio of Total Remuneration(A+B+C) to Net Income(%) Compensation paid to Supervisors from an Invested Company Other than the Company’s Subsidiary EITC Companies in the consolidated financial statements 0.1815 0.1815 -	December 31, 2016 Unit: NT$thousands Ratio of Total Remuneration(A+B+C) to Net Income(%) Compensation paid to Supervisors from an Invested Company Other than the Company’s Subsidiary EITC Companies in the consolidated financial statements 0.1815 0.1815 -
				Remuneration				Ratio of Total
		Base Compensation		Remuneration to				Remuneration(A+B+C)		Compensation paid to
			(A)	Supervisors (B)		Allowances(C)		to Net Income(%)		Supervisors from an Invested
Title	Name
			Companies in		Companies in		Companies in		Companies in	Company Other than the

		EITC	the consolidated	EITC	the consolidated	EITC	the consolidated	EITC	the consolidated	Company’s Subsidiary
			financial		financial		financial		financial

			statements		statements		statements		statements
Supervisor	Evergreen International Corp. Representative: Wu, Kuang-Hui	0	0	1,400	1,400	72	72	0.1815	0.1815	-
Supervisor	Evergreen International Corp. Representative: Yeh, Jia-Chyuan (1)
Supervisor	Evergreen International Corp. Representative: Lin, Long-Hwa

Note(1)：Mr. Yeh, Jia-Chyuan was appointed by Evergreen International Corp.on March 16, 2016.

Remuneration of the President and Vice President

December 31, 2016 Unit: NT$ thousands


												Ratio of total
						Bonuses and		Profit Sharing-Employee
		Salary(A)		Severance Pay(B)								compensation(A+B+C
						Allowances (C)		Compensation(D)						Compensation paid
												+D)to	net income(%)
														to the President and

										Companies in				Vice President from
Title	Name									the consolidated			Companies in	an Invested
			Companies in		Companies in		Companies in	EITC
										financial			the	Company Other
		EITC	the consolidated	EITC	the consolidated	EITC	the consolidated			statements		EITC	consolidated	than the Company’s

			financial		financial		financial						financial	Subsidiary
			statements		statements		statements
								Cash	Stock	Cash	Stock		statements


President	Wey, Maw-Jiunn	10,042	10,042	1,195	1,195	706	706	47	0	47	0	1.4786	1.4786	24
Executive Vice President	Hwang, Jim-I
Executive Vice President	Chen, Cheng-Pang
Executive Vice President	Hsu, Ta-Chung

3.3 Implementation of Corporate Governance

3.3.1 Board of Directors

Mr. Chen, Ching-Piao and Mr. Loh,Yao-Fon (Representative of Evergreen Marine Corp. (Taiwan) Ltd.) was discharged on Mar 25,2016, Mr. Chang, Kuo-Wei (Representative of Chang Yung-Fa Charity Foundation ) was discharged on Mar 16,2016 and Mr. Hsieh,Chih-Chien (Representative of Chang Yung-Fa Charity Foundation ) was discharged on Jun 23,2016.
Mr. Hung, Ping-Kun and Mr. Chang, Kuo-Hua was appointed by Evergreen Marine Corp. (Taiwan) Ltd. on Mar 25,2016, and Mr. Wey, Maw-Jiunn was appointed by Chang Yung-Fa Charity Foundation on Mar 16,2016.
The Board Meetings were convened six (6) times(A) in 2016. The directors’ and supervisors’ attendance status are as follows:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) 【B/A】	Remarks
Chairman	Evergreen Marine Corp. (Taiwan) Ltd. Representative：Hung, Ping-Kun	6	0	100%	Appointed Should Attendance：6
Chairman	Evergreen Marine Corp. (Taiwan) Ltd. Representative：Chen, Ching-Piao	0	0	0%	Discharged Should Attendance：0
Director	Chang Yung-Fa Charity Foundation Representative：Ko, Lee-Ching	5	1	83.33%
Director	Chang Yung-Fa Charity Foundation Representative：Wey, Maw-Jiunn	6	0	100%	Appointed Should Attendance：6
Director	Chang Yung-Fa Charity Foundation Representative：Chang, Kuo-Wei	0	0	0%	Discharged Should Attendance：0
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative：Chang, Kuo-Hua	4	2	66.77%	Appointed Should Attendance：6
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative：Loh, Yao-Fon	0	0	0%	Discharged Should Attendance：0
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative：Tai, Jiin-Chyuan	5	1	83.33%

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) 【B/A】	Remarks
Director	Chang Yung-Fa Charity Foundation Representative：Hsieh, Chih-Chien	2	0	100%	Discharged Should Attendance：2
Independent Director	Yu, Fang-Lai	5	1	83.33%
Independent Director	Chang, Ching-Ho	6	0	100%
Independent Director	Szu, Wen-Chang	6	0	100%
Supervisor	Evergreen International Corp. Representative：Wu, Kuang-Hui	6	0	100%
Supervisor	Evergreen International Corp. Representative：Yeh, Jia-Chyuan	6	0	100%	Appointed Should Attendance：6
Supervisor	Evergreen International Corp. Representative：Lin, Long-Hwa	0	0	0%	Discharged Should Attendance：0

3.3.2 Attendance of Supervisors at Board Meetings

Mr. Lin, Long-Hwa (Representative Evergreen International Corp.) was discharged on Mar 16,2016 and Mr. Yeh, Jia-Chyuan was appointed by Evergreen International Corp. on Mar 16,2016.
The Board Meetings were convened six (6) times(A) in 2016. The supervisors’ attendance status are as follows:

Title	Name	Attendance in Person(B)	Attendance Rate (%) 【B/A】	Remarks
Supervisor	Evergreen International Corp. Representative：Wu, Kuang-Hui	6	100%
Supervisor	Evergreen International Corp. Representative：Yeh, Jia-Chyuan	6	100%	Appointed Should Attendance：6
Supervisor	Evergreen International Corp. Representative：Lin, Long-Hwa	0	0%	Discharged Should Attendance：0

The Supervisors understand the finance and business status of the Company by communicating with the internal auditors and the independent accountants. The internal auditors have submitted the audit reports to the supervisors periodically, and the Company’s independent accountants have presented the financial report and audit status to the supervisors periodically.

3.3.3 Attendance of Members at Remuneration Committee Meetings

(1) The Remuneration Committee was established in 2011 and consists of three (3) members.
(2) The duties of the Remuneration Committee are as follows:
A. Establish and periodically review the performance evaluation and remuneration policy, system, standards, and structure for directors, supervisors, and managerial officers.
B. Periodically evaluate and establish the remuneration of directors, supervisors, and managerial officers.
(3) The Meeting of the Remuneration Committee was convened three (3) times(A) in 2016. The members’ attendance status are as follows:

Title				Attendance Rate (%) 【B/A】
	Name	Attendance i	By Proxy
		n Person(B)
Convener	Szu, Wen-Chang	3	0	100%
Member	Yu, Fang-Lai	3	0	100%
Member	Chang, Ching-Ho	3	0	100%

3.3.4 Internal Control System Exercution Status

Evergreen International Storage & Transport Corporation

Internal Control Statement

Date: Mar. 28, 2017

The Company states the following with regard to its internal control system during the period from 01 Jan. 2016 to 31 Dec. 2016, based on the findings of a self-assessment：

The Company is fully aware that establishing, operating, and maintaining an internal control system are the responsibility of its Board of Directors and management. The Company has established such a system aimed at providing reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations (including profits, performance, and safeguard of asset security), reliability, timeliness, transparency of reporting, and compliance with applicable laws and regulations.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing the three goals mentioned above. Furthermore, the effectiveness of an internal control system may change along with changes in environment or circumstances. The internal control system of the Company contains self-monitoring mechanisms, however, and the Company takes corrective actions as soon as a deficiency is identified.
The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies promulgated by the Securities and Futures Commission, Ministry of Finance (hereinbelow, the “Regulations”). The internal control system judgment criteria adopted by the Regulations divide internal control into five elements based on the process of management control: 1. control environment 2. risk assessment 3. control activities 4. information and communications 5. monitoring. Each element further contains several items. Please refer to the Regulations for details.
The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
Based on the findings of the assessment mentioned in the preceding paragraph, the Company believes that during the stated time period its internal control system (including its supervision of subsidiaries), encompassing internal controls for knowledge of the degree of achievement of operational effectiveness and efficiency objectives, reliability, timeliness, transparency of reporting, and compliance with applicable laws and regulations, was effectively designed and operating, and reasonably assured the achievement of the above-stated objectives.

This Statement will become a major part of the content of the Company’s Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
This statement has been passed by the Board of Directors Meeting of the Company held on 28 Mar. 2017, where zero of the eight attending directors expressed dissenting opinions, and the remainder all affirmed the content of this Statement.

Evergreen International Storage & Transport Corporation

Chairman: Hung, Ping-Kun

President: Wey, Maw-Jiunn

Ⅳ.Capital Overview

4.1 Capital and Shares

4.1.1 Source of Capital

As of April 30, 2017


		Authorized Capital		Paid-in Capital
	Par Value
Month／Year
	(NT$)
		Shares	Amount	Shares	Amount


03／2002	10	530,000,000	5,300,000,000	521,892,613	5,218,926,130
11／2002	10	1,100,000,000	11,000,000,000	1,067,141,094	10,671,410,940
2003～04／2017	-	1,100,000,000	11,000,000,000	1,067,141,094	10,671,410,940

4.1.2 Status of Shareholders

					As of April 30,2017	As of April 30,2017
					Foreign
			Other	Domestic
	Government	Financial			Institutions &
Item			Juridical	Natural		Total
	Agencies	Institutions			Natural
			Persons	Persons
					Persons

Number of Shareholders	3	4	65	46,631	123	46,826
Shareholding (shares)	830,225	13,289,154	535,247,773	465,356,828	52,417,114	1,067,141,094
Percentage	0.08	1.25	50.15	43.61	4.91	100.00

4.1.3 Shareholding Distribution Status

			As of April 30, 2017
Class of Shareholding
	Number of Shareholders	Shareholding(Shares)	Percentage
(Unit: Share)

1-999	15,555	4,232,109	0.40
1,000-5,000	21,201	49,978,936	4.68
5,001-10,000	4,909	40,255,877	3.77
10,001-15,000	1,301	16,614,334	1.56
15,001-20,000	1,208	22,778,805	2.13
20,001-30,000	845	22,032,861	2.06
30,001-50,000	717	29,482,966	2.76
50,001-100,000	590	43,110,686	4.04
100,001-200,000	261	37,660,626	3.53
200,001-400,000	130	36,398,775	3.41
400,001-600,000	38	18,205,986	1.71
600,001-800,000	21	15,001,571	1.41
800,001-1,000,000	8	7,147,316	0.67
1,000,001 or over	42	720,240,246	67.87
Total	46,826	1,067,141,094	100.00

4.1.4 Market Price, Net Worth, Earnings, and Dividends per Share

Unit: NT$

	Year	Year			2017
			2015	2016
Item					(As of April 30,2017)

Market Price per Share	Highest		20.00	14.20	16.05
	Lowest		11.50	12.30	12.80
	Average		16.24	13.15	14.75
Net Worth per Share	Before Distribution		20.03	20.32	-
	After Distribution		19.68	-	-
Earnings per Share	Weighted Average Shares (thousand shares)		1,067,141	1,067,141	1,067,141
	Earnings per Share		0.79	0.76	-
Dividends per Share	Cash Dividends		0.35	0.35	-
	Stock Dividends	Dividends from Retained Earnings	-	-	-
		Dividends from Capital Surplus	-	-	-
	Accumulated Undistributed Dividends		-	-	-
Return on Investment	Price/Earnings Ratio (Note 1)		19.71	17.17	-
	Price/Dividend Ratio (Note 2)		44.49	37.29	-
	Cash Dividend Yield Rate (Note 3)		2.25%	2.68%	-

Notes 1：Price/Earnings Ratio = Average Market Price/Earnings per Share Notes 2：Price/Dividend Ratio = Average Market Price /Cash Dividend per Share Notes 3：Cash Dividend Yield Rate = Cash Dividend per Share/ Average Market Price

4.1.5 Dividend Policy and Implementation Status

Dividend Policy:

Any profit made by the Company for each fiscal year shall, after deduction of tax, be applied first towards making up any losses incurred by the Company in previous years, secondly 10% of the balance thereof shall be retained as the legal reserve, and set aside the special reserve in compliance with regulations, together with the accumulated unallocated profit of the previous period, shall be allocated pursuant to the proposal made by the Board of Directors and adopted by the Shareholders at their meeting.

Stockholders’ dividends shall be distributed in cash dividends and stock dividends, with the cash dividend at least 10% of the total amount of distribution.

Dividend Distribution in Current Year:

The board adopted a proposal for 2016 dividend distribution at its meeting on March 28, 2017 that cash dividends will be distributed to shareholders for NT$0.35/per share, total amount of distribution is about NT$373.50 million.

The Description of Expected Dividend Policy will be Changed Significantly:Nil

’ ’ 4.1.6 Employee Compensation、Directors and Supervisors Remuneration

Range or percentage of employee compensation、 directors’ and supervisors’ remuneration :

According to the Articles of Incorporation of the Company,a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 5% for directors’ and supervisors’ remuneration.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated on the basis of the Company’s Articles of Incorporation and consideration of legal reserve with distributable profit of current year for the year ended December 31, 2016. The employees’compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $15,000 and $6,000, and the employees’ compensation will be distributed in the form of cash.

Employees’ compensation and directors’ and supervisors’ remuneration of 2015 as resolved by the meeting of Board of Directors’ were in agreement with those amounts recognized in the 2015 financial statements.

The estimated employee compensation 、directors’ and supervisors’ remuneration for 2016:

Unit: NT$ thousands

Item	Estimated in 2016	Resolution of The Board of Directors’ meeting (As of March 28,2017)
Employee Compensation(Cash)	15,000	15,000
Remuneration of The Directors and Supervisors(Cash)	6,000	6,000

The actual employee compensation and directors’ and supervisors’ remuneration for 2015:

Unit: NT$ thousands

Item	The amount of actual distribution	The amount of recognition	Difference	Difference Causes and Process
Employee Compensation(Cash)	15,000	15,000	-	Nil
Remuneration of The Directors and Supervisors(Cash)	6,000	6,000	-	Nil

4.1.7 Status of Stock Repurchased by EITC : N/A

Ⅴ. Operational Highlights

5.1 Business Activities

The company is engaged in the following activities:
(1) Evergreen International Storage and Transport Corporation
- (a) Gasoline Stations
- (b) Highway Bus Transportation
- (c) Urban Automobile Transportation
- (d) Passenger Car Rental and Leasing
- (e) Sightseeing Bus Transportation
- (f) Automobile Container Transport
- (g) Ship Transportation
- (h) Shipping Agency Services
- (i) Container Distributing Center Business
- (j) Harbor Cargoes Forwarding Services
- (k) All business items that are not prohibited or restricted by law, except those that are subject to special approval
(2) Gaining Enterprise S.A.
- (a) Ship Trading, Transportation and Chartering
- (b) Operation and Investments of Container Yards
- (c) Leases and Investment of Overseas Container Terminals
- (d) Marine Transportation Related Business
(3) Shun An Enterprise Corporation
- (a) Management Consulting
- (b) Employment Agency

2. The proportion of EITC’s consolidated revenue situation:

Unit: NT$ thousands


		The Proportion of
The Main Commodities	2016
		Revenues(%)


Ship Chartering	1,908,199	25.54
Inland Transportation	1,443,139	19.31
Rental Containers	1,359,498	18.19
Container Yard Service	1,281,355	17.15
Gas Station Sale	477,799	6.39
Passenger Transportation	405,256	5.42
Others	596,851	8.00
Total	7,472,097	100.00

3. Plans to Develop New products (Services):

The Group operates in many different sectors, including ship chartering, container leasing, passenger transportation, inland transportation, wharf, container depot, warehouse, petrol station and vehicle inspection business. The Group will keep monitoring global economic growth, market trends and adjust business strategy and policy accordingly. The Group will keep taking into account corporate social responsibility, reduce the impact of the operation of the environment and actively into the social welfare. The Group has been committing to develop new businesses and revitalise land assets. The Group has been planning its Dayuan land asset, to develop a logistics industrial park for D.C. business, which will expand the group’s business scope and further increase the group’s revenue.

5.2 Human Resources


				2017
	Year	2016	2015
				(As of April 30, 2017)


Number of Employees	Staff	290	278	288
	Labor	758	757	767
	Seafarer	309	318	307
	Total	1,357	1,353	1,362
Average Age		43.00	42.90	43.10
Average Years of Service		15.80	14.10	15.80
Education	Ph.D.	0%	0%	0%
	Masters	1.55%	1.26%	1.40%
	Bachelor’s Degree	47.68%	46.26%	48.67%
	Senior High School	40.53%	40.95%	39.87%
	Below Senior High School	10.24%	11.53%	10.06%

Ⅵ. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheet

－ 1.Consolidated Condensed Balance Sheet Based on IFRS

Unit: NT$ thousands

Year	Year
		Financial Summary for The			Last Five Years
							2017

Item		2012	2013	2014	2015	2016	(As of Mar. 31, 2017)

Current assets		5,286,017	5,569,837	5,204,483	4,831,723	4,883,682	4,711,515
Property, plant and equipment		15,229,803	15,197,647	23,465,908	25,936,258	25,425,140	24,679,388
Intangible assets		1,878	1,966	3,258	4,045	3,291	2,873
Other assets		2,856,598	3,268,280	3,428,868	3,310,075	3,488,629	3,318,374
Total assets		23,374,296	24,037,730	32,102,517	34,082,101	33,800,742	32,712,150
Current liabilities	Before distribution	640,693	565,367	1,176,034	1,911,824	2,380,308	2,329,333
	After distribution	963,671	890,176	1,555,425	2,286,028	-	-
Non-current liabilities		3,330,667	3,675,882	9,750,657	10,654,488	9,592,754	8,895,097
Total liabilities	Before distribution	3,971,360	4,241,249	10,926,691	12,566,312	11,973,062	11,224,430
	After distribution	4,294,338	4,566,058	11,306,082	12,940,516	-	-
Equity attributable to owners of theparent		19,259,532	19,625,769	21,000,419	21,372,025	21,686,191	21,346,264
Capital stock		10,671,411	10,671,411	10,671,411	10,671,411	10,671,411	10,671,411
Capital surplus		4,262,917	4,262,917	4,263,504	4,264,163	4,264,590	4,264,713
Retained earnings	Before distribution	4,323,356	4,304,802	4,720,339	5,161,954	5,655,600	5,831,629
	After distribution	4,003,214	3,984,660	4,346,840	4,788,455	-	-
Other equity interest		1,848	386,639	1,345,165	1,274,497	1,094,590	578,511
Non-controlling interest		143,404	170,712	175,407	143,764	141,489	141,456
Tl i	Before distribution	19,402,936	19,796,481	21,175,826	21,515,789	21,827,680	21,487,720
ota equty	After distribution	19,079,958	19,471,672	20,796,435	21,141,585	-	-

－ 2.Consolidated Condensed Balance Sheet Based on ROC GAAP

Unit: NT$ thousands

Year	Year	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
Item
		2012	2013	2014	2015	2016
Current assets		5,287,320	N/A
Funds and investments		1,772,086
Property, plant and equipment		15,982,686
Intangible assets		329,069
Other assets		136,561
Total assets		23,507,722
Current liabilities	Before distribution	616,446
	After distribution	936,588
Long-term liabilities		87
Other liabilities		2,909,334
Total liabilities	Before distribution	3,525,867
	After distribution	3,846,009
Capital stock		10,671,411
Capital surplus		4,263,052
Retained earnings	Before distribution	5,692,576
	After distribution	5,372,434
Unrealized gain or loss on financial instruments		345,179
Cumulative translation adjustments		(796,766)
Net loss not recognized as pension cost		(333,739)
Minority interest		140,142
Total khld’	Before distribution	19,981,855
stocoers equity	After distribution	19,661,713

6.1.2 Condensed Statement of Comprehensive Income/Condensed Statement of

Income

－ 1.Consolidated Condensed Statement of Comprehensive Income Based on IFRS

Unit: NT$ thousands

Year
	Financial Summary for The			Last Five Years
						2017


Item	2012	2013	2014	2015	2016	(As of Mar. 31, 2017)


Operating revenue	6,104,487	6,113,325	6,730,457	7,348,665	7,472,097	1,870,442
Gross profit	805,641	789,031	966,901	1,243,691	1,270,952	297,539
Operating profit	533,227	517,407	686,563	961,434	1,016,017	240,872
Non-operating income and expenses	119,841	158,274	191,946	78,252	(3,378)	(28,586)
Profit before income tax	653,068	675,681	878,509	1,039,686	1,012,639	212,286
Profit for the year from continuingoperations	593,666	581,298	674,798	843,287	809,015	176,280
Profit for the period	593,666	581,298	674,798	843,287	809,015	176,280
Other comprehensive income	(562,093)	105,809	1,025,968	(99,320)	(123,347)	(516,363)
Total comprehensive income for theyear	31,573	687,107	1,700,766	743,967	685,668	(340,083)
Profit, attributable to owners of theparent	590,802	580,653	668,344	843,743	810,884	176,029
Profit, attributable to non-controllinginterest	2,864	645	6,454	(456)	(1,869)	251
Comprehensive income attributable to owners of the parent	28,773	686,517	1,694,205	744,446	687,238	(340,050)
Comprehensive income attributable to non-controlling interest	2,800	590	6,561	(479)	(1,570)	(33)
Earnings per share (in dollars)	0.55	0.54	0.63	0.79	0.76	0.16

－ 2.Consolidated Condensed Statement of Income Based on ROC GAAP

Unit: NT$ thousands

Year	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
Item

	2012	2013	2014	2015	2016
Operating revenue	6,104,487	N/A
Gross profit	759,142
Operating profit	483,661
Non-operating income and gains	118,776
Non-operating expenses and losses	1,384
Income from continuing operations before income tax	601,053
From continuing operation net income	514,076
Net income	514,076
Earnings per share (in dollars)	0.48

6.2 Five-Year Financial Analysis

－ 1.Consolidated Financial Analysis Based on IFRS

	Year						2017
		Financial Analysis for The Last Five Years
Item							(As of Mar.

		2012	2013	2014	2015	2016	31,2017)
Financial structure (％)	Debt Ratio	16.99	17.64	34.04	36.87	35.42	34.31
	Ratio of long-term capital to property, plant and equipment	149.27	154.45	131.79	124.04	123.58	123.11
Solvency (％)	Current ratio	825.05	985.17	442.55	252.73	205.17	202.27
	Quick ratio	812.23	970.54	435.52	247.95	202.21	199.20
	Interest earned ratio(times)	1,309.75	689.07	27.90	9.46	7.33	5.51
Operating performance	Accounts receivable turnover(times)	12.15	13.33	13.13	11.01	8.38	1.80
	Average collection period	30	27	28	33	44	50
	Inventory turnover(times)	-	-	-	-	-	-
	Accounts payable turnover(times)	19.09	17.49	17.37	17.63	16.56	4.18
	Average days in sales	-	-	-	-	-	-
	Property, Plant and equipment turnover(times)	0.39	0.40	0.35	0.30	0.29	0.07
	Total assets turnover(times)	0.26	0.26	0.24	0.22	0.22	0.06
Profitablilty	Return on total assets(％)	2.54	2.46	2.50	2.86	2.77	0.65
	Return on stockholders’ equity(％)	3.04	2.97	3.29	3.95	3.73	0.81
	Pre-tax income to paid-in capital(％)	6.12	6.33	8.23	9.74	9.49	1.99
	Profit ratio(％)	9.73	9.51	10.03	11.48	10.83	9.42
	Earnings per share(NT$)	0.55	0.54	0.63	0.79	0.76	0.16
Cash flow	Cash flow ratio(％)	184.32	206.48	136.51	115.39	96.84	26.50
	Cash flow adequacy ratio(％)	185.60	157.08	37.34	42.26	51.58	-
	Cash reinvestment ratio(％)	2.66	2.51	3.01	3.99	4.15	1.36
L	Operating leverage	2.22	2.38	2.60	2.73	2.80	2.94
everage	Financial leverage	1.00	1.00	1.05	1.15	1.19	1.24

－ 2.Consolidated Financial Analysis Based on ROC GAAP

	Year	Year
			Financial Analysis for The Last Five Years
Item

			2012	2013	2014	2015	2016

Financial structure (％)	Debt Ratio		15.00	N/A
	Ratio of long-term capital to fixed assets		125.02
Solvency (％)	Current ratio		857.71
	Quick ratio		844.18
	Interest earned ratio(times)		1,207.93
Operating performance	Accounts receivable turnover(times)		12.15
	Average collection period		30
	Inventory turnover(times)		-
	Accounts payable turnover(times)		19.25
	Average days in sales		-
	Fixed assets turnover(times)		0.37
	Total assets turnover(times)		0.26
Profitablilty	Return on total assets(％)		2.19
	Return on stockholders’ equity(％)		2.55
	Ratio to Issued capital(％)	Operating income	4.53
		Pre-tax income	5.63
	Profit ratio(％)		8.42
	Earnings per share(NT$)		0.48
Cash flow	Cash flow ratio(％)		205.03
	Cash flow adequacy ratio(％)		202.95
	Cash reinvestment ratio(％)		2.86
	Operating leverage		2.34
Leverage	Financial leverage		1.00

6.3 Supervisors’ Report

To: 2017 Annual General Meeting

EVERGREEN INTERNATIONAL STORAGE & TRANSPORT CORPORATION (EITC)

The Board of Directors has prepared and submitted to the supervisors the Company’s 2016 Business Report, Financial Statements, and Profit Allocation Proposal of the year ended December 31, 2016. The CPA firm of PricewaterhouseCoopers, Taiwan, was retained to audit EITC’s Financial Statements and has issued an Independent Auditors’ Report relating to the Financial Statements. In accordance with Article 219 of the Company Law, the undersigned hereby certifies the Business Report, Financial Statements, and Profit Allocation Proposal of the year ended December 31, 2016 have been examined and approved by the undersigned.

Supervisor： Wu, Kuang-Hui

Yeh, Jia-Chyuan

Date： March 29, 2017

6.4. Consolidated Financial Statements for the Years Ended December 31,2016 and 2015, and Independent Auditors’ Report

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Evergreen International Storage and Transport Corporation

Opinion

We have audited the accompanying consolidated balance sheets of Evergreen International Storage and Transport Corporation and its subsidiaries (the “Group”) as at December 31, 2016 and 2015, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2016 and 2015, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

Accuracy of transportation and container yard service revenue

Description

Please refer to Note 4(27) for accounting policies on operating revenue, and Note 6(16) for details of operating revenue.

The Group is primarily engaged in land container transport, cargo handling, ship and cargo container lease, operation of gasoline station, highway bus and tourist bus carrier. For the year ended December 31, 2016, the total revenue of container transport and container yard service was NT$2,724,650 thousand, constituting 36.46% of operating revenue in 2016 and were the main source of income. Transportation and container yard service revenue were recognised in the accounting periods in which the services are rendered, the revenue recognition were based on the relevant information (cargo specification, numbers, transportation starting point and destination and cargo handling service types) that were recorded by front service employees and charged for different services by system.

Due to the high numbers of transactions, the services fees of transported or handled containers were different with specification, numbers and the distance between starting point and destination, and the trading amount were small. The information process, recording and maintenance of relevant business statement were done partly manually, and may lead to inaccurate calculation of transport and container yard service revenue. As a result, more audit staff were required to perform the procedures. Also, the amount of revenue was material to the financial statements, thus we consider the accuracy of transportation and container yard service revenue a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. Based on our understanding of the Group’s business and industry, we assessed the reasonableness of revenue recognition policies and procedures and confirmed that these were consistently applied in the financial statements;
B. We obtained an understanding of the transportation process, and assessed and tested relevant internal controls, including the information of container specification, numbers and transportation starting point and destination in handover statement which was recorded by drivers, agreed with the information in the computer system and operating statement;

C. We understood the process of container yard service, and assessed and tested relevant internal controls, including the information of container specification, numbers and cargo handling service types in the statement which was prepared by the Group personnel, were consistent with customers’ shipping accounts; and
D. We verified the accuracy of operating statement which was used in revenue recognition by management, including randomly checking the charge fees in the operating statement and work content against with charges of services types, daily transportation statement and cargo handling statement generated by the computer system, to recalculate the accuracy and ascertained that these were consistent with the carrying amount of revenue.

Valuation of property, plant and equipment impairment

Description

Please refer to Note 4(14) for accounting policies on property, plant and equipment, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on property, plant and equipment impairment valuation, and Note 6(6) for details of property, plant and equipment.

As of December 31, 2016, the amount of ships and transportation equipment held by the Group for ship and container lease business was NT$16,466,242 thousand and recognised as property, plant and equipment, constituting 48.72% of consolidated total assets. Management assessed whether the property, plant and equipment were impaired using the recoverable amount of the cash generating unit. The assumptions used in determining the recoverable amount estimate was subjected to management’s judgment and involves a high degree of uncertainty, and included discount rate, expected growth rate of operating revenue, gross profit ratio, operating profit ratio, capital expenditure. As the assessed results of recoverable amount were material to the financial statements, thus we consider the valuation of property, plant and equipment impairment a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. We understood and assessed policies, internal controls and processes that were related with asset impairment valuation;
B. We interviewed management on the impairment valuation report, and assessed the discount rate and the reasonableness of operating revenue, gross profit ratio, operating profit ratio, growth rate and capital expenditure that were used in the estimation of future cash flow, including review of the basic information of such assumptions. Also, we ascertained that the documents had been approved by appropriate management, reviewed the actual execution of management’s past operating plan, and compared with industry forecast to assess the intention and ability; and
C. We checked the inputted value of valuation model, the setting of formulation, and recalculated the accuracy of valuation model calculation result.

Fair value measurement of investment in unlisted stock without active market

Description

Please refer to Note 4(7) for accounting policies on available-for-sale financial assets, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on financial assets- fair value measurement of investment in unlisted stock without active market, Note 6(2) for details of available-for-sale financial assets, and Note 12(3) for fair value information of financial instruments.

As of December 31,2016, the Group held unlisted stock without active market which was recognised as available-for-sale financial assets in the amount of NT$513,897 thousand, and recognised other comprehensive income for fair value change on the measurement date. Management measured the fair value using market method, the valuation process included the choice of measurement method, references to market value information of comparable company in valuation model, consideration of market liquidity and discount of specific risk.

As the estimate of fair value of unlisted stock without active market was subjected to management’s judgment, and involved many assumptions, such as the choice of valuation model and parameters setting, any changes in judgments and estimates would effect the final result of accounting estimates and thus contains uncertainty. We consider financial assets- fair value measurement of investment in unlisted stock without active market a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

A. We understood and assessed relevant policies and valuation process on the fair value measurement and disclosure of unlisted stock without active market;
B. We assessed whether management adopted an adequate measurement method and valuation model which were commonly adopted in the same industry; and
C. We assessed the reasonableness of assumptions on comparable company and parameters setting, including the relevance and reliability of business nature and financial information between comparable company and the company being valued, and reviewed relevant basic data and corroborating documents.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Evergreen International Storage and Transport Corporation as at and for the years ended December 31, 2016 and 2015.

Responsibilities of management and those charged with governance for the

consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including supervisors, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 ROC GAAS 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 consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated 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.
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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group 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 consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Lai, Chung-Hsi Chih, Ping-Chiun

For and on behalf of PricewaterhouseCoopers, Taiwan March 28, 2017

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2016 AMOUNT % $ 2,885,889 8 862,593 3 17,241 - 214,087 1 814,929 2 18,394 - 33,712 - 28,023 - 8,814 - 4,883,682 14 1,238,413 4 3,299 - 1,020,304 3 25,425,140 75 720,048 2 3,291 - 179,842 1 326,723 1 28,917,060 86 $ 33,800,742 100	December 31, 2015	December 31, 2015
	AMOUNT $ 2,885,889 862,593 17,241 214,087 814,929 18,394 33,712 28,023 8,814 4,883,682 1,238,413 3,299 1,020,304 25,425,140 720,048 3,291 179,842 326,723 28,917,060 $ 33,800,742	AMOUNT $ 2,892,709 1,079,861 11,990 188,619 536,967 30,130 35,294 31,697 24,456 4,831,723 1,065,870 3,674 1,074,774 25,936,258 723,236 4,045 201,163 241,358 29,250,378 $ 34,082,101	%
Current assets Cash and cash equivalents Available-for-sale financial assets - current Notes receivable, net Accounts receivable, net Accounts receivable, net - related parties Other receivables Inventories Prepayments Other current assets Total Current Assets Non-current assets Available-for-sale financial assets - non- current Financial assets carried at cost - non- current Investments accounted for using equity method Property, plant and equipment, net Investment property, net Intangible assets Deferred income tax assets Other non-current assets Total Non-current Assets TOTAL ASSETS			8 3 - 1 2 - - - -
			14
			3 - 3 76 2 - 1 1
			86
			100

(Continued)

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2016 AMOUNT % $ 12,650 - 349,408 1 28,151 - 195,448 1 359,766 1 78,064 - 1,296,155 4 60,666 - 2,380,308 7 6,016,587 18 2,111,187 6 1,464,980 4 9,592,754 28 11,973,062 35 10,671,411 31 4,264,590 13 1,951,837 6 3,703,763 11 1,094,590 3 21,686,191 64 141,489 1 21,827,680 65 $ 33,800,742 100	December 31, 2015	December 31, 2015
	AMOUNT $ 12,650 349,408 28,151 195,448 359,766 78,064 1,296,155 60,666 2,380,308 6,016,587 2,111,187 1,464,980 9,592,754 11,973,062 10,671,411 4,264,590 1,951,837 3,703,763 1,094,590 21,686,191 141,489 21,827,680 $ 33,800,742	AMOUNT $ 25,318 305,817 27,660 256,253 21,321 77,390 1,156,847 41,218 1,911,824 6,981,080 2,032,327 1,641,081 10,654,488 12,566,312 10,671,411 4,264,163 1,867,463 3,294,491 1,274,497 21,372,025 143,764 21,515,789 $ 34,082,101	%
Current liabilities Notes payable Accounts payable Accounts payable - related parties Other payables Other payables - related parties Current income tax liabilities Long-term liabilities, current portion Other current liabilities, others Total Current Liabilities Non-current liabilities Long-term borrowings Deferred income tax liabilities Other non-current liabilities Total Non-current Liabilities TOTAL LIABILITIES Equity attributable to owners of the parent Capital stock Common stock Capital surplus Capital surplus Retained earnings Legal reserve Unappropriated retained earnings Other equity interest Other equity interest Equity attributable to owners of the parent Non-controlling interest Total equity Significant contingent liabilities and unrecognized contract commitments Significant events after the balance sheet date TOTAL LIABILITIES AND EQUITY			- 1 - 1 - - 4 -
			6
			20 6 5
			31
			37
			31 13 5 10 4
			63 -
			63
			100

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

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items	Years ended December 31 2016 2015 Notes AMOUNT % AMOUNT % 6(16) and 7 $ 7,472,097 100 $ 7,348,665 100 6(20) and 7 ( 6,201,145) ( 83)( 6,104,974) ( 83) 1,270,952 17 1,243,691 17 6(20) and 7 ( 254,935) ( 3)( 282,257) ( 4) 1,016,017 14 961,434 13 6(17) 167,628 2 165,244 2 6(18) ( 40,478) - 17,746 - 6(19) ( 160,011) ( 2) ( 122,918) ( 1) 6(5) 29,483 - 18,180 - ( 3,378) - 78,252 1 1,012,639 14 1,039,686 14 6(22) ( 203,624) ( 3)( 196,399) ( 3) $ 809,015 11 $ 843,287 11 6(15) $ 67,787 1 ($ 34,441) - ( 2) - ( 43) - 6(22) ( 11,524) - 5,855 - ( 190,801) ( 3) 369,867 5 15,546 - ( 455,895) ( 6) 6(22) ( 4,353) - 15,337 - ($ 123,347) ( 2)($ 99,320) ( 1) $ 685,668 9 $ 743,967 10 $ 810,884 11 $ 843,743 11 ( 1,869) - ( 456) - $ 809,015 11 $ 843,287 11 $ 687,238 9 $ 744,446 10 ( 1,570) - ( 479) - $ 685,668 9 $ 743,967 10 6(23) $ 0.76 $ 0.79 $ 0.76 $ 0.79
Operating revenue Operating costs Gross profit Operating expenses Operating profit Non-operating income and expenses Other income Other gains and losses Finance costs Share of profit of associates and joint ventures accounted for using equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year Other comprehensive income, net Items that will not be reclassified to profit or loss Remeasurement of defined benefit plan Share of other comprehensive loss of associates and joint ventures accounted for using equity method, items that will not be reclassified to profit or loss Income tax relating to the components of other comprehensive profit Items that will be reclassified to profit or loss Exchange differences arising on translation of foreign operations Unrealized gain (loss) on valuation of available-for-sale financial assets Income tax relating to the components of other comprehensive profit Total other comprehensive loss for the year, net Total comprehensive income for the year Profit (loss) attributable to: Owners of the parent Non-controlling interest Comprehensive income (loss) attributable to: Owners of the parent Non-controlling interest Earnings per share Basic earnings per share (in dollars) Diluted earnings per share (in dollars)

Items

Years ended December 31
2016
2015
Notes
AMOUNT
%
AMOUNT
%
6(16) and 7
$ 7,472,097
100
$ 7,348,665
100
6(20) and 7
(
6,201,145) (
83)(
6,104,974) (
83)
1,270,952
17
1,243,691
17
6(20) and 7
(
254,935) (
3)(
282,257) (
4)
1,016,017
14
961,434
13
6(17)
167,628
2
165,244
2
6(18)
(
40,478)
-
17,746
-
6(19)
(
160,011) (
2) (
122,918) (
1)
6(5)
29,483
-
18,180
-
(
3,378)
-
78,252
1
1,012,639
14
1,039,686
14
6(22)
(
203,624) (
3)(
196,399) (
3)
$ 809,015
11
$ 843,287
11
6(15)
$ 67,787
1 ($ 34,441)
-
(
2)
- (
43)
-
6(22)
(
11,524)
-
5,855
-
(
190,801) (
3)
369,867
5
15,546
- (
455,895) (
6)
6(22)
(
4,353)
-
15,337
-
($ 123,347) (
2)($ 99,320) (
1)
$ 685,668
9
$ 743,967
10
$ 810,884
11
$ 843,743
11
(
1,869)
- (
456)
-
$ 809,015
11
$ 843,287
11
$ 687,238
9
$ 744,446
10
(
1,570)
- (
479)
-
$ 685,668
9
$ 743,967
10
6(23)
$ 0.76
$ 0.79
$ 0.76
$ 0.79

Operating revenue
Operating costs
Gross profit
Operating expenses
Operating profit
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Share of profit of associates and joint
ventures accounted for using equity
method
Total non-operating income and
expenses
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income, net
Items that will not be reclassified to profit
or loss
Remeasurement of defined benefit plan
Share of other comprehensive loss of
associates and joint ventures accounted
for using equity method, items that will
not be reclassified to profit or loss
Income tax relating to the components of
other comprehensive profit
Items that will be reclassified to profit or
loss
Exchange differences arising on
translation of foreign operations
Unrealized gain (loss) on valuation of
available-for-sale financial assets
Income tax relating to the components of
other comprehensive profit
Total other comprehensive loss for the
year, net
Total comprehensive income for the year
Profit (loss) attributable to:
Owners of the parent
Non-controlling interest
Comprehensive income (loss) attributable
to:
Owners of the parent
Non-controlling interest
Earnings per share
Basic earnings per share (in dollars)
Diluted earnings per share (in
dollars)

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

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

Notes			Equity	attributable to owners	theparent	theparent		Non-controlling interest	Total equity
	Common stock	Capital surplus	Retaine	d Earnings	Other equityinterest		Total
			Legal reserve	Unappropriated retained earnings	Exchange differences arising on translation of foreign operations	Unrealized (loss) gain on valuation of available-for-sale financial assets
6(15) 6(15)	$ 10,671,411 - - - - - - $ 10,671,411 $ 10,671,411 - - - - - $10,671,411	$ 4,263,504 - - 659 - - - $ 4,264,163 $ 4,264,163 - - 427 - - $4,264,590	$ 1,800,628 66,835 - - - - - $ 1,867,463 $ 1,867,463 84,374 - - - - $1,951,837	$ 2,919,711 ( 66,835 ) ( 373,499 ) - 843,743 ( 28,629 ) - $ 3,294,491 $ 3,294,491 ( 84,374 ) ( 373,499 ) - 810,884 56,261 $ 3,703,763	$ 419,167 - - - - 369,890 - $ 789,057 $ 789,057 - - - - ( 191,100 ) $ 597,957	$ 925,998 - - - - ( 440,558 ) - $ 485,440 $ 485,440 - - - - 11,193 $ 496,633	$ 21,000,419 - ( 373,499 ) 659 843,743 ( 99,297 ) - $ 21,372,025 $ 21,372,025 - ( 373,499 ) 427 810,884 ( 123,646 ) $21,686,191	$ 175,407 - ( 5,892 ) - ( 456 ) ( 23 ) ( 25,272 ) $ 143,764 $ 143,764 - ( 705 ) - ( 1,869 ) 299 $ 141,489	$ 21,175,826 - ( 379,391 ) 659 843,287 ( 99,320 ) ( 25,272 ) $ 21,515,789 $ 21,515,789 - ( 374,204 ) 427 809,015 ( 123,347 ) $21,827,680

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

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation
Amortisation
Bad debt expense
Interest expense
Interest income
Dividend income
Share of profit of associates and joint ventures
accounted for using equity method
Loss on disposal of property, plant and equipment
Gain on disposal of investments
Gain on disposal of investments accounted for using
equity method
Impairment loss of financial assets
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable, net
Accounts receivable, net
Accounts receivable, net - related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities, others
Other non-current liabilities
Cash inflow generated from operations
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities

Years endedDecember31
Notes
2016
2015
$ 1,012,639
$ 1,039,686
6(20)
1,827,674
1,661,536
6(20)
2,290
2,240
6(4)
22
-
6(19)
159,792
122,631
6(17)
(
25,908 ) (
20,706 )
6(17)
(
106,711 ) (
99,096 )
6(5)
(
29,483 ) (
18,180 )
6(18)
12,068
17,182
6(18)
(
600 ) (
1,747 )
-
(
17,366 )
-
3,977
(
5,251 ) (
1,208 )
(
25,490 )
1,629
(
277,962 ) (
170,381 )
13,155
(
23,017 )
1,582
1,425
3,674
8,457
15,642
(
26,106 )
(
12,668 )
26,769
43,591
4,184
491
1,037
40,370
863
(
8,578 )
3,131
19,448
(
27,032 )
(
106,963) (
51,701)
2,552,824
2,438,207
24,490
21,138
(
153,608 ) (
115,263 )
(
118,734) (
138,070)
2,304,972
2,206,012

(Continued)

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets
Proceeds from disposal of available-for-sale financial
assets
Capital stock reduction of financial assets carried at cost
Disposal of investments accounted for using equity method
Disposal of a subsidiary
Disposal of a subsidiary, net of cash transferred out
Capital stock reduction of investment accounted for using
equity method
Acquisition of property, plant and equipment (including
prepayments for equipment)
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Acquisition of intangible assets
Increase in other non-current assets - other financial assets
Decrease in other non-current assets - other financial assets
Dividends received
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term borrowings
Repayment of long-term borrowings
Increase in guarantee deposits received
Decrease in guarantee deposits received
Dividends paid
Net cash flows (used in) from financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Years endedDecember31
Notes
2016
2015
($ 1,100,000 ) ($ 820,000 )
1,158,600
863,747
375
-

-
44,618
-
22,716
-
(
33,610 )
36,950
-
6(24)
(
1,459,883 ) (
3,603,776 )
14,047
9,777
(
100 )
-
(
1,536 ) (
3,027 )
-
(
1,180 )
485
-
143,137
134,453
(
1,207,925) (
3,386,282 )
493,808
1,753,069
(
1,177,019 ) (
520,331 )
-
1,374
(
1,351 )
-
6(14)
(
374,204 ) (
379,391 )
(
1,058,766)
854,721
(
45,101)
111,424
(
6,820 ) (
214,125 )
2,892,709
3,106,834
$ 2,885,889
$ 2,892,709

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

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

(1) Incorporated in 1973, Evergreen International Storage and Transport Corporation (the “Company”) was initially operated under the name of “Everglory Transport Corporation”. In July 1986, the Company was renamed as “Evergreen Transport Corporation”. Shares of the Company have been traded on the Taiwan Stock Exchange since 1990. In September 2001, the Company was renamed again and is currently known as “Evergreen International Storage and Transport Corporation”. The Company is principally engaged in container trucking, operation of container distribution centers, ship chartering, operation of gasoline station and passenger transportation.

The Company merged with Evergreen Container Terminal Corporation and Uniglory Marine Corporation on March 31, 2002 and November 1, 2002, respectively. On May 1, 2003, the Company merged with Evervoyage Transportation Corporation, a subsidiary of the Company, which was conducted in accordance with the Business Mergers and Acquisitions Law.

(2) Gaining Enterprise S.A. (GESA) was incorporated in Panama on December 16, 1993 and is primarily engaged in ship trading, transportation and chartering, operation and investments of container yards, leases and investments of overseas container terminals and marine transportation related business.
(3) Shun An Enterprise Corporation (SAEC) was initially incorporated on November 10, 2008, and is primarily engaged in management consulting and employment agency.
(4) The Company and its subsidiaries are collectively referred herein as the “Group”.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on March 28, 2017.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRSs”) as endorsed by the Financial Supervisory Commission (“FSC”)

None.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments issued by included in the 2017 version of IFRS as endorsed by the FSC:

the Group New standards, interpretations and amendments issued by included in endorsed by the FSC:	the 2017 version of IFRS a
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28) Accounting for acquisition of interests in joint operations (amendments to IFRS 11) IFRS 14,‘Regulatory deferral accounts’ Disclosure initiative (amendments to IAS 1) Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38) Agriculture: bearer plants (amendments to IAS 16 and IAS 41) Defined benefit plans: employee contributions (amendments to IAS 19R) Equity method in separate financial statements (amendments to IAS 27) Recoverable amount disclosures for non-financial assets (amendments to IAS 36) Novation of derivatives and continuation of hedge accounting (amendments to IAS 39) IFRIC 21, ‘Levies’ Improvements to IFRSs 2010-2012 Improvements to IFRSs 2011-2013 Improvements to IFRSs 2012-2014	January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2016 January 1, 2014 January 1, 2014 January 1, 2014 July 1, 2014 July 1, 2014 January 1, 2016

the Group
New standards, interpretations and amendments issued by included in
endorsed by the FSC:

the 2017 version of IFRS a

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Investment entities: applying the consolidation exception (amendments
to IFRS 10, IFRS 12 and IAS 28)
Accounting for acquisition of interests in joint operations
(amendments to IFRS 11)
IFRS 14,‘Regulatory deferral accounts’
Disclosure initiative (amendments to IAS 1)
Clarification of acceptable methods of depreciation and amortisation
(amendments to IAS 16 and IAS 38)
Agriculture: bearer plants (amendments to IAS 16 and IAS 41)
Defined benefit plans: employee contributions (amendments to IAS
19R)
Equity method in separate financial statements (amendments to IAS 27)
Recoverable amount disclosures for non-financial assets (amendments
to IAS 36)
Novation of derivatives and continuation of hedge accounting
(amendments to IAS 39)
IFRIC 21, ‘Levies’
Improvements to IFRSs 2010-2012
Improvements to IFRSs 2011-2013
Improvements to IFRSs 2012-2014

January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2016
January 1, 2014
January 1, 2014
January 1, 2014
July 1, 2014
July 1, 2014
January 1, 2016

The above standards and interpretations have no significant impact to the Group’s financial condition and operating result based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs endorsed by the FSC effective from 2017:

endorsed by the FSC effective from 2017:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Classification and measurement of share-based payment transactions (amendments to IFRS 2)	January 1, 2018

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Applying IFRS 9 ‘Financial instruments’with IFRS 4‘Insurance contracts’ (amendments to IFRS 4) IFRS 9, ‘Financial instruments’ Sale or contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28) IFRS 15, ‘Revenue from contracts with customers’ Clarifications to IFRS 15, ‘Revenue from contracts with customers’ (amendments to IFRS 15) IFRS 16, ‘Leases’ Disclosure initiative (amendments to IAS 7) Recognition of deferred tax assets for unrealised losses (amendments to IAS 12) Transfers of investment property (amendments to IAS 40) IFRIC 22, ‘Foreign currency transactions and advance consideration’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 1, ‘First-time adoption of International Financial Reporting Standards’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 12, ‘Disclosure of interests in other entities’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to IAS 28, ‘Investments in associates and joint ventures’	January 1, 2018 January 1, 2018 To be determined by International Accounting Standards Board January 1, 2018 January 1, 2018 January 1, 2019 January 1, 2017 January 1, 2017 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2018

New Standards,Interpretations andAmendments

Effective date by
International Accounting
StandardsBoard

Applying IFRS 9 ‘Financial instruments’with IFRS 4‘Insurance
contracts’ (amendments to IFRS 4)
IFRS 9, ‘Financial instruments’
Sale or contribution of assets between an investor and its associate or
joint venture (amendments to IFRS 10 and IAS 28)
IFRS 15, ‘Revenue from contracts with customers’
Clarifications to IFRS 15, ‘Revenue from contracts with customers’
(amendments to IFRS 15)
IFRS 16, ‘Leases’
Disclosure initiative (amendments to IAS 7)
Recognition of deferred tax assets for unrealised losses (amendments to
IAS 12)
Transfers of investment property (amendments to IAS 40)
IFRIC 22, ‘Foreign currency transactions and advance consideration’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 1, ‘First-time adoption of International Financial Reporting
Standards’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to
IFRS 12, ‘Disclosure of interests in other entities’
Annual improvements to IFRSs 2014-2016 cycle- Amendments to IAS
28, ‘Investments in associates and joint ventures’

January 1, 2018
January 1, 2018
To be determined by
International Accounting
Standards Board
January 1, 2018
January 1, 2018
January 1, 2019
January 1, 2017
January 1, 2017
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2017
January 1, 2018

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and operating result based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

A. IFRS 9, ‘Financial instruments’
(a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.

(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses or lifetime expected credit losses (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance).
B. IFRS 16, ‘Leases’
IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’and related interpretations and SICs. The standard requires lessees to recognise a right-of-use asset and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
C. Amendments to IAS 7, ‘Disclosure initiative’

This amendment requires that an entity shall provide more disclosures related to changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”and IFRSs.

(2) Basis of preparation

A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
(a) Available-for-sale financial assets measured at fair value.
(b) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process

of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Mainbusiness activities	Ownership(%)	Ownership(%)
			December 31, 2016	December 31, 2015
The Company The Company GESA HINV	SAEC GESA Hazel Investment (Netherlands) N.V.(HINV) Hazel Estate B.V.	Management consulting and employment agency Ship trading, transportation and chartering, operation and investments of container yards, leases and investments of overseas container terminals and marine transportation related business Investments Investments	80.00 100.00 70.00 100.00	80.00 100.00 70.00 100.00

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Foreign currency translations

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional and the Group’s presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations
(a) The operating results and financial position of all the group entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- ii.Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

iii.All resulting exchange differences are recognized in other comprehensive income.

(b) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group still retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.
(c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realized within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Available-for-sale financial assets

A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting; beneficiary securities are recognized and derecognized using settlement date accounting.
C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in

equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets carried at cost’.

(8) Notes, accounts and other receivables

Notes and accounts receivable are claims resulting from the sale of goods or services. Receivables arising from transactions other than the sale of goods or services are classified as other receivables. Notes, accounts and other receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. However, shortterm accounts receivable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial.

(9) Impairment of financial assets

A. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
B. The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows:
(a) Significant financial difficulty of the issuer or debtor;
(b) A breach of contract, such as a default or delinquency in interest or principal payments;
(c) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider;
(d) It becomes probable that the borrower will enter bankruptcy or other financial reorganization;
(e) The disappearance of an active market for that financial asset because of financial difficulties;
(f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;
(g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or

(h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
C. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:
(a) Financial assets measured at amortized cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortized cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(b) Financial assets carried at cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an accumulated impairment account.

The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an accumulated impairment account.

(10) Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

A. The contractual rights to receive the cash flow from the financial asset expire.
B. The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

(11) Operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(12) Inventories

The perpetual inventory system is adopted for inventory recognition. Inventories are stated at cost. The cost is determined using the moving weighted average method. At the end of period, inventories are evaluated at the lower of cost or net realizable value, and the individual item approach is used in the comparison of cost and net realizable value. The calculation of net realizable value is based on the estimated selling price in the normal course of business, net of estimated costs of completion and estimated selling expenses.

(13) Investments accounted for using equity method / associates

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20% or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes not affecting the Group’s ownership percentage of the associate, the Group recognizes change in ownership interest in the associate in ‘capital surplus’ in proportion to its ownership.

D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.
G. When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
H. When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

(14) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

Asset Land improvements Buildings Machinery Loading/unloading equipment Transportation equipment Ships Office equipment Leasehold improvements Other equipment	Useful Life
	3 - 25 years 15 - 55 years 3 - 15 years 5 - 15 years 4 - 10 years 23 - 29 years 3 - 6 years 2 - 10 years 2 - 50 years

The significant components of buildings include hydroelectric facilities and buildings, which are depreciated over 15 to 55 years.

(1) Operating leases (lessee)

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

(2) Investment property

A. An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 3~55 years.
B. The significant components of investment property include land and buildings. Buildings are depreciated over its useful life of 55 years.

(3) Intangible assets

Computer software is amortized on a straight-line basis over its estimated useful life of 3 years.

(4) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(5) Borrowings

A. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.

(6) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial.

(7) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(8) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(9) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Pensions
(a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans

i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
ii. Remeasurement arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognized immediately in profit or loss.

C. Employees’ compensation and directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal obligation or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(10) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the

legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(11) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(12) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities.

(13) Revenue recognition

A. Sales of goods

The Group sells oil. Revenue is measured at the fair value of the consideration received or receivable taking into account of business tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods should be recognized when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

B. Sales of services

The Group provides passenger transportation, container transportation and container yard services. Revenue from delivering services is recognized under the percentage-of-completion method when the outcome of services provided can be estimated reliably. The stage of completion of a service contract is measured by the percentage of the actual services performed as of the financial reporting date to the total services to be performed. If the outcome of a service contract cannot be estimated reliably, contract revenue should be recognized only to the extent that contract costs incurred are likely to be recoverable.

C. Leases service

The Group follows the guidance of IAS 17 “Leases” to recognize revenue from the leasing of ships and containers. Leases are required to be classified as either finance lease or operating lease

according to the extent of transition of risks and rewards of ownership. Revenue is recognized through the period of leases.

(14) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; the information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

A. Financial assets—impairment of equity investments

The Group follows the guidance of IAS 39 to determine whether a financial asset—equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

If the decline of the fair value of an individual equity investment below cost was considered significant or prolonged, the Group would suffer a loss in its financial statements, being the transfer of the accumulated fair value adjustments recognized in other comprehensive income on the impaired available-for-sale financial assets to profit or loss or being the recognition of the impairment loss on the impaired financial assets carried at cost in profit or loss.

B. Financial assets carried at cost

The equity based financial instruments for unlisted stocks held by the Group that are not traded in an active market are classified as financial asset carried at cost due to lack of information to determine the fair value.

(2) Critical accounting estimates and assumptions

A. Financial assets—fair value measurement of unlisted stocks without active market

The fair value of unlisted stocks held by the Group that are not traded in an active market is determined considering fair value assessment of other companies of the same type, market conditions and other economic indicators existing on balance sheet date. Any changes in these judgements and estimates will impact the fair value measurement of these unlisted stocks. Please refer to Note 12(3) for the financial instruments fair value information.

As of December 31, 2016, the carrying amount of unlisted stocks was $513,897.

B. Impairment assessment of tangible and intangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Time deposits	December31,2016 2,334 $ 39,005 2,844,550 2,885,889 $	December31,2015
		2,589 $ 37,924 2,852,196
		2,892,709 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. The Group has no cash and cash equivalents pledged to others.

(2) Available-for-sale financial assets

		December	31,2016		December	31,2015
Current items:
Listed stocks		$	723,276		$	723,276
Beneficiary certificates			100,000			158,000
Subtotal			823,276			881,276
Adjustments			39,317			198,585
Total		$	862,593		$	1,079,861
Non-current items:
Listed stocks		$	513,610		$	513,610
Unlisted stocks			275,394			276,113
Subtotal			789,004			789,723
Adjustments			485,812			312,550
Accumulated impairment	(		36,403)	(		36,403)
Total		$	1,238,413		$	1,065,870

A. The Group recognized $11,193 and ($440,558) in other comprehensive profit or loss for fair value change and reclassified ($600) and ($1,747) from equity to profit or loss for the years ended December 31, 2016 and 2015, respectively.
B. The dissolution of Evergreen International Engineering Corporation had been resolved at the stockholders’ meeting on June 29, 2015, and the date of dissolution was set as July 1, 2015. The Group assessed that the original investment cost can no longer be recovered, so an impairment loss of $2,294 was recognized for the year ended December 31, 2015.

(3) Financial assets carried at cost

Financial assets carried at cost
		December31,2016			December31,2015
Non-current items:
Universal Venture Fund Inc.		$	3,806		$	5,357
Accumulated impairment	(		507)	(		1,683)
		$	3,299		$	3,674

A. Based on the Group’s intention, its investment should be classified as available-for-sale financial assets. However, as they are not traded in an active market, and no sufficient industry information of companies similar to the investee companies can be obtained, the fair value of the investment cannot be measured reliably. The Group classified those stocks as ‘financial assets carried at cost’.
B. The Group assessed that the investment value of Universal Venture Fund Inc. is impaired, so an impairment loss of $1,683 was recognized for the year ended December 31, 2015.

C. The stockholders of Universal Venture Fund Inc. approved to decrease its capital to offset deficits and return proceeds from capital reduction in cash on June 14, 2016 and set effective date as August 15, 2016. The Group received returned capital amounting to $375 and proportionately derecognised $1,551 from initial cost and $1,176 from accumulated impairment proportionate to the capital reduction.
D. As of December 31, 2016 and 2015, no financial assets carried at cost held by the Group were pledged to others.

(4) Accounts receivable

pledged to others. Accounts receivable
		December	31,2016		December	31,2015
Accounts receivable		$	214,633		$	189,165
Accounts receivable - related parties			814,929			536,967
Less: allowance for bad debts	(		546)	(		546)
		$	1,029,016		$	725,586

A. The Group’s accounts receivable that were neither past due nor impaired were fully performing in line with the credit standards prescribed based on counterparties’ industrial characteristics, scale of business and profitability.
B. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Up to 3 months Over 3 months	December31,2016 114,272 $ 142 114,414 $	December31,2015
		37,402 $ -
		37,402 $

The above ageing analysis was based on past due date.

C. Movement analysis of financial assets that were impaired is as follows:
(a) There was no impairment on accounts receivable as of December 31, 2016 and 2015.
(b) Movement of the provision for impairment of accounts receivable are as follows:

Individualprovision At January 1 - $ Provision for impairment 22 Writeoffs during the period 22) ( At December 31 - $		2016

2015

	Individual	provision		Group	provision
At January 1	$	-		$	628		$	628
Effect of consolidated
entity's movement		-	(		82)	(		82)
At December 31	$	-		$	546		$	546

D. The Group holds $21,181 of collateral as security for accounts receivable.

(5) Investments accounted for using equity method

			2016			2015
At January 1		$	1,074,774		$	1,097,400
Disposal of investments accounted for
using equity method			-	(		34,879)
Capital stock reduction of investment
accounted for using equity method	(		36,950)			-
Share of profit or loss of investments
accounted for using equity method			29,483			18,180
Earnings distribution of investments
accounted for using equity method	(		36,426)	(		35,357)
Changes in capital surplus			514			794
Changes in other equity items	(		11,091)			5,858
Effect of consolidated entity's movement			-			22,778
At December 31		$	1,020,304		$	1,074,774
			December31,2016			December31,2015
Associates :
United Stevedoring Corp.		$	30,758		$	30,212
Ever Reward Logistics Corp.			26,137			25,410
Taipei Port Container Terminal
Corp.			895,357			906,043
Qingdao Evergreen Container
Storage and Transportation Corp.			68,052			113,109
		$	1,020,304		$	1,074,774

A. The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below:

As of December 31, 2016 and 2015, the carrying amount of the Group’s individually immaterial associates amounted to $1,020,304 and $1,074,774, respectively.

				Year ended			Year ended
	0			December31,2016			December31,2015
Profit for the period from continuing
operations			$	167,667		$	97,539
Other comprehensive loss- net of tax		(		7)	(		142)
Total comprehensive income			$	167,660		$	97,397

B. Taipei Port Container Terminal Corporation (Taipei Port) is accounted for using equity method despite the percentage of combined holding in Taipei Port is less than 20%. The reason is the issuing entity had to reserve issue rights for its employees, and the Group could not exercise rights with original percentage of ownership, which caused the percentage of ownership to decrease from 20% to 19.49%. After the assessment of the decrease in the percentage of ownership, the Group still has significant influence over Taipei Port.
C. The Group sold 5% of Qingdao Evergreen Container Storage and Transportation Corp. (QECT) on Octobor 14, 2015. As a result, its shareholding ratio declined from 20% to 15%. The Group uses the equity method despite having less than 20% shareholding ratio because the Group has a significant number of directors and significant influence over QECT.
D. QECT deducted capital stock by returning cash to stockholders (The ratio of capital reduction is 54.0541%). The Group repaid $36,950 of its shares on June 15, 2016.

(6) Property, plant and equipment

At January 1, 2016 Cost Accumulated depreciation 2016 Opening net book amount Additions Disposals Reclassifications Depreciation charge Effect of exchange rate changes Closing net book amount At December 31, 2016 Cost Accumulated depreciation	Land	Land improvements	Buildings	Machinery	Loading/ unloading equipment	Transportation equipment	Ships	Office equipment	Leasehold improvements	Other equipment	Construction inprogress	Total
	8,525,807 $ - 8,525,807 $ 8,525,807 $ - - - - - 8,525,807 $ 8,525,807 $ - 8,525,807 $	12,731 $ 4,636) ( 8,095 $ 8,095 $ - - 13,696 4,424) ( - 17,367 $ 26,427 $ 9,060) ( 17,367 $	949,475 $ 830,224) ( 119,251 $ 119,251 $ 1,080 - 16,108 12,044) ( - 124,395 $ 966,663 $ 842,268) ( 124,395 $	19,069 $ 17,645) ( 1,424 $ 1,424 $ 280 - - 373) ( - 1,331 $ 17,923 $ 16,592) ( 1,331 $	1,449,182 $ 1,306,576) ( 142,606 $ 142,606 $ 2,851 - 56,347 28,847) ( - 172,957 $ 1,464,740 $ 1,291,783) ( 172,957 $	13,641,732 $ 2,196,770) ( 11,444,962 $ 11,444,962 $ 1,276,548 41,502) ( 94,065 1,094,432) ( 188,949) ( 11,490,692 $ 14,649,334 $ 3,158,642) ( 11,490,692 $	15,289,409 $ 9,707,135) ( 5,582,274 $ 5,582,274 $ 115,420 - 22,907 654,620) ( 90,431) ( 4,975,550 $ 15,186,176 $ 10,210,626) ( 4,975,550 $	16,549 $ 15,327) ( 1,222 $ 1,222 $ 623 - - 303) ( - 1,542 $ 16,585 $ 15,043) ( 1,542 $	68,374 $ 20,686) ( 47,688 $ 47,688 $ - - - 7,504) ( - 40,184 $ 68,374 $ 28,190) ( 40,184 $	468,354 $ 405,425) ( 62,929 $ 62,929 $ 24,273 13) ( 10,065 21,939) ( - 75,315 $ 496,912 $ 421,597) ( 75,315 $	- $ - - $ - $ - - - - - - $ - $ - - $	40,440,682 $ 14,504,424) ( 25,936,258 $ 25,936,258 $ 1,421,075 41,515) ( 213,188 1,824,486) ( 279,380) ( 25,425,140 $ 41,418,941 $ 15,993,801) ( 25,425,140 $

The Group has provided a negative pledge to the loan granting banks for the credits used to purchase the above transportation equipment.
As the land with book value of $20,009 in Jhuwei area in Dayuan District, Taoyuan City is farming and pasturable land, the ownership is registered to a natural person. The Group has set the pledge of land ownership to itself in order to protect its rights.

At January 1, 2015 Cost Accumulated depreciation 2015 Opening net book amount Additions Disposals Reclassifications Depreciation charge Effect of consolidated entity's movement Effect of exchange rate changes Closing net book amount At December 31, 2015 Cost Accumulated depreciation	Land	Land improvements	Buildings	Machinery	Loading/ unloading equipment	Transportation equipment	Ships	Office equipment	Leased assets	Leasehold improvements	Other equipment	Construction inprogress	Total
	8,133,922 $ - 8,133,922 $ 8,133,922 $ 391,266 - 619 - - - 8,525,807 $ 8,525,807 $ - 8,525,807 $	11,692 $ 3,604) ( 8,088 $ 8,088 $ 2,209 - - 2,202) ( - - 8,095 $ 12,731 $ 4,636) ( 8,095 $	947,715 $ 812,171) ( 135,544 $ 135,544 $ 2,080 - 635 19,008) ( - - 119,251 $ 949,475 $ 830,224) ( 119,251 $	18,652 $ 18,000) ( 652 $ 652 $ 1,071 - - 299) ( - - 1,424 $ 19,069 $ 17,645) ( 1,424 $	1,440,661 $ 1,337,161) ( 103,500 $ 103,500 $ 3,160 - 60,238 24,292) ( - - 142,606 $ 1,449,182 $ 1,306,576) ( 142,606 $	10,272,566 $ 1,232,824) ( 9,039,742 $ 9,039,742 $ 2,922,931 26,884) ( 92,943 963,086) ( 2) ( 379,318 11,444,962 $ 13,641,732 $ 2,196,770) ( 11,444,962 $	14,729,139 $ 8,774,165) ( 5,954,974 $ 5,954,974 $ 66,785 - - 625,545) ( - 186,060 5,582,274 $ 15,289,409 $ 9,707,135) ( 5,582,274 $	17,687 $ 16,148) ( 1,539 $ 1,539 $ 14 - - 317) ( 14) ( - 1,222 $ 16,549 $ 15,327) ( 1,222 $	206 $ 140) ( 66 $ 66 $ - - - 19) ( 47) ( - - $ - $ - - $	51,231 $ 14,324) ( 36,907 $ 36,907 $ - - 17,143 6,362) ( - - 47,688 $ 68,374 $ 20,686) ( 47,688 $	447,102 $ 396,128) ( 50,974 $ 50,974 $ 15,778 75) ( 13,517 17,207) ( 58) ( - 62,929 $ 468,354 $ 405,425) ( 62,929 $	- $ - - $ - $ - - - - - - - $ - $ - - $	36,070,573 $ 12,604,665) ( 23,465,908 $ 23,465,908 $ 3,405,294 26,959) ( 185,095 1,658,337) ( 121) ( 565,378 25,936,258 $ 40,440,682 $ 14,504,424) ( 25,936,258 $

The Group has provided a negative pledge to the loan granting banks for the credits used to purchase the above transportation equipment.
As the land with book value of $20,009 in Jhuwei area in Dayuan District, Taoyuan City is farming and pasturable land, the ownership is registered to a natural person. The Group has set the pledge of land ownership to itself in

order to protect its rights.

(7) Investment property

A. Changes in investment property:

At January 1, 2016
Cost

Accumulated depreciation
2016
Opening net book amount

Depreciation charge
Closing net book amount
At December 31, 2016
Cost

Accumulated depreciation
At January 1, 2015
Cost

Accumulated depreciation
2015
Opening net book amount

Depreciation charge
Closing net book amount
At December 31, 2015
Cost

Accumulated depreciation

Land
Buildings
Total
$ 639,583
168,768
$ 808,351
$ -
85,115)
(
85,115)
(
639,583
$ 83,653
$ 723,236
$ $ 639,583 $ 83,653
723,236
$ -
3,188)
(
3,188)
(
639,583
$ 80,465
$ 720,048
$ $ 639,583
168,768
$ 808,351
$ -
88,303)
(
88,303)
(
639,583
$ 80,465
$ 720,048
$ Land
Buildings
Total
$ 639,583
168,768
$ 808,351
$ -
81,916)
(
81,916)
(
639,583
$ 86,852
$ 726,435
$ $ 639,583
86,852
$ 726,435
$ -
3,199)
(
3,199)
(
639,583
$ 83,653
$ 723,236
$ $ 639,583
168,768
$ 808,351
$ -
85,115)
(
85,115)
(
639,583
$ 83,653
$ 723,236
$

B. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period	Year ended December31,2016 50,875 $ 7,553 $	Year ended December31,2015
		48,685 $
		6,473 $

C. The fair value of the investment property held by the Group as at December 31, 2016 and 2015 was $2,433,272 and $2,271,971, respectively, which was valued by the Group. Valuations were made using the income approach which is categorized within Level 3 in the fair value hierarchy. Key assumptions are as follows:

Key assumptions are as follows:
Other payables (including related parties) 0 Gross margin Discount rate 0 Payable on equipment Others	December 31,2016 85.994% 1.845% December31,2016 359,163 $ 196,051 555,214 $	December 31,2015
		88.282% 1.985% December31,2015
		99,033 $ 178,541
		277,574 $

(8) Other payables (including related parties)

- (9) Long term borrowings

Type of borrowings Foreign currency unsecured borrowings - USD Less: arrangement fees Less: current portion	Interest rate range 1.7420%~2.7500%	Expiry year December31,2016 111 7,335,294 $ 22,552) ( 7,312,742 1,296,155) ( 6,016,587 $

)Other non-current liabilities Type ofborrowings Foreign currency unsecured borrowings - USD Less: arrangement fees Less: current portion Accrued pension obligations Guarantee deposits received	Interestraterange Expiry year December31,2015 1.5199%~1.8567% 111 8,166,039 $ 28,112) ( 8,137,927 1,156,847) ( 6,981,080 $ December31,2016 December31,2015 1,445,588 $ 1,620,338 $ 19,392 20,743 1,464,980 $ 1,641,081 $

(10) Other non-current liabilities

(11) Pensions

A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 15% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. The foreign subsidiary paid the pension directly to the retired employees when they have their own defined benefit pension plan.

(b) The amounts recognised in the balance sheet are as follows:

			December31,2016			December31,2015
Present value of defined benefit
obligations		$	2,485,670		$	2,622,689
Fair value of plan assets	(		1,040,082)	(		1,002,351)
Net defined benefit liabilities		$	1,445,588		$	1,620,338

(c) Changes in net defined benefit liabilities are as follows:

2016 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan asset (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Balance at December 31		Present value of defined benefit obligations	Fair value of planassets		Net defined benefit liabilities
	2,622,689 $ 78,308 32,537 2,733,534 - 773) ( 45,210) ( 25,023) ( 71,006) ( - 176,858) ( 2,485,670 $		1,002,351) ($ - 12,529) ( 1,014,880) ( 3,218 - - - 3,218 205,278) ( 176,858 1,040,082) ($	1,620,338 $ 78,308 20,008 1,718,654 3,218 773) ( 45,210) ( 25,023) ( 67,788) ( 205,278) ( - 1,445,588 $

2015 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan asset (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Effect of consolidated entity's movement Balance at December 31		Present value of defined benefit obligations	Fair value of planassets		Net defined benefit liabilities
	2,613,352 $ 72,722 55,963 2,742,037 - 1,902 114,674 78,030) ( 38,546 - 149,854) ( 8,040) ( 2,622,689 $		974,803) ($ - 21,775) ( 996,578) ( 4,105) ( - - - 4,105) ( 158,552) ( 149,854 7,030 1,002,351) ($	1,638,549 $ 72,722 34,188 1,745,459 4,105) ( 1,902 114,674 78,030) ( 34,441 158,552) ( - 1,010) ( 1,620,338 $

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and its domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2016 and 2015 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increase rate	2016 1.20%~1.25% 1.75%~2.00%	2015
		1.25%
		2.00%

The assumption of future death rate depends on the Taiwan Standard Ordinary Experience Mortality Table (2004-2008) for 2016 and 2015.

Because the main actuarial assumption changed, the present value of defined benefit obligations is affected. The analysis was as follows:

Increase Decrease 0.25~0.5% 0.25~0.5% December 31, 2016 Effect on present value of defined benefit obligations 92,668) ($ 127,916 $ December 31, 2015 Effect on present value of defined benefit obligations 105,718) ($ 116,676 $ Discount rate	Increase Decrease 0.25~0.5% 0.25~0.5% 126,539 $ 92,586) ($ 115,205 $ 105,448) ($ Future salaryincrease rate

The sensitivity analysis above is based on other conditions that are unchanged but only one assumption is changed. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

(f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2017 amounts to $145,316.
(g)As of December 31, 2016, the weighted average duration of that retirement plan is 8~10 years.
B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contributes monthly an amount based on not less then 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
C. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2016 and 2015 were $126,365 and $133,487, respectively.

(12) Capital stock

A. As of December 31, 2016, the Company’s authorized capital was $11,000,000, consisting of 1,100,000 thousand shares of ordinary stock, and the paid-in capital was $10,671,411 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.
B. The Company has the same weighted average number of ordinary shares outstanding at the beginning and ending of the years 2016 and 2015.

(13) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(14) Retained earnings

legal reserve is insufficient. Retained earnings
			2016			2015
At January 1		$	3,294,491		$	2,919,711
Profit for the period			810,884			843,743
Appropriation, release and distribution
of earnings	(		457,873)	(		440,334)
Remeasurement on post employment
benefit obligations, net of tax			56,261	(		28,629)
At December 31		$	3,703,763		$	3,294,491

A. According to the Company’s Articles of Incorporation, any profit made by the Company for each fiscal year shall, after deduction of tax, be applied first towards making up any losses incurred by the Company in previous years, then 10% of the balance thereof shall be retained as the legal reserve, and set aside the special reserve in compliance with regulations, together with the accumulated unallocated profit of the previous period, shall be allocated pursuant to the proposal made by the Board of Directors and adopted by the shareholders at their meeting.
B. The Company’s dividend policy is summarized below:

Stockholders’ dividends shall be distributed in cash dividends and stock dividends, with the cash dividend comprising at least 10% of the total amount of distribution.

C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.
E. The appropriation of earnings and distribution of capital reserve of years 2015 and 2014 had been resolved at the stockholders’ meeting on June 15, 2016 and 2015, respectively. Details are summarized below:

summarized below:
Legal reserve Cash dividends		Dividends per share (in dollars) 0.35 $ 2015		2014
	Amount 84,374 $ 373,499 457,873 $		Amount 66,835 $ 373,499 440,334 $	Dividends per share (in dollars)
				0.35 $

The information about the appropriation of earnings resolved at the stockholders’ meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

F. The Company declared the earnings distribution for 2016 at the Board of Directors’ meeting on March 28, 2017. The information is summarized below:

Legal reserve Cash dividends	2016	2016
	Amount 81,088 $ 373,499 454,587 $	Dividends per share (indollars)
		0.35 $

The information about the earnings distribution in 2016 presented above has not been resolved at the stockholders’ meeting up until March 28, 2017.

remuneration, please refer to Note 6(21).

(15) Other equity items

Other equity items
					2016
	Available-for-sale				Currency
		investments			translation		Total
At January 1	$	485,440		$	789,057	$	1,274,497
Available-for-sale investments:
-Revaluation – gross		16,146			-		16,146
-Revaluation – tax	(	4,353)			-	(	4,353)
-Revaluation – transfer	(	600)			-	(	600)
Currency translation:
-Group		-	(		191,100)	(	191,100)
At December 31	$	496,633		$	597,957	$	1,094,590
					2015
	Available-for-sale				Currency
		investments			translation		Total
At January 1	$	925,998	$		419,167	$	1,345,165
Available-for-sale investments:
-Revaluation – gross	(	454,148)			-	(	454,148)
-Revaluation – tax		15,337			-		15,337
-Revaluation – transfer	(	1,747)			-	(	1,747)
Currency translation:
-Group		-			369,890		369,890
At December 31	$	485,440		$	789,057	$	1,274,497

(16) Operating revenue

			Year ended			Year ended
			December31,2016			December31,2015
Sales revenue		$	481,249		$	533,459
Service revenue			3,631,467			3,645,428
Lease revenue			3,360,557			3,171,094
			7,473,273			7,349,981
Less: Sales returns and allowances	(		1,176)	(		1,316)
		$	7,472,097		$	7,348,665

(17) Other income

Dividend income Interest income: Bank deposits Imputed rate of interest for deposits Other income	Year ended December31,2016 106,711 $ 25,908 13 34,996 167,628 $	Year ended December31,2015
		99,096 $ 20,706 15 45,427
		165,244 $

(18) Other gains and losses

		Year ended			Year ended
		December 31,2016			December 31,2015
Net currency exchange (loss) gain	($	9,199)		$	21,162
Loss on disposal of property,
plant and equipment	(	12,068)	(		17,182)
Gain on disposal of investments		600			19,113
Other losses	(	19,811)	(		5,347)
	($	40,478)		$	17,746

(19) Finance costs

Interest expense: Bank borrowings Imputed rate of interest for deposits Others	Year ended December31,2016 159,792 $ 219 - 160,011 $	Year ended December31,2015
		122,630 $ 287 1
		122,918 $

(20) Expenses by nature

Cost of sales and related fees Employee benefit expense Depreciation Amortisation Transportation expense Vessels operation expense Other expenses Operating costs and operating expenses	Year ended December31,2016 1,782,359 $ 1,568,604 1,827,674 2,290 700,423 459,293 115,437 6,456,080 $	Year ended December31,2015
		1,861,700 $ 1,573,877 1,661,536 2,240 681,751 474,383 131,744
		6,387,231 $

(21) Employee benefit expense

Wages and salaries Labor and health insurance fees Pension cost Other personnel expenses	Year ended December31,2016 1,245,015 $ 78,234 126,365 118,990 1,568,604 $	Year ended December31,2015
		1,247,328 $ 78,508 133,487 114,554
		1,573,877 $

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 5% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2016 and 2015, employees’ compensation was both accrued at $15,000; directors’ and supervisors’ remuneration was both accrued at $6,000.

The employees’ compensation was estimated on the basis of the Company’s Articles of Incorporation and consideration of legal reserve with distributable profit of current year for the year ended December 31, 2016.

Employees’ compensation and directors’ and supervisors’ remuneration of 2015 as resolved by the meeting of Board of Directors were in agreement with those amounts recognised in the 2015 financial statements.

Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the meeting of board of directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(22) Income tax

A. Income tax expense

(a) Components of income tax expense:

Current tax: Current tax on profits for the period Tax on unappropriated earnings Adjustment in respect of prior years Deferred tax: Origination and reversal of temporary differences Income tax expense	Year ended Year ended December31,2016 December31,2015 83,653 $ 84,108 $ 35,724 29,535 30 539) ( 84,217 83,295 203,624 $ 196,399 $	Year ended December31,2015
		196,399 $

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

Year ended December 31, 2016 Fair value gains/losses on available-for-sale financial assets 4,353) ($ Remeasurement of defined benefit obligations 11,524) ( 15,877) ($	Year ended December 31, 2015
	15,337 $ 5,855
	21,192 $

Year ended December31,2016	Year ended December31,2015

Capital surplus - changes in equity of associates and joint ventures accounted for using equity method ($ 87) ($ 135)

B. Reconciliation between income tax expense and accounting profit:

Tax calculated based on profit before tax and statutory tax rate Expenses adjusted by tax regulation Tax exempted income by tax regulation Additional 10% tax on unappropriated earnings Adjustment in respect of prior years Income tax expense	Year ended December31,2016	Year ended December31,2015
	173,122 $ 4,305 9,557) ( 35,724 30 203,624 $	178,812 $ 1,371 12,780) ( 29,535 539) ( 196,399 $

C. Amounts of deferred tax assets or liabilities as a result of temporary difference, loss carryforward and investment tax credit are as follows:

Temporary differences: -Deferred tax assets: Unrealized sales discounts and allowances Unrealized compensation loss Unrealized impairment loss Net defined benefit liabilities Unpaid annual leave Subtotal -Deferred tax liabilities: Unrealized exchange gain Invesments income (overseas) Difference between depreciation for financial reporting and tax purposes Unrealized gain or loss on available-for-sale financial assets (overseas) Reserve for land revaluation increment tax Subtotal Total				2016
		January1	Recognized in profit or loss	Recognized in other comprehensive income	Recognized in equity		December 31
	850 $ 521 676 194,432 4,684 201,163 47) ( 910,648) ( 55,202) ( 3,239) ( 1,063,191) ( 2,032,327) ( 1,831,164) ($		850) ($ 32) ( 200) ( 14,268) ( 3,460 11,890) ( 148) ( 77,534) ( 5,355 - - 72,327) ( 84,217) ($	- $ - - (9,431) - 9,431) ( - 2,332) ( - 4,114) ( - 6,446) ( 15,877) ($	- $ - - - - - - 87) ( - - - 87) ( 87) ($	- $ 489 476 170,733 8,144 179,842 195) ( 990,601) ( 49,847) ( 7,353) ( 1,063,191) ( 2,111,187) ( 1,931,345) ($

January1 Temporary differences: -Deferred tax assets: Unrealized sales discounts and allowances 850 $ Unrealized compensation loss 381 Unrealized impairment loss - Provision for bad debts 1 Unrealized foreign exchange loss 15 Net defined benefit liabilities 198,522 Unpaid annual leave 4,428 Subtotal 204,197 -Deferred tax liabilities: Unrealized exchange gain 113) ( Net defined benefit liabilities 36) ( Invesments income (overseas) 839,202) ( Difference between depreciation for financial reporting and tax purposes 51,425) ( Unrealized gain or loss on available -for-sale financial assets (overseas) 19,041) ( Reserve for land revaluation increment tax 1,063,191) ( Subtotal 1,973,008) ( Total 1,768,811) ($			2015	2015	2015
	January1	Recognized in profit or loss	Recognized in other comprehensive income		Recognized in equity	Effect of consolidated entity's movement		December 31
		- $ 140 676 - - 6,742) ( 310 5,616) ( 38) ( - 73,864) ( 3,777) ( - - 77,679) ( 83,295) ($		- $ - - - - 2,837 - 2,837 - - 2,553 - 15,802 - 18,355 21,192 $	- $ - - - - - - - - - 135) ( - - - 135) ( 135) ($	- $ - - 1) ( 15) ( 185) ( 54) ( 255) ( 104 36 - - - - 140 115) ($	850 $ 521 676 - - 194,432 4,684 201,163 47) ( - 910,648) ( 55,202) ( 3,239) ( 1,063,191) ( 2,032,327) ( 1,831,164) ($

D. The Company’s income tax returns through 2014 have been assessed and approved by the Tax Authority.
E. Unappropriated retained earnings:

Authority. Unappropriated retained earnings:
Earnings generated in and before 1997 Earnings generated in and after 1998	December31,2016 1,216,233 $ 2,487,530 3,703,763 $		December31,2015
			1,216,233 $ 2,078,258 3,294,491 $

F. As of December 31, 2016 and 2015, the balance of the imputation tax credit account was $381,784 and $340,728, respectively. The creditable tax rate was 20.63% for 2015 and is estimated to be 15.35% for 2016.

(23) Earnings per share

estimated to be 15.35% for 2016. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year	Weighted average number of ordinary shares outstanding (shareinthousands) Earnings per share (indollars) 1,067,141 0.76 $ 1,067,141 1,749 1,068,890 0.76 $ endedDecember31,2016
	Amount aftertax 810,884 $ 810,884 - 810,884 $		Weighted average number of ordinary shares outstanding (shareinthousands)
			1,067,141 1,067,141 1,749 1,068,890	0.76 $ 0.76 $

		YearendedDecember31,	YearendedDecember31,	YearendedDecember31,	YearendedDecember31,	2015	2015
			Weighted		average
			number	of ordinary
			shares outstanding				Earnings per
	Amount aftertax		(shareinthousands)				share (indollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	$	843,743		1,067,141			$	0.79
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent		843,743		1,067,141
Assumed conversion of all
dilutive potential ordinary
shares
Employees’ compensation		-			1,555
Profit attributable to
ordinary shareholders of the
parent plus assumed
conversion of all dilutive
potential ordinary shares	$	843,743		1,068,696			$	0.79
Supplemental cash flow information
Investing activities with partial cash	payments:
		Year ended				Year ended
		December31,2016			December			31,2015
Acquisition of property, plant and
equipment (including prepayments	for
equipment)		$	1,720,013		$			3,671,384
Add : opening balance of payable on
equipment			99,033					31,425
Less : ending balance of payable on
equipment		(	359,163)		(			99,033)
Cash paid during the period		$	1,459,883		$			3,603,776

(24) Supplemental cash flow information

7. RELATED PARTY TRANSACTIONS

(1) Significant related party transactions and balances

A. Operating revenue

Operating revenue
The entities which have significant influence to the Group Associates Other related parties	Year ended December31,2016 2,058,725 $ 203,505 3,249,655 5,511,885 $	Year ended December31,2015
		2,099,931 $ 194,877 3,089,494
		5,384,302 $

The terms on the above transactions with the related parties are not materially different from those with non-related parties.

B. Purchases of goods

with non-related parties. Purchases of goods
The entities which have significant influence to the Group Associates Other related parties	Year ended December31,2016 130,950 $ 5,968 74,243 211,161 $	Year ended December31,2015
		131,151 $ 5,222 81,616
		217,989 $

The terms on the above transactions with the related parties are not materially different from those with non-related parties.

C. Receivables from related parties

with non-related parties. Receivables from related parties
Accounts receivable: The entities which have significant influence to the Group Associates Other related parties	December31,2016 23,372 $ 19,202 772,355 814,929 $	December31,2015
		14,384 $ 17,858 504,725
		536,967 $

D. Payables to related parties

Payables to related parties
Accounts payable: The entities which have significant influence to the Group Associates Other related parties Subtotal Other payables: The entities which have significant influence to the Group Other related parties Subtotal Total	December31,2016 27,296 $ 347 508 28,151 104 359,662 359,766 387,917 $	December31,2015
		27,449 $ 192 19 27,660 3,517 17,804 21,321 48,981 $

E. Property transactions
(a) Acquisition of property, plant and equipment (including prepayments for equipment)

The entities which have significant influence to the Group Other related parties	Year ended December31,2016 204 $ 1,326,923 1,327,127 $	Year ended December31,2015
		5,299 $ 1,808,181 1,813,480 $

The prices on the above transactions are in accordance with market prices and the results of agreements.

(b) Disposal of property, plant and equipment

Other related parties		Year ended December 31,2016	Year ended December 31,2016	Year ended December 31,2016		Year ended December 31,2015	Year ended December 31,2015
		Disposal proceeds		Gain (loss) on disposal		Disposal proceeds	Gain (loss) on disposal
		- $		- $		66 $	9) ($

F. Due to contributions to society for charity activities, the Group donated $20,476 and $25,511 to Chang Yung-Fa Foundation and Chang Yung-Fa Charity Foundation in 2016 and 2015, respectively.

(2) Key management compensation

Key management compensation
Short-term employee benefits Post-employment benefits		Year ended December31,2016		Year ended December31,2015
		23,146 $ 1,209 24,355 $		23,865 $ 2,044 25,909 $

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

The Group’s assets pledged as	collateral are as follows:
Pledged assets Other non-current assets - pledged time deposits	December31,2016 December31,2015 121,196 $ 121,680 $ Bookvalue	Purpose
	December31,2016 121,196 $
		To purchase supplies and materials and execute contracts etc.

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

A. To meet operational needs, the Group signed loading/unloading equipment contracts amounting to USD 7,000 thousand on December 3, 2015. Capital expenditure contracted for as of December 31, 2016 but not yet incurred amounted to USD 2,100 thousand.
B. To meet operational needs, the Group signed container building contracts amounting to USD 10,387 thousand with a container manufacturer on November 29, 2016. Capital expenditure contracted for as of December 31, 2016 but not yet incurred amounted to USD 10,387 thousand.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

(1) The Company declared the earnings distribution for 2016 at the Board of Directors’ meeting on March 28, 2017. The details of earnings distribution is referred to in Note 6(14).
(2) To meet operational needs, the Group signed container building contracts amounting to USD 11,470 thousand with a container manufacturer on March 15, 2017.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders and issue new shares to maintain an optimal capital.

(2) Financial instruments

A. Fair value information of financial instruments

The carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, refundable deposits, other financial assets, notes payable, accounts payable, other payables and guarantee deposits) are approximate to their fair values. The interest rate of long-term borrowings is approximate to the market interest rate, thus, the carrying amount can be considered reasonable as the basis for fair value estimation. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

B. Financial risk management policies

(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial position and financial performance.
(b) Risk management is carried out by the Group under policies approved by the Board of Directors.

C. Significant financial risks and degrees of financial risks
(a)Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
ii. Management has set up a policy to require each subsidiary to manage their foreign exchange risk against their functional currency. Each subsidiary is required to hedge their entire foreign exchange risk exposure with the Group treasury. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.
iii. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other subsidiaries’ functional currency: USD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

luctuations is as follows:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items KRW:NTD Financial liabilities Monetary items JPY:NTD	December31,2016
	Foreign currency amount (In Thousands) 1,508 $ 3,071,060 2,596	Exchangerate 32.2500 0.0271 0.2756	Book value (NTD)
			48,639 $ 83,226 716

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Non-monetary items KRW:NTD Financial liabilities Monetary items USD:NTD	December31,2015	December31,2015
	Foreign currency amount (In Thousands) 2,122 $ 2,100,483 2,100	Exchangerate 32.8250 0.0281 32.8250	Book value (NTD)
			69,665 $ 59,024 68,933

iv. Total exchange (loss) gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group in 2016 and 2015, amounted to ($9,199) and $21,162, respectively.
v. Analysis of foreign currency market risk arising from significant foreign exchange variation:

nalysis of foreign currency market ariation:	risk arising from significant foreign exchange	risk arising from significant foreign exchange	risk arising from significant foreign exchange
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD Financial liabilities Monetary items JPY:NTD	Year ended December31,2016
		Sensitivityanalysis
	Degree of variation 1% 1%	Effect on profit or loss 486 $ 7	Effect on other comprehensive income
			- $ -

YearendedDecember31,2015	YearendedDecember31,2015	YearendedDecember31,2015
	Sensitivity analysis
Degree of variation 1% 1%	Effect on profit or loss 697 $ 689	Effect on other comprehensive income
		- $ -

Price risk

i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet as available-for-sale financial assets.
ii. The Group’s investments in equity securities comprise beneficiary certificates, domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, for the years ended December 31, 2016 and 2015, other components of equity would have increased/decreased by $210,101 and $214,573, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

Interest rate risk

i. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group’s borrowings are at variable rates. During the years ended December 31, 2016 and 2015, the Group’s borrowings at variable rates were denominated in the USD.
ii. At December 31, 2016 and 2015, if interest rates on USD-denominated borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the years ended December 31, 2016 and 2015 would have been $78,275 and $75,003 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.

(b)Credit risk

i. The Group’s transactions are conducted only with counterparties with good credit conditions. The Group’s strategy also requires that before completing transactions, the Group should perform credit confirmation procedures, consider the nature of transactions in requesting the counterparties to provide the pledged notes or guarantees, and regularly assess the collectability of notes and accounts receivable. Therefore, the Group expects no significant bad debts.

The credit risk of other financial assets (including cash and cash equivalents) mainly results from the risk of failing to meet the contract requirements by the counterparty. The maximum credit risk is equal to the book value.

ii. The banks and financial institutions that the Group has bank deposits and other financial instrument contracts have solid reputation and low non-performance risk. Hence, the Group has no significant credit risk.
iii. The ageing analysis of financial assets that were past due but not impaired is shown in Note 6(4).
iv.The individual analysis of financial assets that have been impaired is provided in the statement for each type of financial asset in Note 6.

(c)Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group’s treasury department. The Group’s treasury department monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.
ii. The Group invested in interest bearing deposits, time deposits and securities with residual capital. Those instruments have appropriate maturity dates and sufficient liquidity to provide sufficient capital movement. The Group has no significant liquidity risk because the Group’s holding capital at the balance sheet date is higher than accrued liability for the coming year.
iii.The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. As of December 31, 2016 and 2015, notes payable, accounts payable and other payables would expire within 1 year. As of December 31, 2016 and 2015, long-term borrowings are analysed based on the remaining period. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities :

Non-derivative financial liabilities :
Less than Between Between December 31, 2016 1year 1 and 2years 2 and5 years Over5 years Total Long-term borrowings (including current portion) 1,452,307 $ 1,423,594 $ 4,726,128 $ 192,551 $ 7,794,580 $ Less than Between Between December 31, 2015 1year 1 and 2years 2 and5 years Over5 years Total Long-term borrowings (including current portion) 1,277,182 $ 1,351,519 $ 3,931,987 $ 2,045,944 $ 8,606,632 $ Non-derivative financial liabilities :	Total
	7,794,580 $
December 31, 2015 Long-term borrowings (including current portion)

iv. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value estimation

A. Details of the fair value of the Group’s investment property measured at cost are provided in Note 6(7).
B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates are included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

100

C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2016 and 2015 is as follows:

2016 and 2015 is as follows:
December 31, 2016 Assets: Available-for-sale financial assets Equity securities Beneficiary certificates December 31, 2015 Assets: Available-for-sale financial assets Equity securities Beneficiary certificates	Level 1 1,487,076 $ 100,033 1,587,109 $ Level 1 1,646,218 $ 158,159 1,804,377 $	Level 2 - $ - - $ Level 2 - $ - - $	Level3 513,897 $ - 513,897 $ Level3 341,354 $ - 341,354 $	Total
				2,000,973 $ 100,033
				2,101,006 $
				Total
				1,987,572 $ 158,159
				2,145,731 $

D. The methods and assumptions the Group used to measure fair value are as follows:
(a)The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Market quoted price	Listed shares	Open-end fund
	Closing price	Net asset value

(b) For high-complexity financial instruments, the fair value is measured by using self-developed valuation model based on the valuation method and technique widely used within the same industry. The valuation model is normally applied to derivative financial instruments, debt instruments with embedded derivatives or securitized instruments. Certain inputs used in the valuation model are not observable at market, and the Group must make reasonable estimates based on its assumptions. The effect of unobservable inputs to the valuation of financial instruments is provided in Note 12(3)9.
(c) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the

101

consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

(d) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.
E. For the years ended December 31, 2016 and 2015, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2016 and 2015:

Equity securities

Opening net book amount Acquired in the period Gains and losses recognized in net income (Note 1 ) Gains and losses recognized in other comprehensive income (Note 2 ) Effect of exchange rate changes Closing net book amount	Year ended December31,2016	Year ended December31,2015
	341,354 $ - - 174,813 2,270) ( 513,897 $	446,754 $ 7,197 2,294) ( 114,934) ( 4,631 341,354 $

Note 1: Recorded as non-operating income and expenses.

Note 2: Recorded as unrealized valuation gain or loss of available-for-sale financial assets.

G. For the years ended December 31, 2016 and 2015, there was no transfer into or out from Level 3.
H. Financial segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. Investment property is valuated regularly by the Group’s financial segment based on the valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.

102

I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non- derivative equity instrument: Unlisted shares	Fair value at December 31, 2016	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	513,897 $	Market comparable companies	Price to earnings ratio multiple Price to book ratio multiple Discount for lack of marketability	8.09 1.12~1.81 30%	The higher the multiple, the higher the fair value. The higher the multiple, the higher the fair value. The higher the discount for lack of marketability, the lower the fair value.

103

Non- derivative equity instrument: Unlisted shares	Fair value at December 31, 2015	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	341,354 $	Market comparable companies	Price to earnings ratio multiple Price to book ratio multiple Discount for lack of marketability	7.11~29.29 0.67~1.64 30%	The higher the multiple, the higher the fair value. The higher the multiple, the higher the fair value. The higher the discount for lack of marketability, the lower the fair value.

J. The Group has carefully assessed the valuation models and assumptions used to measure fair value; therefore, the fair value measurement is reasonable. However, use of different valuation models or assumptions may result in difference measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

Input	Change	December	December	31,2016	31,2016
		Recognized inprofit or loss		Recognized in other comprehensive income
		Favourable change	Unfavourable change	Favourable change	Unfavourable change
Price to earnings ratio multiple, price to book ratio multiple, discount for lack of marketability	±1%	$-	$-	$5,139	$5,139

104

December 31, 2015

Recognized in other Recognized in profit or loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity instrument Price to earnings ratio multiple, price to book ratio multiple, discount for lack of ±1% $ - $ - $ 3,414 $ 3,414 marketability

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Aggregate purchases or sales of the same securities reaching NT$300 million or 20% of the Company's paid-in capital or more: Please refer to table 3.
E. Acquisition of real estate reaching NT$300 million or 20% of the Company's paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of the Company's paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of the Company's paid-in capital or more: Please refer to table 4.
H. Receivables from related parties reaching NT$100 million or 20% of the Company's paid-in capital or more: Please refer to table 5.
I. Derivative financial instruments undertaken during the reporting periods: None.

105

J. Significant inter-company transactions during the reporting periods: The Group has no significant inter-company transaction.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China)：Please refer to table 6.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 7.
B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas.：None.

106

14. SEGMENT INFORMATION

(1) General information

The Group has included several operating segments with similar economic characteristics and meeting the requirements as reportable segments and have included other operating segments that do not meet the quantitative thresholds

as other segments. Products for sale and types of services of every reportable segment are summarized as follows:

(a) Inland transportation is the business of carrying cargo and passengers.
(b) Container terminals are the business of container and cargo loading.
(c) International marine transportation is the business of container terminals and leased ships and containers.
(d) Gasoline station is the business of different kinds of petroleum products sold.
(e) Other businesses are those not classified from (a) to (d).

(2) Measurement of segment information

(a) Segment profit (loss), the basis of assessing performance, is measured at operating profit (loss).
(b) Segment assets are measured at the basis of identifiable assets, including property, plant and equipment, investment property, intangible assets, prepayments for equipment and prepayments for lands.
(c) Management measurement of the performance of segments do not include information on liabilities. Therefore, the information on the segments’ liabilities are not disclosed.

107

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

Revenue from outside the Company Revenue from Interdepartmental transactions Operating profit Identifiable assets Depreciation and amortisation			YearendedDecember31,2016	YearendedDecember31,2016
	Inland Transportation	Container Terminals	International Marine Transportation	Gasoline Station	Others	Adjustments and Write-off	Total
	1,900,893 $ - 1,900,893 $ 151,692 $ 1,630,316 $ 118,644 $	574,580 $ - 574,580 $ 84,786 $ 7,979,617 $ 25,444 $	4,464,519 $ - 4,464,519 $ 718,355 $ 16,125,046 $ 1,680,198 $	478,032 $ - 478,032 $ 16,603 $ 61,293 $ 1,749 $	54,073 $ - 54,073 $ 44,581 $ 556,204 $ 3,929 $	- $ - - $ - $ - $ - $	7,472,097 $ - 7,472,097 $ 1,016,017 $ 26,352,476 $ 1,829,964 $

Revenue from outside the Company Revenue from Interdepartmental transactions Operating profit Identifiable assets Depreciation and amortisation			YearendedDecember31,2015	YearendedDecember31,2015
	Inland Transportation	Container Terminals	International Marine Transportation	Gasoline Station	Others	Adjustments and Write-off	Total
	1,926,920 $ 401 1,927,321 $ 162,676 $ 1,705,087 $ 106,326 $	588,722 $ 88 588,810 $ 98,682 $ 7,331,018 $ 28,120 $	4,242,811 $ 940 4,243,751 $ 638,667 $ 16,682,228 $ 1,523,494 $	497,366 $ - 497,366 $ 5,655 $ 70,128 $ 1,861 $	92,846 $ - 92,846 $ 55,754 $ 993,326 $ 3,975 $	- $ 1,429) ( 1,429) ($ - $ - $ - $	7,348,665 $ - 7,348,665 $ 961,434 $ 26,781,787 $ 1,663,776 $

108

(4) Reconciliation for segment income (loss)

A reconciliation of reportable segment profit or loss to the profit before tax and discontinued operations for years ended December 31, 2016 and 2015 is provided as follows:

Year ended December 31,2016 Reportable segments operating profit and loss 971,436 $ Other segments operating profit and loss 44,581 Total segments 1,016,017 Total non-operating income and expenses 3,378) ( Profit before tax 1,012,639 $	Year ended December 31,2015
	905,680 $ 55,754
	961,434 78,252
	1,039,686 $

(5) Information on products and services

Please refer to Note 6 (16) for the related information.

(6) Geographical information

Geographical information for the years ended December 31, 2016 and 2015 is as follows:

Revenue Non-current assets 6,044,982 $ 10,889,911 $ 1,359,498 15,464,095 67,617 - 7,472,097 $ 26,354,006 $ YearendedDecember31,2016	YearendedDecember31,2015	YearendedDecember31,2015
Revenue 6,044,982 $ 1,359,498 67,617 7,472,097 $	Revenue 6,136,912 $ 1,200,170 11,583 7,348,665 $	Non-current assets
		10,845,066 $ 15,938,151 -
		26,783,217 $

The non-current assets do not include financial instruments and pledged time deposits and deferred income tax assets.

109

(7) Major customer information

Major customer information of the Group for the years ended December 31, 2016 and 2015 is as follows:

Evergreen Marine Corp. Evergreen International Corp. Evergreen International S.A.	Revenue Segment 2,058,725 $ International marine transportation, inland transportation, gasoline station and container terminals 1,587,265 Inland transportation, international marine transportation, container terminals, gasoline station and others 1,359,498 International marine transportation YearendedDecember31,2016	YearendedDecember31,2015	YearendedDecember31,2015
		Revenue Segment 2,099,931 $ International marine transportation, inland transportation, gasoline station and container terminals 1,600,023 Inland transportation, international marine transportation, container terminals, gasoline station and others 1,200,170 International marine transportation	Segment

110

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Provision of endorsements and guarantees to others

Year ended December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 1

Number (Note 1)	Endorser / guarantor	Party being endorsed / guaranteed	Party being endorsed / guaranteed	Ceiling on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount during the year ended December 31, 2016	Outstanding endorsement/ guarantee amount at December 31, 2016	Actual amount drawn down	Amount of endorsements /guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser / guarantor company (%)	Ceiling on total amount of endorsements / gurantees provided (Note 3)	Provision of endorsements / guarantees by parent company to subsidiary	Provision of endorsements / guarantees by subsidiary to parent company	Provision of endorsements / guarantees to the party in Mainland China	Footnote
		Company name	Relationshi p with the endorser/ guarantor (Note 2)
0	Evergreen International Storage and Transport Corporation	Gaining Enterprise S.A.	2	32,529,287 $	8,871,169 $	7,690,045 $	7,335,295 $	- $	35.46	32,529,287 $	Y	N	N	Note 4

Note 1: The numbers filled in for the endorsements/guarantees provided by the Group or subsidiaries are as follows：

(1) The Company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories:
(1)Having business relationship.
(2)The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3)The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.
(4)The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.
(5)Mutual guarantee of the trade as required by the construction contract.
(6)Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
Note 3: Under the Company’s “Procedures for Provision of Endorsements and Guarantees” No.13, the Company’s total guarantees and endorsements to others should not exceed 150% of the Company’s net asset value, and total guarantees and endorsements provided for a single party should not exceed 30% of the Company’s net asset value. The Company’s endorsements and guarantees provided toward its subsidiaries are not restricted by the above, but should not exceed 150% of the Company’s net asset value. The calculation is shown below:
The net assets based on latest financial report 21,686,191 thousand dollars × 150% ＝ 32,529,287 thousand dollars
The net assets based on latest financial report 21,686,191 thousand dollars × 30% ＝6,505,857thousand dollars
Note 4: When preparing consolidated financial statements, the translations have already been written off.

111

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 2, Page 1

Securities held by	Type and name of marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2016	As of December 31, 2016	As of December 31, 2016	As of December 31, 2016	Footnote
				Number of shares or units	Book value	Ownership (%)	Fair value or net asset value
Evergreen International Storage and Transport Corporation	Beneficiary certificate
	Yuanta De-Bao Money Market Fund	None	Available-for-sale financial assets - current	2,520,958.90	$ 30,020	-	30,020 $
	FSITC Taiwan Money Market Fund	None	Available-for-sale financial assets - current	1,650,629.10	25,003	-	25,003
	Yuanta De-Li Money Market Fund	None	Available-for-sale financial assets - current	1,548,234.90	25,005	-	25,005
	FSITC Money Market Fund	None	Available-for-sale financial assets - current	113,206.69	20,005	-	20,005
	Equity securities
	Evergreen Marine Corp.	Major institutional stockholder of the Company	Available-for-sale financial assets - current	16,155,240	179,323	0.46	179,323
	EVA Airways Corp.	Investee of the Company's major institutional stockholder	Available-for-sale financial assets - current	39,947,715	583,237	0.99	583,237
	Central Reinsurance Corp.	Investee of the Company's major institutional stockholder	Available-for-sale financial assets - non-current	48,788,966	724,516	8.68	724,516
	Evergreen International EngineeringCorp.	Investee of the Company's major institutional stockholder	Available-for-sale financial assets - non-current	715,713	-	11.93	-
	Ever Accord Construction Corp.	Investee of the Company's major institutional stockholder	Available-for-sale financial assets - non-current	8,130,882	83,635	15.27	83,635
	UNI Airways Corp.	Investee of the Company's major institutional stockholder	Available-for-sale financial assets - non-current	13,161,594	204,251	4.17	204,251
	Taiwan Terminal Services Co., Ltd.	Subsidiary of the Company's major institutional stockholder	Available-for-sale financial assets - non-current	1,200,000	14,015	12.00	14,015
	Dongbu Pusan Container Terminal Co., Ltd.	None	Available-for-sale financial assets - non-current	300,000	83,226	15.00	83,226
	Universal Venture Fund Inc.	None	Financial assets carried at cost - non-current	379,252	3,299	2.98	3,299	Note

112

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 2, Page 2

Securities held by	Type and name of marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2016	As of December 31, 2016	As of December 31, 2016	As of December 31, 2016
				Number of shares or units	Book value	Ownership (%)	Fair value or net asset value
Gaining Enterprise S.A.	Green Peninsula Agencies Sdn. Bhd.	None	Available-for-sale financial assets - non-current	950,000	$ 119,585	19.00	119,585 $
	Greenpen Properties Sdn. Bhd.	None	Available-for-sale financial assets - non-current	950,000	9,185	19.00	9,185

Note：Financial assets carried at cost - non-current consisted of stocks with no quoted market price and value cannot be measured reliably, and wherein the Company also does not possess significant influence. In accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers”, these financial assets are carried at cost.

113

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Aggregate purchases or sales of the same securities reaching NT$300 million or 20% of the Company's paid-in capital or more

Year ended December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 3

Investor	Type and name of marketable securities （Note 1）	General ledger account	Balance as at January 1, 2016 ( Note 4 )	Balance as at January 1, 2016 ( Note 4 )	Addition （Note 3）	Addition （Note 3）	Disposal （Note 3）	Disposal （Note 3）	Disposal （Note 3）	Disposal （Note 3）	Balance as at December 31, 2016 ( Note 4 )	Balance as at December 31, 2016 ( Note 4 )
			Number of shares or units	Amount	Number of shares or units	Amount	Number of shares or units	Selling price	Book value	Gain (loss) on disposal	Number of shares or units	Amount
Evergreen International Storage and Transport Corporation	Beneficiary certificate
	Mega Diamond Money Market Fund	Available-for- sale financial assets - current	4,698,946.78	$ 58,000	21,369,594.43	$ 265,000	26,068,541.21	$ 323,380	$ 323,000	$ 380	-	$ -
	Yuanta De-Li Money Market Fund	Available-for- sale financial assets - current	3,105,300.70	50,000	30,679,260.20	495,000	32,236,326.00	520,126	520,000	126	1,548,234.90	25,000

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for using equity method; otherwise leave the columns blank.

Note 3:Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4:Valuation adjustments at year-end are not included.

114

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of the Company’s paid-in capital or more

Year ended December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 4

Purchaser / seller	Counterparty	Relationship with the Counterparty	Transaction	Transaction	Transaction	Transaction	Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)
			Purchases/ Sales	Amount	Percentage of total purchases / sales (%)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)(%)
Evergreen International Storage and Transport Corporation	Evergreen International Corp.	Major institutional stockholder of the Company	Operating revenues	1,587,265 $	35.95	30~60 Days	- $	-	Accounts Receivable $ 276,165	47.78
	Evergreen Marine Corp.	Major institutional stockholder of the Company	Operating revenues	427,072	9.67	30~60 Days	-	-	Accounts Receivable 23,372	4.04
	United Stevedoring Corp.	Investee of the Company's subsidiary accounted for using equity method	Operating revenues	200,090	4.53	15~60 Days	-	-	Accounts Receivable 18,724	3.24
	EVA Airways Corp.	Investee of the Company's major institutional stockholder	Operating revenues	179,493	4.07	20~60 Days	-	-	Accounts Receivable 16,629	2.88
Gaining Enterprise S.A.	Evergreen Marine Corp.	Major institutional stockholder of the Company	Operating revenues	1,631,653	53.38	30 Days	-	-	-	-
	Evergreen International S.A.	The main stockholder of the major institutional stockholder of the Company	Operating revenues	1,359,498	44.47	120 Days	-	-	Accounts Receivable 468,303	100.00

115

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Receivables from related parties reaching NT$100 million or 20% of the Company’s paid-in capital or more

December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 5

Creditor	Counterparty	Relationship with the Company	Balance as at December 31, 2016	Turnover rate (times)	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Evergreen International Storage and Transport Corporation	Evergreen International Corp.	Major institutional stockholder of the Company	$ 276,165	7.51	- $	-	276,165 $	- $
Gaining Enterprise S.A.	Evergreen International S.A.	The main stockholder of the major institutional stockholder of the Company	468,303	3.39	-	-	232,395	-

116

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Information on investees (not including investees in Mainland China)

Year ended December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 6, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as of December 31, 2016	Shares held as of December 31, 2016	Shares held as of December 31, 2016	Net income (loss) of the investee during the year ended December 31, 2016	Investment income (loss) recognized by the Company during the year ended December 31, 2016	Footnote
				Balance as at December 31, 2016	Balance as at December 31, 2015	Number. of shares	Ownership (%)	Book value
Evergreen International Storage and Transport Corporation	Gaining Enterprise S.A.	Republic of Panama	1.Ship trading, transportation and chartering 2.Operation and investments of container yards 3.Leases and investments of overseas container terminals 4.Marine transportation related business	4,977,435 $	4,977,435 $	1,570,000	100.00	10,919,029 $	456,079 $	456,079 $	Subsidiary of the Company (Note 2)
〞	Shun An Enterprise Corp.	Taiwan	Management consulting and employment agency	20,000	20,000	2,000,000	80.00	25,054	3,861	3,089	Subsidiary of the Company (Note 2)
〞	Ever Reward Logistics Corp.	Taiwan	International trading, packing, forwarding agency, storage and warehousing, information administration	22,777	22,777	740,000	30.00	26,137	17,349	5,204	Investee of the Company accounted for using equity method
〞	Taipei Port Container Terminal Corp.	Taiwan	Container distribution and cargo stevedoring	507,619	507,619	50,761,905	9.76	448,283	60,555) (	5,911) (	Investee of the Company accounted for using equity method
Gaining Enterprise S.A.	Hazel Investment (Netherlands) N.V.	Curacao	Investment Business	378,051	378,051	4,200	70.00	315,528	8,803) (	6,162) (	Indirect subsidiary of the Company (Note 1) (Note 2)

117

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Information on investees (not including investees in Mainland China)

Year ended December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 6, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as of December 31, 2016	Shares held as of December 31, 2016	Shares held as of December 31, 2016	Net income (loss) of the investee during the year ended December 31, 2016	Investment income (loss) recognized by the Company during the year ended December 31, 2016	Footnote
				Balance as at December 31, 2016	Balance as at December 31, 2015	Number. of shares	Ownership (%)	Book value
Hazel Investment (Netherlands) N.V.	Hazel Estate B.V.	Netherlands	Investment Business	533,723 $	533,723 $	40	100.00	449,959 $	7,990) ($	7,990) ($	Indirect subsidiary of the Company (Note 1) (Note 2)
Hazel Estate B.V.	Taipei Port Container Terminal Corp.	Taiwan	Container distribution and cargo stevedoring	506,019	506,019	50,601,940	9.73	447,074	60,555) (	5,891) (	Investee of the Company’s indirect subsidiary accounted for using equity method
Shun An Enterprise Corporation	United Stevedoring Corp.	Taiwan	Cargo and labor service stevedoring	25,000	25,000	2,500,000	50.00	30,758	7,738	3,869	Investee of the Company’s subsidiary accounted for using equity method

Note 1：Initial investments amount was denominated in foreign currency, and converted to NTD based on spot rate on balance sheet date. Note 2：The investment is a consolidated entity. The transaction was eliminated when the consolidated financial statements were prepared.

118

EVERGREEN INTERNATIONAL STORAGE AND TRANSPORT CORPORATION AND SUBSIDIARIES

Information on investments in Mainland China- basic information

Year ended December 31, 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Table 7

Table 7
Investee in Mainland China	Main business activities	Paid-in Capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2016	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan during the year ended December 31, 2016		Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2016	Net income (loss) of the investee during the year ended December 31, 2016	Ownership held by the Company (direct or indirect) (%)	Investment income (loss) recognized by the Company during the year ended December 31, 2016 (Note 2)	Book value of investments in Mainland China as of December 31, 2016	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2016	Footnote
					Remitted to Mainland China	Remitted back to Taiwan (Note 3)
Qingdao Evergreen Container Storage & Transportation Co.,Ltd.	1. Main businesses: Inland container transportation, storage, loading, discharging, repair, cleaning and related activities. 2. Impact on operations of the Company: Increase investment income.	196,223 $	2	27,870 $	- $	36,950 $	- $	203,135 $	15.00	32,212 $	68,052 $	- $	Investment Income (loss) Note 2 (2) B

Name of the company	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2016	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)		Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Evergreen International Storage and Transport Corporation	- $	112,875 $		13,096,608 $

Note 1: Investment methods are classified into the following three categories:
(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.： Gaining Enterprise S.A.
(3) Others.
Note 2: In the ‘Investment income (loss) recognized by the Company for the year ended December 31, 2016’ column:
(1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
A. The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
B. The financial statements that are audited and attested by R.O.C. parent company’s CPA.
C. Others.
Note 3: Capital stock reduction of investment accounted for using equity method.

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AI assistant

EITC — Annual Report 2017

52161_rns_2017-07-20_de9eae28-086b-4333-8bfa-b83d68c02339.pdf

HEAD OFFICE

STOCK DEPARTMENT

SPOKESPERSON

DEPUTY SPOKESPERSON

AUDITORS

CORPORATE WEBSITE

CONTENTS

Ⅰ. Letter to Shareholders

1.1 Performance in 2016

1. Business Fulfilment in 2016

(1) Land Transportation Service

(2) Container Depot Service

(3) International Marine Service

1.2 Operation Strategy for 2017

1. Operation Direction

(1) Business Diversification and Steady Growth

(2) Reduce Costs and Improve Business Performance

(3) Increase Awareness of Environment Protection and Social Responsibility

2. Forecast of Business Performance

3. Key Marketing Policy

(1) Inland Transportation Business

(2) Container Depot Business

1.3 Future Development Strategy

1.4 Effects of External Competitive Environment, Laws and Macroenvironment

Ⅱ. Company Profile

2.1 Date of Incorporation

2.2 Company History

Ⅲ. Corporate Governance Report

3.1 Organization

3.1.1 Organizational Chart

3.2 Directors, Supervisors and Management Team

3.2.1 Directors and Supervisors

3.2.2 Remuneration for Directors , Supervisors, President, and Vice President

Remuneration for Directors

Remuneration for Supervisors

Remuneration of the President and Vice President

3.3 Implementation of Corporate Governance

3.3.1 Board of Directors

3.3.2 Attendance of Supervisors at Board Meetings

3.3.3 Attendance of Members at Remuneration Committee Meetings

3.3.4 Internal Control System Exercution Status

Ⅳ.Capital Overview

4.1 Capital and Shares

4.1.1 Source of Capital

4.1.2 Status of Shareholders

4.1.3 Shareholding Distribution Status

4.1.4 Market Price, Net Worth, Earnings, and Dividends per Share

4.1.5 Dividend Policy and Implementation Status

’ ’ 4.1.6 Employee Compensation、Directors and Supervisors Remuneration

4.1.7 Status of Stock Repurchased by EITC : N/A

Ⅴ. Operational Highlights

5.1 Business Activities

2. The proportion of EITC’s consolidated revenue situation:

3. Plans to Develop New products (Services):

5.2 Human Resources

Ⅵ. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheet

－ 1.Consolidated Condensed Balance Sheet Based on IFRS

－ 2.Consolidated Condensed Balance Sheet Based on ROC GAAP

6.1.2 Condensed Statement of Comprehensive Income/Condensed Statement of

Income

－ 1.Consolidated Condensed Statement of Comprehensive Income Based on IFRS

－ 2.Consolidated Condensed Statement of Income Based on ROC GAAP

6.2 Five-Year Financial Analysis

－ 1.Consolidated Financial Analysis Based on IFRS

－ 2.Consolidated Financial Analysis Based on ROC GAAP

6.3 Supervisors’ Report

To: 2017 Annual General Meeting

EVERGREEN INTERNATIONAL STORAGE & TRANSPORT CORPORATION (EITC)

6.4. Consolidated Financial Statements for the Years Ended December 31,2016 and 2015, and Independent Auditors’ Report

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Accuracy of transportation and container yard service revenue

Description

EITC Annual Report 2017