Stock Code:2601

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Review Report For the three Months Ended March 31, 2019 and 2018

Address: 14F., No.237, Sec. 2, Fuxing S. Rd., Da' an Dist., Taipei City 106, Taiwan $(R.O.C.)$ $(02)2706 - 9911$ Telephone:

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

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors' Review Report	3
4. Consolidated Balance Sheets	4
5. Consolidated Statements of Comprehensive Income	5
6. Consolidated Statements of Changes in Equity	6
7. Consolidated Statements of Cash Flows	7
8. Notes to the Consolidated Financial Statements
Company history (1)	8
Approval date and procedures of the consolidated financial statements (2)	8
(3) New standards, amendments and interpretations adopted	$8 - 11$
(4) Summary of significant accounting policies	$11 - 20$
Significant accounting assumptions and judgments, and major sources of (5) estimation uncertainty	20
Explanation of significant accounts (6)	$21 - 61$
Related-party transactions (7)	$62 - 63$
(8) Pledged assets	64
(9) Significant commitments and contingencies	$64 - 66$
(10) Losses due to major disasters	66
(11) Subsequent events	66
$(12)$ Other	$66 - 67$
(13) Segment information	67

Independent Auditors' Review Report

To the Board of Directors First Steamship Company Ltd.:

Introduction

We have reviewed the accompanying consolidated balance sheets of the First Steamship Company Ltd. and its subsidiaries of March 31, 2019 and 2018, the related consolidated statements of comprehensive income for the three months ended March 31, 2019 and 2018, as well as the changes in equity and cash flows for the three months ended March 31, 2019 and 2018, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standards ("IASs") 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our review.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standards 65, "Review of Financial Information Performed by the Independent Auditor of the Entity". A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in note 6(g), the equity accounted investments of the First Steamship Company Ltd. and its subsidiaries in its investee companies of \$1,222,643 thousand and \$1,464,984 thousand as of March 31, 2019 and 2018. And its equity in net earnings (losses) on these investee companies of \$17,697 thousand and \$(35,189) thousand for the three months ended March 31, 2019 and 2018, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain equity accounted investee companies described in the Basis for Oualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the First Steamship Company Ltd. and its subsidiaries as of March 31, 2019 and 2018, and of its consolidated financial performance for the three months ended March 31, 2019 and 2018, as well as its consolidated cash flows for the three months ended March 31, 2019 and 2018 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IASs 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Emphasis of Matter

As stated in Note 3(1) to the consolidated financial statements, the Company has initially adopted the IFRS 16, "Leases" from January 1, 2019 and applied the modified retrospective approach with no restatement of comparative period amounts. Our conclusion is not modified in respect of this matter.

The engagement partners on the reviews resulting in this independent auditors' review report are Shu Ying Chang and Li Chen Lai.

KPMG

Taipei, Taiwan (Republic of China) May 14, 2019

Notes to Readers

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

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

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 30, 2019 and 2018

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2019, December 31, 2018, and March 31, 2018

(Expressed in Thousands of New Taiwan Dollars)

		March 31, 2019		December 31, 2018		March 30, 2018
	Assets	Amount	$\%$	Amount	$\%$	Amount	%		Liabilities and Equity
	Current assets:								Current liabilities:
1100	Cash and cash equivalents (Note 6(a))	5,263,596 S.	13	5,468,507	16	4,956,384	15	2100	Short-term borrowings (Notes $6(n)$ )
1110	Current financial assets at fair value through profit or loss (Note $6(b)$ )	166,451		151,968	$\overline{\phantom{a}}$	222,223		2110	Short-term notes and bills payable
1136	Current financial assets at amortized cost, net (Notes $6(c)$ and 8)	529,932		921,600	3			2120	Current financial liabilities at fair value through profit or loss (Note $6(b)$ and $(p)$ )
1150	Notes receivable, net (Notes 6(d))					1,859		2130	Current contract liabilities (Notes $6(x)$ and 9)
1170	Accounts receivable, net (Notes $6(d)$ and $(x)$ )	1,105,867	3	1,214,938	4	406,746	1	2170	Accounts payable (Note $6(q)$ )
1200	Other receivables, net (Notes 6 (e))	910,628	2	906,515	3	974,337	3	2200	Other payables (Notes 6(c), (g), (i), (q), (y), 7 and $9)$
1220	Current tax assets	229		229		65,958	$\overline{\phantom{a}}$	2230	Current tax liabilities
1300	Inventories, net	372,166		363,337	1	333,803	1	2280	Current lease liabilities (Notes $6(r)$ and 7)
1320	Inventories (for construction business), net (Note 8	651,486	2	658,896	$\overline{2}$	578,393	$\overline{2}$	2321	Current portion of bonds payable (Note 6(p))
	and $9)$							2322	Current portion of long-term borrowings (Note 6(o))
1461	Non-current assets classified as held for sale(Notes $6(fj)$ and 8)	544,857		503,590				2323	Long-term notes and accounts payable, current portion (Note $6(s)$ )
1476	Other current financial assets (Notes 6(m) and 8)	582,934		613,914	$\overline{2}$	138,584		2399	Other current liabilities (Note 6(m) and (t))
1479	Other current assets, others (Notes 6(s), (v), 7 and 9)	362,296		575,933	2	866,392	$\overline{\mathbf{3}}$
		10,490,442	25	11,379,427	34	8.544.679	26		Non-Current liabilities:
	Non-current assets:							2530	Bonds payable (Note 6(p))
1550	Investments accounted for using equity method, net	1,336,186	3	1,324,098	4	1,464,984	4	2540	Long-term borrowings (Note $6(0)$ )
	(Notes $6(f)$ , (g) and 11)							2570 2580	Deferred tax liabilities
1600 1755	Property, plant and equipment (Notes 6(i), 7 and 8) Right-of-use assets (Notes 6(j) and 7)	13,490,660	33	13,427,506	38	13,783,226	42	2612	Non-current lease liabilities (Notes $6(r)$ and 7) Long-term accounts payable (Note $6(s)$ )
1760	Investment property, net (Notes $6(f)$ , (k) and 8)	10,944,195	27					2640	Net defined benefit liability, non-current
1780	Intangible assets (Note 6(l))	144,739 2,256,974	$\tilde{\phantom{a}}$	144,982 2,213,422	$\overline{\phantom{a}}$	393,072		2645	Guarantee deposits
1840	Deferred tax assets	871,141	5 $\overline{c}$	518,633	6	2,160,682 419,571
1915	Prepayments for business facilities (Notes 9)	627,143	2	613,494	2 $\overline{2}$	716,778	2		Total liabilities
1935	Long-term lease payments receivable (Note 6(d))	800,346	$\overline{2}$	885,063	3	1,448,578	4		Equity attributable to owners of parent (Notes 6(f),
1980	Other non-current financial assets(notes 6(m), 7 and	461,844		526,060	2	711,426	$\overline{a}$		$(g)$ , $(p)$ and $(v)$ ):
	8)							3100	Capital stock
1985	Long-term prepaid rents(notes $6(s)$ and 8)			3,279,198	9	3,538,964	1 ₁	3200	Capital surplus
1990	Other non-current assets (Notes $6(v)$ and 7)	159,631		163,210		22,877		3300	Retained earnings
		31,092,859	75	23,095,666	66	24,660,158	74	3400	Other equity interest
									Total equity attributable to owners of parent:
								36XX	Non-controlling interests (Notes $6(h)$ and $(v)$ )
									Total equity
	Total assets	41,583,301 100		34,475,093 100		33,204,837	100		Total liabilities and equity

March 31, 2019		December 31, 2018		March 30, 2018
Amount	$\frac{0}{2}$	Amount	%	Amount	$\frac{1}{6}$

3,573,993	9	3,540,288	10	2,774,934	8
49,947		49,947		49,945
5,244
5,404		5,173		22,612
2,831,276	7	3,680,595	11	3,438,536	10
1,317,332	3	1,813,412	6	1,343,035	5
129,960		149,727		64,443
940,608	2
998,057	2	997,668	3
1,131,125	3	1,629,615	5	3,049,842	9
		46,545		63,163
304,529	I	429,187		141,593
11.287,475	27	12,342,157	36	10,948,103	32

2,282,379	5	997,668	3	1,993,004	6
4 962,159	12	5,632,493	16	4,441,700	13
71,264		68,973		204,742	$\mathbf{1}$
9,365,388	23
		1,399,021	4	1,549,011	5
1,637		1,650		7,660
950,989	2 42	953,419	3	897,462	$\overline{\mathbf{3}}$
17,633,816	69	9,053,224	26	9,093,579	$\overline{28}$
28,921,291		21,395,381	62	20,041,682	60
6,308,832	15	6,308,832	18	6,308,832	19
2,051,210	5	1,953,436	6	1,916,601	6
265,799	$\mathbf{1}$	680,956	2	757,760	2
(83, 387)		(230,852)	(1)	(342, 559)	(1)
8,542,454	21	8,712,372	25	8,640,634	26
4,119,556	10	4,367,340	13	4,522,251	14
12,662,010	31	13,079,712	38	13,163,155	40
41,583,301 2	100	34,475,093	100	33,204,837	100

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

		For the three months ended March 31
			2019		2018
			Amount	℅	Amount	℅
4000	Operating revenues (Notes $6(x)$ and 7)	S	2.141.422	100	2.032,559	100
5000	Operating costs (Notes 6(k) and (t))		710,827	33	559,256	27
	Gross profit from operations		1,430,595	67	1,473,303	$\overline{73}$
6000	Operating expenses (Notes 6(d), (i), (l), (r), (s), (t), (y) and 7)		992,222	47	1,115,769	55
6450	Impairment loss determined in accordance with IFRS 9 (Note 6(d))		15.531	-1
	Net operating income		422,842	19	357,534	18
	Non-operating income and expenses (Notes 6(f), (g), (p), (r), (z) and 7):
7010	Other income		29.349	1	8,038
7020	Other gains and losses, net		121,883	6	35,482	$\overline{2}$
7050	Finance costs		(257, 500)	(12)	(100, 425)	(5)
7060	Share of profit (loss) of associates accounted for using equity method, net		10.794	-1	(35, 189)	(2)
			(95, 474)	(4)	(92,094)	(5)
7900	Profit from continuing operations before tax		327,368	15	265,440	13
7950	Less: Tax expense (Note $6(u)$ )		101,644	$\overline{5}$	111,318	5
	Profit		225.724	10	154,122	8
8300	Other comprehensive income:
8360	Components of other comprehensive income that will be reclassified to profit or loss
8361	Exchange differences on translation of foreign financial statements		239,710	11	137,898	7
8365	Equity related to non-current assets or disposal groups classified as held for sale		735
8370	Share of other comprehensive income of associates accounted for using equity		1,593		(40, 669)	(2)
	method, components of other comprehensive income that will be reclassified to profit or loss
8399	Income tax related to components of other comprehensive income that will be
	reclassified to profit or loss
	Total components of other comprehensive income that will be reclassified to profit or __ loss		242,038	$\mathbf{11}$	97,229	5
8300	Other comprehensive income, net		242,038	11	97.229	5
	Comprehensive income (loss)	\$	467,762	21	251,351	$\overline{13}$
	Profit (loss), attributable to:
	Owners of parent	S	139.343	6	84,630	5
	Non-controlling interests (Note 6(v))		86.381	4	69,492	3
		S	225,724	10	154,122	$\overline{\mathbf{a}}$
	Comprehensive income (loss) attributable to:
	Owners of parent	S	286.808	13	78,207	4
	Non-controlling interests (Note $6(v)$ )		180.954	8	173,144	9
		S	467,762	21	251,351	$\overline{13}$
	Earnings per share (Note 6(w)) Basic earnings per share (NT dollars)
				0.22		0.13
	Diluted earnings per share(NT dollars)	S		0.21		0.13

$\ddot{\phantom{a}}$

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

	Equity attributable to owners of parent
	Share capital				Retained earnings			Total other equity interest
								Equity related
							Exchange differences on	to non-current assets (or
							translation of	disposal	Total equity
					Unappropriated		foreign	groups)	attributable to
	Common				retained	Total retained	financial	classified as	owners of	Non-controllin
Balance at January 1, 2018	stock 6,308,832	1,898,430	107.468	Capital surplus Legal reserve Special reserve	earnings 565.662	earnings $\sqrt{673,130}$	statements (336, 136)	held for sale	parent 8,544,256	g interests 4,382,386	Total equity 12,926,642
Profit (loss) for the three months ended March 31, 2018					84,630	84,630			84,630	69,492	154,122
Other comprehensive income for the three months ended March 31, 2018							(6, 423)		(6, 423)	103,652	97,229
Total comprehensive income for the three months ended March 31, 2018					84,630	84,630	(6, 423)		78,207	173,144	251,351
Due to donated assets received		3,332							3,332	$\overline{\phantom{a}}$	3,332
Changes in equity of associates accounted for using equity method		(4,245)							(4,245)	$\blacksquare$	(4,245)
Difference between consideration and carrying amount of subsidiaries acquired or disposed	$\sim$	19,084							19.084	(33,009)	(13, 925)
Balance at March 31, 2018	6,308,832	1,916,601	107,468		650,292	757,760	(342, 559)		8,640,634	4.522.521	13,163,155
Balance at January 1, 2019	6,308,832	1,953,436	163,964	336,136	180,856	680,956	(266, 508)	35,656	8,712,372	4,367,340	13,079,712
Effects of retrospective application and retrospective restatement					(554, 500)	(554, 500)			(554, 500)	(428, 738)	(983, 238)
Equity at beginning of period after adjustments	6,308,832	1,953,436	163,964	336,136	(373, 644)	126,456	(266, 508)	35,656	8,157,872	3.938,602	12,096,474
Profit (loss) for the three months ended March 31, 2019					139 343	139,343			139,343	86,381	225,724
Other comprehensive income for the three months ended March 31, 2019							146,730	735	147,465	94,573	242,038
Total comprehensive income for the three months ended March 31, 2019					139.343	139,343	146,730	735	286,808	180,954	467,762
Changes in equity of associates accounted for using equity method		(299)							(299)		(299)
Due to recognition of equity component of convertible bonds (preference share) issued		98,073							98,073		98,073
Balance at March 31, 2019	6.308,832	2,051,210	163,964	336,136	(234, 301)	265,799	(119, 778)	36,391	8,542,454	4,119,556	12,662,010.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

	For the three months ended March 31
	2019	2018
Cash flows from (used in) operating activities:
Profit before tax	\$ 327,368	265,440
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense	510,827	221,746
Amortization expense	9,461	16,763
Expected credit loss/ Provision for bad debt expense	15,531	3,639
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	(10, 386)	(1,049)
Interest expense	257,500	100,425
Interest income	(29, 349)	(8,038)
Share of loss (profit) of associates accounted for using equity method	(10, 794)	35,189
Loss (gain) on disposal of property, plan and equipment	2,740	(42)
Reversal of impairment loss on non-financial assets	(40, 533)
Lease expense		59,534
Total adjustments to reconcile profit (loss)	704,997	428,167
Changes in operating assets and liabilities:
Changes in operating assets:
Decrease (increase) in financial assets at fair value through profit or loss, mandatorily measured at fair value	(4,954)	255,784
Notes receivable		(1, 859)
Accounts receivable	223,670	(232, 278)
Other receivables	(23, 535)	(18, 129)
Inventories	6,406	(23, 497)
Other current assets	31,186	(121, 299)
Other financial assets	(304)	(293)
Changes in operating liabilities:
Contract liabilities	231	19,730
Accounts payable	(931, 836)	(790, 475)
Other payables	(369, 360)	(128, 465)
Other current liabilities	(26, 786)	38,891
Net defined benefit liability	(13)	(15)
Other operating liabilities		(24, 568)
Total adjustments	(390, 298)	(598, 306)
Cash outflow generated from operations	(62,930)	(332, 866)
Interest received	56,260	10,614
Interest paid	(247, 199)	(101, 018)
Income taxes paid	(126, 517)	(168, 648)
Net cash flows used in operating activities	(380, 386)	(591, 918)

$\cdot$

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT' D)

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

	For the three months ended March 31
	2019	2018
Cash flows from (used in) investing activities:
Proceeds from disposal of financial assets at amortised cost	69,181
Acquisition of investments accounted for using equity method		(465, 198)
Acquisition of property, plant and equipment	(133, 148)	(157,082)
Proceeds from disposal of property, plant and equipment	5,456	16,215
Decrease in other receivables	6,205	140,973
Acquisition of intangible assets	(4, 457)	(36, 430)
Decrease in receivables (transfer of stock equity and prepaid investment)		11,315
Decrease (increase) in other financial assets	1,667	(45, 127)
Increase in other non-current assets	(1,200)	(1, 438)
Increase in prepaid equipment		(151, 936)
Other investing activities (long-term prepaid rents)		(3, 453)
Net cash flows from (used in) investing activities	(56, 296)	(692, 161)
Cash flows from (used in) financing activities:
Decrease in short-term borrowings	(9,233)	(27, )
Increase in short-term notes and bills payable		29
Payments of lease liabilities	(193, 796)
Proceeds from issuing bonds	1,542,300
Proceeds from long-term borrowings	147,171	605,970
Repayments of long-term borrowings	(1, 351, 946)	(1,386,939)
Increase (decrease) in guarantee deposits	(23, 541)	89,874
Acquisition of ownership interests in subsidiaries		(13, 925)
Other financing activities		3,332
Net cash flows used in financing activities	110,955	(728, 678)
Effect of exchange rate changes on cash and cash equivalents	120,816	(10, 442)
Net decrease in cash and cash equivalents	(204, 911)	(2,023,199)
Cash and cash equivalents at beginning of period	5,468,507	6,979,583
Cash and cash equivalents at end of period	5,263,596 S	4,956,384

$\bar{z}$

$\overline{\phantom{a}}$

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

First Steamship Company Ltd. (the "Company") was established in October 1963 in accordance with the Company Act of the Republic of China. The Company's registered office address is located at 14F, No.237, Sec. 2, Fuxing S. Rd., Taipei City, R.O.C. The major business activities of the Company and its subsidiaries ("the Group") are the domestic and international sea transportation and related businesses, trading of vessels and related products, providing services of financial leasing, providing business consultation services, trading of cosmetics, furnishings and etc., investments, and selling, renting, investing in construction. Please refer to note 14 for further information.

(2) Approval date and procedures of the consolidated financial statements:

These consolidated financial statements were authorized for issuance by the Board of Directors on May 14, 2019.

(3) New standards, amendments and interpretations adopted:

The impact of the International Financial Reporting Standards ("IFRSs") endorsed by the $(a)$ Financial Supervisory Commission, R.O.C. ("FSC") which have already been adopted. The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2018.

		Effective date
	New, Revised or Amended Standards and Interpretations	per IASB
"Leases" IFRS 16		January 1, 2019
IFRIC 23	"Uncertainty over Income Tax Treatments"	January 1, 2019
Amendments to IFRS 9	"Prepayment Features with Negative Compensation"	January 1, 2019
Amendments to IAS 19	"Plan Amendment, Curtailment or Settlement" "	January 1, 2019
Amendments to IAS 28	"Long-term interests in associates and joint ventures"	January 1, 2019
	Annual Improvements to IFRS Standards 2015-2017 Cycle"	January 1, 2019

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

IFRS 16 "Leases" $(i)$

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

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

1) Definition of a lease

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

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

2) As a lessee

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

· Leases classified as operating leases under IAS 17

At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group's incremental borrowing rate as at January 1, 2019. Right-of-use assets are measured at either:

their carrying amount as if IFRS 16 had been applied since the commencement date, discounted using the lessee's incremental borrowing rate at the date of initial application – the Group applied this approach to its largest property leases; or
an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments – the Group applied this approach to all other lease. In addition, the Group used the following practical expedients when applying IFRS 16 to leases.
Applied a single discount rate to a portfolio of leases with similar characteristics.
Adjusted the right-of-use assets by the amount of IAS 37 onerous contract provision immediately before the date of initial application, as an alternative to an impairment review.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term.
Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
3) As a lessor

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

4) Impacts on financial statements

On transition to IFRS 16, the Group recognised additional \$10,891,529 thousands of right-of-use assets, reduced \$3,469,405 thousands of long-term of prepaid rents (including current portion), additional \$329,302 thousands of deferred tax assets, reduced \$1,445,566 thousands of long-term accounts payable and additional \$10,270,230 thousands of lease liabilities, reduced \$428,738 thousands of non-controlling interest and reduced \$554,500 thousands of retained earnings. When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted-average rate applied is 4.9%.

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

	January 1, 2019
Operating lease commitment at December 31, 2018 as disclosed in the Group's \$ 13,096,621
consolidated financial statements
Discounted using the incremental borrowing rate at January 1, 2019	10,270,230
Finance lease liabilities recognized as at December 31, 2018
Lease liabilities recognized at January 1, 2019	10.270.230

Notes to the Consolidated Financial Statements

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

As of the date, the following IFRSs that have been issued by the IASB, but have yet to be endorsed by the FSC:

New, Revised or Amended Standards and Interpretations	Effective date per TASB
Amendments to IFRS 3 "Definition of a Business"	January 1, 2020
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture"	Effective date to be determined by IASB
IFRS 17 "Insurance Contracts"	January 1, 2021
Amendments to IAS 1 and IAS 8 "Definition of Material"	January 1, 2020

Those which may be relevant to the Group are set out below:

Issuance / Release Dates	Standards or Interpretations	Content of amendment
October 31, 2018	Amendments to IAS 1 and IAS 8 "Definition of Material"	The amendments clarify the definition of material and how it should be applied by including in the definition guidance that until has featured elsewhere in IFRS now Standards. In addition, the explanations accompanying the definition have been improved. Finally, the amendments ensure that the definition of material is consistent across all IFRS Standards.

The Group assessed that the above IFRSs may not be relevant to the Group.

Summary of significant accounting policies: $(4)$

Statement of compliance $(a)$

The consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language consolidated financial statements, the Chinese version shall prevail.

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 "Interim Financial Reporting" which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statements for the year ended December 31, 2018. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2018.

(b) Basis of consolidation

List of subsidiaries in the consolidated financial statements $(i)$

List of subsidiaries in the consolidated financial statements include.

		Shareholding
Name of Investor	Name of Subsidiary	Principal activity	March 31, December 2019	31, 2018	March 31. 2018	Note
Ltd.	First Steamship Co., Yee Shin Investment Co., Ltd.	General investing	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Ltd.	First Steamship Co., Yee young Co., Ltd	Real estate development, rental and leasing of building	100.00%	100.00%		100,00% The company directly (indirectly) holds more than 50% of its subsidiaries
Ltd.	First Steamship Co., First Steamship Group Development Co., Ltd.	Real estate development, rental and leasing of building	55.00%	55.00%		55.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Ltd.	First Steamship Co., FIRST STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
First Steamship Co., GRAND OCEAN Ltd.	RETAIL GROUP LTD.	Investment holding company	3.82%	3.82%		3.95% The company directly (indirectly) holds more than 50% of its subsidiaries
First Steamship Co., FIRST MARINER Ltd.	HOLDING LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
First Steamship Co., NEW URBAN Ltd.	INVESTMENTS LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Yee Shin Investment Co., Ltd RETAIL	GRAND OCEAN GROUP LTD.	Investment holding company	2.29%	1.82%		1.81% The company directly (indirectly) holds more than 50% of its subsidiaries
First Steamship Group Development Consultants LTD Co., Ltd.	Lan Hai Engineering	Engineering Consultancy	70.00%	70.00%		70.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	LONGEVITY NAVIGATION S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	PRAISE MARITIME S.A.	International transportation and shipping agency	100.00%	100,00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	BEST STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	GRAND STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100,00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	AHEAD CAPITAL LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	MEDIA ASSETS GLOBAL LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries

Notes to the Consolidated Financial Statements

	Shareholding
Name of Investor	Name of Subsidiary	Principal activity	March 31, 2019	December 31, 2018	March 31, 2018	Note
FIRST STEAMSHIP S.A.	BLACK SEA STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	SHIP BULKER STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	NATURE SOURCES LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	GRAND OCEAN RETAIL GROUP LTD.	Investment holding company	48.38%	48.38%		48.38% The company directly (indirectly) holds more than 50% of its subsidianes
FIRST STEAMSHIP S.A.	RELIANCE STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	ALLIANCE STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	SURE SUCCESS STEAMSHIP S.A.	International transportation and shipping agency	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	HERITAGE RICHES LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	SHINING STEAMSHIP INTERNATIONAL S.A.	International transportation and shipping agency	100.00%	%	$\overline{\phantom{0}}$	% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST STEAMSHIP S.A.	EXCELLENT STEAMSHIP INTERNATIONAL S.A.	International transportation and shipping agency	100.00%	%		% The company directly (indirectly) holds more than 50% of its subsidiaries
AHEAD CAPITAL GRAND OCEAN LTD.	RETAIL GROUP LTD.	Investment holding company	1.85%	1.85%		1.85% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST MARINER FIRST MARINER HOLDING LTD.	CAPITAL LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST MARINER HOLDING LTD.	MARINER FAR EAST LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST MARINER CAPITAL LTD.	MARINER CAPITAL LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
FIRST MARINER CAPITAL LTD.	Mariner Finance Ltd.	Loan company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries

$\bar{\beta}$

Notes to the Consolidated Financial Statements

				Sharcholding
Name of Investor	Name of Subsidiary	Principal activity	March 31, 2019	December 31, 2018	March 31, 2018	Note
FIRST MARINER CAPITAL LTD.	Morton Securities Ltd.	Securities and Securities underwriting company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
MARINER CAPITAL LTD.	Youchen Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Shanghai Youxin Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Suzhou Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Nanjing Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Nantong Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Huaian Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Hefei Youxin Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Wuhan Youxin Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Qingdao Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Weifang Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Chongqing Youren Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Fuzhou Youli Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Dongguan Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Guangzhou Youqiang Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Ningbo Youren Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Changsha Youli Car Service Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Xian Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries

$\hat{\boldsymbol{\beta}}$

$\sim 10^{-1}$

Notes to the Consolidated Financial Statements

				Shareholding
Name of Investor	Name of Subsidiary	Principal activity	March 31, 2019	December 31, 2018	March 31, 2018	Note
Youchen Car Leasing Ltd.	Xiamen Youhon Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Chengdu Youcheng Car Automobile Leasing Ltd.	Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Xuzhou Youhon Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Lianyungang Youren Car Service Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Jinhua Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Suqian Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Jinan Youli Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Yancheng Youcheng Car Leasing Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Youchen Car Leasing Ltd.	Zhuzhou Youcheng Car Leasing Ltd.	Automobile Finance leasing company	%	% ÷		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries and it also completed liquidation in October 2017
Youchen Car Leasing Ltd.	Zhongshan Youcheng Car Rental Co., Ltd.	Automobile Finance leasing company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
GRAND OCEAN RETAIL GROUP LTD.	GRAND CITI LTD.	Investment holding company	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
	GRAND CITI LTD. Grand Ocean Retail Group Ltd.	Trading of cosmetics, furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Group Ltd.	Grand Ocean Retail Suzhou Grand Ocean Department Store Co., Ltd.	Trading of cosmetics, furnishings, etc.	86.67%	86.67%		86.67% The company directly (indirectly) holds more than 50% of its subsidiaries It was closed on December 31,2018, and it was processed in the liquidation process.
Grand Ocean Retail Nanjing Ocean Group Ltd.	Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Group Ltd.	Grand Ocean Retail Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd.	Trading of cosmetics, furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Grand Ocean Retail Zayton Ocean Group Ltd.	Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Group Ltd.	Grand Ocean Retail Shanghai Jing Xuan Business Management Co., Ltd.	Trading of cosmetics, furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries

$15$

Notes to the Consolidated Financial Statements

	Sharcholding
Name of Investor	Name of Subsidiar v	Principal activity	March 31, 2019	December 31, 2018	March 31, 2018	Note
Grand Ocean Retail Fuzhou Jiaruixing Group Ltd.	Commercial Management Co., Ltd.	Management consulting business, and trading of cosmetics. furnishings, etc.	100.00%	100.00%		% The company directly (indirectly) holds more than 50% of its subsidiaries
Zayton Ocean Department Store Co., Ltd.	Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Trading of cosmetics, furnishings, etc.	30.00%	30.00%		30.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Nanjing Ocean Department Store Co., Ltd.	Suzhou Grand Ocean Department Store Co., Ltd	Trading of cosmetics. furnishings, etc.	6.66%	6.66%		6.66% The company directly (indirectly) holds more than 50% of its subsidiaries. It was closed on December 31, 2018, and it was processed in the liquidation process.
Nanjing Ocean Department Store Co., Ltd.	Nanjing Grand Ocean Department Hefei Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Grand Ocean Department Store Co., Ltd.	Fuzhou Zhongcheng Fuzhou Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Grand Ocean Department Store Co., Ltd.	Fuzhou Zhongcheng Fuzhou Tiandi Grand Ocean Department Store cosmetics, Co., Ltd.	Trading of furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Fuzhou Zhongcheng Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	70.00%	70.00%		70.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Fuzhou Grand Ocean Department Store Co., Ltd.	Fuzhou Tiandi Grand Ocean Department Store cosmetics, Co., Ltd.	Trading of furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Wuhan Guanggu Grand Ocean Department Store cosmetics, Co., Ltd.	Trading of furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Xiangtan Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidianes. It was closed on December 31,2018, and it was processed in the liquidation process.
Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Chongqing Guanggu Grand Ocean Department Store Co., Ltd.	Trading of cosmetics, furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Wuhan Longyang Grand Trading of Ocean Department Store cosmetics, Co., Ltd.	furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Hengyang Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	100.00%	100.00%		1.00% The company directly (indirectly) holds more than 50% of its subsidiaries

Notes to the Consolidated Financial Statements

				Sharcholding
Name of Investor	Name of Subsidiary	Principal activity	March 31, 2019	December 31, 2018	March 31, 2018	Note
Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Shiyan Ocean Modern Shopping Co., Ltd.	Trading of cosmetics. furnishings, etc.	100.00%	100.00%		100.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Guanggu Grand Ocean Department Store Co., Ltd.	Xiangtan Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries. It was closed on December 31, 2018, and it was processed in the liquidation process.
Wuhan Guanggu Grand Ocean Department Store Co., Ltd.	Chongqing Guanggu Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Guanggu Grand Ocean Department Store Co., Ltd.	Wuhan Longyang Grand Trading of Ocean Department Store cosmetics, Co., Ltd.	furnishings, etc.	50.00%	50.00%		50.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Guanggu Grand Ocean Department Store Co. Ltd.	Yichang Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	99.00%	99.00%		99.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Wuhan Longyang Grand Ocean Department Store Co., Ltd.	Yichang Grand Ocean Department Store Co., Ltd.	Trading of cosmetics, furnishings, etc.	1.00%	1.00%		1.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Xiangtan Grand Ocean Department Store Co., Ltd.	Hengyang Grand Ocean Department Store Co., Ltd.	Trading of cosmetics. furnishings, etc.	%	%		99.00% The company directly (indirectly) holds more than 50% of its subsidiaries

(ii) List of subsidiaries which are not included in the consolidated financial statements: None.

$(c)$ Leases (policy applicable from January 1, 2019)

Identifying a lease

For contract signing date, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Assesses whether the contract is, or contains, a lease, the Group evaluates the following items: :

$(1)$ the contract involves the use of an identified asset, the identified asset is expressly specified in the contract or is implicitly specified as it is available for use, and its entity may distinguish or represent substantially all of the capacity, and the supplier have a substantive right to substitute the asset, the asset is not an identified asset; and
$(2)$ the Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use; and
When one of the following conditions is met, the Company has the right to direct the use of $(3)$ the identified asset throughout the period of use:

· The customer has the right to use the identified assets and the purpose of their use throughout the period of use.

· The decision-making process regarding the use of the asset and the purpose of its use is predetermined, and:

Notes to the Consolidated Financial Statements

The customer has the right to operate the asset throughout the period of use and the supplier has no right to change such operational instructions; or
The manner in which the customer designs the asset has pre-determined how and during the entire use period.

When the lease is established or the reassessment of the contract includes a lease, the combined company distributes the consideration in the contract to the individual lease component on a relative price basis. However, at the time of lease of land and construction, the combined company chooses to treat the lease component and the non-lease component as part of a single lease without distinguishing between non-lease components.

2. As a lessee

The Group recognizes right-of-use asset and lease liability at the commencement date. The cost of the right-of-use asset comprises: the amount of the initial measurement of the lease liability; any lease payments made at or before the commencement date; any initial direct costs incurred by the lessee; an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease; and less any leas incentives received.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of use assets or the of the lease terms. Otherwise, the group evaluate regular whether the right-of-asset is impaired and to account for any impairment loss identified; when the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

At the commencement date the Group measures the lease liability ate the present value of the lease payments that are not paid at that date. The lease payments discount using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses it's incremental borrowing rate. The group using incremental borrowing rate as the discount.

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

i. fixed payments, including in-substance fixed payments;

ii. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date:

iii. amounts expected to be payable by the lessee under residual value guarantees;

iv. the Group is reasonably certain to exercise purchase that option or an option to terminate the lease or payments of penalties for terminating the lease.

The lease liability is subsequently measured at amortized cost using the effective interest method and remeasure the amount when:

i. change in future lease payments arising from a change in an index or a rate;

ii. change in the amounts expected to be payable under a residual value guarantee; or

iii. if the Company changes its assessment of whether it will exercise a purchase option, extension or termination option.

iv. changes its assessment of whether it will extension or termination option, and change in the lease term

v. Modification of the subject, scope or other terms of the lease

It is remeasured if there is a change in future lease payments arising from a change in an index or

Notes to the Consolidated Financial Statements

a rate; if there is a change in the amounts expected to be payable under a residual value guarantee; or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss.

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

The Group will use the right-of-use asset and lease liabilities that are not in line with the definition of investment real estate as separate items expressed in the balance sheet.

The Company recognizes the lease payments associated with short-term leases and low-value asset leases as expenses on a straight-line basis over the lease term.

As a lessor

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments discount using the interest rate implicit in the lease, if that rate can be readily determined. At the time of the assessment, the consideration of the combined company includes whether the lease period covers the relevant specific indicators such as the main part of the economic life of the underlying asset.

If the combined company is a sub-lease, the main lease and sub-lease transaction are processed separately, and the classification of the sub-lease transaction is evaluated based on the right-of-use asset generated by the main lease. If the primary lease is a short-term lease and an exemption is applied, the sub-lease transaction should be classified as an operating lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

Assets held under finance leases are expressed as amounts receivable from finance leases based on the amount of net lease investment. The original direct costs incurred in negotiating and arranging operating leases are included in the net lease investment. The net investment in leases is a type that can be reflected in a fixed rate of return in each period and is recognized as interest income during the lease term. For operating leases, the combined company uses the straight-line basis to recognise the lease payments received as rental income over the lease term.

(d) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

Income taxes $(e)$

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of IAS 34, Interim Financial Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period (and allocated to current and deferred taxes based on its proportionate size).

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

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

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in "Interim Financial Reporting" accordance with IAS 34 and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Except for the following, the preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2018. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2018.

Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

Except the following explanation mentioned below, the explanation of significant accounts described in the consolidated financial statements are the same as those in the consolidated financial statements for the year ended December 31, 2018. For the related information, please refer to note 6 of the consolidated financial statements for the year ended December 31, 2018.

(a) Cash and cash equivalents

		March 31, 2019	December 31, 2018	March 31, 2018
Petty cash	S	39.949	49,601	49,147
Demand deposits		5,202,080	5,397,402	4,774,699
Time deposits		21,567	21,504	132,538
Total		5,263,596	5.468.507	4,956,384

Please refer to note 6(aa) for the sensitivity analysis and interest rate risk of the financial assets and liabilities of the Group.

Financial assets $(b)$

As follows: $(i)$

		March 31, 2019	December 31, 2018	March 31, 2018
Financial assets at fair value through profit or loss
Financial asset held-for-trading
Beneficiary certificates	S	154,041	140,466	210,092
Shares of stock of listed companies		12,410	11,502	12,131
Total		166.451	151.968	222.223
Financial liabilities held-for-trading
Embedded derivatives--
Redemption and resale rights of		5.244
convertible corporate bond

Please refer to note 6(aa) for disclosure of credit risk and market risk of all financial $(ii)$ instruments mentioned above.
$(iii)$ Please refer to note 6(z) for the unrealized gain (loss) on valuation of financial assets and liabilities.

$(c)$ Current financial assets at amortized cost

	March 31,	December 31,	March 31,
	2019	2018	2018
Corporate bond	529,932	921.600

1. On June 15, 2018, the Group's Board of Directors had passed a resolution during the meeting to purchase a one-year unsecured 10% corporate bond issued by Skyfame Realty Holdings Ltd. at par value of \$924,300 thousand (USD \$30,000 thousand). The Group assesses that the objective is to hold the asset to collect the contractual cash flows until its maturity date, and the cash flows of financial assets are solely payments of principal and interest on the principal amount outstanding; therefore, the financial asset was reported as financial asset measured at amortized cost. On January 28, 2019, the Group's Board of Directors had agreed to Skyfame Realty Holdings Ltd. redemption \$394,368 thousand (USD \$12,800 thousand) of unsecured corporate bond in advance. Moreover, the aforesaid amount in financing was \$144,315 thousand (USD) \$4,684 thousand) and \$468,163 thousand (USD \$15,240 thousand) as of March 31,2019 and December 31, 2018.
1. As of March 31, 2019 and March 31, 2018, the financial assets of the Group had been pledged as collateral for borrowings. Please refer to note 8
$(d)$ Trade receivables and other receivables

	March 31, 2019	December 31, 2018	March 31, 2018
Current
Account payable	\$		1,859
Trade receivables	262,213	385,502	193,161
Allowance for impairment
	262,213	385,502	195,020
Leases payment receivables (included operating lease)	1,378,088	1,025,414	239,925
Less: Unearned interest	(155, 777)	(169,065)	(24, 441)
Allowance for impairment	(37, 657)	(26,913)	(1,899)
	843,654	829,436	213,585
Subtotal	1,105,867	1,214,938	408,605
Non-current
Leases payment receivables	907,201	988,803	1,692,865
Less: Unearned interest	(75, 775)	(78, 628)	(222, 855)
Allowance for impairment	(31,080)	(25,112)	(21, 432)
Subtotal of non-current asset	800,346	885,063	1,448,578
Total	1,906,213	2,100,001	1,875,183
			(Continued)

Notes to the Consolidated Financial Statements

(i) The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information.
1) The loss allowance provision in rental business department in China was determined as follows:

	2019.3.31
		Gross carrying amount of leases payment receivable	Weighted-aver age loss rate	Loss allowance provision
Current	S	1.510,608	0.16%	2,360
1 to 30 days past due		88,092	2.64%	2,326
31 to 60 days past due		16,630	15.29%	2,542
61 to 90 days past due		18.271	34.05%	6,221
More than 91 days past due (Note)		79,136	69.86%	55,288
		712 737		68 737

			2018.12.31
		Gross carrying amount of leases payment receivable	Weighted-aver age loss rate	Loss allowance provision
Current	S	1,605,182	0.15%	2,438
1 to 30 days past due		79,394	2.30%	1,826
31 to 60 days past due		10,676	16.59%	1,770
61 to 90 days past due		4,768	36.88%	1,759
More than 91 days past due (Note)		66,504	66.51%	44,232
		1,766,524		52,025
			2018.3.31
		Gross carrying amount of leases payment receivable	Weighted-averag Loss allowance e loss rate	provision
Current	S	1,516,646	0.5%	7,583
1 to 30 days past due		124,559	0.5%	623
31 to 60 days past due		8,140	0.5%	41
61 to 90 days past due		9,181	10%	918
More than 91 days past due (Note)		26,968	52.53%	14,166
	S	1.685.494		23,331

$$ 1,685,494$

Note: The amount of the overdue payment of the lease business on March 31,2019, December 31, 2018 and March 31,2018 was \$71,000 thousand(CNY\$ 15,517 thousand), \$62,494 thousand(CNY\$ 13,962 thousand) and \$13,403 thousand(CNY\$ 2,895 thousand). The

Notes to the Consolidated Financial Statements

Group assessed the recoverable amount of the above overdue payment and proposed a reserve for loss of \$39,694 thousand (CNY\$8,675 thousand), \$36,143 thousand (CNY\$7,927 thousand) and \$6,804 thousand (CNY\$1,470 thousand) after deducting unrealized financing profit and deposit

$2)$ The loss allowance provision in retail business department in China was determined as follows:

		2019.3.31
	Gross carrying amount	Weighted-aver age loss rate	Loss allowance provision
Current	214,331
		2018.12.31
	Gross carrying amount	Weighted-aver age loss rate	Loss allowance provision
Current	339,792
		2018.3.31
	Gross carrying amount	Weighted-aver age loss rate	Loss allowance provision
Current	165.354

$3)$ The loss allowance provision in shipping business department was determined as follows:

		2019.3.31
	Gross carrying amount	Weighted-aver age loss rate	Loss allowance provision
Current	33.121
		2018.12.31
	Gross carrying	Weighted-aver	Loss allowance
	amount	age loss rate	provision
Current	24.718
		2018.3.31
	Gross carrying	Weighted-aver	Loss allowance
	amount	age loss rate	provision
Current	15.169

$4)$ The loss allowance provision in Taiwan as of was determined as follows:

		2019.3.31
Current	Gross carrying amount 14.761	Weighted-aver age loss rate	Loss allowance provision
		2018.12.31
	Gross carrying amount	Weighted-aver age loss rate	Loss allowance provision
Current	20.992

		2018.3.31
		Gross carrying Weighted-averag Loss allowance
	amount	e loss rate	provision
Current	40.	$\overline{\phantom{0}}$

(ii) The movements in the allowance for trade receivables were as follows:

		For the three months ended March 31
		2019	2018
Balance on January 1, 2019 and 2018 per IFRS 9	S	52.025	19,366
Impairment losses recognized		15.531	3,639
Foreign exchange gain (loss)		1 1 8 1	326
Balance on March 31, 2019 and 2018		68.737	23.33

(iii) Expiration analysis of consolidated company lease payments to report the undiscounted lease payments to be received in the future $\overline{1}$ as absolute

		March 31,2019
Below 1 year	S	1,037,088
1 to 2 year past due		740,292
2 to 3 year past due		166,909
Total lease investment		1,944,289
Unearned financing income		(231, 552)
The present value of the lease payments receivable		1,712,737

The components and aging of financial lease receivables were as follows:

$\mathcal{L}$

		Gross investment in the lease	Unearned revenue	Present value of minimum lease payment receivables
December 31, 2018
Within operating cycle	S	1,025,414	(169,065)	856,349
Between operating cycle and 5 year		988,803	(78, 628)	910,175
		2,014,217	(247, 693)	.766,524
March 31, 2018
Within operating cycle	S	239,925	(24, 441)	215,484
Between operating cycle and 5 year		1.692,865	(222, 855)	1,470,010
		1.932.790	(247, 296)	1,685,494

(Continued)

$\sim$

کرد

The other receivables $(e)$

	March 31,2019	December 31,2018	March 31,2018
Other receivables-transfer of equity shares \$	19,022	18,608	25,462
Other receivables-loans (included related parties)	66,346	71,616	94,794
Other receivables-investment and guarantee deposits	741,252	725,119	749,959
Other receivables-others	103,030	109,780	104,122
Less: Allowance for impairment	(19.022)	(18, 608)
Total	910,628	906.515	974.337

$(i)$ The other receivables–loans arise from the demand of short-term financing by the car rental platform and cooperative construction in rental business department and other department.. Furthermore, other receivables–others are the advance payment in accordance with the promotions held by retail business department and venders. Since the Group and the vendors are in a long-term business relationship, the Group has considered historical experience and believed that they were less doubtful of the recoverability of these receivables. The Group assessed the aforesaid other receivables as the financial assets with low credit risk and measured loss allowances at an amount as 12-month expected credit loss. Management believed that there were less doubtful of credit losses.
(ii) In 2012, the Group paid a guarantee deposit of CNY\$124,000 thousand to Quanzhou Fengsheng Group to purchase the commercial real estate of the Fengsheng Junyuan Development Project developed by Fengsheng Group in Fengze District, Quanzhou. After assessing the investment value of the project, the Board of Directors of the Group resolved during the meeting in July, 2015 to invest Quanzhou Fengan Real Estate Development Co., Ltd., and expected to obtain 100% equity of the company with a contractual amount of CNY\$325,000 thousand. As of December 31, 2015, the Group had paid CNY\$200,000 thousand, which was reported under the prepayment for investments. The management of the Group evaluated the uncertainty of the investment and thus terminated the investment. Therefore, the original prepayment for investments of CNY\$200,000 thousand and other financial assets – current of CNY\$124,000 thousand, were reclassified as other receivables as of June 30, 2016.

In addition, the Group reviewed the nature of other receivables and analyzed the current financial position of the counterparty. In order to secure the aforementioned debt, the Group had acquired pledge of stock rights of Quanzhou Fengan Real Estate Development Co., Ltd., and at the same time had obtained the debtor' s promise that other investment profits to be priority to repay the debt. The Group evaluated that the aforementioned debt should have no impairment concern. Because the debtor takes time to complete the relevant legal procedures of the disposition of investment, the Group and the debtor renegotiate the repayment period, which should be before April 30, 2017, before September 30, 2017, and before December 31, 2017. The total amount of repayment should be 10%, 40% and 50%, respectively. In case of

violation of the agreement, the aforementioned collateral would be transferred to the Group for debt repayment. In accordance with the aforesaid agreement, the Group was received CNY\$162,000 thousand on December 31, 2017. On December 19, 2017, the Board of Directors of the Group resolved during the meeting on the Fengsheng Group's extension of the repayment agreement, which extended remaining proceeds to June 30, 2018. Due to the delay of procedures of the disposition of investment, Fengsheng Group could not make the payments by the aforementioned date. As of March 31,2019 · December 31, 2018 and March 31,2018, the outstanding receivables were CNY\$162,000 thousand (\$741,252 thousand \$725,119 thousand and \$749,959 thousand respectively. The Group acquired the deferred repayment instructions by Fullshare Holdings and promised that it will be the first one to receive funds when developing the land of Fengan and it will repay the debts; and it shall be based on the assessment report of this claim, to assess that the value of the creditor's rights without any impairment. In addition, the Group shall actively assist the Fengan Company in the development of the Fengan land, so to recover the amount owed to the merged company when the development project begins its pre-sales process.

(iii) The merged company sold its 100% equity of Tong-ling Grand Ocean Department Store in December 2016. The selling price was \$48,549 thousand (CNY\$ 10,000 thousand). As of March 31,2019 · December 31,2018 and March 31, 2018, the transfer amount that has not yet been received is \$19,022 thousand (CNY\$ 4,157 thousand) $\cdot$ \$18,608 thousand (CNY\$ 4,157 thousand) and \$25,462 thousand (CNY\$5,500 thousand), and the payments should be collected by May 15, 2017 according to the contract. The merged company has obtained the financial support statement of the transferee company and has coordinated the repayment method and schedule. However, the company has filed a lawsuit against the transferee company in 2018, but the recoverability of the amount was assessed and the impairment loss of \$19,022 thousand (CNY\$4,157 thousand) \$18,608 thousand (CNY\$ 4,157 thousand) and zero was recognized on March 31,2019 · December 31,2018 and March 31, 2018, under the expected credit impairment loss of the statement of comprehensive income.

The movements in the allowance for other receivables were as follows:

	For the three
	months ended
	March 31,2019
Balance on January 1, 2019	18.608
Foreign exchange losses	414
Balance on March 31, 2019	19.022

(iv) The subsidiary of the merged company, Youchen Car Leasing Ltd., loaned the original funds to ChaoShang Investment Limited in Jiangsu in December 2017 and the remaining credits plus interest of \$168,631 thousand (CNY\$ 37,000 thousand) was transferred to Huiho Investment Management Co., Ltd. in Shanghai, and the creditor's amount was fully collected in March 2018.
(f) Non-current Assets Held for Sale
(i) On December 7, 2018, the board of directors of the merged company resolved to sale the invested real estate, including related lands and houses; and on March 29, 2019, the company (Continued)

signed a sales contract with the non-relative Wisdom Marine International Inc. for a total contract price of 465,800 thousand. It has started to conduct the sales and is expected to complete the sales within one year, and the assets will be reported under the non-current assets held for sale. As of March 31,2019 and December 31, 2018, the amount of non-current assets held for sale was both \$ 246,147 thousand.

(ii) On December 7, 2018, the board of directors of the merged company resolved to sale the investment of equity method - Sandmartin International Holdings Limited; it has started to conduct the related sales and is expected to complete the sales within one year, and the investment using the equity method will be reported under the non-current assets held for sale.As of March 31,2019 and December 31, 2018, the amount of non-current assets held for sale was \$298,710 thousand and \$257,443 thousand.

		March 31, 2019	December31, 2018
Investment Property		246,147	246,147
Investments at equity		298,710	257,443
Total		544.857	503,590
Exchange difference arising from the translation of the financial statements of the foreign operating institution in relation to the non-current assets to be disposed of and recognized in other comprehensive gains and losses	S	4,331	3,596
Property revaluation increments		32,060	32,060
		36,391	35,656

On March 31, 2019, the above-mentioned non-current assets to be sold were measured at a book value and fair value less than the cost of sales, and were recognized as deductible interest of 40,533 thousand (US\$1,315 thousand), under the other interests and losses of the consolidated consolidated income statement. Please refer to Note 6 (z) for details.

The non-repetitive fair value and investment using the equity method is measured at \$465,800 thousand and \$298,710 thousand, respectively, based on observable inputs which are the measurement basis of the price in similar transaction or in the same industry, and their fair value are in the second level and first level, respectively.

The non-current assets held for sale of the merged company are estimated using the market valuation technique to estimate the fair value of the non-current assets held for sale, using the recent transaction price of the same or similar transactions in the market as the observable inputs

As of March 31, 2019, December 31, 2018 and March 31, 2018, the non-current assets to be sold of the Group are provided as collateral guarantees. Please refer to Note 8 for details.

(g) Investments accounted for using equity method

The Group's investments accounted for using the equity method at the reporting date were as follows:

Investee	March 31, 2019	December 31, 2018	March 31. 2018
Beijing ShouHai International Economics \$ and Technology Consultant Service Co., Ltd.	6.893	6.742	6,880
Taiwan Environment Scientific Co., Ltd.	113,543	120,745	151,058
Sandmartin International Holdings Ltd.			374,153
IRC Properties Inc.			132,678
Summit Ascent Holdings Ltd.	1,215,750	1,196,611	800,215
	.336.186	1.324.098	.464,984

$(i)$ Aggregation of financial information-individually insignificant associates' equity

The Group's financial information for investments accounted for using the equity method that are individually insignificant were as follows:

	March 31.	December 31,	March
	2019	2018	31, 2018
Carrying amount of individually insignificant associates' equity	1,336,186	1.324.098	1.464


	2019	2018
Attributable to the Group:	10,794	(35,189)
Loss from continuing operations	1.593	(40.669)
Other comprehensive income	12.387	75.858)

$(ii)$ The Group will be disposed of by the board of directors on December 7, 2018, The full equity of Sandmartin International Holdings., Ltd. will be sold within one year. The investments using the equity method are reported to the non-current assets held for sale of Note 6(f).
(iii) On May 3, 2018, the Group had disposed the entire equity of IRC Properties Inc. and ceased the significant influence on the company. For related information, please refer to the consolidated financial report in the end of 2018.
(iv) In December 2017, the Group obtained 12.67% of the equity of Summit Ascent Holdings Ltd. in cash of \$101,290 thousand and in financing of \$676,073 thousand (reported as other payables). The management of the Group is a director of Summit Ascent Holdings Ltd. which has significant influence on the company; therefore, the company is evaluated by the equity method. Subsequently, the Group obtained 6.55% by \$384,171 thousand. Moreover, the aforesaid amount in financing were \$333,902 thousand, \$333,419 thousand and \$277,965

thousand (reported as other payables) as of March 31, 2019 · December 31, 2018 and March 31, 2018.

$(v)$ On March 5, 2018, the Group subscribed to the issuance of new shares of the investee, Taiwan Environment Scientific Co., Ltd., amounting to \$12,127 thousand. The Group recognizes increase of capital surplus due to not subscribing by shareholding percentage amounting to \$2,330 thousand. Moreover, the Group recognized the capital surplus by shareholding percentage of \$299 thousand due to the change in investee' s capital surplus.
(vi) The unreviewed financial statements of investments accounted for using equity method

Except for Taiwan Environment Scientific Co., Ltd. as of March 31, 2019, investments were accounted for by the equity method, and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that had not been reviewed.

As of March 31, 2018, investments were accounted for by the equity method, and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that had not been reviewed.

(vii) Guarantees

There is no guarantee in investments using equity methods of the Group.

(h) Material non-controlling interests of subsidiaries

The material non-controlling interests of a subsidiary were as follows:

	Main operation/		Percentage of non-controlling interests
Name of Subsidiary	place	March 31. 2018	December 31. 2018	March 30. 2018
GRAND OCEAN RETAIL GROUP LTD.	China/Cayman Islands	43.66%	43.66%	43.80%

The following information of the aforementioned subsidiary has been prepared in accordance with the IFRSs endorsed by the FSC. Intra-group transactions were not eliminated in this information.

$(i)$ Collective financial information of Grand Ocean Retail Group Ltd.

	March 31, 2019	December 31, 2018	March 31, 2018
Current assets	\$ 6,566,401	7,695,337	6,902,600
Non-current assets	21,300,076	13,239,338	13,885,267
Current liabilities	(6,710,246)	(7, 194, 719)	(7, 131, 881)
Non-current liabilities	(11,889,545)	(3,910,056)	(3,502,843)
Non-controlling interest	522	(304)	(4,788)
Net assets	9,267,208	9.829,596	10,148,355
Non-controlling interest	4.046,063	4.291.602	4,444,980

For the three months ended

	March 31
		2019	2018
Sales revenue		.779.679	.691,163
Net income	S	202,171	162,878
Other comprehensive income		216,608	235,423
Comprehensive income		418.779	398,301
Profit (loss), attributable to non-controlling interests		87.799	71.823
Comprehensive income (loss), attributable to non-controlling interests		182.374	75.397

	For the three months ended March 31
	2019	2018
Net cash flows from operating activities	\$ (321, 150)	(532, 846)
Net cash flows from investing activities	(134, 119)	(351, 244)
Net cash flows from financing activities	(393, 936)	(895, 529)
Effect of exchange rate changes	107,967	47,315
Net decrease in cash and cash equivalents	741,238)	1,732,304

$(i)$ Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group were as follows:

	Land	Buildings	Transportation equipment	Vessels	Office couipment	Leaschold Improvement	Construction in progress	Total
Cost or deemed cost:
Balance at January 1, 2019	126.409 s	3,795,849	118.527	8.152.699	320,672	7.485.417	129.957	20.129.530
Additions			39.946		3,179	42,057	47.966	133,148
Other reclassifications		21,707				72,965	(94.672)
Disposals and obsolescence			(19, 419)		(37, 838)	(360, 871)		(418.128)
Effect of change in foreign exchange rates		83.284	2.485	23.885	6,882	165,837	2.371	284.744
Balance at March 31, 2019	126.409. S.	$-3,900,840$	141,539	8,176,584	292.895	2.405.405	85.622	20.129.294
Balance at January 1, 2018	126.409 s	3.869.781	183.662	7.902.335	323.543	6.906.844	201.690	19 514.264
Additions			6.538		5.719	72.230	147,880	232.367
Other reclassifications						249,125	(249, 125)
Disposals and obsolescence			$(17.9-3)$		(2,513)	(5,992)		(26, 448)
Effect of change in foreign exchange rates		59.935	2.499	(177, 789)	4,787	110,046	2,622	2,100
Balance at March 31, 2018	$5 - 126,409$	3,929,716	124.756.	2.224.546.	331.536	7.332.253	103,067	19.722,283.
Depreciation and impairment loss:
Balance at January 1, 2019	s	398,011	71.629	1.577 649	238 024	4.416.711		6.702.024
Depreciation		23,735	5,390	83.911	6 70 8	109.624		229,368
Disposals and obsolescence			(13,009)		(40, 467)	(356.456)		(409.932)
Effect of change in foreign exchange		8,409	1.456	4.580	5.112	97,617		117,174
rates
Balance at March 31, 2019		430.155	65.466	1.666.140	209.377	4.267.496		6.638.634
Balance at January 1, 2018	S	330,525	91.496	1,205,218	228 357	3.830,145		5,685,741
Depreciation		23,358	8.066	79.690	6.735	103.191		221.040
Disposals and obsolescence			(3.390)		(1.993)	(4.892)		(10.275)
Effect of change in foreign exchange		4,915	1.291	(27,624).	3.442	60,527		42.551
rates
Balance at March 31, 2018	$\mathbf{s}$ Contract Contract	358, 98	97.463.	1.257.284	236,541	3,988,971		5.939.057
Carrying amounts:
Balance at January 1, 2019	$S = 126.409$	3.397.838	46,898	6,575,050	32.648	3.068.706	129.957	13,427,506
Balance at March 31, 2019	$5 - 126,409$	3,470,685	76,073	6.510.444	83.518	3.137.909	85,622	13,490,660
Balance at January 1, 2018	s 126.409	3.539.256	92,166	6,697,117	95.186.	3.076.699	201,690	13,828,523
Balance at March 31, 2018	S. 126.409	3.570.918	77,293	6.167.262	24.995	3.313.282	103.067	13,783,226

$(i)$ As of March 31, 2019 · December 31, 2018 and March 31, 2018, due to payments to stores maintenance to acquire property, plant and equipment, and payments to land use rights, the subsidiary recognized other payables amounting to \$278,877 thousand > \$286,652 thousand and \$419,557 thousand, respectively.
$(ii)$ The significant components of the buildings include the main building, machinery and air conditioner with their own estimated useful lives.
(iii) Please refer to note 6(z) for gains on disposal of property, plant and equipment.
(iv) Guarantee

ડે≿

As of March 31, 2019 · December 31, 2018 and March 31,2018, the property, plant and equipment of the Group had been pledged as collateral for bank borrowings; please refer to note 8 for further detail.

Right-of-use assets $(i)$

The cost and depreciation of the land, building, machine and transportation equipment of the Group were as follows:

	Land	Buildings	Machine and transportation equipment	Total
Cost:
Balance at January 1, 2019
Effects of retrospective application and retrospective restatement	3,378,465	7,547,100	55,964	10,981,529
Addition		480		480
Effect of change in foreign exchange rates	75,165	167,425	1,224	243,814
Balance at March 31, 2019	3,453,630	7.715.005	57.188	11,225,823
Depreciation:
Balance at January 1, 2019
Depreciation	25,331	254,110	1,775	281,216
Effect of change in foreign exchange rates	38	372		412
Balance at March 31, 2019	25.369	254.482	.777	281.628
Carrying amounts $\therefore$
Balance at January 1, 2019
Balance at March 31, 2019	3,428,261	7,460,523	55.411	10.944.195

The Group of the department store building, office space, staff quarters and transportation equipment used for business leases from January 1 to March 31, 2019 · please refer to note 6(s) for further detail. •

(k) Investment properties

		Land and
	improvement		Buildings	Total
Cost or deemed cost:
Balance at January 1, 2019	S	115,769	50,251	166,020
Balance at March 31, 2019		115,769	50,251	166.020
Balance at January 1, 2018	S	313,005	135,322	448,327
Balance at March 31, 2018		313,005	135,322	448,327
Accumulated depreciation and impairment losses:
Balance at January 1, 2019	\$		21,038	21,038
Depreciation			243	243
Balance at March 31, 2019			21,281	21,281
Balance at January 1, 2018	\$		54,549	54,549
Depreciation			706	706
Balance at March 31, 2018			55,255	55,255
Carrying amounts:
Balance at January 1, 2019		115,769	29,213	144,982
Balance at March 31, 2019		115,769	28,970	144,739
Balance at January 1, 2018		313,005	80,773	393.778
Balance at March 31, 2018		313,005	80,067	393,072

The fair value of the investment property was not significantly different from those disclosed in the Note 6 (j) of the annual consolidated financial statements for the year ended December 31, 2018.

For the case where the investment properties of the Group is transferred to the non-current assets hend for sale, please refer to note 6(f) for further detail.

As of March 31, 2019 · December 31, 2018 and March 31, 2018, the investment properties of the Group had been pledged as collateral for bank borrowings; please refer to note 8 for further details.

Intangible assets $(i)$

The costs, amortization, and impairment loss of intangible assets were as follows:

		Goodwill	Trademark	License Plate	Other	Total
Cost:
Balance at January 1, 2019	S.	1,396,645	430,575	375,927	80,545	2,283,692
Additions – parent company only					4,457	4.457
Effect of change in foreign exchange rates		30,951	1.261	8,364	1,705	42,281
Balance at March 31, 2019		1,427,596	431.836	384,291	86,707	2,330,430
Balance at January 1, 2018	\$	1,421,771	417.399	273,176	60,716	2,173,062
Additions-parent company only				34,983	1,447	36,430
Effect of change in foreign exchange rates		22,171	(9,390)	4,497	784	18,062
Balance at March 31, 2018		1.443.942	408,009	312,656	62.947	2.227.554
Accumulated amortization and impairment loss:
Balance at January 1, 2019	\$	6,318		5,242	58,710	70,270
Amortization					1,836	1,836
Effect of change in foreign exchange rates		19		117	1.214	1,350
Balance at March 31, 2019		6,337		5.359	61.760	73.456
Balance at January 1, 2018	\$	6,125		5,337	51,147	62,609
Amortization					3,671	3,671
Effect of change in foreign exchange rates		(138)		84	646	592
Balance at March 31, 2018		5.987		5.421	55.464	66,872
Carrying amounts:
Balance at January 1, 2019		1,390,327	430,575	370,685	21,835	2,213,422
Balance at March 31, 2019		1,421,259	431.836	378,932	24,947	2,256,974
Balance at January 1, 2018	\$	1,415,646	417.399	267,839	9.569	2,110,453
Balance at March 31, 2018	\$	1,437,955	408.009	307.235	7,483	2,160,682

$(i)$ Recognition of amortization and impairment

The amortization and impairment loss of intangible assets are included in the consolidated statements of comprehensive income for the three months ended March 31, 2019 and 2018:

	For the three months ended March 31
	2019	2018
Operating expenses	1.836	3.671

(ii) Goodwill

Management believes that the recoverable amount of CGU in retail business and the use of key assumptions has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2018. Also, management believes that there were no significant changes. Please refer to note $6(k)$ of the annual consolidated financial statements for the year ended December 31, 2018.

(m) Other financial assets – current and non-current

		March 31, 2019	December 31, 2018	March 31, 2018
Other financial assets – current
Deposits $-$ out for lease	S	72,557	3,900	3,235
Restricted deposits		298,596	296,279	133,786
Deposits - ready to transaction		209,973	310,028
Others		1,808	3,707	1,563
		582.934	613.914	138,584
Other financial assets $-$ non-current
Deposits $-$ out for lease	\$	174,281	239,621	244,985
Restricted deposits		255,084	255,084	430,150
Others		32,479	31,355	36,291
		461,844	526,060	711,426

$(i)$ Deposits — out for lease is leasing deposit from lessee.
As of March 31, 2019, December 31, 2018 and March 31, 2018, the Group has collected $(ii)$ deposits-ready to transaction in advance for securities brokerage business, amounting to \$209,973 thousand, \$310,028 thousand and zero, respectively. The deposits and the receipts in advance are reported as other financial assets – current and other current liabilities, respectively.

Short-term borrowings $(n)$

	March 31, 2019		December 31, 2018	March 31, 2018
Unsecured bank loans	\$	1,355,804	1,253,516	1,610,844
Secured bank loans		1,691,651	1,694,854	661,802
Other unsecured loans		526,538	591.918	502,288
Total		3,573,993	3.540.288	2.774.934
Unused credit lines		954.453	750.000	476.919
Range of interest rates		$1.5\%~7\%$	$1.5\%$ ~7%	.5%~6%

For the collateral of short-term borrowings, please refer to note 8.

(o) Long-term borrowings

The list, terms and conditions of long-term borrowings of the Group were as follows:

	March 31, 2019	December 31, 2018	March 31, 2018
Secured bank loans	3,568,181 S	4,705,936	4,680,556
Unsecured bank loans	2,525,103	2,556,172	2,810,986
Less: current portion	(1, 131, 125)	(1,629,615)	(3,049,842)
Total	4,962,159	5,632,493	4.441.700
Unused short-term credit lines	2.661,578	2.741.795	928.712
Range of interest rates	1.35%~5.35%	$1.35\% \sim 5.35\%$	1.35%~5.23%

$(i)$ Lending and repayment of loans

For the nine months ended March 31, 2019 and 2018, the Group proceeded from long-term borrowings amounting to \$147,171 thousand and \$605,970 thousand, respectively and the repayment amounted to \$1,351,946 thousand and \$1,386,939 thousand, respectively.

$(ii)$ Collateral of bank loans

For the collateral of long term borrowings, please refer to note 8.

(iii) Syndicated loan contract

On October 23, 2015, the Group signed a syndicated loan agreement with a total credit line of EUR \$66,000 thousand, and the period was from November 23, 2015 to November 22, 2018, a total of three years' agreement with the banks, the Group should repay the loan in five installments from November 2016. Furthermore, the credit period was extended for two years in November 2018, to November 23, 2020, hence it shall be repaid in four installments starting in November 2018. The Group must comply with certain financial covenants based on its audited annual and reviewed semiannual consolidated financial statements (June 30 and December 31)..

$\equiv$

(iv) For the information of interest risk, currency risk and liquidity risk, please refer to note 6(aa).

(m) Bonds payable

The information of bonds of the Group were as follows:

	March 31, 2019	December 31, 2018	March 31, 2018
Total convertible bonds issued	\$ 2,000,000	2,000,000	2,000,000
Total ordinary bonds issued	1,542,300
Less: current portion	(998, 057)	(997, 668)
Discounted corporate bonds payable	(261, 864)	(4,664)	(6,996)
Long-term portion of bonds payable	2,282,379	997,668	1,993,004
Embedded derivative instruments – call and $\mathbf{\hat{s}}$ put rights (Reported as financial liabilities) at fair value through profit or loss)	5,244
Equity component-conversion right (Reported as capital surplus-share options)	98,073
		For the three months ended March 31
		2019	2018
Embedded derivative instruments – call and put rights, included in financial liabilities (Reported as other gains and $S$ losses)		1,234
Interest expense		16,048 S	9,152

(i)As of February 26, 2019, the key terms and conditions of the outstanding overseas guaranteed convertible bonds issued by the Group were as follows:

Item	Overseas Guaranteed Convertible Bonds 2018
Issue Size	NT\$ 1,542.30 million (equivalent to US\$ 50.000 million) The Bonds will be issued as guaranteed convertible bonds, in registered form at face value in denomination of US\$200,000 or in any integral multiples thereof. The USD par value of the Bonds will be translated based on NT\$30.8460 / US\$1.000 according to Taipei Forex Inc. Taiwan Dollar 11:00am Fixing on 19 February 2019, "TRY11 Index" on Bloomberg (the "Fixed Exchange Rate" )
Issue Date	26 February 2019
Maturity Date	26 January 2022 (2 years $+11$ months)
Listing Venue	Tentatively the Bonds are to be listed on the Singapore Stock Exchange.
Coupon	Zero

SBLC Bank	The Bank of East Asia Limited, Taipei Branch
Early Redemption at Option of Issuer	Issuer Call – After year 2, the Issuer may redeem in whole but not in part, at the US Dollar Linked Amount of the Early Redemption Amount on the date of redemption if the Market Price of the Shares (translated into US Dollars at the Prevailing Rate) for each of 30 consecutive Trading Days, the last of which occurs not more than 10 trading days prior to the date of the redemption notice, shall have been at least 130% of the quotient of the Early Redemption Amount divided by the number of Shares to be issued per Bond Clean up Call - Callable at any time, in whole but not in part, at the US Dollar Linked amount of the Early Redemption Amount if more than 90% in principal amount of the Bonds originally outstanding has been redeemed, repurchased and cancelled or converted Tax Call – Yes, in whole but not in part, at the US Dollar Linked amount of the Early Redemption Amount if, as a result of changes relating to tax laws in the ROC, the Issuer becomes obligated to pay additional amounts. Bondholders have the right to elect for their Bonds not to be redeemed but with no entitlement to any additional amounts The Early Redemption Amount for each US\$200,000 of Bonds is determined so that it represents for the Bondholder a gross yield of 0.50% per annum on an annual basis.
Redemption at the	Bondholders' Put - At the end of year 2, Bondholders may exercise the
Option of the Bondholder	put option in relation to their Bonds in whole but not in part, at the US Dollar Linked amount of the Early Redemption Amount. Change of Control Put -- Yes, at the US Dollar Linked Amount of the Early Redemption Amount upon the occurrence of a Change of Control. Delisting Put - Yes, at the US Dollar Linked Amount of the Early Redemption Amount, if the Shares cease to be listed or admitted for trading or are suspended for a period equal to or exceeding 30 consecutive Trading Days on the TWSE
Conversion Procedure	Conversion Period The Bonds may be converted into newly issued common shares of the Issuer at any time after ninety (90) days from the Issue Date (exclusive), and ending on: (1) the seventh $(7th)$ day prior to the Maturity Date or $(2)$ the fifth (5th) Trading Day prior to any date where the Issuer exercises its early redemption right pursuant to the applicable laws and the Trust Deed. Conversion Price The initial Conversion Price is NT\$11.95. The exchange rate used for the Conversion Price calculation is the Fixed Exchange Rate, NT\$30.8460 / US\$1.000 according to Taipei Forex Inc. Taiwan Dollar 11:00am Fixing on 19 February 2019, "TRY11 Index" on Bloomberg.
Redemption at Maturity	Unless previously redeemed, repurchased and cancelled or converted, the Bonds will be redeemed on the Maturity Date at an amount equal to the principal amount of the Bonds plus a gross yield of 0.5% per annum, calculated on an annual basis (the "Redemption Amount"). The Redemption Amount will be 101.47% of the face value and converted into NT dollars based on the Fixed Exchange Rate, and this fixed NT dollar amount will be converted using the prevailing exchange rate for payment in US dollars.

(ii) As of September 30, 2018, the key terms and conditions of the outstanding convertible bonds issued by the Group were as follows:

Terms	1st secured convertible bonds issued in 2015
Offering Amount	\$2,000,000 thousand
Issue Date	June 29, 2015
Issue Period	June 29, 2015 ~ June 29, 2020
Coupon Rate	1.675%
LC Bank	Chang Hwa Commercial Bank
Entrusted Bank	Mega International Commercial Bank
Final Redemption	The Company can exercise the right to redeem one half of issued amount in the fourth and fifth year.

(q) Accounts payable and other payables

	March 31, 2019	December 31, 2018	March 31, 2018
Accounts payable
Arising from direct sales	\$ 173,447	156,481	136,163
Arising from concessionaire sales	2,555,988	3,452,100	3,247,114
Others	101,841	72,014	55,259
Total	2,831,276	3,680,595	3,438,536
Other payables
Securities payable	\$ 478,217	801,582	277,965
Construction payables	278,877	286,652	419,557
Others	560,238	725,178	487,607
Total	1,317,332	813,412	1,185,129

Lease liabilities $(r)$

The information of lease liabilities of the Group were as follows:

	March 31, 2019
	Future minimum rent payment	Interest	Minimum rent payment present value
Below 1 year	1,420,093 \$	479,485	940,608
1 to 5 year past due	5,365,724	1,434,697	3,931,027
More than 5 year	6,285,277	850,916	5,434,361
	13,071,094	2.765.098	10,305,996
Current	420,093,	479.485	940,608
Noncurrent	1,651,001	2.285.613	9,365,388

The Group did not materially issue, repurchase or repay the lease liability from January 1 to March 31, 2019.

The amounts recognized in profit or loss as follows:

	FOT the three months end March 31,2019
Interest expense of lease liabilities	.7.189
Expenses relating to variable leases payments not included in the measurement of lease liabilities	39,407
Expenses relating to short-term leases
Total cash flow for the Group's leases as follows:
	For the three months end March 31,2019

Total cash outflow for leases

(i) Lease of land, housing and construction

The Group 's lease of land use rights, housing and buildings as office space, staff quarters and department stores for business use on March 31, 2019. The lease period of office premises is usually three years, the staff quarters are usually one year, and the department store building are usually ten to twenty years. Some leases include the option to extend the lease period at the end of the lease term.

The lease payments for certain contracts are subject to changes in the local price index or based on the sales amount leased by the combined company during the lease term.

쒸

(Continued)

Wash Alex Alexander and Alex

$\mathbf{s}$

361,290

(ii) Other lease

The lease period of the combined company's leased transportation and machinery and equipment is two to ten years. Some lease contracts stipulate that the combined company has the option to purchase the leased assets when the lease term expires.

In addition, the period in which the combined company leases part of the office is one year, and the leases are short-term leases. The merger company chooses to apply the exemption recognition requirement without recognizing its related right-of-use assets and lease liabilities.

Contract

Operating lease $(s)$

$(i)$ Long-term prepaid rental

	March 31, 2019	March 31, 2018
Current	190,207	231,948
Noncurrent	3,279,198	3,538,964
Total	3.469.405	3.770.912

Long-term prepaid rental consisted of advance payment of the right to use a piece of land, advance rental payment for the lease of space in the shopping mall. The land use right covers a period ranging from forty to fifty years.

(ii) Leases as lessee

Rental payables from non-cancellable operating leases, please refer to Note 6 (q) of the consolidated financial report of the end December 31, 2018.

The lease payments for the above lease contracts are recognized on a straight-line basis over the lease term and the rent payable is as follow:

	December 31, 2018	March 31, 2018
Long-term payables	\$ 1,445,566	1,612,174
Less: current portion	(46,545)	(63, 163)
	1.399.021	1.549.011

(iii) Leases as lessor

The combined company leases its marine equipment and transportation equipment. Since it does not transfer almost all the risks and rewards of ownership of the assets attached to the underlying assets, these lease contracts are classified as operating leases. Please refer to Note 6 (i) for property, plant and equipment.

The maturity analysis of the lease payments is reported in the following table for the total amount of undiscounted lease payments to be received in the future:

Bulk carriers	March 31, 2019
Less than one year	\$ 536,612
Between one and two years	297,447
Between two and three years	243,950
Between three and four years	136,072
Between four and five years	136,072
Over five years	257,605
Undiscounted total lease payments	.607.758
Transportation equipments	March 31, 2019
Less than one year	\$ 44,277
Between one and two years	31,077
Between two and three years	8,701
Undiscounted total lease payments	84,055

The future minimum lease payments under non-cancellable leases were as follows: :

		December 31, 2018	March 31, 2018
Bulk carriers
Less than one year	\$	557,048	502,166
Between one and five years		835.691	921,124
Over five years		304,527	506,331
		1.697,266	1.929.621
		December 31, 2018	March 31, 2018
Transportation equipments
Less than one year	\$	20,496	215,484
Between one and five years		16,075	1,470,010
	S	36.571	1.685.494

The Group leases a number of bulk carriers under operating leases. These leases typically cover a period of 1 to 7 years. As all of the risks and rewards of ownership over the lease object are substantially retained within the Group, such leases are treated as operating leases. For the financing leases of the minibuses, please refer to note 6(d) for further details.

The direct expenses including repairs and maintenance arising from bulk carriers were as follows:

	For the three months end
March 31
2019	2018
5.739

Employee benefits $(t)$

Defined benefit plans $(i)$

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2019 and 2018.

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

	For the three months end March 31
		2019	2018
Operating expenses		40

(ii) Defined contribution plans

Under these defined contribution plans, the Group allocates 6% of each employee's monthly wages in Taiwan to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act, without additional legal or constructive obligation.

The subsidiaries in China also adopt defined contribution pension plans for their employees. These companies contribute amounts proportionate to each employ's salary level to personal accounts. The amounts contributed by the employees but minus the amounts withdrawn by them in advance are returned to them as they resign or retire. Also, the amounts contributed by these companies are returned to the employees based on the service years but minus the amounts withdrawn by them in advance.

The pension costs incurred from defined contribution plans amounting to \$17,214 thousand and \$19,641 thousand for the three months ended March 31, 2019 and 2018, respectively.

(iii) Short-term employee benefits (reported as other current liabilities-other)

	March 31,	December 31,	March 31,
	2019	2018	2018
Vacation liability	11.420	11.171	11,554

(u) Income Tax

The components of income tax were as follows:

	For the three months ended March 31
		2019	2018
Current tax expense
Current period	S	103,790	98,261
Land value increment tax		77
		103,867	98,261
Deferred tax expense
Origination and reversal of temporary differences		(2,223)	9,669
Change in tax rate			3,388
		(2,223)	13,057
Income tax expense from continuing operations		101.644	11.318

The years of ROC subsidiaries' tax returns which were examined and approved by the national tax authorities were as follows:

	Approved year
First Steamship Co., Ltd.	2016
Yee Shin Investment Co., Ltd.	2017
Yee Young Co., Ltd.	2017
Royal Sunway Co., Ltd.	2017
Lan Hai Engineering Consultants Ltd.	2016

The annual tax returns of subsidiaries in China and Hong Kong through 2017 were examined and approved by the tax authority.

Capital and other equity $(v)$

Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to March 31, 2019 and 2018. For the related information, please refer to note 6(t) of the consolidated financial statements for the year ended December 31, 2018.

$(i)$ Capital surplus

The components of the capital surplus were as follows:

	March 31, 2019	December 31, 2018	March 31, 2018
Share capital	\$ 561,458	561,458	561,458
Stock option from convertible corporate bonds	748,921	748,921	748,921
Share options	98,073
Forfeited share options	13,838	13,838	13,838
Treasury share transactions	15,967	15,967	15,967
Stock options - fair value differences of associates under equity method	31,738	32,037	1,572
Difference arising from subsidiary's share price and its carrying value	430,844	430,844	424,474
Changes in a parent's ownership interest in a subsidiary	147,039	147,039	147,039
Donation from shareholders	3,332	3,332	3,332
	2.051.210	1,953,436	1.916.601

According to the ROC Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring paid-in capital in excess of par value should not exceed 10% of the total common stock outstanding.

The Group issued overseas guaranteed convertible bonds for the year ended December 31, 2019. Please refer to note $6(p)$ for further details.

The Company collected the expired unclaimed dividends of the period from 2008 to 2012 and recognized capital surplus - donation from shareholders of \$3,332 thousand in accordance with regulation with Ruling No. 10602420200 from the Ministry of Economic Affairs.

(ii) Retained earnings

According to the Articles of Association, the Company is required to appropriate earnings every accounting year. The after tax earnings are initially used to offset cumulative losses. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders' meeting for approval.

According to the Company's articles of incorporation, the dividend policy of the Company is based on the principle of prudence, which considers the Company's future funding needs and financial structure by reserving a certain amount of earnings, and distributing stock dividends and cash dividends from the remaining earnings. In order to maintain stable dividend distribution, in principle, the distribution of cash dividends shall not be less than 10% of the total dividends. If the distribution of cash dividends is less than NT\$0.1 dollars per share, the Board of Directors can pass a resolution to distribute stock dividends instead, but it will be subject to a resolution by the shareholders during their shareholders' meeting.

$1)$ Legal reserve

According to the ROC Company Act, the Company must retain 10% of its after-tax annual earnings as legal reserve until such retention equals the amount of total capital. When a company incurs no loss, it may, pursuant to a resolution by a shareholders' meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

$2)$ Special reserve

The Group chose to apply the exemption under the IFRS1 "First-time adoption of IFRS"; therefore, a portion of cumulative translation adjustments amounting to thousand was reclassified as special earnings reserve. The net increase in retained earnings due to this reclassification is not covered by the Ruling No. 1010012865 issued by the FSC on April 6, 2012 for purposes of appropriating the same amount of special earnings reserve.

In accordance with the aforementioned Ruling No. 1010012865, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders' equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders' equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions. A resolution was passed during the shareholders' meeting held on June 29, 2018 for the reclassification of special earnings reserve of \$336,136 thousand. Then on April 26, 2019, the board of directors proposed a revolving of \$105,284 thousand.

$3)$ Earnings distribution
a) On April 26, 2019, t the board of directors meeting was approved the amount of dividends distributed to the owners is as follows:

	For the year ended December 31
Dividends distributed to common stock owners:
Cash	63.088

Notes to the Consolidated Financial Statements

On June 29, 2018, the shareholder's meeting had passed a resolution not to $b)$ distribute the earnings of 2017.
(iii) Treasury stock

A resolution for transferring 6,370,000 treasury shares to employees was passed during the board meeting of the subsidiary, Grand Ocean Retail Group Ltd., held on August 11, 2017. The recipients include the senior level management, and employees nominated by the general manager or Board of Directors. The grant-date fair value were \$0.052, \$0.076 and \$0.051. respectively.

$1)$ The employees must comply with rules below after shares have been granted:
The employees cannot apply for these shares to be traded until the 24th month $a)$ period has elapsed from the subscription date.
$b)$ Within the 24th to the 36th month period from the subscription date, the employees can choose to sell up to 30% of the original shares subscripted or postpone the sale.
$c)$ Within the 36th month to the 48th month period from the subscription date, the employees can choose to sell another 15,000 shares subscripted (i.e. accumulated shares sold cannot exceed 60% of the original shares subscripted) or postpone the sale.
d) After the 48th month period from the subscription date, the employees can choose to sell the remaining 40% of the original shares subscripted (i.e. accumulated shares sold up to 100% of the original shares subscripted) or postpone the sale.
$2)$ The details for transferring treasury shares to employees:

(In thousands of shares)

	For the three months ended March 31
	2019	2018
Outstanding at January 1 (Same as outstanding at March 31)	6.350

The proceeds from transferring treasury shares were recognized as prepaid salary for employees to execute subscription. As of March 31, 2019, December 31, 2018, and March 31, 2018, these prepaid salary amounting to \$117,841 thousand, \$115,276 thousand and \$126,120 thousand were recognized under prepaid account, respectively.

(iv) Other equity interests

	Exchange differences on translation of foreign financial statements	Equity related to non-current assets (or disposal groups) classified as held for sale	Non-controlling Interest	Total
Balance at January 1, 2019	\$ (266, 528)	35,656	4,367,340	4,136,468
Tracing the number of impacts			(428, 738)	(428, 738)
Profit of non-controlling interests			86,381	86,381
Real estate revaluation increment on subsidiaries accounted for using equity method	1,593			1,593
Exchange differences on foreign operations	145,137	735	94,573	240,445
Balance at March 31, 2019	(119,798)	36.391	4.119.556	4,036,149
Balance at January 1, 2018	\$ (336, 136)		4,382,386	4,046,250
Loss of non-controlling interests			69,492	69,492
Difference between consideration and carrying amount of subsidiaries acquired or disposal			(33,009)	(33,009)
Exchange differences on subsidiaries accounted for using equity method	(40,669)			(40, 669)
Exchange differences on foreign operations	34.246		103,652	137,898
Balance at March 31, 2018	(342.559)		4.522.521	4.179.962

$49$

(w) Earnings per share

The Company's earnings per share were calculated as follows:

	For the three months ended March 31
	2019	2018
Basic earnings per share
Profit/(loss) attributable to ordinary shareholders of the Company	139,343	84,630
Weighted-average number of ordinary shares	630,883	630,883
Earnings (loss) per share (dollars)	0.22	0.13
Diluted earnings per share
Profit/(loss) attributable to ordinary shareholders of the Company Effect of dilutive potential ordinary shares	139,343	84,630
Effect of conversion of convertible bonds	4,530
Profit/(loss) attributable to ordinary shareholders of the Company (diluted)	143,873	84.630
Weighted-average number of ordinary shares	630,883	630,883
Effect of dilutive potential ordinary shares
Effect of issuance of share option	114	899
Effect of conversion of convertible bonds	48,757
Weighted-average number of ordinary shares (diluted)	679.754	631,782
Earnings (loss) per share (dollars)	0.21	0.13

$(x)$ Revenue from contracts with customers

$(i)$ Disaggregation of revenue

				For the three months ended March 31, 2019
		Freight department	Invest department	Retail department	Lease department	Other department	Total
Primary geographical markets
Taiwan	\$		1,117		1,840	16,866	19,823
China				1,779,679	78,838		1,858,517
Other		256,471	6,611		$\blacksquare$		263,082
		256,471		7,728 1,779,679	80.678	16.866	2,141,422
Major products/services lines
Commissions revenue (Retail \$ revenue - concessionaire sales)				721,312			721,312
Commodity sales (Retail revenue – direct sales)				532,217			532,217
Lease revenue (Note)		256,471	1,117	221,845	18,952		498,385
Financial lease interest income (Note)					54,375		54,375
Service revenue and others			6,611	304,305	7,351	16,866	335,133
		256.471	7.728	1,779,679	80,678	16,866	2,141,422
				For the three months ended March 31, 2018
		Freight department	Invest	Retail department department department department	Lease	Other	Total
Primary geographical markets
Taiwan	\$	981			2,115	4,074	7,170
China				1,691,163	78,181		1,769,344
Other		255,269	776		Harry Common		256,045
	S	256,250	776	1,691,163	80,296	4.074	2,032,559
Major products/services lines
Commissions revenue (Retail \$ $revenue - $ sales)				835,538			835,538
Commodity sales (Retail revenue - direct sales)				433,472			433,472
Lease revenue (Note)		256,250		187,927	14,842		459,019
Financial lease interest income (Note)					57,212		57,212
Service revenue and others		$\bullet$ , and a set of $\bullet$	776	234,226	8,242	4,074	247,318
		\$256,250		776 1,691,163	80,296		4,074 2,032,559

Note: The lease revenue and financial lease interest income of the Group are under accounting policies of IFRS 16 and IAS 17.

$5|$

$(ii)$ Contract balances

	March 31, 2019	December 31, 2018	March 31, 2018
Accounts receivable	14.761	20,992	177,992
Notes receivable	$\bullet$		1,859
Less: allowance for impairment	$\leftarrow$
Total	14 761	20.992	179.851
Contract liabilities	5.404	5.173	180.518

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

The balance of the contractual liabilities in the January 1, 2019 and 2018. The amounts recognized as income were \$3,511 thousand and zero for the three months ended March 31, 2019 and 2018.

The major change in the balance of contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. There was no other significant changes during the period from January 1 to March 31, 2019 and 2018.

(y) Employee compensation and directors' and supervisors' remuneration

According to the Articles of Association, once the Company has annual profit, it should appropriate no less than 1% of the profit to its employees and 3% or less as directors' and supervisor's remuneration. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The pervading target given via shares or cash includes dependent employees of the Company's subsidiaries under certain requirements approved by Board of Directors. However, directors' and supervisors' remuneration could only be paid by cash.

The compensation to employees amounted to \$1,393 thousand and \$958 thousand, respectively, for the three months ended March 31, 2019 and 2018. The remunerations to directors and supervisors amounted to \$1,393 thousand and \$958 thousand, respectively, for the three months ended March 31, 2019 and 2018. These amounts were calculated using the Company's net profit before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholder' meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. Shares distributed to employees as employees' remuneration are calculated based on the closing price of the Company's shares on the day before the approval by the Board of Directors.

For the year ended December 31, 2018, the Company lossed before tax. The company was unestimated its employee compensation and directors' and supervisors' remuneration amounting. The information is available on the Market Observation Post System website.

For the year ended December 31, 2017, the Company estimated its employee compensation and directors' and supervisors' remuneration amounting to \$6,800 thousand and \$3,000 thousand,

respectively. There is no difference between actual amount distributed and the estimated amount in the consolidated financial statements of 2017 for the employee compensation and directors' and supervisors' remuneration. The information is available on the Market Observation Post System website.

(z) Non-operating income and expenses

Other income $(i)$

The details of other income were as follows:


	2019	2018
Interest income
Loan to related parties	2,465	4,167
Open-end fund	284	270
Bank deposits	8,305	3,601
Amortized cost financial assets	18,295
Total	29 349

(ii) Other gains and losses

The details of other gains and losses were as follows:

		For the three months ended March 31
		2019	2018
Foreign exchange gain (losses)	$\mathbf S$	21,645	(7,916)
Gains (loss) on financial assets (liabilities) at fair value through profit or loss
Open-end fund and shares of stock of listed companies		9,152	1,138
Non-derivative instruments – accumulator and decumulator			(89)
Non-derivative instruments – redemption and resale rights of convertible corporate bonds		1,234
Reversal of impairment loss on non-current assets as held for sale		40,533
Gain or loss on disposal of property, plant and equipment		(2,740)	42
Other income, others		52,059	42,307
	\$	121.883	35.482

(iii) Finance costs

The details of finance costs were as follows:

2019	2018

Interest expense
Bank loans \$	107,827 75,199
Borrowings from related parties	7,691
Interest on corporate bonds	8,375 8,375
Amortization on discount of corporate bonds	777 7,673
Lease liabilities	127,189
Financial expenditures	6,436 8,383
	100.425 257.500

(aa) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group's financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note $6(z)$ of the consolidated financial statements for the year ended December 31, 2018.

Credit risk $(i)$
1) Account receivable and Debt securities of credit risk

Please refer to Note 6 (c) for credit risk information of the lease receivables and account receivable. Other amortized costs of financial assets include other receivables and invested corporate bonds. Please refer to Note 6 (c), (d) and (e) for details.

For the expected credit loss of 12 month or the expected credit loss at the loan duration, the above-mentioned financial assets are listed on March 31, 2019 and 2018 as credit losses are presented. Please refer to Note 6 (d) and (e) for credit impairment status.

(ii) Liquidity risks

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

	Carrying amount	Contractual cash flows	1 years	$1$ to 5 vears	Over 5 years
March 31, 2019
Non-derivative financial liabilities
Non-interest bearing liabilities \$	4,575,607	4 575,607	3,606,318	397.452	571,837
Floating rate instrument	8,789,222	9.311,389	4,629,886	4,681,503
Leases liabilities	4,732,428	5,131,205	2,534,190	2,597,015
Fixed rate instruments	10,305,996	13.071.094	1,420,093	5,365,724	6,285,277
	28,403,253	32.089.295	12.190.487	13.041.694	6.857.114

December 31, 2018
Non-derivative financial liabilities
Non-interest bearing liabilities \$	7,091,410	7,091,410	4,758,900	770,244	1,562,266
Floating rate instrument	10,079,572	10,639,068	5,046,952	5,592,116
Fixed rate instruments	3,569,689	3,698,010	2,664,510	1,033,500	$\overline{\phantom{a}}$
	\$20,740,671	21,428,488	12.470.362	7.395.860	1.562.266
March 31, 2018
Non-derivative financial liabilities
Non-interest bearing liabilities \$	6,855,336	6,855,336	4,956,208	795,373	1,103,755
Floating rate instrument	10,042,152	10,490,921	5,831,721	4,261,105	398,095
Fixed rate instruments	2.545.238	2,683,276	616,276	2,067,000
	19.442.726	20.029.533	1,404,205	7,123,478	1.501.850

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Market risk

$1)$ Currency risk

The Group's significant exposure to foreign currency risk was as follows:

	March 31, 2019			December 31, 2018			March 31, 2018
	Foreign	Exchang		Foreign	Exchang		Foreign	Exchang
	currency	e rate	NTD	currency	c rate	NTD	currency	e rate	NTD
Financial assets
Monetary items
USD:NTD	S 68	30.81	2,095	533	30.72	16.374
HKD:USD	1,089	0.1275	4.277	10,740	0.1277	42,145	2,377	0.1275	8,821
AUD:USD	40	0.7090	869	40	0.7050	861	760	07680	16,985
EUR:USD	504	1.1233	17,438	551	1.1465	19,391	687	1.2346	24,678
NTD:USD	3,043	0.0325	3.043	5,273	0.0326	5.273	3,015	0.0344	3,015
Non-monetary items
Non-current assets held for sale	76,069	0.1275	298 710	65,624	0.1277	257.443
Investments accounted for using equity method
HKD:USD	309,600	0.1275	1,215,750	304,957	0.1277	1,196,611	316,445	0.1275	1,174,368
PHP:USD							237,809	0.0192	132,678
Financial liabilities
Monetary items
USD:CNY	20,500	6.7335	631.601	13,000	6.8632	399 356	8,975	6.2881	261,262
HKD:USD	246,732	0.1275	968,876	259,234	0.1277	1,017,199	74,901	0.1275	277,965
EUR:USD	11,348	1.1233	392.754	11,348	1.1465	399.695	52,250	1.2346	1,877,824
CNY:USD	55,000	0.1485	251,660	70,000	0.1457	313.323	70,000	0.1590	324,057
EUR:CNY							4,700	77633	168,914

$2)$ Sensitivity analysis

The Group's exposure to foreign currency risk arises from cash and cash equivalents, financial assets at fair value though profit or loss, loans and borrowings; and trade and other payables that are denominated in foreign currency. A weakening (strengthening) of 1% of the NTD against the USD, EUR, HKD, AUD and RMB as of March 31, 2019 and 2018 would have decreased or increased the profit before tax by \$22,172 thousand and \$28,565 thousand, respectively. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date.

Since the Group has several functional currencies, the information on foreign exchange gain (loss) on foreign currency denominated monetary items is disclosed by the total amount thereof. For the three months ended March 31, 2019 and 2018, foreign exchange gain (loss) (including realized and unrealized portions) amounted to \$21,645 thousand and \$(7,916) thousand, respectively

$3)$ Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.5% when reporting to management internally, which also represents the Group's management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.5%, the Group's profit before tax would have decreased / increased by \$3,792 thousand and \$5,879 thousand for the three months ended March 31, 2019 and 2018 with all other variable factors remaining constant.

Other market price risk $3)$

The sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

		For the three months ended March 31
	2019		2018
Prices of securities at the reporting date	Other comprehensive income after tax	Net income	Other comprehensive income after tax	Net income
Increase 5%		.702		10.505
Decrease 5%		(7.702)		(10.505)

(iv) Fair value of financial instruments

$1)$ Fair value hierarchy

The carrying amount and fair value of the Group's financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required :

			March 31, 2019
			Fair Value
	Carrying amount	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Non-derivative financial assets mandatorily measured at fair value through profit or loss	166.451 S.	166.451			166.451
Financial liabilities at fair value through profit or loss
Financial liabilities mandatorily measured at fair value through profit or loss	5.244 S.			5.244	5.244
	December 31, 2018
	Carrying		Fair Value
	amount	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Non-derivative financial assets mandatorily measured at fair value through profit or loss	151.968	151.968			151.968
			March 31, 2018
			Fair Value
	Carrying amount	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Non-derivative financial assets mandatorily measured at fair value through profit or loss	222.223 s	222,223			222.223

$(2)$ Valuation techniques for financial instruments not measured at fair value

The Group's valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

$a)$ Financial assets measured at amortized cost (debt investment that has no active markets) and financial liabilities measured at amortized cost.

سع

Notes to the Consolidated Financial Statements

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

Valuation techniques for financial instruments measured at fair value $3)$
Non-derivative financial instruments a)

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

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

Derivative financial instruments $b)$

$4)$

Measurement of the fair value of derivative instruments is based on the valuation techniques. The details of the valuation model used by the Group for each derivative financial instrument were as follows:

Adjusted Binary tree
Call option and put option of corporate bond
Reconciliation of Level 3 fair values
	Financial asset or liability held for trading Embedded derivative instruments
Opening balance, January 1, 2019	\$
Total gains and losses recognized:
In profit or loss	(1,234)
Issued	6,478
Ending Balance, March 31, 2019	5.244

For the three months ended March 31, 2019, total gains and losses that were included in other gains and losses and the financial assets were as follows:

	Three months ended March 31, 2019
Total gains and losses recognized: In profit or loss, and presented in "other gains and losses"	1.234)

5) Quantified information on significant unobservable inputs (Level 3) used in fair value

measurement

The Group's financial instruments that use Level 3 inputs to measure fair value is embedded derivative instruments.

Quantified information of significant unobservable inputs was as follows:

			Inter-relationship between
			significant unobservable
			inputs and fair value
Item	Valuation technique	Significant unobservable inputs	measurement
Embedded derivative instruments- call and put right	Adjusted binary tree	Volatility (The volatility is 41.16% at	The estimated fair value would decrease if the volatility were
		March 31.2019)	higher

6) Fair value measurements in Level 3 - sensitivity analysis of reasonably possible alternative assumptions

The fair value measurement of financial instruments by the Group is reasonable, but the use of different evaluation models or evaluation parameters may result in different evaluation results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects to net income:

			Fair value at Net income
	Inputs	Increase or decrease	Favour- able	Unfavour- able
March 31, 2019
Financial liabilities at fair value through profit
or loss
Embedded derivative instruments- call and Volatility put right		5%	۰	(154)
		$-5%$	154	-

The favourable and unfavourable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(ab) Financial risk management

There were no significant changes in the Group's financial risk management and policies as disclosed in Note 6(aa) of the consolidated financial statements for the year ended December 31, 2018.

(ac) Capital management

The Group's objectives for managing capital are ensuring the ability to operate continuously, providing returns to shareholders and other stakeholders, and maintaining an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabilities.

The Group and other entities in the same industry use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

The Group's debt to adjusted capital ratios at the end of the reporting period were as follows:

			December 31, 2018	Marcch 31, 2018
Total liabilities	28,921,291	S	21,395,381	20,041,682
Less: cash and cash equivalents	(5,263,596)		(5,468,507)	(4,956,384)
Net debt	23.657.695		15.926.874	15.085.298
Total equity	12.662.010		13.079.712	13.163.155
Debt-to-equity ratio at December 31	187%		122%	115%

The increase in the ratio of debt to equity in March 31, 2019 is due to the merger of the company's overseas guaranteed convertible corporate bonds and the transition to IFRS 16 and in the amount of net debt.

(ad) Investment in non-cash transaction and rising from financing activities

The Group's financing activities which did not affect the current cash flow in the three months ended March 31, 2019 and 2018 were as follows:

$\sim 10^{-1}$

			Non-cash changes
	January 1. 2019	Cash flows	New lease in this period and interest expenses	Amortization on bonds payable	Foreign exchange movement	March 31, 2019
Short-term borrowings	3,540,288 S.	(9,233)	-		42,938	3,573,993
Short-term notes and bills payable	49,947					49,947
Bonds payable	1,995,336	1,542,300		(257,200)		3,280,436
Long-term borrowings	7,262,108	(1,204,775)			35,951	6,093,284
Leases liabilities	10,270,230	(320,985)	127,669	$\overline{\phantom{a}}$	229,082	10,305,996
Guarantee deposits	953,419	(23, 541)			21,111	950,989
Total liabilities from	\$24,071,328	(16.234)	127.669	(257, 200)	329.082	24.254.645

financing activities

					Non-cash changes
		January 1, 2018	Cash flows	Amortization on bonds payable	Foreign exchange movement	March 31, 2018
Short-term borrowings	S	2,813,379	(27, 019)	۰	(11, 426)	2,774,934
Short-term notes and bills payable		49,916	29	۰		49,945
Bonds payable		1,992,227	$\blacksquare$	777		1,993,004
Long-term borrowings		8,407,751	(780, 969)		(135, 240)	7,491,542
Guarantee deposits		794,622	89,874		12.966	897,462
Total liabilities from financing activities		14.057.895	(718.085)	777	(133,700)	13.206.887

$\mathcal{L}_{\text{eff}}$

(7) Related-party transactions:

Parent company and ultimate controlling company $(a)$

First Steamship Company Ltd. is the ultimate controlling company of the Group.

(b) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements:

Name of related party	Relationship with the Group
Nanjing Tiandu Co., Ltd.	The Group's manager is the company's chairman
Shanghai Tian An Tower Co., Ltd.	The Group's manager is the company's director
Huizhou Tianan Xinghe City Management Co., Ltd.	A substantial related party
Huiyang Tamsui New Sun City Construction Co., Ltd.	A substantial related party
Shanghai Guorui Tongshun Environmental Protection Technology Co., Ltd.	A substantial related party

(c) Significant transactions with related parties
(i) Leases
- 1) Lease liabilities

		Right-of-use assets		Lease liabilities	Interest expense
Relationship	Purpose	January 1, 2019	March 31, 2019	January 1, 2019	For the three months ended March 31,2019
Other related parties	office building and department store	70,793	72.371	77.822	910
Other related parties	Energy-saving renovation engineering equipment	55,018	56.705	54,577	696

The Group are under accounting policies of IFRS 16 from January 1, 2019, operating lease contracts entered into with the related parties are recognized as right-of-use assets and lease liabilities.

2) Operating Leases

			Lease expense		тторегчу шанадешент fees
			For the three months ended March 31		For the three months ended March 31
Relationship	Account	2019		2018	2019
Other related parties	office building and department store	(Note) \$ 37,259		38,525	335

Note: Expenses relating to variable leases payments not included in the measurement of

lease liabilities.

As of March 31, 2019, December 31, 2018, and March 31, 2018 the balance of Group' s rental security deposit to other related parties amounted to \$9,151 thousand, \$8,952 thousand, and \$9,259 thousand ; December 31, 2018 and March 31, 2018, the balance of Group's unpaid rentals to other related parties amounted to zero and \$9,124 thousand.

$(ii)$ Others
$\mathbf{D}$ The Group provided management consulting services and signed service contracts with other related parties. For the three months ended March 31, 2019 and 2018, the revenue from consulting services was \$5,388 thousand and \$5,429 thousand, respectively.
The Group had signed an energy-saving reconstruction contract with other related parties. The total amount of the contract was CNY\$35,000 thousand. As of December 31, 2018, the pre-paid amount of energy saving projects was not suitable and re-assessed after the evaluation, and then was rejected due to the uncertainty of US-China trade war. In addition, on March 31, 2018, the amount of prepaid energy-saving projects was \$152,770 thousand (RMB 33,000) and which reported as prepaid equipment. As of March 31, 2019 and 2018 the Group purchased energy-saving equipment for \$423 thousand and zero from other related parties and which reported as Property, plant and equipment accounts.
(d) Key management personnel compensation
$(i)$ Key management personnel compensation

Key management personnel compensation comprised:

	For the three months ended March 31
	2019	2018
Short-term employee benefits	.621

$(ii)$ The Group granted key management personnel rights to subscribe treasury shares as prepaid salaries. As of March 31, 2019, December 31, 2018 and March 31, 2018, those prepaid salaries amounting to \$26,051 thousand (CNY\$5,693 thousand), \$25,484 thousand (CNY\$5,693 thousand) and \$27,627 thousand (CNY\$6,001 thousand), which were recognized under other non-current assets and prepayment accounts.

$\mathbf{D}{\text{total}}$ and $\mathbf{D}{\text{total}}$

(8) Pledged assets:

The carrying amount of pledged assets were as follows:

Pledged assets	Object	March 31, 2019	December 31, 2018	March 31, 2018
Current financial assets at amortised cost	Securities payable	\$ 529,932	921,600
Inventories (for construction business)	Bank loans	117,552	117,552	275,776
Other financial assets $-$ current and non-current (Note 1)
Restricted deposit	Bank loans, bank depository funds, corporate bonds and guarantee to loans borrowed by other related parties	553,680	551,363	563,936
Property, plant and equipment (Note 2)	Bank loans and ordinary bonds payable	10,207,920	10,201,012	9,645,962
Investment Property (Goss) amount)	Bank loans and ordinary bonds payable	144,739	144,982	392,942
Non-current assets classified as held for sale	Bank loans	246,147	246,147
		\$11,799,970	12.182.656	10,878,616

Note 1: The credit line of the above pledged assets has been made, with some are actually appropriated.

Note 2: Including the land use rights, which are recognized as Right-of-use assets and long-term prepaid rentals.

(9) Significant commitments and contingencies:

Except for those described in note 6, the Group's other significant commitments and contingencies were as follows:

$(a)$ Unrecognized contractual commitments
$(i)$ As of March 31, 2019, December 31, 2018 and March 31, 2018, the Group leased a number of offices and department stores with rental commitments in future years, please refer to note $6(r)$ and $(s)$
$(ii)$ The total amount of the Group's contracts to purchase commercial real estate as department store business office in March 31, 2019 was CNY\$148,487 thousand. As of March 31, 2019, December 31, 2018 and March 31, 2018 the unpaid amount were \$74,021thousand (CNY\$16,177 thousand), \$72,410 thousand (CNY\$16,177 thousand) and \$89,991 thousand (CNY\$19,439 thousand).
(iii) The combined company signed the contract for the purchase of the vessel on March 29, 2019. The total contract price was \$1,004,406 thousand (US\$32,600 thousand) and the initial payment of \$100,440 thousand (US\$3,260 thousand) was paid in April, it is expected to complete the delivery in $\circ$

(iv) The unrecognized contractual commitments of the Group were as follows:

	March 31, 2019	December 31, 2018	March 31, 2018
Acquisition of land and building	665,331	665,331
Prepaid of land and building	108,309	108,309
Purchase contract of vehicle for rent	68,230	57.156
Prepaid	11.439	48.134
Sales contract of land	513.730	40.196	103.369
Advance receipts	5.404		22.612

$(v)$ The Group provided guarantees for banks loans as follows:

	March 31.	December 31,	March 31,
	2019	2018	2018
Guarantees	$\overline{\phantom{0}}$	-	822,000

(vi) The Group signed the joint construction contracts with other companies as follows:

Item	Construction name
Joint construction with allocation of buildings, Joint construction with selling separately	Me island phase1
Joint investing and developing on construction site, Joint construction with allocation of buildings, construction on self-owned land	Me island phase II B3
Joint construction with allocation of buildings Joint construction with allocation of buildings Joint investing and developing on construction site	Me island phase II B4 Me island phase III B1 Nan Jing Jian Kang

Contingencies $(b)$

The subsidiary, MFL purchased property from Changzhou HuiRun Asset Management Ltd. $(i)$ (CHAML) in 2016. The consideration was CNY\$100,000 thousand. Meanwhile, MFL had signed a lease contract with CHAML. The leasing fee would be collected in six installments with amount of CNY\$19,167 thousand for each nominal installment plus interest. CHAML had fulfilled payment obligations in 2016. However, in January 2018, CHAML requested MFL to return excess interest paid with amount of CNY\$7,928 thousand for the reason that the interest rate being charged was too high. As of April 24, 2018, MFL had signed a settlement agreement with CHAML. The agreement had been submitted to the court, and the Company had acquired the document of MFL and CHAML withdrawing the lawsuit.
$(ii)$ On July 16, 2018, Securities and Futures Investors Protection Center (SFIPC) filed a civil lawsuit against the ex-chairman of the subsidiary, Lion Shin Investment Co., (LSICL), and claimed \$24,153 thousand for violating Securities Exchange Act. LSICL shall be liable jointly and separately. In accordance with the lawyer' s opinion, the ex-chairman was sentenced for violating insider-trading of Securities Exchange Act on criminal lawsuit. According to No. 473

of the Code of Criminal Procedure and other relevant regulations, within one year after the criminal judgment becomes irrevocable, SFIPC could motion the Procuratorate to return or pay the amount of proceeds, \$17,797 thousand, of the crime confiscated to cover the amount claimed from civil lawsuit.

After that, the company, the ex-chairman and t SFIPC have reached a settlement on January 18, 2019. The settlement amount was \$19,900 thousand and the agreement of \$17,797 thousand should be from the reimbursement that have been confiscated in criminal cases and to repay the investors, requesting by the SFIPC to the Taiwan Taipei District Prosecutors Office; and the remaining \$2,103 thousand shall be repaid by the company and the former responsible person of the company. The company had paid \$2,103 thousand on January 18, 2019.

On the basis of Article 23 of the Company Act, and Articles 184 and 544 of the Civil Code, the company also claimed on January 4, 2019 that the ex-chairman to compensate the paid \$2,103 thousand by the company. The lawsuit was just filed, and the final outcome of the lawsuit will be based on the subsequent process and circumstances

(10) Losses due to major disasters: None

(11) Subsequent events

The Group was dismissed by the board of directors on April 8, 2019. The full equity of Summit Ascent Holdings Ltd., (accounting for the equity method) was settled on April 23, 2019. Victor Sky Holding Ltd., a subsidiary of Sun City Group Holdings Co., Ltd., signed a sale agreement at a price of HK\$1.94 per share, a disposal price of HK\$554,934 thousand and an estimated disposal benefit of HK\$249,681 thousand. As of the date of this review, the delivery procedure has been completed.

$(12)$ Other:

		For the three months ended March 31
By function		2019			2018
By item	Operating Cost	Operating expense	Total	Operating Cost	Operating expense	Total
Employee benefits
Salary	42,993	160,630	203,623	45,849	196,114	241,963
Health and labor insurance		1,508	1,508	284	1,139	1,423
Pension		17,263	17,263	391	19,382	19,773
Others	3,960	32,358	36,318	3,845	34,434	38,279
Depreciation	84,288	426,539	510,827	80,397	141,349	221,746
Depletion
Amortization	5,739	3,722	9,461	4,707	12,056	16,763

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

(b) Seasonality of operations

The Group's retail business is subject to seasonal fluctuations as a result of vacation. Thus, this industry typically has higher revenues and results for the first and fourth quarter of the year.

(13) Segment information:

The Group's operating segment information and reconciliation were as follows:

For the three months ended March 31, 2019	Freight department	Invest department	Retail department	Lease department	Other segment	Reconciliation and elimination	Total
Revenue:
Revenue from external customers	\$256,471	7,728	1,779,679	80,678	16,866		2,141,422
Intersegment revenues		16,564		343		(16,907)
Total revenue	\$256.471	24.292	.779.679	81.021	6.866!	(16,907)	2,141,422
Reportable segment profit	\$23,009	(5.743)	303.695	9.559	(3,152)		327,368
or loss
For the three months ended March 31, 2018
Revenue:
Revenue from external customers	\$256,250	776	1,691,163	80,296	4,074		2,032,559
Intersegment revenues	12.044			343		(12, 387)
Total revenue	\$268.294	776	691,163	80.639	4.074	(12, 387)	2.032,559
Reportable segment profit or	\$47,617	(56.110)	264.900	13.666	(4.633)		265,440
loss

$67$

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FSC — Interim / Quarterly Report 2019

52157_rns_2019-11-14_8f7202ce-4867-4657-a21b-3facbc744252.pdf

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Table of contents

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Emphasis of Matter

Notes to Readers

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 30, 2019 and 2018

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2019, December 31, 2018, and March 31, 2018

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2019 and 2018

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT' D)

For the three months ended March 31, 2019 and 2018

Reviewed only, not audited in accordance with generally accepted auditing standards

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

(2) Approval date and procedures of the consolidated financial statements:

(3) New standards, amendments and interpretations adopted:

IFRS 16 "Leases" $(i)$

Notes to the Consolidated Financial Statements

Those which may be relevant to the Group are set out below:

Summary of significant accounting policies: $(4)$

(b) Basis of consolidation

List of subsidiaries in the consolidated financial statements $(i)$

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

$(c)$ Leases (policy applicable from January 1, 2019)

Notes to the Consolidated Financial Statements

2. As a lessee

Notes to the Consolidated Financial Statements

Income taxes $(e)$

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

Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Financial assets $(b)$

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

The other receivables $(e)$

(g) Investments accounted for using equity method

$(i)$ Property, plant and equipment

Right-of-use assets $(i)$

(k) Investment properties

Intangible assets $(i)$

$(i)$ Recognition of amortization and impairment

(ii) Goodwill

Short-term borrowings $(n)$

(o) Long-term borrowings

$(i)$ Lending and repayment of loans

(m) Bonds payable

Lease liabilities $(r)$

(ii) Other lease

Operating lease $(s)$

(iii) Leases as lessor

Employee benefits $(t)$

(u) Income Tax

$(i)$ Capital surplus

Notes to the Consolidated Financial Statements

(iv) Other equity interests

FSC Interim / Quarterly Report 2019

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 30, 2019 and 2018

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)
Reviewed only, not audited in accordance with generally accepted auditing standards