FSC — Interim / Quarterly Report 2019

Nov 14, 2019

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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 Six Months Ended June 30, 2019 and 2018

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

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.

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Table of contents

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

Page

1 2 3 4 5 6 7 8 8 8～11 11～20 20 20～65 66～68 68 68～70 70 70 71 72

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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 June 30, 2019 and 2018, the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2019 and 2018, as well as the changes in equity and cash flows for the six months ended June 30, 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 $ 6,855 thousand and $ 1,353,602 thousand as of June 30, 2019 and 2018. And its equity in net earnings (losses) on these investee companies of $ 140 thousand, $ (37,101) thousand, $ 17,837 thousand and $ (72,290) thousand for the three months and six months ended June 30, 2019 and 2018, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

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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 Qualified 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 June 30, 2019 and 2018, and of its consolidated financial performance for the three months and six months ended June 30, 2019 and 2018, as well as its consolidated cash flows for the six months ended June 30, 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(a) 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) August 12, 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.

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(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 September 30, 2018 and 2017

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2019, December 31, 2018, and June 30, 2018

(Expressed in Thousands of New Taiwan Dollars)

June 30, 2019 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 4,818,865 12 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 171,759 - 1136 Current financial assets at amortized cost, net (Notes 6(c) , 8 and 11) 534,232 1 1170 Accounts receivable, net (Notes 6(d), (x) and 8) 1,030,506 3 1200 Other receivables, net (Notes 6(e)) 168,152 2 1220 Current tax assets 229 - 1300 Inventories, net 287,803 1 1320 Inventories (for construction business), net (Note 8 and 9) 637,783 2 1461 Non-current assets classified as held for sale(Notes 6(f) and 8) 344,828 1 1476 Other current financial assets (Notes 6(m) and 8) 976,617 2 1479 Other current assets, others (Notes 6(s), (v), 7 and 9) 433,238 1 10,135,930 25 Non-current assets: 1550 Investments accounted for using equity method, net (Notes 6(f) and (g)) 116,878 - 1600 Property, plant and equipment (Notes 6(i), 7 and 8) 13,299,995 34 1755 Right-of-use assets (Notes 6(j) , 7 and 8) 10,509,430 27 1760 Investment property, net (Notes 6(f), (k) and 8) 144,496 - 1780 Intangible assets (Note 6(l)) 2,243,225 6 1840 Deferred tax assets 864,264 2 1915 Prepayments for business facilities (Notes 7 and 9) 821,757 2 1935 Long-term lease payments receivable (Note 6(d)) 654,649 2 1980 Other non-current financial assets (Notes 6(e),(m), 7 and 8) 960,515 1 1985 Long-term prepaid rents (Notes 6(s) and 8) - - 1990 Other non-current assets(Notes 6(v) and 7) 274,781 1 29,158,072 75 Total assets $ 39294002 100	June 30, 2019 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 4,818,865 12 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 171,759 - 1136 Current financial assets at amortized cost, net (Notes 6(c) , 8 and 11) 534,232 1 1170 Accounts receivable, net (Notes 6(d), (x) and 8) 1,030,506 3 1200 Other receivables, net (Notes 6(e)) 168,152 2 1220 Current tax assets 229 - 1300 Inventories, net 287,803 1 1320 Inventories (for construction business), net (Note 8 and 9) 637,783 2 1461 Non-current assets classified as held for sale(Notes 6(f) and 8) 344,828 1 1476 Other current financial assets (Notes 6(m) and 8) 976,617 2 1479 Other current assets, others (Notes 6(s), (v), 7 and 9) 433,238 1 10,135,930 25 Non-current assets: 1550 Investments accounted for using equity method, net (Notes 6(f) and (g)) 116,878 - 1600 Property, plant and equipment (Notes 6(i), 7 and 8) 13,299,995 34 1755 Right-of-use assets (Notes 6(j) , 7 and 8) 10,509,430 27 1760 Investment property, net (Notes 6(f), (k) and 8) 144,496 - 1780 Intangible assets (Note 6(l)) 2,243,225 6 1840 Deferred tax assets 864,264 2 1915 Prepayments for business facilities (Notes 7 and 9) 821,757 2 1935 Long-term lease payments receivable (Note 6(d)) 654,649 2 1980 Other non-current financial assets (Notes 6(e),(m), 7 and 8) 960,515 1 1985 Long-term prepaid rents (Notes 6(s) and 8) - - 1990 Other non-current assets(Notes 6(v) and 7) 274,781 1 29,158,072 75 Total assets $ 39294002 100	June 30, 2019 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 4,818,865 12 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 171,759 - 1136 Current financial assets at amortized cost, net (Notes 6(c) , 8 and 11) 534,232 1 1170 Accounts receivable, net (Notes 6(d), (x) and 8) 1,030,506 3 1200 Other receivables, net (Notes 6(e)) 168,152 2 1220 Current tax assets 229 - 1300 Inventories, net 287,803 1 1320 Inventories (for construction business), net (Note 8 and 9) 637,783 2 1461 Non-current assets classified as held for sale(Notes 6(f) and 8) 344,828 1 1476 Other current financial assets (Notes 6(m) and 8) 976,617 2 1479 Other current assets, others (Notes 6(s), (v), 7 and 9) 433,238 1 10,135,930 25 Non-current assets: 1550 Investments accounted for using equity method, net (Notes 6(f) and (g)) 116,878 - 1600 Property, plant and equipment (Notes 6(i), 7 and 8) 13,299,995 34 1755 Right-of-use assets (Notes 6(j) , 7 and 8) 10,509,430 27 1760 Investment property, net (Notes 6(f), (k) and 8) 144,496 - 1780 Intangible assets (Note 6(l)) 2,243,225 6 1840 Deferred tax assets 864,264 2 1915 Prepayments for business facilities (Notes 7 and 9) 821,757 2 1935 Long-term lease payments receivable (Note 6(d)) 654,649 2 1980 Other non-current financial assets (Notes 6(e),(m), 7 and 8) 960,515 1 1985 Long-term prepaid rents (Notes 6(s) and 8) - - 1990 Other non-current assets(Notes 6(v) and 7) 274,781 1 29,158,072 75 Total assets $ 39294002 100	December 31, 2018 Amount % 5,468,507 16 151,968 - 921,600 3 1,214,938 4 906,515 3 229 - 363,337 1 658,896 2 503,590 1- 613,914 2 575,933 2	June 30, 2018 Amount % 3,836,987 12 180,777 1 - - 918,773 3 901,974 3 - - 269,497 1 585,592 2 - - 486,025 2 816,560 3 7,996,185 27 1,353,602 4 13,858,494 42 - - 392,366 1 2,194,257 7 413,463 1 849,499 3 1,075,208 3 474,584 1 3,472,498 11 25,634 - 24,109,605 73 32105790 100 June 30, 2019 Liabilities and Equity Amount % Current liabilities: 2100 Short-term borrowings (Notes 6(n)) $ 3,199,068 8 2110 Short-term notes and bills payable 49,949 - 2120 Current financial liabilities at fair value through profit or loss (Note 6(b) and (p)) 3,856 - 2130 Current contract liabilities (Notes 6(x) and 9) 1,352 - 2170 Accounts payable (Note 6(q)) 2,247,177 6 2200 Other payables (Notes 6(c), (g), (i), (q), (v), (y) and 9) 1,200,304 3 2230 Current tax liabilities 81,732 - 2280 Current lease liabilities (Notes 6(r) and 7) 975,749 2 2321 Current portion of bonds payable (Note 6(p)) 998,445 3 2322 Current portion of long-term borrowings (Note 6(o)) 1,073,501 3 2323 Long-term notes and accounts payable, current portion (Note 6(s)) - - 2399 Other current liabilities (Note 6(m) and (t)) 108,731 - 9,939,864 25 Non-Current liabilities: 2530 Bonds payable (Note 6(p)) 1,291,428 3 2540 Long-term borrowings (Note 6(o)) 4,333,333 11 2570 Deferred tax liabilities 75,845 - 2580 Non-current lease liabilities (Notes 6(r) and 7) 8,991,289 23 2612 Long-term accounts payable (Note 6(s)) - - 2640 Net defined benefit liability, non-current 1,637 - 2645 Guarantee deposits 892,682 2 15,586,214 39 Total liabilities 25,526,078 64 Equity attributable to owners of parent (Notes 6(f) , (g), (p) and (v)): 3100 Capital stock 6,308,832 16 3200 Capital surplus 1,960,619 5 3300 Retained earnings 1,387,923 4 3400 Other equity interest (87,244) - Total equity attributable to owners of parent: 9,570,130 25 36XX Non-controlling interests (Notes 6(h) and (v)) 4,197,794 11 Total equity 13,767,924 36 Total liabilities and equity $ 39,294,002 100	June 30, 2018 Amount % 3,836,987 12 180,777 1 - - 918,773 3 901,974 3 - - 269,497 1 585,592 2 - - 486,025 2 816,560 3 7,996,185 27 1,353,602 4 13,858,494 42 - - 392,366 1 2,194,257 7 413,463 1 849,499 3 1,075,208 3 474,584 1 3,472,498 11 25,634 - 24,109,605 73 32105790 100 June 30, 2019 Liabilities and Equity Amount % Current liabilities: 2100 Short-term borrowings (Notes 6(n)) $ 3,199,068 8 2110 Short-term notes and bills payable 49,949 - 2120 Current financial liabilities at fair value through profit or loss (Note 6(b) and (p)) 3,856 - 2130 Current contract liabilities (Notes 6(x) and 9) 1,352 - 2170 Accounts payable (Note 6(q)) 2,247,177 6 2200 Other payables (Notes 6(c), (g), (i), (q), (v), (y) and 9) 1,200,304 3 2230 Current tax liabilities 81,732 - 2280 Current lease liabilities (Notes 6(r) and 7) 975,749 2 2321 Current portion of bonds payable (Note 6(p)) 998,445 3 2322 Current portion of long-term borrowings (Note 6(o)) 1,073,501 3 2323 Long-term notes and accounts payable, current portion (Note 6(s)) - - 2399 Other current liabilities (Note 6(m) and (t)) 108,731 - 9,939,864 25 Non-Current liabilities: 2530 Bonds payable (Note 6(p)) 1,291,428 3 2540 Long-term borrowings (Note 6(o)) 4,333,333 11 2570 Deferred tax liabilities 75,845 - 2580 Non-current lease liabilities (Notes 6(r) and 7) 8,991,289 23 2612 Long-term accounts payable (Note 6(s)) - - 2640 Net defined benefit liability, non-current 1,637 - 2645 Guarantee deposits 892,682 2 15,586,214 39 Total liabilities 25,526,078 64 Equity attributable to owners of parent (Notes 6(f) , (g), (p) and (v)): 3100 Capital stock 6,308,832 16 3200 Capital surplus 1,960,619 5 3300 Retained earnings 1,387,923 4 3400 Other equity interest (87,244) - Total equity attributable to owners of parent: 9,570,130 25 36XX Non-controlling interests (Notes 6(h) and (v)) 4,197,794 11 Total equity 13,767,924 36 Total liabilities and equity $ 39,294,002 100	December 31,	2018		June 30, 2018 Amount % 3,019,127 9 49,944 - - - 25,363 - 2,560,613 8 1,281,982 4 93,625 - - - 996,891 3 2,002,426 6 47,032 - 172,508 -
						Amount	%		Amount
						3,540,288 10 49,947 - - - 5,173 - 3,680,595 11 1,813,412 6 149,727 - - - 997,668 3 1,629,615 5 46,545 - 429,187 1
					9,939,864 25	12,342,157 36			10,249,511 30
	10,135,930	25	11,379,427 34		1,291,428 3 4,333,333 11 75,845 - 8,991,289 23 - - 1,637 - 892,682 2	997,668 3 5,632,493 16 68,973 - - - 1,399,021 4 1,650 - 953,419 3			996,891 3 5,110,097 18 152,887 - - - 1,443,200 4 4,155 - 948,660 3
	116,878 13,299,995 10,509,430 144,496 2,243,225 864,264 821,757 654,649 960,515 - 274,781	- 34 27 - 6 2 2 2 1 - 1	1,324,098 4 13,427,506 38 - - 144,982 - 2,213,422 6 518,633 2 613,494 2 885,063 3 526,060 2 3,279,198 9 163,210 -
					15,586,214 39	9,053,224 26			8,655,890 28
					25,526,078 64	21,395,381 62			18,905,401 58
					6,308,832 16 1,960,619 5 1,387,923 4 (87,244) -	6,308,832 18 1,953,436 6 680,956 2 (230,852) (1)			6,308,832 20 1,923,567 6 664,076 2 (122,371) -
	29,158,072	75	23,095,666 66
					9,570,130 25 4,197,794 11	8,712,372 25 4,367,340 13			8,774,104 28 4,426,285 14
					13,767,924 36	13,079,712 38			13,200,389 42
					$ 39,294,002 100	34,475,093 100			32,105,790 100
	$ 39294002	100	34475093 100

$ 39,294,002 100 34,475,093 100 32,105,790 100

Total assets

See accompanying notes to consolidated financial statements.

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(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 Comprehensive Income

For the three months and six months ended June 30, 2019 and 2018

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

For the three months ended June 30 2019 2018 Amount % Amount 4000 Operating revenues (Notes 6(x) and 7) $ 1,942,854 100 1,837,482 5000 Operating costs (Notes 6(k), (s) and (t)) 626,638 32 518,009 Gross profit from operations 1,316,216 68 1,319,473 6000 Operating expenses (Notes 6(i), (j), (l), (r), (s), (t), (y) and 7) 1,007,783 53 954,233 6450 Impairment loss determined in accordance with IFRS 9 (Note 6(d)) 21,254 1 - Net operating income 287,179 14 365,240 Non-operating income and expenses: 7010 Other income(Notes 6(z) and 7) 32,276 2 29,116 7020 Other gains and losses, net (Notes 6(f), (g), (i), (p) and (z)) 1,255,539 65 (131,755) 7050 Finance costs(Notes 6 (p), (r) and (z)) (253,092) (13) (115,391) 7055 Impairment loss determined in accordance with IFRS 9(Notes 6(e)) - - (19,277) 7060 Share of profit (loss) of associates accounted for using equity method, net(Notes 6(g)) (3,380) - (37,101) 1,031,343 54 (274,408) 7900 Profit (loss) from continuing operations before tax 1,318,522 68 90,832 7950 Less: Tax expense (Note 6(u)) 92,676 5 118,545 Profit (loss) 1,225,846 63 (27,713) 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 (83,520) (4) 104,659 8365 Equity related to non-current assets or disposal groups classified as held for sale 2,321 - - 8370 Share of other comprehensive income of associates accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 13,935 1 66,173 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 (67,264) (3) 170,832 8300 Other comprehensive income, net (67,264) (3) 170,832 Comprehensive income (loss) $ 1,158,582 60 143,119 Profit (loss), attributable to: Owners of parent $ 1,185,212 61 (93,684) Non-controlling interests (Note 6(v)) 40,634 2 65,971 $ 1,225,846 63 (27,713) Comprehensive income (loss) attributable to: Owners of parent $ 1,181,355 61 126,504 Non-controlling interests (Note 6(v)) (22,773) (1) 16,615 $ 1,158,582 60 143,119 Earnings per share (Note 6(w)) Basic earnings per share (NT dollars) $ 1.88 Diluted earnings per share(NT dollars) $ 1.58	For the three months ended June 30	For the three months ended June 30	For the three months ended June 30	For the three months ended June 30		For the six months ended June 30	For the six months ended June 30	For the six months ended June 30	% 100 28
	2019		% 100 32	2018		2019 Amount 4,084,276 1,337,465	% 100 33	2018
	Amount $ 1,942,854 626,638			Amount 1,837,482 518,009	%			Amount 3,870,041 1,077,265
					100 28
			68 53 1	1,319,473 954,233 -	72 52 -	2,746,811 2,000,005 36,785	67 48 1	2,792,776 2,070,002 -	72 53 -
	287,179		14	365,240	20	710,021	18	722,774	19
	32,276 1,255,539 (253,092) - (3,380)		2 65 (13) - -	29,116 (131,755) (115,391) (19,277) (37,101)	2 (7) (6) (1) (2)	61,625 1,377,422 (510,592) - 7,414	2 34 (13) - -	37,154 (96,273) (215,816) (19,277) (72,290)	1 (2) (6) - (2) (9)
	1,031,343		54	(274,408)	(14)	935,869	23	(366,502)
	1,318,522 92,676		68 5	90,832 118,545	6 6	1,645,890 194,320	41 5	356,272 229,863	10 6
	1,225,846		63	(27,713)	-	1,451,570	36	126,409	4
	(83,520) 2,321 13,935 -		(4) - 1 -	104,659 - 66,173 -	6 - 4 -	156,190 3,056 15,528 -	4 - - -	242,557 - 25,504 -	6 - 1 -
	(67,264)		(3)	170,832	10	174,774	4	268,061	7
	(67,264)		(3)	170,832	10	174,774	4	268,061	7
	$ 1,158,582		60	143,119	10	1,626,344	40	394,470	11
	$ 1,185,212 40,634		61 2	(93,684) 65,971	4 (4)	1,324,555 127,015	33 3	(9,054) 135,463	- 4
	$ 1,225,846		63	(27,713)	-	1,451,570	36	126,409	4
	$ 1,181,355 (22,773)		61 (1)	126,504 16,615	9 1	1,468,163 158,181	36 4	204,711 189,759	5 6
	$ 1,158,582		60	143,119	10	1,626,344	40	394,470	11
	$		1.88		(0.15)		2.10		(0.01)
	$		1.58		(0.15)		1.87		(0.01)

See accompanying notes to consolidated financial statements.

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(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 six months ended June 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2018 Profit (loss) for the six months ended June 30, 2018 Other comprehensive income for the six months ended June 30, 2018 Total comprehensive income for the six months ended June 30, 2018 Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve appropriated Donation from shareholders Changes in equity of associates accounted for using equity method Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in non-controlling interests Balance at June 30, 2018 Balance at January 1, 2019 Effects of retrospective application and retrospective restatement Equity at beginning of period after adjustments Profit for the six months ended June 30, 2019 Other comprehensive income for the six months ended June 30, 2019 Total comprehensive income for the six months ended June 30, 2019 Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Reversal of special reserve Changes in equity of associates accounted for using equity method Due to recognition of equity component of convertible bonds issued Changes in ownership interests in subsidiaries Changes in non-controlling interests Balance at June 30, 2019		Equityattributable to owners ofparent Retained earnings Total other equityinterest Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Exchange differences on translation of foreign financial statements Equity related to non-current assets classified as held for sale Total equity attributable to owners of parent Non-controll inginterests Total equity
	Share capital Common stock Capital surplus
	$ 6,308,832 1,898,430 107,468 - 565,662 673,130 (336,136) - 8,544,256 4,382,386 12,926,642 - - - - (9,054) (9,054) - - (9,054) 135,463 126,409 - - - - - - 213,765 - 213,765 54,296 268,061 - - - - (9,054) (9,054) 213,765 - 204,711 189,759 394,470 - - 56,496 - (56,496) - - - - - - - - - 336,136 (336,136) - - - - - - - 3,332 - - - - - - 3,332 - 3,332 - (4,237) - - - - - - (4,237) - (4,237) - 26,042 - - - - - - 26,042 (46,709) (20,667) - - - - - - - - - (99,151) (99,151) $ 6,308,832 1,923,567 163,964 336,136 163,976 664,076 (122,371) - 8,774,104 4,426,285 13,200,389 $ 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 - - - - (554,500) (554,500) - - (554,500) (428,738) (983,238) 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 - - - - 1,324,555 1,324,555 - - 1,324,555 127,015 1,451,570 - - - - - - 140,552 3,056 143,608 31,166 174,774 - - - - 1,324,555 1,324,555 140,552 3,056 1,468,163 158,181 1,626,344 - - 640 - (640) - - - - - - - - - - (63,088) (63,088) - - (63,088) - (63,088) - - - (105,284) 105,284 - - - - - - - (22,478) - - - - - - (22,478) - (22,478) - 96,902 - - - - - - 96,902 - 96,902 - (67,241) - - - - - - (67,241) 251,621 184,380 - - - - - - - - - (150,610) (150,610) $ 6,308,832 1,960,619 164,604 230,852 992,467 1,387,923 (125,956) 38,712 9,570,130 4,197,794 13,767,924

See accompanying notes to consolidated financial statements.

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(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 six months ended June 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Cost of share-based payments awards Share of loss (profit) of associates accounted for using equity method Loss on disposal of property, plan and equipment Gain on disposal of non-current assets classified as held for sale Loss (gain) on disposal of investments Impairment loss on financial assets Impairment loss on non-financial assets Gain on reversal of non-current assets classified as held for sale Lease expense Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Financial assets at fair value through profit or loss, mandatorily measured at fair value Accounts receivable Other receivables Inventories Other current assets Other financial assets Increase in other non-current assets Changes in operating liabilities: Contract liabilities Accounts payable Other payables Other current liabilities Net defined benefit liability Other operating liabilities Total adjustments Cash outflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows used in operating activities	For the six months ended June 30 2019 2018 $ 1,645,890 356,272 1,023,933 453,256 17,897 27,401 36,785 459 (20,985) 15,155 510,592 215,816 (58,535) (32,000) (3,090) (5,154) 30,604 - (7,414) 72,290 1,826 3,878 (217,213) - (999,684) 8,189 - 19,277 - 90,803 (84,329) - - 28,825	For the six months ended June 30 2019 2018 $ 1,645,890 356,272 1,023,933 453,256 17,897 27,401 36,785 459 (20,985) 15,155 510,592 215,816 (58,535) (32,000) (3,090) (5,154) 30,604 - (7,414) 72,290 1,826 3,878 (217,213) - (999,684) 8,189 - 19,277 - 90,803 (84,329) - - 28,825
	2019 $ 1,645,890 1,023,933 17,897 36,785 (20,985) 510,592 (58,535) (3,090) 30,604 (7,414) 1,826 (217,213) (999,684) - - (84,329) -
	230,387	898,195
	414 402,393 (22,820) 100,943 (43,981) (2,293) (123,569) (3,821) (1,463,410) (265,600) - (13) (28,442)	291,897 (378,284) 11,866 32,968 (98,731) (270) - (596) (1,685,459) (45,851) 15,480 (3,520) (50,915)
	(1,219,812)	(1,013,220)
	426,078 74,936 3,090 (480,912) (266,450)	(656,948) 24,313 5,154 (220,192) (243,111)
	(201,938)	(1,090,784)

7-1

(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 six months ended June 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities: Acquisition of financial assets at amortized cost Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from disposal of non-current assets classified as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in other receivables Acquisition of intangible assets Decrease in receivables (transfer of stock equity and prepaid investment) Decrease (increase) in other financial assets Increase in other non-current assets Increase in prepaid equipment Other investing activities (long-term prepaid rents) Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Proceeds from issuing bonds Repayments of bonds Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits received Payments of lease liabilities Treasury shares sold to employees Acquisition of ownership interests in subsidiaries Other financing activities Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	71,775 - - (467,070) 1,871,084 132,911 463,360 - (309,928) (465,958) 13,489 25,098 15,162 189,887 (12,493) (60,736) - 13,714 (357,723) (130,646) (1,609) (10,396) (202,511) (289,787) - (6,955)
	1,550,606 (1,069,938)
	- 186,367 (371,408) - 2 28 1,542,300 - (1,000,000) - 743,350 1,468,913 (2,664,283) (2,882,484) (70,420) 146,478 (382,539) - 30,207 - - (20,667) - 3,332
	(2,049,222) (1,098,033)
	92,232 116,159
	(649,642) (3,142,596) 5,468,507 6,979,583
	$ 4,818,865 3,836,987

(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

June 30, 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 August 12, 2019.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards ( “IFRSs”) endorsed by the 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.

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

• (i) IFRS 16“Leases”

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

8

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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(c)

On transition to IFRS 16, the Group elected to apply the practical expedient to 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.

• A. 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:

• (a) 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:

• (a) Applied a single discount rate to a portfolio of leases with similar characteristics.

• (b) 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.

• (c) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term.

9

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (d) Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.

• (e) 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 $11,009,298 thousand of right-of-use assets, reduced $3,469,405 thousand of long-term of prepaid rents ( including current portion ), additional $329,302 thousand of deferred tax assets, reduced $1,445,566 thousand of long-term accounts payable and additional $10,297,999 thousand of lease liabilities, reduced $428,738 thousand of non-controlling interest and reduced $554,500 thousand 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 $ 13,126,826 Group’s consolidated financial statements 10,297,999 Discounted using the incremental borrowing rate at January 1, 2019 Finance lease liabilities recognized as at December 31, 2018 - $ 10,297,999 Lease liabilities recognized at January 1, 2019

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

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

New, Revised or Amended Standards and Interpretations Amendments to IFRS 3“Definition of a Business” Amendments to IAS 1 and IAS8“Definition of Material”	Effective date per IASB
	January 1, 2020 January 1, 2020

10

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Except for the following items, the application of the above-mentioned newly recognized international financial reporting standards will not result in significant changes to the consolidated financial statements. The nature and impact of the major disruptors are as follows:

• 1) Amendments to IAS 1 and IAS 8 “Definition of Material”

This amendment clarifies the definition of significant and the explanations relating to the improvement of the significant definition. The Group is continuing to assess the impact of the above criteria on the financial position and operating results of the Group.

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

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

New, Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28“Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture” IFRS 17“Insurance Contracts”	Effective date per IASB
	Effective date to be determined by IASB January 1, 2021

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

(4) Summary of significant accounting policies:

• (a) Statement of compliance

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.

11

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (b) Basis of consolidation

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

List of subsidiaries in the consolidated financial statements include.

Name of Investor Name of Subsidiary Principal activity

Shareholding June 30, 2019 December 31, 2018 June 30, 2018 Note

First Steamship Co., Ltd. Yee Shin Investment Co., Ltd. General investing 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries First Steamship Co., Ltd. Yee young Co., Ltd Real estate development, rental and leasing of building 100.00% 100.00% 100.00% The company was closed on June 30, 2019, and it was processed in the short form merger process. First Steamship Co., Ltd. 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 First Steamship Co., Ltd. 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. In May 2019, it decided to reduce the capital of 1,090 shares, which is still in the process of capital reduction. First Steamship Co., Ltd. Grand Ocean Retail Group Ltd. Investment holding company 3.70% 3.82% 3.82% The company directly (indirectly) holds more than 50% of its subsidiaries First Steamship Co., Ltd. First Mariner 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., Ltd. New Urban 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 Grand Ocean Retail Group Ltd. Investment holding company 2.21% 2.29% 2.29% The company directly (indirectly) holds more than 50% of its subsidiaries First Steamship Group Development Co., Ltd. Lan Hai Engineering Consultants Ltd. 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

12

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of Investor Name of Subsidiary Principal activity

Shareholding June 30, 2019 December 31, 2018 June 30, 2018 Note

First Steamship S.A. Black Sea Steamship S.A. International transportation and shipping agency First Steamship S.A. Ship Bulker Steamship S.A. International transportation and shipping agency First Steamship S.A. Nature Sources Ltd. Investment holding company First Steamship S.A. Grand Ocean Retail Group Ltd. Investment holding company First Steamship S.A. Reliance Steamship S.A. International transportation and shipping agency First Steamship S.A. Alliance Steamship S.A. International transportation and shipping agency First Steamship S.A. Sure Success Steamship S.A. International transportation and shipping agency First Steamship S.A. Heritage Riches Ltd. Investment holding company First Steamship S.A. Shining Steamship International S.A. International transportation and shipping agency First Steamship S.A. Excellent Steamship International S.A. International transportation and shipping agency Ahead Capital Ltd. Grand Ocean Retail Group Ltd. Investment holding company First Mariner Holding Ltd. First Mariner Capital Ltd. Investment holding company First Mariner Holding Ltd. Mariner Far East Ltd. Investment holding company First Mariner Capital Ltd. Mariner Capital Ltd. Investment holding company First Mariner Capital Ltd. Mariner Finance Ltd. Loan company First Mariner Capital Ltd. Morton Securities Ltd. Securities and Securities underwriting company Mariner Capital Ltd. Mariner Finance Ltd. Automobile Finance leasing company Mariner Finance 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 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 46.83% 48.38% 48.38% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries and reduced 19,500 shares on April 29, 108 100.00% - % - % The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% - % - % The company directly (indirectly) holds more than 50% of its subsidiaries 1.79% 1.85% 1.85% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries

13

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Notes to the Consolidated	Financial Statements
Name of Investor Name of Subsidiary Principal activity	Shareholding June 30, 2019 December 31, 2018 June 30, 2018 Note
Mariner Finance Ltd. Suzhou Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Nanjing Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Nantong Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Huaian Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Hefei Youxin Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Wuhan Youxin Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Qingdao Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Weifang Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Chongqing Youren Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Fuzhou Youli Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Dongguan Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Guangzhou Youqiang Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Ningbo Youren Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Changsha Youli Car Service Ltd. Automobile Finance leasing company Mariner Finance Ltd. Xian Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Xiamen Youhon Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Chengdu Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance 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 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries

14

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Notes to the Consolidated	Financial Statements
Name of Investor Name of Subsidiary Principal activity	Shareholding June 30, 2019 December 31, 2018 June 30, 2018 Note 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries - % - % 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries and it also completed liquidation in October 2017 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 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. 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 30.00% 30.00% 30.00% The company directly (indirectly) holds more than 50% of its subsidiaries
Mariner Finance Ltd. Lianyungang Youren Car Service Ltd. Automobile Finance leasing company Mariner Finance Ltd. Jinhua Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Suqian Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Jinan Youli Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Yancheng Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Zhuzhou Youcheng Car Leasing Ltd. Automobile Finance leasing company Mariner Finance Ltd. Zhongshan Youcheng Car Rental Co., Ltd. Automobile Finance leasing company Grand Ocean Retail Group Ltd. Grand Citi Ltd. Investment holding company Grand Citi Ltd. Grand Ocean Department Store Group Ltd. Trading of cosmetics, furnishings, etc. Grand Ocean Department Store Group Ltd. Suzhou Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Grand Ocean Department Store Group Ltd. Nanjing Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Grand Ocean Department Store Group Ltd. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Grand Ocean Department Store Group Ltd. Zayton Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Grand Ocean Department Store Group Ltd. Shanghai Jing Xuan Business Management Co., Ltd. Trading of cosmetics, furnishings, etc. Grand Ocean Department Store Group Ltd. Fuzhou Jiaruixing Commercial Management Co., Ltd. Management consulting business, and trading of cosmetics, furnishings, etc. Zayton Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc.

15

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Notes to the Consolidated	Financial Statements
Name of Investor Name of Subsidiary Principal activity	Shareholding June 30, 2019 December 31, 2018 June 30, 2018 Note
Nanjing Grand Ocean Department Store Co., Ltd. Suzhou Grand Ocean Department Store Co., Ltd Trading of cosmetics, furnishings, etc. Nanjing Grand Ocean Department Store Co., Ltd. Nanjing Grand Ocean Department Hefei Store Co., Ltd. Trading of cosmetics, furnishings, etc. Nanjing Grand Ocean Department Store Co., Ltd. Fuzhou Tiandi Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Fuzhou Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Fuzhou Tiandi Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Fuzhou Grand Ocean Department Store Co., Ltd. Fuzhou Tiandi Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Guanggu Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Xiangtan Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Chongqing Guanggu Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Longyang Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Hengyang Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Shiyan Ocean Modern Shopping Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Guanggu Grand Ocean Department Store Co., Ltd. Xiangtan 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. 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 57.13% - % - % The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 14.29% 50.00% 50.00% The company directly (indirectly) holds more than 50% of its subsidiaries 70.00% 70.00% 70.00% The company directly (indirectly) holds more than 50% of its subsidiaries 14.29% 50.00% 50.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 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. 50.00% 50.00% 50.00% The company directly (indirectly) holds more than 50% of its subsidiaries 50.00% 50.00% 50.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 100.00% 100.00% 100.00% The company directly (indirectly) holds more than 50% of its subsidiaries 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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Notes to the Consolidated	Financial Statements
Name of Investor Name of Subsidiary Principal activity	Shareholding June 30, 2019 December 31, 2018 June 30, 2018 Note
Wuhan Guanggu Grand Ocean Department Store Co., Ltd. Chongqing Guanggu Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Guanggu Grand Ocean Department Store Co., Ltd. Wuhan Longyang Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Guanggu Grand Ocean Department Store Co., Ltd. Yichang Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Wuhan Longyang Grand Ocean Department Store Co., Ltd. Yichang Grand Ocean Department Store Co., Ltd. Trading of cosmetics, furnishings, etc. Nanjing Grand Ocean Department Hefei Store Co., Ltd. Fuzhou Tiandi 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 50.00% 50.00% 50.00% The company directly (indirectly) holds more than 50% of its subsidiaries 99.00% 99.00% 99.00% The company directly (indirectly) holds more than 50% of its subsidiaries 1.00% 1.00% 1.00% The company directly (indirectly) holds more than 50% of its subsidiaries 14.29% - % - % 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

• (3) When one of the following conditions is met, the Company has the right to direct the use of 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:

    • 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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

1. 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 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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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.

3. 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.

(e) Income taxes

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.

19

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “ Interim Financial Reporting ” 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.

(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

Petty cash Demand deposits Time deposits Total	June 30, 2019 $ 19,511 4,423,528 375,826 $ 4,818,865	December 31, 2018 49,601 5,397,402 21,504 5,468,507	June 30, 2018 81,244 3,734,407 21,336
			3,836,987

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

• (b) Current financial assets and liabilities at fair value through profit or loss

• (i) As follows:

Mandatorily measured at fair value through profit or loss： Non-derivative financial assets Shares of stock of listed companies Beneficiary certificates Total Financial liabilities held-for-trading Embedded derivatives- Call and put rights of convertible	June 30, 2019	December 31, 2018 140,466 11,502		June 30, 2018
	$ 159,191 12,568 $ 171,759 $ 3,856			167,905 12,872 180,777
		151,968
		-		-

bonds

(ii) Please refer to note 6(aa) for disclosure of credit risk and market risk of all financial instruments mentioned above.

20

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (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

Corporate bond	June 30, 2019 $ 534,232	December 31, 2018 921,600	June 30, 2018
			-

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 $ 931,800 thousand (US$ 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 $ 397,568 thousand (US$ 12,800 thousand) of unsecured corporate bond in advance. Moreover, the aforesaid amount in financing was $ 147,727 thousand (US$ 4,756 thousand) and $ 468,163 thousand (US$ 15,240 thousand) as of June 30, 2019 and December 31, 2018.

2. The financial assets of the Group had been pledged as collateral for borrowings. Please refer to note 8

(d) Accounts receivables

Current Accounts receivables Less: Allowance for impairment Leases payment receivables (included operating lease) Less: Unearned interest Allowance for impairment Subtotal of current asset Non-current Leases payment receivables Less: Unearned interest Allowance for impairment Subtotal of non-current asset Total	June 30, 2019 $ 223,135 - 223,135 1,032,932 (173,536) (52,025) 807,371 1,030,506 752,370 (60,861) (36,860) 654,649 $ 1,685,155	December 31, 2018		June 30, 2018 169,294 - 169,294 912,636 (154,930) (8,227) 749,479 918,773 1,199,884 (112,874) (11,802) 1,075,208 1,993,981
		385,502 - 385,502 1,025,414 (169,065) (26,913) 829,436 1,214,938 988,803 (78,628) (25,112) 885,063 2,100,001

21

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

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:

Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due More than 91 days past due（Note） Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due More than 91 days past due（Note） Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due More than 91 days past due（Note）			June 30, 2019		Loss allowance provision 1,970 2,941 4,751 16,718 62,505
		Gross carrying amount of leases payment receivable	Weighted-average loss rate
		$ 1,257,104 0.16% 117,860 2.50% 34,041 13.96% 53,398 31.31% 88,502 70.63% $ 1,550,905 December 31, 2018
					88,885 Loss allowance provision 2,438 1,826 1,770 1,759 44,232
		Gross carrying amount of leases payment receivable	Weighted-average loss rate
		$ 1,605,182 79,394 10,676 4,768 66,504 $ 1,766,524	0.15% 2.30% 16.59% 36.88% 66.51% June 30, 2018
					52,025
					Loss allowance provision 8,715 303 66 397 10,548 20,029
		Gross carrying amount of leases payment receivable	Weighted-average loss rate
		$ 1,743,041 60,583 13,128 3,970 23,994 $ 1,844,716	0.5% 0.5% 0.5% 10% 43.96%

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• Note: As of June 30, 2019, December 31, 2018 and June 30, 2018 ,the Group had filed lawsuits for colleting the overdue receivables from leasing business with total amount of $ 82,150 thousand (CNY 18,183 thousand), $ 62,494 thousand (CNY 13,962 thousand) and $30,331 thousand (CNY 6,584 thousand). The Group assessed the recoverability of those overdue receivables, and recognized provision for allowance of $45,929 thousand (CNY 10,051 thousand), $ 36,143 thousand (CNY 7,927 thousand) and $ 7,859 thousand (CNY 1,695 thousand) less unearned interests and guarantee deposit

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

Current Current Current			June 30, 2019		Loss allowance provision -
		Gross carrying amount Weighted-average loss rate $ 189,409 - December 31, 2018	Weighted-average loss rate
					Loss allowance provision -
		Gross carrying amount $ 339,792	Weighted-average loss rate
			- June 30, 2018
					Loss allowance provision -
		Gross carrying amount $ 132,132	Weighted-average loss rate
			-

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

Current Current Current			June 30, 2019		Loss allowance provision -
		Gross carrying amount Weighted-average loss rate $ 24,602 - December 31, 2018	Weighted-average loss rate
					Loss allowance provision -
		Gross carrying amount $ 24,718	Weighted-average loss rate
			- June 30, 2018
					Loss allowance provision -
		Gross carrying amount $ 24,939	Weighted-average loss rate
			-

23

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

Current Current Current			June 30, 2019	Loss allowance provision -
		Gross carrying amount Weighted-average loss rate $ 9,124 - December 31, 2018
				Loss allowance provision -
		Gross carrying amount $ 20,992	Weighted-average loss rate - June 30, 2018
				Loss allowance provision -
		Gross carrying amount	Weighted-average loss rate
		$ 12,223	-

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

Balance on January 1, 2019 and 2018 per IFRS 9 Impairment losses recognized Foreign exchange gain (loss) Balance on June 30, 2019 and 2018	For the six months ended June 30 2019 2018 $ 52,025 19,366 36,785 459 75 204 $ 88,885 20,029	For the six months ended June 30 2019 2018 $ 52,025 19,366 36,785 459 75 204 $ 88,885 20,029	For the six months ended June 30 2019 2018 $ 52,025 19,366 36,785 459 75 204 $ 88,885 20,029
	2019
	$ 52,025 36,785 75
	$ 88,885		20,029

(iii) Expiration analysis of the Group lease payments to report the undiscounted lease payments to be received in the future

Below 1 year 1 to 2 year past due 2 to 3 year past due Gross investment in the lease Unearned revenue Present value of minimum lease payments receivable	June 30,2019 $ 1,032,932 620,824 131,546
	1,785,302 (234,397)
	$ 1,550,905

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

December 31, 2018 Within operating cycle Between operating cycle and 5 year June 30, 2018 Within operating cycle Between operating cycle and 5 year	Gross investment in the lease $ 1,025,414 988,803			Unearned revenue (169,065) (78,628)	Present value of minimum lease payment receivables 856,349 910,175 1,766,524 757,706 1,087,010 1,844,716
	$ 2,014,217			(247,693)
	$ 912,636 1.199,884			(154,930) (112,874)
	$ 2,112,520			(267,804)

• (iv) The Group and the financial institution shall sign the accounts receivable and sales contract, and the contracted company shall guarantee the receivables for all receivables that cannot be recovered (whether delayed or defaulted) within a certain period of time, and retain the accounts receivable. Almost all risks and rewards are therefore not eligible for financial assets. The carrying amounts of the transferred receivables and related financial liabilities not excluded in the reporting date are as follows:

Resale company CDIB International Leasing Corp.			June 30,2019	June 30,2019		Guarantee **item **
	Transferred accounts receivable amount $ 40,585		Credit lines 45,180	Advanced amount(recognized under Short-term borrowings) 40,585

25

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (e) Other receivables

Current Other receivables–transfer of equity shares Other receivables–loans Other receivables–investment and guarantee deposits Other receivables–others Less: Allowance for impairment Subtotal of current asset Non-current Other receivables–investment and guarantee deposits Subtotal of non-current assets Total		June 30, 2019 $ 18,781 56,927 - 111,225 (18,781) 168,152 731,918 731,918 $ 900,070	December 31,2018 18,608 71,616 725,119 109,780 (18,608) 906,515 - - 906,515	June 30, 2018 23,033 45,632 746,268 106,192 (19,151) 901,974
				- - 901,974

• (i) The other receivables–loans arise from the demand of short-term financing by the car rental platform. 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.

26

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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 June 30, 2019 December 31, 2018 and June 30, 2018, the outstanding receivables were CNY 162,000 thousand ($ 731,918 thousand ,$ 725,119 thousand and $ 746,268 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.

The Group will ensure the recovery of the aforementioned creditor's rights and the development of the Fengan land. On August 12, 2019, the Board of Directors resolved to sign a “Debt Confirmation and Repayment Plan” with Damahua Investment Co., Ltd., Quanzhou Fengsheng Group Co., Ltd. and Quanzhou Fengan Real Estate Development Co., Ltd. to agreeing to provide loans from Damahua Investment Co., Ltd. to support the development and construction of the Feng'an block and to sell it externally, and to ensure that the future sales proceeds will be repaid to the aforementioned claims. Considering the development progress of the Fengan land, the credit recovery time will be longer than one year and will be transferred to other receivables-non-current (accounting for other non-current financial assets).

In addition, the board of directors also signed the "Debt Preservation and Conditional Credit Transfer Agreement" and agreed to merge the company and Damahua Investment Co., Ltd. to comprehensively supervise the development project of the Fengan land to ensure that the future sales proceeds will be repaid to the aforementioned claims; if the relevant special circumstances in the transfer agreement occur, the aforementioned creditor's rights will be transferred to Damahua Investment Co., Ltd. at CNY 162,000 thousand. The Group shall assess the value of the creditor's rights based on creditor's rights protection measures, creditor's rights transfer agreements, etc., without any impairment.Consider the collection of creditor’s rights for more than one year and transfer it to other receivable-non-current(accounting for other non-current financial assets.

27

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group 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 June 30, 2019 December 31, 2018 and June 30, 2018, the transfer amount that has not yet been received is $ 、 18,781 thousand (CNY 4,157 thousand) $ 18,608 thousand (CNY 4,157 thousand) and $ 23,033 thousand (CNY 5,000 thousand), and the payments should be collected by May 15, 2017 according to the contract. The Group has filed a lawsuit against the transferee company in 2018, and after the Group’s assessment of recoverability of other receivables, the Group recognized all impairment loss in 2018.

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

Balance on January 1, 2019 and 2018 Impairment losses recognized Foreign exchange losses Balance on June 30, 2019 and 2018		For the six months ended June 30 2019 2018 $ 18,608 - - 19,277 173 (126) $ 18,781 19,151	For the six months ended June 30 2019 2018 $ 18,608 - - 19,277 173 (126) $ 18,781 19,151
		2019
		$ 18,608 - 173
		$ 18,781	19,151

• (iii) The subsidiary of the Group, Mariner Finance 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 classified as held for sale

• (i) On December 7, 2018, the board of directors of the Group resolved to sale the invested real estate, including related lands and houses; as of December 31, 2018, the amount of non-current assets classified as held for sale was $ 246,147 thousand. On March 29, 2019, the company signed a sales contract with the non-relative Wisdom Marine International Inc. for a total contract price of $ 463,360 thousand (untaxed). The property rights transfer registration was completed in May. The relevant price has been fully collected, deducting the relevant taxes and fees and recognized the disposal gain of non-current assets classified as held for sale of $ 217,213 thousand, please refer to Note 6 (z).

• (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 classified as held for sale. As of June 30, 2019 and December 31, 2018, the amount of non-current assets classified as held for sale was $ 344,828 thousand and $ 257,443 thousand.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Investment Property Investments accounted for using equity method Total 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 Revaluation surplus Total comprehensive income	June 30, 2019 $ - 344,828 $ 344,828 $ 6,037 33,894 $ 39,931		December31, 2018
			246,147 257,443 503,590 2,981 33,894 36,875

On June 30, 2019, the above-mentioned non-current assets classified as held for sale were measured at a book value and fair value less than the cost of sales, and were recognized as deductible interest of $ 84,329 thousand (US$ 2,722 thousand), under the other interests and losses of the 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 $ 344,828 thousand, 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 first level, respectively.

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

As of June 30, 2019, December 31, 2018 and June 30, 2018, the non-current assets classified as held for sale 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	June 30, 2019 $ 6,855 110,023 - - $ 116,878	December 31, 2018 6,742 120,745 - 1,196,611 1,324,098	June 30, 2018 6,905 145,359 362,554 838,784 1,353,602
Beijing ShouHai International Economics and Technology Consultant Service Co., Ltd. Taiwan Environment Scientific Co., Ltd. Sandmartin International Holdings Ltd. Summit Ascent Holdings Ltd.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• － ’

• (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:

Carrying amount of individually insignificant associates’equity Attributable to the Group: Gain(Loss) from continuing operations Other comprehensive income Total comprehensive income	June 30, 2019 December 31, 2018 June 30, 2018 $ 116,878 1,324,098 1,353,602 For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ (3,380) (37,101) 7,414 (72,290) 13,935 66,173 15,528 25,504 $ 10,555 29,072 22,942 (46,786)	June 30, 2019 December 31, 2018 June 30, 2018 $ 116,878 1,324,098 1,353,602 For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ (3,380) (37,101) 7,414 (72,290) 13,935 66,173 15,528 25,504 $ 10,555 29,072 22,942 (46,786)	June 30, 2019 December 31, 2018 June 30, 2018 $ 116,878 1,324,098 1,353,602 For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ (3,380) (37,101) 7,414 (72,290) 13,935 66,173 15,528 25,504 $ 10,555 29,072 22,942 (46,786)
		22,942	(46,786)

• (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 classified as 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. On April 8, 2019, the board of directors of the Group passed a resolution during the meeting to sell the entire equity of an associate of Summit Ascent Holdings Ltd., afterwards, on April 23, 2019, the Group signed sell agreement with Victor Sky Holding Ltd., the subsidiary of Sun City Group Holdings Co., Ltd. The disposal price was $ 2,207,368 thousand (HKD 554,934 thousand), with par value of HKD 1.94, deduct the financing of $ 336,284 thousand when purchased, net cash flow in $ 1,871,084 thousand, and the gain on disposal was $ 999,684 thousand (HKD 256,833 thousand) the gain of disposal had already been reported to other gains and losses in the consolidated statements of comprehensive income. The disposal benefit includes the amount of $ 17,931 thousand that the Group will be reclassified as profit or loss in relation to the related enterprise and recognized in other comprehensive income statement.

• (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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (vi) The unreviewed financial statements of investments accounted for using equity method

Except for Taiwan Environment Scientific Co., Ltd. as of June 30, 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 June 30, 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:

Name of Subsidiary	Mainoperation/ Percentage of non-controlling interests
	place June 30, 2018 December 31, 2018 June 30, 2018
GRAND OCEAN RETAIL GROUP LTD.	China/Cayman Islands 45.47% 43.66% 43.66%

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.

Current assets Non-current assets Current liabilities Non-current liabilities Non-controlling interests Net assets Non-controlling interests	June 30, 2019 $ 6,037,324 20,814,242 (6,393,816) (11,395,201) (2,096) $ 9,060,453 $ 4,120,300		December 31, 2018 7,695,337 13,239,338 (7,194,719) (3,910,056) (304) 9,829,596 4,291,602		June 30, 2018
					5,576,713 13,759,456 (5,866,514) (3,494,254) (3,759) 9,971,642 4,353,618

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Sales revenue Profit Other comprehensive income Comprehensive income (loss) Profit (loss), attributable to non-controlling interests Comprehensive income (loss), attributable to non-controlling interests Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effect of exchange rate changes Net decrease in cash and cash equivalents	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)	For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,551,941 1,476,863 3,331,620 3,168,026 $ 84,520 161,057 286,691 323,935 (141,851) (111,700) 74,757 123,723 $ (57,331) 49,357 361,448 447,658 $ 39,251 70,831 127,050 142,654 $ (24,157) 21,490 158,217 196,887 For the six months ended June 30 2019 2018 $ (572,896) (818,124) (308,225) (761,898) (452,927) (1,298,000) 58,513 47,595 $ (1,275,535) (2,830,427)
	2019 $ 1,551,941 $ 84,520 (141,851) $ (57,331) $ 39,251 $ (24,157) $ $
		$		2019 (572,896) (308,225) (452,927) 58,513		2018
		$		(1,275,535)

(i) Property, plant and equipment

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

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Cost or deemed cost: Balance at January 1, 2019 Additions Other reclassifications Disposals and obsolescence Effect of change in foreign exchange rates Balance at June 30, 2019 Balance at January 1, 2018 Additions Other reclassifications Disposals and obsolescence Effect of change in foreign exchange rates Balance at June 30, 2018 Depreciation and impairment loss: Balance at January 1, 2019 Depreciation Disposals and obsolescence Effect of change in foreign exchange rates Balance at June 30, 2019 Balance at January 1, 2018 Depreciation Disposals and obsolescence Impairment loss Effect of change in foreign exchange rates Balance at June 30, 2018 Carrying amounts: Balance at January 1, 2019 Balance at June 30, 2019 Balance at January 1, 2018 Balance at June 30 2018	Land $ 126,409 - - - - $ 126,409	Buildings 3,795,849 92 22,387 - 35,092 3,853,420 3,869,781 - - - 40,922 3,910,703 398,011 46,854 - 3,021 447,886 330,525 48,853 - - 2,955 382,333 3,397,838 3,405,534 3,539,256 3,528,370	Transportation equipment 118,527 43,630 - (40,181) 1,138 123,114 183,662 12,346 - (46,168) 2,262 152,102 71,629 11,860 (27,381) 875 56,983 91,496 15,747 (21,093) 190 1,086 87,426 46,898 66,131 92,166 64,676	Vessels 8,152,699 - - - 90,232	Office equipment 320,672 8,652 1,320 (41,470) 3,376	Leasehold Improvement 7,485,417 55,686 84,044 (360,938) 72,668	Construction inprogress 129,957 106,373 (107,751) - 786 129,365 201,690 217,885 (312,876) - 2,790 109,489 - - - - - - - - - - - 129,957 129,365 201,690 109,489	Total 20,129,530 214,433 - (442,589) 203,292
				8,242,931	292,550 323,543 7,211 - (7,824) 3,542	7,336,877		20,104,666
	$ 126,409 - - - - $ 126,409 $ - - - -			7,902,335 179 - - 185,756		6,906,844 136,492 312,876 (8,040) 71,505		19,514,264 374,113 - (62,032) 306,777
				8,088,270	326,472	7,419,677		20,133,122
				1,577,649 168,686 - 17,875	238,024 13,330 (43,374) 2,593	4,416,711 221,895 (356,519) 42,932 4,325,019		6,702,024 462,625 (427,274) 67,296
	$ -			1,764,210	210,573			6,804,671
	$ - - - - -			1,205,218 160,731 - - 33,433	228,357 13,612 (6,675) - 2,466	3,830,145 212,901 (5,288) 90,613 39,356 4,167,727 3,068,706 3,011,858 3,076,699 3,251,950		5,685,741 451,844 (33,056) 90,803 79,296
	$ -			1,399,382	237,760			6,274,628
	$ 126,409			6,575,050	82,648			13,427,506
	$ 126,409			6,478,721	81,977			13,299,995
	$ 126,409			6,697,117	95,186			13,828,523
	$ 126,409			6,688,888	88,712			13,858,494

• (i) On June 4, 2018, the Board of Directors of Suzhou Grand Ocean Department Store Co., Ltd. resolved during the meeting to signed agreements with lessors to terminate in advance the original rental contracts which will be expired on February 15, 2019. Therefore, the Group recognized impairment losses of all its relevant property, plant and equipment amounting to $ 90,803 thousand.

• (ii) As of June 30, 2019, December 31, 2018 and June 30, 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 $ 194,918 thousand, $ 286,652 thousand and $ 250,922 thousand, respectively.

• (iii) The significant components of the buildings include the main building, machinery and air conditioner with their own estimated useful lives.

• (iv) Please refer to note 6(z) for gains (loss) on disposal of property, plant and equipment.

33

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(v) Guarantee

As of June 30, 2019, December 31, 2018 and June 30, 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.

(j) Right-of-use assets

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

Cost： Balance at January 1, 2019 Effects of retrospective application Addition Lease modifications Effect of change in foreign exchange rates Balance at June 30, 2019 Depreciation： Balance at January 1, 2019 Depreciation Lease modifications Effect of change in foreign exchange rates Balance at June 30, 2019 Carrying amounts:： Balance at June 30, 2019		Land		Buildings	Machine and transportation equipment	Machine and transportation equipment	Total - 11,009,298 9,049 (58,307) 103,874 11,063,914 - 560,822 (140) (6,198) 554,484 10,509,430
		$ - 3,378,465 - - 31,678 $ 3,410,143 $ - 50,669 - (570) $50,099 $ 3,360,044		- 7,574,869 3710 (58,307) 71,740 7,592,012 - 506,336 (140) (5,588) 500,608 7,091,404		- 55,964 5,339 - 456 61,759 - 3,817 - (40) 3,777 57,982

• (i) The subsidiary, Wuhan Longyang Grand Ocean Department Store, signed an agreement for the partial annual fee reduction of the department store building, resulting in a decrease of $ 57,616 thousand for the right-of-use asset cost and lease liability, please refer to Note 6 (r) for the lease liabilities.

• (ii) The Group of the department store building, office space, staff quarters and transportation equipment used for business leases from January 1 to June 30, 2019 ， please refer to note 6(s) for further detail.

34

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(k) Investment properties

Cost or deemed cost: Balance at January 1, 2019 Balance at June 30, 2019 Balance at January 1, 2018 Balance at June 30, 2018 Accumulated depreciation and impairment losses: Balance at January 1, 2019 Depreciation Balance at June 30, 2019 Balance at January 1, 2018 Depreciation Balance at June 30, 2018 Carrying amounts: Balance at January 1, 2019 Balance at June 30, 2019 Balance at January 1, 2018 Balance at June 30, 2018	Owned	property	property		Total 166,020
	Land and improvement		Buildings
	$ 115,769		50,251 50,251 135,322 135,322 21,038 486 21,524 54,549 1,412 55,961 29,213 28,727 80,773 79,361
	$ 115,769				166,020
	$ 313,005				448,327
	$ 313,005				448,327
	$ - -				21,038 486
	$ -				21,524
	$ - -				54,549 1,412
	$ -				55,961
	$ 115,769				144,982
	$ 115,769				144,496
	$ 313,005				393,778
	$ 313,005				392,366

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 classified as held for sale, please refer to note 6(f) for further detail.

As of June 30, 2019, December 31, 2018 and June 30, 2018, the investment properties of the Group had been pledged as collateral for bank borrowings; please refer to note 8 for further details.

35

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(i) Intangible assets

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

Cost: Balance at January 1, 2019 Additions－parent company only Effect of change in foreign exchange rates Balance at June 30, 2019 Balance at January 1, 2018 Additions－parent company only Effect of change in foreign exchange rates Balance at June 30, 2018 Accumulated amortization and impairment loss: Balance at January 1, 2019 Amortization Effect of change in foreign exchange rates Balance at June 30, 2019 Balance at January 1, 2018 Amortization Effect of change in foreign exchange rates Balance at June 30, 2018 Carrying amounts: Balance at January 1, 2019 Balance at June 30, 2019 Balance at January 1, 2018 Balance at June 30, 2018	Goodwill		Trademark		License Plate		Other 80,545 12,493 623 93,661 60,716 8,441 658 69,815 58,710 4,078 512 63,300 51,147 4,594 581 56,322 21,835 30,361 9,569 13,493	Total 2,283,692 12,493 22,019
	$ 1,396,645 - 13,106		430,575 - 4,765 435,340 417,399 - 9,812 427,211 - - - - - - - - 430,575 435,340 417,399 427,211		375,927 - 3,525 379,452 273,176 52,295 2,598 328,069 5,242 - 49 5,291 5,337 - 57 5,394 370,685 374,161 267,839 322,675
	$ 1,429,751							2,318,204
	$ 1,421,771 - 15,376							2,173,062 60,736 28,444
	$ 1,437,147							2,262,242
	$ 6,318 - 70							70,270 4,078 631
	$ 6,388							74,979
	$ 6,125 - 144							62,609 4,594 782
	$ 6,269							67,985
	$ 1,390,327							2,213,422
	$ 1,403,363 $ 1,415,646							2,243,225
								2,110,453
	$ 1,430,878							2,194,257

36

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (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 June 30, 2019 and 2018, and for the six months ended June 30, 2019 and 2018:

Operating expenses	For the three months ended June 30	For the three months ended June 30	For the six months ended June 30 2019 2018 4,078 4,594
	2019 $ 2,242	2018 923	2019 4,078

• (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

Other financial assets－current Deposits－out for lease Restricted deposits Deposits－ready to transaction Others Other financial assets－non-current Deposits－out for lease Restricted deposits Investment and guarantee deposits Others	June 30, 2019 $ 71,089 889,445 14,360 1,723 $ 976,617 $ 172,341 33,021 731,918 23,235 $ 960,515	December 31, 2018 3,900 296,279 310,028 3,707 613,914 239,621 255,084 - 31,355 526,060	June 30, 2018 3,919 453,961 24,500 3,645
			486,025
			233,590 215,075 - 25,919
			474,584

• －

• (i) Deposits out for lease is leasing deposit from lessee, please refer to note 6(e) of investment and guarantee deposits.

• (ii) As of June 30, 2019, December 31, 2018 and June 30, 2018, the Group has collected receipts in advance for securities brokerage business, amounting to $ 17,655 thousand, $ 310,028 thousand and $ 24,500 thousand, respectively. The receipts in advance are reported as other current liabilities.

37

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Short-term borrowings

Short-term borrowings
Unsecured bank loans Secured bank loans Other unsecured loans Other secured loans Total Unused credit lines Range of interest rates	June 30, 2019 $ 883,915 2,032,854 241,714 40,585 $ 3,199,068 $ 1,342,869 1.35%~8.4%	December 31, 2018 1,253,516 1,694,854 591,918 - 3,540,288 750,000 1.5%~7%	June 30, 2018
			2,407,072 289,593 322,462 - 3,019,127 1,435,156 1.5%~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:

Secured bank loans Unsecured bank loans Less: current portion Total Unused credit lines Range of interest rates	June 30, 2019 $ 3,784,863 1,621,971 (1,073,501) $ 4,333,333 $ 2,459,890 1.35%~5.35%		December 31, 2018

• (i) Lending and repayment of loans

For the six months ended June 30, 2019 and 2018, the Group proceeded from long-term borrowings amounting to $743,350 thousand and $1,468,913 thousand, respectively and the repayment amounted to $2,664,283 thousand and $2,882,484 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).

38

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

• (p) Bonds payable

The information of bonds of the Group were as follows:

Total ordinary bonds issued Total convertible bonds issued Less: Current portion		June 30, 2019 December 31, 2018 June 30, 2018 2,000,000 2,000,000 2,000,000 1,542,300 - - (998,445) (997,668) (996,891) (1,000,000) - - (252,427) (4,664) (6,218) 1,291,428 997,668 996,891 3,856 - - 96,902 - - For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,388 - 2,622 - $ (33,057) (9,153) (49,105) (18,305)	June 30, 2019 December 31, 2018 June 30, 2018 2,000,000 2,000,000 2,000,000 1,542,300 - - (998,445) (997,668) (996,891) (1,000,000) - - (252,427) (4,664) (6,218) 1,291,428 997,668 996,891 3,856 - - 96,902 - - For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,388 - 2,622 - $ (33,057) (9,153) (49,105) (18,305)	June 30, 2019 December 31, 2018 June 30, 2018 2,000,000 2,000,000 2,000,000 1,542,300 - - (998,445) (997,668) (996,891) (1,000,000) - - (252,427) (4,664) (6,218) 1,291,428 997,668 996,891 3,856 - - 96,902 - - For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,388 - 2,622 - $ (33,057) (9,153) (49,105) (18,305)	June 30, 2019 December 31, 2018 June 30, 2018 2,000,000 2,000,000 2,000,000 1,542,300 - - (998,445) (997,668) (996,891) (1,000,000) - - (252,427) (4,664) (6,218) 1,291,428 997,668 996,891 3,856 - - 96,902 - - For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,388 - 2,622 - $ (33,057) (9,153) (49,105) (18,305)	June 30, 2019 December 31, 2018 June 30, 2018 2,000,000 2,000,000 2,000,000 1,542,300 - - (998,445) (997,668) (996,891) (1,000,000) - - (252,427) (4,664) (6,218) 1,291,428 997,668 996,891 3,856 - - 96,902 - - For the three months ended June 30 For the six months ended June 30 2019 2018 2019 2018 $ 1,388 - 2,622 - $ (33,057) (9,153) (49,105) (18,305)
	$
Cumulative redeemed amount
	$
	$
			2019	2018 -	2019
			$ 1,388 $ (33,057)		2,622 (49,105)
				(9,153)		(18,305)

• (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 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$30.846 / US$1 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

39

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 Option of the Bondholder	Bondholders’ Put – At the end of year 2, Bondholders may exercise the 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 TradingDays 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 earlyredemption rightpursuant 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$30.846 / US$1 according to Taipei Forex Inc.Taiwan Dollar 11:00am Fixing on 19 February2019,“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.

40

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (ii) As of June 29, 2015, 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
OfferingAmount	$2,000,000 thousand
Issue Date	June 29, 2015
Issue Period	June 29, 2015 ~ June 29, 2020
Coupon Rate	1.675%
LC Bank	ChangHwa 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 fifthyear.

In June, 2019, according to the issuance method, the group has repaid $1,000,000 thousand ordinary bonds with one-half of the total amount issued.

• (q) Accounts payable and other payables

Accounts payable Arising from direct sales Arising from concessionaire sales Others Total Other payables Securities payable Dividend payable Construction payables Others Total	June 30, 2019 $ 114,542 2,033,161 99,474 $ 2,247,177 $ 147,727 213,698 194,918 643,961 $ 1,200,304	December 31, 2018 156,481 3,452,100 72,014 3,680,595 801,582 - 286,652 725,178 1,813,412	June 30, 2018
			30,530 2,474,566 55,517 2,560,613 293,025 99,165 250,922 534,214 1,177,326

41

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Lease liabilities

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

June 30, 2019

		June 30, 2019
Less than one year Between one and five years More than five years Current Non-current	Future minimum rent payment $ 1,436,594 5,252,603 5,884,812 $ 12,574,009 $ 1,436,594 $ 11,137,415	Interest		Minimum rent payment present value 975,749 3,883,309 5,107,980 9,967,038 975,749 8,991,289
		460,845 1,369,294 776,832
		2,606,971
		460,845
		2,146,126

There were no significant issues, repurchases and repayments of finance lease liabilities for the six months ended June 30, 2019.

The amounts recognized in profit or loss as follows:

Interest expense of lease liabilities Variable leases payments not included in the measurement of lease liabilities Expenses relating to short-term leases	For	the three months end June 30,2019	For the six months end June 30,2019	For the six months end June 30,2019
		$ 124,192 $ 24,278 $ 1,185		$ 251,381 $ 63,685 $ 2,083

Total cash flow for the Group’s leases as follows:

Total cash outflow for leases	For the six months end June 30,2019 $ 699,688

(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. The lease period of office premises is usually three years, the staff quarters are usually one year, and the department store building is 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 Group during the lease term.

(ii) Other lease

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

42

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

(s) Operating lease

• (i) Long-term prepaid rental

Current Non-current Total	December 31, 2018		June 30, 2018 235,381 3,472,498
	$ 190,207 3,279,198 $ 3,469,405
			3,707,879

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：

Long-term payables Less: current portion	December 31, 2018		June 30, 2018 1,490,232 (47,032) 1,443,200
	$ 1,445,566 (46,545) $ 1,399,021

• (iii) Leases as lessor

The Group 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 ：

43

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Bulk carriers Less than one year Between one and two years Between two and three years Between three and four years Between four and five years More than five years Total undiscounted lease payments Transportation equipments Less than one year Between one and two years Between two and three years Total undiscounted lease payments	June 30, 2019 $ 704,792 299,861 205,370 137,176 137,176 225,496
	$ 1,709,871
	June 30, 2019 $ 65,343 46,719 16,634
	$ 128,696

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

Bulk carriers Less than one year Between one and five years Over five years Transportation equipments Less than one year Between one and five years	December 31, 2018 $ 557,048 835,691 304,527 $ 1,697,266 December 31, 2018 $ 42,305 38,942 $ 81,247	June 30, 2018 752,548 924,674 446,151
		2,123,373
		June 30, 2018 52,347 25,937
		78,284

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.

44

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Bulk carriers	For the three months end June 30 2019 2018 $ 5,254 5,780	For the three months end June 30 2019 2018 $ 5,254 5,780		For the six months end June 30	For the six months end June 30
		2018		2019 10,993	2018
		5,780			10,487

(t) Employee benefits

• (i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material onetime 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:

Operating expenses	For the three months end June 30	For the three months end June 30		For the six months end June 30	For the six months end June 30
	2019 $ 50	2018		2019	2018 677
		338		99

• (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 $ 15,518 thousand, $ 15,107 thousand, $ 32,732 thousand and $ 34,748 thousand for the three months ended June 30, 2019 and 2018 and the six months ended June 30, 2019 and 2018, respectively.

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

Vacation liability	June 30, 2019		December 31, 2018		June 30, 2018 11,497
	$ 11,276		11,171

45

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Income Tax

The components of income tax were as follows:

Current tax expense Current period Land value increment tax Undistributed surplus plus tax Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Change in tax rate Income tax expense from continuing operations		For the three months ended June 30	For the three months ended June 30		For the six months ended June 30	For the six months ended June 30
		2019 $ 81,789 13,690 2,469 (5,197)	2018		2019 185,579 13,767 2,469 (5,197) 196,618	2018 181,923 - 17,303 (421)
			83,662 - 17,303 (421) 100,544
		92,751				198,805
		(75) - (75)	14,613 3,388		(2,298) - (2,298) 194,320	24,282 6,776 31,058
			18,001
		$ 92,676	118,545			229,863

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

authorities were as follows:
First Steamship Co., Ltd. Yee Shin Investment Co., Ltd. Yee Young Co., Ltd. Royal Sunway Co., Ltd. Lan Hai Engineering Consultants Ltd.	**Approved year **
	2016 2017 2017 2017 2016

The annual tax returns of subsidiaries in China and Hong Kong through 2018 were examined and approved by the tax authority.

• (v) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to June 30, 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.

46

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Capital surplus

The components of the capital surplus were as follows:

Share capital Stock option from convertible corporate bonds Share options Forfeited share options Treasury share transactions Stock options－fair value differences of associates under equity method Difference arising from subsidiary’s share price and its carrying value Changes in a parent's ownership interest in a subsidiary Donation from shareholders	June 30, 2019		December 31, 2018		June 30, 2018
	$ 561,458 748,921 96,902 13,838 15,967 9,559 430,844 79,798 3,332 $ 1,960,619		561,458 748,921 - 13,838 15,967 32,037 430,844 147,039 3,332 1,953,436		561,458 748,921 - 13,838 15,967 1,580 431,432 147,039 3,332 1,923,567

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.

47

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 a resolution was passed during the shareholders' meeting held on June 28, 2019 for the revolving of special earnings reserve of $ 105,284 thousand.

• 3) Earnings distribution

• a ) On June 28, 2019, the shareholder's meetings resolved to distribute the 2018 earnings. As of June 30, 2019, the date of ex-rights/ex-dividend has not yet decided. These earnings were appropriated as follows:

For the year ended December 31,2018 Dividends distributed to ordinary shareholders ： Cash $ 63,088

48

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• b) On June 29, 2018, the shareholder's meeting had passed a resolution not to 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 was $ 0.052, $ 0.076 and $ 0.051, respectively.

• 1) The employees must comply with rules below after shares have been granted:

• a) The employees cannot apply for these shares to be traded until the 24th month 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 the remaining 30% of the original 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.

A resolution for transferring 6,282,000 treasury shares to employees was passed during the board meeting of the subsidiary, Grand Ocean Retail Group Ltd., held on May 14, 2019. The recipients include the senior level management, and employees nominated by the general manager or Board of Directors. The grant-date fair value was $ 4.99 and $ 4.70, respectively. The subscription price per share was $ 24.43 and $ 24.73, respectively.

• 1) The employees must comply with rules below after shares have been granted:

• a) The employees cannot apply for these shares to be traded until the 24th month 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 the remaining 70% of the original shares subscripted (i.e. accumulated shares sold up to 100% of the original shares subscripted) or postpone the sale.

49

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) The details for transferring treasury shares to employees:

(In thousands of shares)

		(Inthousands of shares	(Inthousands of shares
Outstanding at January 1 Exercised during the year Outstanding at June 30		For the six months ended June 30
		2019	2018 6,370 - 6,370
		6,350 6,282 12,632

For the six months ended June 30, 2019 and 2018, the subsidiary, Grand Ocean Retail Group Ltd. the transfer price deducting the tax was $ 153,766 thousand and recognized the share-based employee expenses amounting $ 30,604 thousand and special reserve $ 28,957 thousand.

The proceeds from transferring treasury shares were recognized as prepaid salary for employees to execute subscription. As of June 30, 2019, December 31, 2018, and June 30, 2018, these prepaid salary amounting to $ 238,568 thousand, $ 115,276 thousand and $ 125,499 thousand were recognized under other current assets and non-current assets, respectively.

50

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) Other equity interests

Balance at January 1, 2019 Effects ofretrospective application Profit of non-controlling interests Subsidiaries dividend declared Changes in equity of subsidiaries Exchange differences on subsidiaries accounted for using equity method Reclassified to profit or loss on disposal of subsidiaries accounted for using equity method Equity related to non-current assets classified as held for sale Exchange differences on foreign operations Balance at June 30, 2019 Balance at January 1, 2018 Profit of non-controlling interests Difference between consideration and carrying amount of subsidiaries acquired or disposal Exchange differences on subsidiaries accounted for using equity method Subsidiary declares dividends Exchange differences on foreign operations Balance at June 30, 2018		Exchange differences on translation of foreign financial statements	Equity related to non-current assets classified as held for sale		Non-controlling Interest	Total 4,136,468 (428,738) 127,015 (150,610) 251,621 11,280 4,248 3,056 156,190 4,110,550 4,046,250 135,463 (46,709) 25,504 (99,151) 242,557 4,303,914
	$ $	(266,508) - - - - 11,280 4,248 - 25,024 (125,956) (336,136) - - 25,504 - 188,261 (122,371)	35,656 - - - - - - 3,056 - 38,712 - - - - - - -		4,367,340 (428,738) 127,015 (150,610) 251,621 - - - 31,166 197,794
	$				4,382,386 135,463 (46,709) - (99,151) 54,296 4,426,285
	$

51

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (w) Earnings per share

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

Basic earnings per share Profit/(loss) attributable to ordinary shareholders of the Company Weighted-average number of ordinary shares Earnings (loss) per share (dollars) Diluted earnings per share Profit/(loss) attributable to ordinary shareholders of the Company Effect of dilutive potential ordinary shares Effect of conversion of convertible bonds Profit/(loss) attributable to ordinary shareholders of the Company (diluted) Weighted-average number of ordinary shares Effect of dilutive potential ordinary shares Effect of issuance of share option Effect of conversion of convertible bonds Weighted-average number of ordinary shares (diluted) Earnings (loss) per share (dollars)	For the three months ended June 30 2019 2018 $ 1,185,212 (93,684)	For the three months ended June 30 2019 2018 $ 1,185,212 (93,684)	For the three months ended June 30 2019 2018 $ 1,185,212 (93,684)		For the six months ended June 30 2019 2018 1,324,555 (9,054) 630,883 630,883 2.10 0.01 1,324,555 (9,054) 21,299 - 1,345,854 (9,054) 630,883 630,883 839 (Note) 89,132 - 720,854 630,883 1.87 (0.01)	For the six months ended June 30 2019 2018 1,324,555 (9,054) 630,883 630,883 2.10 0.01 1,324,555 (9,054) 21,299 - 1,345,854 (9,054) 630,883 630,883 839 (Note) 89,132 - 720,854 630,883 1.87 (0.01)
			2018		2019 1,324,555 630,883 2.10 1,324,555 21,299 1,345,854 630,883 839 89,132 720,854 1.87
	$ 1,185,212		(93,684)
	630,883 $ 1.88 1,185,212 16,769 $ 1,201,981 630,883 839 129,063 760,785 $ 1.58		630,883
			(0.15)
						(9,054) 630,883 (Note) -
						630,883 (0.01)

Note: The conversion of convertible bonds was not included in the calculation of the weighted-average number of shares (diluted) due to the anti-dilutive effect.

52

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(x) Revenue from contracts with customers

(i) Disaggregation of revenue

Freight department Primary geographical markets Taiwan $ - China - Other 247,635 $ 247,635 Major products/services lines Commissions revenue (Retail revenue – concessionaire sales) $ - Commodity sales (Retail revenue – direct sales) - Lease revenue (Note) 247,635 Financial lease interest income (Note) - Service revenue and others - $ 247,635 Freight department Primary geographical markets Taiwan $ 690 China - Other 278,915 $ 279,605 Major products/services lines Commissions revenue (Retail revenue – concessionaire sales) $ - Commodity sales (Retail revenue – direct sales) - Lease revenue (Note) 279,605 Financial lease interest income (Note) - Service revenue and others - $ 279,605		**For the three months **	**For the three months **	**ended June **	30, 2019	Total 32,912 1,633,770 276,172 1,942,854 535,407 433,818 480,678 59,827 433,124 1,942,854 Total 3,559 1,554,269 279,654 1,837,482 606,537 370,058 478,121 62,142 320,624 1,837,482
	Freight department $ - - 247,635	Invest department 1,133 - 28,537	Retail department - 1,551,941 -	Lease department 1,218 81,829 -	Other department 30,561 - -
	$ 247,635	29,670	1,551,941	83,047	30,561
		- - 1,133 - 28,537	535,407 433,818 212,741 - 369,975	- - 19,169 59,827 4,051	- - - - 30,561
	$ 247,635	29,670	1,551,941	83,047	30,561
		**For the three months **		**ended June **	30, 2018
	Freight department $ 690 - 278,915	Invest department - - 739	Retail department - 1,476,863 -	Lease department 2,101 77,406 -	Other department 768 - -
	$ 279,605	739	1,476,863	79,507	768
		- - - - 739	606,537 370,058 185,675 - 314,593	- - 12,841 62,142 4,524	- - - - 768
	$ 279,605	739	1,476,863	79,507	768

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Freight department Primary geographical markets Taiwan $ - China - Other 504,106 $ 504,106 Major products/services lines Commissions revenue (Retail revenue – concessionaire sales) $ - Commodity sales (Retail revenue – direct sales) - Lease revenue (Note) 504,106 Financial lease interest income (Note) - Service revenue and others - $ 504,106 Freight department Primary geographical markets Taiwan $ 1,671 China - Other 534,184 $ 535,855 Major products/services lines Commissions revenue (Retail revenue – concessionaire sales) $ - Commodity sales (Retail revenue – direct sales) - Lease revenue (Note) 535,855 Financial lease interest income (Note) - Service revenue and others - $ 535,855		**For the **	six months ended June 30,2019	six months ended June 30,2019	six months ended June 30,2019	Total 52,735 3,492,287 539,254 4,084,276 1,256,719 966,035 979,063 114,202 768,257 4,084,276 Total 10,729 3,323,613 535,699 3,870,041 1,442,075 803,530 937,140 119,354 567,942 3,870,041
	Freight department $ - - 504,106	Invest department 2,250 - 35,148	Retail department - 3,331,620 -	Lease department 3,058 160,667 -	Other department 47,427 - -
	$ 504,106	37,398	3,331,620	163,725	47,427
		- - 2,250 - 35,148	1,256,719 966,035 434,586 - 674,280	- - 38,121 114,202 11,402	- - - - 47,427
	$ 504,106	37,398	3,331,620	163,725	47,427
		**For the **	six months ended June 30,2018
	Freight department $ 1,671 - 534,184	Invest department - - 1,515	Retail department - 3,168,026 -	Lease department 4,216 155,587 -	Other department 4,842 - -
	$ 535,855	1,515	3,168,026	159,803	4,842
		- - - - 1,515	1,442,075 803,530 373,602 - 548,819	- - 27,683 119,354 12,766	- - - - 4,842
	$ 535,855	1,515	3,168,026	159,803	4,842

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

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Contract balances

Contract balances
Accounts receivable Less: allowance for impairment Total Contract liabilities	June 30, 2019 $ 9,124 - $ 9,124 $ 1,352	December 31, 2018 20,992 - 20,992 5,173	June 30, 2018 12,223 -
			12,223
			160,272

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 $4,353 thousand and zero for the six months ended June 30, 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 were no other significant changes during the period from January 1 to June 30, 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 $8,671 thousand, $(680) thousand, $10,064 thousand and $278 thousand, respectively, for the three months and the six months ended June 30, 2019 and 2018. The remunerations to directors and supervisors amounted to zero, $(680) thousand, $1,393 thousand and $278 thousand, respectively, for the three months and the six months ended June 30, 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.

55

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the year ended December 31, 2018, the Company loss 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

(i) Other income

The details of other income were as follows:

Interest income Loan to unrelated parties Open-end fund Bank deposits Amortized cost financial assets Assets Dividend income Total		For the three months ended June 30	For the three months ended June 30	For the six months ended June 30	For the six months ended June 30
		2019	2018	2019	2018 4,875 544 26,581 - 5,154 37,154
		$ 2,085 261 13,347 13,493 3,090 $ 32,276	708 274 22,980 - 5,154 29,116	4,550 545 21,652 31,788 3,090 61,625

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Other gains and losses

The details of other gains and losses were as follows:

Foreign exchange gains (loss) Gain (loss) on disposal of investment Gain (loss) on financial assets (liabilities) at fair value through profit or loss Open-end fund and shares of stock of listed companies Non-derivative instruments－ accumulator and decumulator Embedded derivative instruments－call and put rights of convertible bonds Impairment loss of property and plant and equipment Reversal of impairment loss on non-current asset classified as held for sale Gain on disposal of non-current assets classified as held for sale Gain (loss) on disposal of property, plant and equipment Other income	For the three months ended June 30 2019 2018 $ (45,921) (35,839) 999,684 (8,189) 9,211 (16,204) - - 1,388 - - (90,803) 43,796 - 217,213 - 914 (3,920) 29,254 23,200 $ 1,255,539 (131,755)		For the six months ended June 30 2019 2018 (24,276) (43,755) 999,684 (8,189) 18,363 (15,066) - (89) 2,622 - - (90,803) 84,329 - 217,213 - (1,826) (3,878) 81,313 65,507 1,377,422 (96,273)
			2019 (24,276) 999,684 18,363 - 2,622 - 84,329 217,213 (1,826) 81,313 1,377,422
	$ 1,255,539

57

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Finance costs

The details of finance costs were as follows:

Interest expense Bank loans Interest on corporate bonds Amortization on discount of corporate bonds Lease liabilities Other interest Financial expenditures	For the three months ended June 30 2019 2018 $ 89,236 91,837 8,375 8,375 24,682 778 124,192 - - 5,912 6,607 8,489 $ 253,092 115,391	For the six months ended June 30	For the six months ended June 30
	2019 $ 89,236 8,375 24,682 124,192 - 6,607 $ 253,092	2019 197,063 16,750 32,355 251,381 - 13,043 510,592	2018
			168,659 16,750 1,555 - 11,980 16,872 215,816

(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.

(i) Credit risk

1) Account receivable and Debt securities of credit risk

Please refer to Note 6 (d) 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 June 30, 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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2019 Non-derivative financial liabilities Non-interest bearing liabilities Floating rate instrument Leases liabilities Fixed rate instruments December 31, 2018 Non-derivative financial liabilities Non-interest bearing liabilities Floating rate instrument Fixed rate instruments June 30, 2018 Non-derivative financial liabilities Non-interest bearing liabilities Floating rate instrument Fixed rate instruments	Carrying amount $ 4,151,621 8,000,811 3,133,455 9,967,038	Contractual cash flows 4,151,621 8,481,762 3,427,967 12,574,009	1years 3,268,488 4,136,376 1,843,362 1,436,594	1 to 5 years 316,319 4,345,386 1,584,605 5,252,603	Over 5years
					566,814 - - 5,884,812
	$ 25,252,925	28,635,359	10,684,820	11,498,913	6,451,626
	$ 7,091,410 10,079,572 3,569,689	7,091,410 10,639,068 3,698,010	4,758,900 5,046,952 2,664,510	770,244 5,592,116 1,033,500	1,562,266 - - 1,562,266 1,064,390 397,969 - 1,462,359
	$ 20,740,671	21,428,488	12,470,362	7,395,860
	$ 5,883,806 9,631,834 2,836,567	5,883,806 10,416,875 2,934,144	3,518,201 4,899,679 1,900,644	1,301,215 5,119,227 1,033,500
	$ 18,352,207	19,234,825	10,318,524	7,453,942

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:

Financial assets Monetary items USD:NTD HKD:USD AUD:USD EUR:USD NTD:USD Non-monetary items Non-current assets classified as held for sale Investments accounted for using equity method HKD:USD	June 30, 2019	June 30, 2019	June 30, 2019	December 31, 2018 Foreign currency Exchange rate NTD 533 30.72 16,374 10,740 0.1277 42,145 40 0.7050 861 551 1.1465 19,391 5,273 0.0326 5,273 65,624 0.1277 257,443 304,957 0.1277 1,196,611	December 31, 2018 Foreign currency Exchange rate NTD 533 30.72 16,374 10,740 0.1277 42,145 40 0.7050 861 551 1.1465 19,391 5,273 0.0326 5,273 65,624 0.1277 257,443 304,957 0.1277 1,196,611	December 31, 2018 Foreign currency Exchange rate NTD 533 30.72 16,374 10,740 0.1277 42,145 40 0.7050 861 551 1.1465 19,391 5,273 0.0326 5,273 65,624 0.1277 257,443 304,957 0.1277 1,196,611	June 30, 2018 Foreign currency Exchange rate NTD - - - 697 0.1275 2,710 40 0.7390 895 766 1.1631 27,165 - - - - - - 309,084 0.1275 1,201,338	June 30, 2018 Foreign currency Exchange rate NTD - - - 697 0.1275 2,710 40 0.7390 895 766 1.1631 27,165 - - - - - - 309,084 0.1275 1,201,338
	Foreign currency	Exchange rate	NTD		Exchange rate	NTD	Foreign currency	Exchange rate
			23,295 172,323 867 12,370 4,585 344,828 -	533 10,740 40 551 5,273 65,624 304,957	30.72 0.1277 0.7050 1.1465 0.0326 0.1277 0.1277	16,374 42,145 861 19,391 5,273 257,443 1,196,611	- 697 40 766 - - 309,084	- 0.1275 0.7390 1.1631 - - 0.1275

59

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Financial liabilities Monetary items USD:CNY HKD:USD EUR:USD CNY:USD	June 30, 2019	June 30, 2019	June 30, 2019	December 31, 2018	December 31, 2018	December 31, 2018	June 30, 2018 Foreign currency Exchange rate NTD 16,750 6.6166 510,540 130,341 0.1275 506,603 16,600 1.1631 588,491 70,000 0.1511 322,462	June 30, 2018 Foreign currency Exchange rate NTD 16,750 6.6166 510,540 130,341 0.1275 506,603 16,600 1.1631 588,491 70,000 0.1511 322,462
	Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate
	21,675 37,117 8,511 -	6.8747 0.1281 1.1391 -	673,223 147,727 301,133 -	13,000 259,234 11,348 70,000	6.8632 0.1277 1.1465 0.1457	399,356 1,017,199 399,695 313,323	16,750 130,341 16,600 70,000	6.6166 0.1275 1.1631 0.1511

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 CNY as of June 30, 2019 and 2018 would have decreased or increased the profit before tax by $ 9,086 thousand and $ 18,973 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 and six months ended June 30, 2019 and 2018, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $ (45,921) thousand, $ (35,839) thousand, $ (24,276) thousand and $ (43,755) 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 $ 6,637 thousand and $ 13,071 thousand for the six months ended June 30, 2019 and 2018 with all other variable factors remaining constant.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Other market price risk

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:

Prices of securities at the reporting date		For the six months endedJune 30	For the six months endedJune 30	Net income 8,395
	2019	Net income 7,960 (7,960)	2018
	Other comprehensive income after tax $ -		Other comprehensive income after tax
Increase 5% Decrease 5%			-
	$ -		-	(8,395)

• (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 :

Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss Financial liabilities at fair value through profit or loss Financial liabilities held-for-trading Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through profit or loss Non-derivative financial assets mandatorily measured at fair value through profit or loss			June 30, 2019	June 30, 2019	June 30, 2019	June 30, 2019		Total 171,759
	Carrying amount				Fair Value
			Level 1		Level 2 -	Level 3
	$ 171,759 $ 3,856					-
					-			3,856
								Total 151,968
	Carrying amount				Fair Value
			Level 1		Level 2 -	Level 3
	$ 151,968					-
								Total 180,777
	Carrying amount				Fair Value
			Level 1		Level 2 -	Level 3
	$ 180,777		180,777			-

61

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 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.

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.

• 3) Valuation techniques for financial instruments measured at fair value

• a) Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an 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.

• b) Derivative financial instruments

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 and put right of corporate bond

• 4) Reconciliation of Level 3 fair values

Opening balance, January 1, 2019 Issued Total gains and losses recognized in profit or loss Ending balance, June 30, 2019	Financial liabilities held for trading Embedded derivative instruments $ - 6,478 (2,622) $ 3,856

62

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the six months ended June 30, 2019, total gains and losses that were included in

other gains and losses and the financialliabilitieswere as follows： three months ended June 30, 2019 Six months ended June 30, 2019 Total gains and losses recognized: In profit or loss, and presented in “other gains and losses” $ (1,388) (2,622)	other gains and losses and the financialliabilitieswere as follows： three months ended June 30, 2019 Six months ended June 30, 2019 Total gains and losses recognized: In profit or loss, and presented in “other gains and losses” $ (1,388) (2,622)	other gains and losses and the financialliabilitieswere as follows： three months ended June 30, 2019 Six months ended June 30, 2019 Total gains and losses recognized: In profit or loss, and presented in “other gains and losses” $ (1,388) (2,622)
		(2,622)

• 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		Adjusted binary tree	Volatility (The volatility is 35.50% at	The estimated fair value would decrease if the volatility were higher
put right			June 30,2019)

• 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:

June 30, 2019 Financial liabilities at fair value through profit or loss Embedded derivative instruments- call and put right	Inputs	Increase or decrease	Fair value at Net income
			Favour- able Unfavour- able - - 154 -
	Volatility	5% -5%

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.

63

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio		June 30, 2019	December 31, 2018	June 30, 2018 18,905,401 (3,836,987) 15,068,414 13,200,389 114%
		$ 25,526,078 (4,818,865) $ 20,707,213 $ 13,767,924 150%	21,395,381 (5,468,507) 15,926,874 13,079,712 122%

The increase in the ratio of debt to equity in June 30, 2019 is due to the Group'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 six months ended June 30, 2019 and 2018 were as follows:

• 1) Acquisition of right-of-use assets by lease. Please refer to Note 6 (j) for details.

• 2) Adjustment of liabilities from financing activities were as follows:

64

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Short-term borrowings Short-term notes and bills payable Bonds payable Long-term borrowings Leases liabilities Guarantee deposits Total liabilities from financing activities		January 1, 2019 $ 3,540,288 49,947 1,995,336 7,262,108 10,297,999 953,419 $ 24,099,097	Cash flows (371,408) 2 542,300 (1,920,933) (382,539) (70,420) (2,202,998)	Non-cash	Non-cash	changes	June 30, 2019 3,199,068 49,949 2,289,873 5,406,834 9,967,038 892,682 21,805,444
				Other (Note1) - - (247,763) - (49,118) - (296,881)		Foreign exchange movement
						30,188 - - 65,659 100,696 9,683 206,226

Short-term borrowings Short-term notes and bills payable Bonds payable Long-term borrowings Guarantee deposits Total liabilities from financing activities	January 1, 2018 Cash flows $ 2,813,379 186,367 49,916 28 1,992,227 - 8,407,751 (1,413,571) 794,622 146,478	Non-cash changes	Non-cash changes	June 30, 2018 3,019,127 49,944 1,993,782 7,112,523 948,660
		Other (Note2) - - 1,555 - - 1,555	Foreign exchange movement
			19,381 - - 118,343 7,560 145,284
	$ 14,057,895 (1,080,698)			13,124,036

Note1: The impact of the lease liability on the rental, new and discontinued leases and the amortization of the issuance costs of corporate bonds.

Note2: The amount of amortization of corporate bond issuance costs.

65

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions:

• (a) Parent company and ultimate controlling company

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

Huizhou Tianan Xinghe City Management Co., Ltd. Huiyang Tamsui New Sun City Construction Co., Ltd. Shanghai Guorui Tongshun Environmental Protection Technology Co., Ltd.

• (c) Significant transactions with related parties

• (i) Leases

1) Lease liabilities

Relationship	Purpose	Right-of-use assets January 1, 2019 $ 98,562 55,018	Lease liabilities June 30, 2019 January 1, 2019 93,196 105,591 59,661 54,577	**Interest **	expense For the three months ended June 30,2019 1,505 743
			June 30, 2019 93,196 59,661	For the six months ended June 30,2019
Other related parties Other related parties	office building and department store Energy-saving renovation engineering equipment
				2,415 1,439

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.

66

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Operating Leases

Relationship	Account		Rent expense	Rent expense
		For the three months ended June 30,2019	For the three months ended June 30,2018	For the six months ended June 30,2019	For the six months ended June 30,2018
Other related parties Relationship	office building and department store Account
		- 30,375 - 68,900 Payments that are not included in the measurement of the lease liability Property management fee
		For the six months ended June 30,2019	For the three months ended June 30,2019	For the six months ended June 30,2019	For the three months ended June 30,2019
Other related parties	office building and department store
		$ 63,685 25,160 669 334

As of June 30, 2019, December 31, 2018, and June 30, 2018 the balance of Group's rental security deposit to other related parties amounted to $ 9,036 thousand, $ 8,952 thousand, and $ 9,213 thousand.

(ii) Others

  - 1) The Group provided management consulting services and signed service contracts with other related parties. For the three months and the six months ended June 30, 2019 and 2018, the revenue from consulting services was $ 5,389 thousand, $ 3,741 thousand, $ 10,777 thousand and $ 9,170 thousand, respectively.

  - 2) 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 June 30, 2018, the amount of prepaid energy-saving projects was $ 161,231 thousand (CNY 35,000 thousand) and which reported as prepaid equipment. For the three months and the six months ended June 30, 2019 and 2018, the Group purchased energy-saving equipment for zero, zero, $ 418 thousand (CNY 93 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:

Short-term employee benefits	For the three months ended June 30	For the three months ended June 30	For the six months ended June 30	For the six months ended June 30
	2019	2018 8,550	2019	2018 22,654
	$ 18,654		36,281

67

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (ii) The Group granted key management personnel rights to subscribe treasury shares as prepaid salaries. As of June 30, 2019, December 31, 2018 and June 30, 2018, those prepaid salaries amounting to $ 50,643 thousand (CNY 11,209 thousand), $ 25,484 thousand (CNY 5,693 thousand) and $ 27,824 thousand (CNY 6,001 thousand), which were recognized under other current assets and other non-current assets accounts.

(8) Pledged assets:

The carrying amount of pledged assets were as follows:

Pledged assets	Object		June 30, 2019 $ 534,232 106,377 922,466 40,585 10,105,618 144,496 - $ 11,853,774	December 31, 2018 921,600 117,552 551,363 - 10,201,012 144,982 246,147 12,182,656	June 30, 2018 - 275,776 669,036 - 10,516,354 392,290 -
Current financial assets at amortised cost Inventories (for construction business) Other financial assets－ current and non-current (Note 1) Accounts receivable Property, plant and equipment (Note 2) Investment Property Non-current assets classified as held for sale	Securities payable Bank loans Bank loans, bank depository funds and ordinary bonds payable Bank loans Bank loans and ordinary bonds payable Bank loans and ordinary bonds payable Bank loans
					11,853,456

• 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 June 30, 2019, December 31, 2018 and June 30, 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 was CNY 148,487 thousand. As of June 30, 2019, December 31, 2018 and June 30, 2018 the unpaid amount were $ 73,089 thousand (CNY 16,177 thousand), $ 72,410 thousand (CNY 16,177 thousand) and $ 19,391 thousand (CNY 4,209 thousand).

• (iii) The Group signed the contract for the purchase of the vessel on March 29, 2019. The total contract price was $ 1,012,556 thousand (US$ 32,600 thousand) and the initial payment of $ 202,511 thousand (US$ 6,520 thousand) was paid on April, 2019, it is expected to complete the delivery in 2020 .

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

Acquisition of land and building Prepaid of land and building Purchase contract of vehicle for rent Prepaid Sales contract of land Advance receipts	June 30, 2019	December 31, 2018 665,331 108,309 57,156 48,134 40,196 5,173	June 30, 2018 665,331
	$ 665,331 $ 108,309 $ 82,897 $ 32,403 $ 20,552 $ 1,352
			108,309
			26,334
			3,926
			103,369
			25,363

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

Guarantees	June 30, 2019	December 31, 2018 -	June 30, 2018
	$ -		822,000

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

Item Joint construction with allocation of buildings, Joint construction with selling separately Joint investing and developing on construction site, Joint construction with allocation of buildings, construction on self-owned land Joint construction with allocation of buildings Joint construction with allocation of buildings Joint investing and developing on construction site	Construction name
	Me island phase1 Me island phaseII B3 Me island phaseII B4 Me island phaseIIIB1 Nan Jing Jian Kang

• (b) Contingencies

• (i) The subsidiary, Mariner Finance Ltd. (MFL) purchased property from Changzhou HuiRun Asset Management Ltd. (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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (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 the 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

• (a) On July 22, 2019, the board of directors of the Group passed a resolution during the meeting to invested on Da Yu Financial Holding Ltd. (Original name: China Agrotech Holdings Limited) for 96,990 thousand shares with par value of HKD 0.52, amounting to HKD 50,435 thousand. Until the issuance date of the consolidated financial statements, the Group had completed the procedure of settlement.

• (a) On July 22, 2019 the board of directors of the Group agreed a resolution during the meeting to has redeemed unsecured corporate bonds in advance by Skyfame Realty Holding Ltd. At par value of US$ 17,200 thousand. Until the issuance date of the consolidated financial statements, the Group had completed the procedure of redeemed.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(12) Other:

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

function, is as follows:
	For the three months ended June 30
By function By item	2019			2018
	Operating Cost	Operating expense	Total	Operating Cost	Operating expense	Total
Employee benefits Salary Health and labor insurance Pension Others Depreciation Depletion Amortization	45,129 - - 4,063 95,397 - 5,254	194,269 1,332 15,568 30,216 417,709 - 3,182	239,398 1,332 15,568 34,279 513,106 - 8,436	45,730 286 393 3,929 81,745 - 5,780	162,088 1,114 15,052 32,878 149,765 - 4,858	207,818 1,400 15,445 36,807 231,510 - 10,638

	For the six months ended June 30	For the six months ended June 30	For the six months ended June 30	For the six months ended June 30	For the six months ended June 30	For the six months ended June 30
By function **By item **	2019			2018
	Operating Cost	Operating expense	**Total **	Operating Cost	Operating expense	**Total **
Employee benefits Salary Health and labor insurance Pension Others Depreciation Depletion Amortization	88,122 - - 8,023 179,685 - 10,993	354,899 2,840 32,831 62,574 844,248 - 6,904	443,021 2,840 32,831 70,597 1,023,933 - 17,897	91,579 570 784 7,774 162,142 - 10,487	354,490 2,253 34,641 67,312 291,114 - 16,914	446,069 2,823 35,425 75,086 453,256 - 27,401

(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.

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FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Segment information:

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

For the three months ended June 30, 2019 Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss For the three months ended June 30, 2018 Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss For the six months ended June 30, 2019 Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss For the six months ended June 30, 2018 Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss	Freight department $ 247,635 - $ 247,635 $ 21,578 $ 279,605 10,371 $ 289,976 $ (72,349) Freight department $ 504,106 -	Invest department 29,670 16,929 46,599 932,381 739 - 739 (69,563) Invest department 37,398 33,493	Retail department 1,551,941 - 1,551,941 160,945 1,476,863 - 1,476,863 252,723 Retail department 3,331,620 - 3,331,620 464,640 3,168,026 - 3,168,026 517,623	Lease department 83,047 214 83,261 200,837 79,507 114 79,621 (11,905) Lease department 163,725 557 164,282 210,396 159,803 457	Other segment 30,561 -	Reconciliation and elimination - (17,143) (17,143) - - (10,485) (10,485) - Reconciliation and elimination - (34,050) (34,050) - - (22,872) (22,872) -	Total 1,942,854 - 1,942,854 1,318,522 1,837,482 - 1,837,482 90,832 Total 4,084,276 - 4,084,276 1,645,890 3,870,041 - 3,870,041 356,272
					30,561
					2,781
					768 -
					768 (8,074) Other segment 47,427 - 47,427 (371) 4,842 - 4,842 (12,707)
	$ 504,106 $ 44,587 $ 535,855 22,415 $ 558,270 $ (24,732)	70,891
		926,638
		1,515 -
		1,515		160,260
		(125,673)		1,761

72