FSC - Interim / Quarterly Report 2019

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 Nine Months Ended September 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.

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
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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

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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 September 30, 2019 and 2018, the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2019 and 2018, as well as the changes in equity and cash flows for the nine months ended September 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 $ 6,659 thousand and $ 1,522,226 thousand as of September 30, 2019 and 2018. And its equity in net earnings (losses) on these investee companies of $ 48 thousand, $ 521 thousand, $ 17,885 thousand and $ (62,340) thousand for the three months and nine months ended September 30, 2019 and 2018, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

3-1

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 September 30, 2019 and 2018, and of its consolidated financial performance for the three months and nine months ended September 30, 2019 and 2018, as well as its consolidated cash flows for the nine months ended September 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) November 13, 2019

Notes to Readers

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

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

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

Reviewed only, not audited in accordance with the generally accepted auditing standards as of September 30, 2019 and 2018

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2019, December 31, 2018, and September 30, 2018

(Expressed in Thousands of New Taiwan Dollars)

September 30, 2019 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 4,160,915 11 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 498,787 1 1136 Current financial assets at amortized cost, net (Notes 6(c) , 8) - - 1170 Accounts receivable, net (Notes 6(d), (y) and 8) 905,642 2 1200 Other receivables, net (Notes 6(e)) 168,456 - 1220 Current tax assets - - 1300 Inventories, net 349,601 1 1320 Inventories (for construction business), net (Note 8 and 9) 640,258 2 1461 Non-current assets classified as held for sale(Notes 6(f) and 8) 252,228 1 1476 Other current financial assets (Notes 6(x) and 8) 803,472 2 1479 Other current assets, others (Notes 6(t), (w), 7 and 9) 366,725 1 8,146,084 21 Non-current assets: 1550 Investments accounted for using equity method, net (Notes 6(f) and (g)) 246,593 1 1600 Property, plant and equipment (Notes 6(j), 7 and 8) 13,046,782 35 1755 Right-of-use assets (Notes 6(k) , 7 and 8) 9,934,914 27 1760 Investment property, net (Notes 6(f), (l) and 8) 144,252 - 1780 Intangible assets (Note 6(m)) 2,191,803 6 1840 Deferred tax assets 842,180 2 1915 Prepayments for business facilities (Notes 7 and 9) 1,005,445 3 1935 Long-term lease payments receivable (Note 6(d)) 581,498 2 1980 Other non-current financial assets (Notes 6(e),(n), 7 and 8) 933,364 2 1985 Long-term prepaid rents (Notes 6(t) and 8) - - 1990 Other non-current assets(Notes 6(w) and 7) 277,441 1 29,204,272 79 Total assets $ 37,350,356 100	September 30, 2019 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 4,160,915 11 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 498,787 1 1136 Current financial assets at amortized cost, net (Notes 6(c) , 8) - - 1170 Accounts receivable, net (Notes 6(d), (y) and 8) 905,642 2 1200 Other receivables, net (Notes 6(e)) 168,456 - 1220 Current tax assets - - 1300 Inventories, net 349,601 1 1320 Inventories (for construction business), net (Note 8 and 9) 640,258 2 1461 Non-current assets classified as held for sale(Notes 6(f) and 8) 252,228 1 1476 Other current financial assets (Notes 6(x) and 8) 803,472 2 1479 Other current assets, others (Notes 6(t), (w), 7 and 9) 366,725 1 8,146,084 21 Non-current assets: 1550 Investments accounted for using equity method, net (Notes 6(f) and (g)) 246,593 1 1600 Property, plant and equipment (Notes 6(j), 7 and 8) 13,046,782 35 1755 Right-of-use assets (Notes 6(k) , 7 and 8) 9,934,914 27 1760 Investment property, net (Notes 6(f), (l) and 8) 144,252 - 1780 Intangible assets (Note 6(m)) 2,191,803 6 1840 Deferred tax assets 842,180 2 1915 Prepayments for business facilities (Notes 7 and 9) 1,005,445 3 1935 Long-term lease payments receivable (Note 6(d)) 581,498 2 1980 Other non-current financial assets (Notes 6(e),(n), 7 and 8) 933,364 2 1985 Long-term prepaid rents (Notes 6(t) and 8) - - 1990 Other non-current assets(Notes 6(w) and 7) 277,441 1 29,204,272 79 Total assets $ 37,350,356 100	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	September 30, 2018 Amount % 3,758,494 11 158,669 - 915,900 3 978,841 3 874,943 3 - - 291,884 1 570,982 2 - - 767,689 2 739,092 3 9,056,494 28 1,658,514 5 13,548,237 41 - - 391,663 1 2,192,054 7 407,643 1 820,492 2 921,980 3 505,964 2 3,298,169 10 36,434 - 23,781,150 72 32,837,644 100 September 30, 2019 Liabilities and Equity Amount % Current liabilities: 2100 Short-term borrowings (Notes 6(d) and (o)) $ 3,155,482 8 2110 Short-term notes and bills payable 49,982 - 2120 Current financial liabilities at fair value through profit or loss (Note 6(b) and (q)) 2,468 - 2130 Current contract liabilities (Notes 6(y) and 9) 3,204 - 2170 Accounts payable (Note 6(r)) 1,875,184 6 2200 Other payables (Notes 6(c), (j), (r), (z)and 9) 911,693 2 2230 Current tax liabilities 52,310 - 2280 Current lease liabilities (Notes 6(s) and 7) 907,317 2 2321 Current portion of bonds payable (Note 6(q)) 999,223 3 2322 Current portion of long-term borrowings (Note 6(p)) 1,972,169 6 2323 Long-term notes and accounts payable, current portion (Note 6(t)) - - 2399 Other current liabilities (Note 6(n) and (u)) 113,428 - 10,042,460 27 Non-Current liabilities: 2530 Bonds payable (Note 6(q)) 1,313,806 4 2540 Long-term borrowings (Note 6(p)) 3,274,461 9 2570 Deferred tax liabilities 78,827 - 2580 Non-current lease liabilities (Notes 6(s) and 7) 8,492,498 23 2612 Long-term accounts payable (Note 6(t)) 28,281 - 2640 Net defined benefit liability, non-current 1,637 - 2645 Guarantee deposits 814,627 2 14,004,137 38 Total liabilities 24,046,597 65 Equity attributable to owners of parent (Notes 6(f) , (g), (q)and (w): 3100 Capital stock 6,308,832 17 3200 Capital surplus 1,950,918 5 3300 Retained earnings 1,261,625 3 3400 Other equity interest (274,594) (1) Total equity attributable to owners of parent: 9,246,781 24 36XX Non-controlling interests (Notes 6(i)and (w) 4,056,978 11 Total equity 13,303,759 35 Total liabilities and equity $ 37,350,356 100	December 31, 2018	December 31, 2018	September 30,
				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
			10,042,460 27	12,342,157 36		11,280,445 35
8,146,084	21	11,379,427 34	1,313,806 4 3,274,461 9 78,827 - 8,492,498 23 28,281 - 1,637 - 814,627 2	997,668 3 5,632,493 16 68,973 - - - 1,399,021 4 1,650 - 953,419 3		997,279 3 5,227,685 16 159,169 - - - 1,401,208 4 4,145 - 935,172 3
246,593 13,046,782 9,934,914 144,252 2,191,803 842,180 1,005,445 581,498 933,364 - 277,441	1 35 27 - 6 2 3 2 2 - 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 -
			14,004,137 38	9,053,224 26		8,724,658 26
			24,046,597 65	21,395,381 62		20,005,103 61
			6,308,832 17 1,950,918 5 1,261,625 3 (274,594) (1)	6,308,832 18 1,953,436 6 680,956 2 (230,852) (1)		6,308,832 19 1,929,320 6 665,837 2 (317,637) (1)
29,204,272	79	23,095,666 66
			9,246,781 24 4,056,978 11	8,712,372 25 4,367,340 13		8,586,352 26 4,246,189 13
			13,303,759 35	13,079,712 38		12,832,541 39
			$ 37,350,356 100	34,475,093 100		32,837,644 100
$ 37,350,356	100	34,475,093 100

See accompanying notes to consolidated financial statements.

(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 nine months ended September 30, 2019 and 2018

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

For the three months ended September 30	For the three months ended September 30	For the three months ended September 30		For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	% 100 29
2019	% 100 33	2018	% 100 33	2019 Amount % 5,830,439 100 1,916,636 33		2018
Amount $ 1,746,163 579,171		Amount				Amount 5,663,997 1,662,378
		1,793,956 585,113
1,166,992 924,812 15,121	67 53 1	1,208,843 1,043,927 2,337	67 58 -	3,913,803 67 2,924,817 50 51,906 1 937,080 16		4,001,619 3,113,929 2,337	71 55 -
227,059	13	162,579	9			885,353	16
11,866 (90,909) (216,122) - (1,896)	- (6) (12) - -	21,289 (22,421) (98,601) 190 (8,569)	1 (2) (5) - -	73,491 - 1,286,513 22 (726,714) (12) - - 5,518 -		58,443 (118,694) (314,417) (19,087) (80,859)	1 (3) (6) - (1)
(297,061)	(18)	(108,112)	(6)	638,808 10		(474,614)	(9)
(70,002) 51,985	(5) 3	54,467 59,634	3 3	1,575,888 26 246,305 4		410,739 289,497	7 5
(121,987)	(8)	(5,167)	-	1,329,583 22		121,242	2
- - - (322,331) (533) (312) -	- -	33,625 -	2 -	- - - -		33,625 -	1 -
	-	33,625	2	- -		33,625	1
	(18) - - -	(415,836) - 13,426 -	(24) - 1 -	(166,141) (3) 2,523 - 15,216 - - -		(173,279) - 38,930 -	(3) - 1 -
(323,176)	(18)	(402,410)	(23)	(148,402) (3)		(134,349)	(2)
(323,176)	(18)	(368,785)	(21)	(148,402) (3)		(100,724)	(1)
$ (445,163)	(26)	(373,952)	(21)	1,181,181 19		20,518	1
$ (120,235) (1,752)	(8) -	1,761 (6,928)	- -	1,204,321 20 125,262 2		(7,293) 128,535	- 2
$ (121,987)	(8)	(5,167)	-	1,329,583	22	121,242	2
$ (307,584) (137,579)	(18) (8)	(193,505) (180,447)	(11) (10)	1,160,579 19 20,602 -		11,206 9,312	- 1
$ (445,163)	(26)	(373,852)	(21)	1,181,181 19		20,518	1
$	(0.19)		0.00	1.91			(0.01)
$	(0.19)		0.00	1.69			(0.01)

See accompanying notes to consolidated financial statements.

(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 nine months ended September 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

			Equityattributable to o	Equityattributable to o	Equityattributable to o	wners ofparent	wners ofparent	wners ofparent
Share capital	Capital surplus		Retained earnings			Total other equityinterest			Total equity attributable to owners of parent
Common stock		Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings	Exchange differences on translation of foreign financial statements	Revaluation surplus	Equity related to non-current assets classified as held for sale
$ 6,308,832	1,898,430 107,468 -			565,662 673,130 (336,136) -				-
- -	- - - - - -			(7,293) (7,293) - - - - - (13,306) 31,805 -
-	- - -			(7,293) (7,293) (13,306) 31,805 -
- - - - - -	- - 56,496 - (56,496) - - - - - - 336,136 (336,136) - - - - 3,332 - - - - - - - 2,358 - - - - - - - 25,200 - - - - - - - - - - - - - - -
$ 6,308,832	1,929,320 163,964 336,136 165,737 665,837 (349,442) 31,805 -
$ 6,308,832 -
6,308,832	1,953,436 163,964 336,136			(373,644) 126,456 (266,508) - 35,656
- -	- - - - - -
-	- - -			1,204,321 1,204,321 (46,123) - 2,381 1,160,579
- - - - - - - -
$ 6,308,832

See accompanying notes to consolidated financial statements.

(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 nine months ended September 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 Impairment loss on non-current assets classified as held for sale 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 Gain on disposal of share of profit of associates accounted for using equity method Impairment loss on non-financial assets 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 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 nine months ended September 30 2019 2018 $ 1,575,888 410,739 1,516,298 676,681 30,592 38,995 51,906 21,424 (12,321) 13,844 726,714 314,417 7,738 - (70,187) (52,842) (3,304) (5,601) 30,604 - (5,518) 80,859 9,491 9,357 (217,213) - (2,950) 8,297 (1,002,072) - - 89,909 - 115,355	For the nine months ended September 30 2019 2018 $ 1,575,888 410,739 1,516,298 676,681 30,592 38,995 51,906 21,424 (12,321) 13,844 726,714 314,417 7,738 - (70,187) (52,842) (3,304) (5,601) 30,604 - (5,518) 80,859 9,491 9,357 (217,213) - (2,950) 8,297 (1,002,072) - - 89,909 - 115,355
	2019 $ 1,575,888 1,516,298 30,592 51,906 (12,321) 726,714 7,738 (70,187) (3,304) 30,604 (5,518) 9,491 (217,213) (2,950) (1,002,072) - -
	1,059,778	1,310,695
	(343,986) 531,629 14,820 25,483 47,514 (3,128) (1,969) (1,759,658) (184,597) (10,892) (13) -	319,390 (353,381) (39,004) 14,642 (33,067) (7,067) 70,296 (1,894,796) (80,939) 13,042 (3,530) (75,533)
	(625,019)	(759,252)
	950,869 107,003 3,304 (716,207) (345,807)	(348,513) 40,370 5,601 (313,805) (329,985)
	(838)	(946,332)

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 nine months ended September 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 Proceeds from disposal 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 subsidiaries 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 Increase in other receivables Decrease in other receivables Acquisition of intangible assets Proceeds from disposal of intangible assets Decrease in receivables (transfer of stock equity and prepaid investment) Decrease 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 (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 subsidiaries'cash dividends paid subsidiaries'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	- (440,109) 458,426 - (147,424) (751,594) 1,872,546 134,670 6,183 - 463,360 - (502,633) (637,442) 22,088 42,732 (40,268) - - 208,523 (17,430) (126,558) - 675 - 17,449 (197,797) (167,917) (21,418) (27,627) (411,281) (287,494) - (10,330)
	1,484,352 (2,045,022)
	(362,475) 831,908 35 31 1,542,300 - (1,000,000) - 863,613 2,532,176 (2,913,885) (3,644,602) (123,453) 166,900 (665,594) - (150,582) (99,642) 31,402 - - (20,667) - 3,332
	(2,778,639) (230,564)
	(12,467) 829
	(1,307,592) (3,221,089) 5,468,507 6,979,583
	$ 4,160,915 3,758,494

(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

September 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 November 13, 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

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.

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.

In addition, the Group has transition to IFRS 16 using the following expediency practices：

(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.

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:

disclosed as follows:
Operating lease commitment at December 31, 2018 as disclosed in the Group’s consolidated financial statements Discounted using the incremental borrowing rate at January 1, 2019 Finance lease liabilities recognized as at December 31, 2018 Lease liabilities recognized at January 1, 2019	January 1, 2019
	$ 13,126,826 10,297,999 - $ 10,297,999

(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

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:

Effective date per New, Revised or Amended Standards and Interpretations IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Effective date to be Between an Investor and Its Associate or Joint Venture” determined by IASB IFRS 17 “Insurance Contracts” January 1, 2021 Amendments to IFRS 9, IAS 39 and IFRS 7“Interest Rate Benchmark January 1, 2020 Reform”

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.

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	Shareholding	Note
			September 30, 2019	December 31, 2018	September 30, 2018
First Steamship Co., Ltd. First Steamship Co., Ltd. First Steamship Co., Ltd. First Steamship Co., Ltd. First Steamship Co., Ltd. First Steamship Co., Ltd. First Steamship Co., Ltd. Yee Shin Investment Co., Ltd Royal Sunway Development Co., Ltd. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A.	Yee Shin Investment Co., Ltd. Yee young Co., Ltd. Royal Sunway Development Co., Ltd. First Steamship S.A. Grand Ocean Retail Group Ltd. First Mariner Holding Ltd. New Urban Investments Ltd. Grand Ocean Retail Group Ltd. Lan Hai Engineering Consultants Ltd. Longevity Navigation S.A. Praise Maritime S.A. Best Steamship S.A. Grand Steamship S.A. Ahead Capital Ltd.	General investing Real estate development, rental and leasing of building Real estate development, rental and leasing of building International transportation and shipping agency Investment holding company Investment holding company Investment holding company Investment holding company Engineering Consultancy International transportation and shipping agency International transportation and shipping agency International transportation and shipping agency International transportation and shipping agency Investment holding company	100.00% - % 55.00% 100.00% 3.70% 100.00% 100.00% 2.21% - % 100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 55.00% 55.00% 100.00% 100.00% 3.82% 3.82% 100.00% 100.00% 100.00% 100.00% 2.29% 2.29% 70.00% 70.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%		The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries. On July 1, 2019, it has being merged, which has completed the registration process. The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries. In May 2019, it decided to reduce the capital of 1,090 shares. The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries and it also disposed on July 25, 2019 The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of Investor	Name of Subsidiary	Principal activity		Shareholding	Shareholding	Note
			September 30, 2019	December 31, 2018	September 30, 2018
First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. First Steamship S.A. Ahead Capital Ltd. First Mariner Holding Ltd. First Mariner Holding Ltd. First Mariner Capital Ltd. First Mariner Capital Ltd. First Mariner Capital Ltd. Mariner Capital Ltd.	Media Assets Global Ltd. Black Sea Steamship S.A. Ship Bulker Steamship S.A. Nature Sources Ltd. Grand Ocean Retail Group Ltd. Reliance Steamship S.A. Alliance Steamship S.A. Sure Success Steamship S.A. Heritage Riches Ltd. Shining Steamship International S.A. Excellent Steamship International S.A. Grand Ocean Retail Group Ltd. First Mariner Capital Ltd. Mariner Far East Ltd. Mariner Capital Ltd. Mariner Finance Ltd. Morton Securities Ltd. Mariner Finance Ltd.	Investment holding company International transportation and shipping agency International transportation and shipping agency Investment holding company Investment holding company International transportation and shipping agency International transportation and shipping agency International transportation and shipping agency Investment holding company International transportation and shipping agency International transportation and shipping agency Investment holding company Investment holding company Investment holding company Investment holding company Loan company Securities and Securities underwriting company Automobile Finance leasing company	100.00% 100.00% 100.00% 100.00% 46.83% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 1.79% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 48.38% 100.00% 100.00% 100.00% 100.00% - % - % 1.85% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 48.38% 100.00% 100.00% 100.00% 100.00% - % - % 1.85% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries and reduced 19,500 shares on April 29, 2019 The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of Investor	Name of Subsidiary	Principal activity	Shareholding	Shareholding	Shareholding	Note The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries and it also completed liquidation in October 2018 The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries 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. The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries
			September 30, 2019	December 31, 2018	September 30, 2018
Mariner Finance Ltd. Mariner Finance Ltd. Mariner Finance Ltd. Mariner Finance Ltd. Mariner Finance Ltd. Mariner Finance Ltd. Mariner Finance Ltd. Grand Ocean Retail Group Ltd. Grand Citi Ltd. Grand Ocean Department Store Group Ltd. Grand Ocean Department Store Group Ltd. Grand Ocean Department Store Group Ltd. Grand Ocean Department Store Group Ltd. Grand Ocean Department Store Group Ltd. Grand Ocean Department Store Group Ltd. Zayton Grand Ocean Department Store Co., Ltd.	Lianyungang Youren Car Service Ltd. Jinhua Youcheng Car Leasing Ltd. Suqian Youcheng Car Leasing Ltd. Jinan Youli Car Leasing Ltd. Yancheng Youcheng Car Leasing Ltd. Zhuzhou Youcheng Car Leasing Ltd. Zhongshan Youcheng Car Rental Co., Ltd. Grand Citi Ltd. Grand Ocean Department Store Group Ltd. Suzhou Grand Ocean Department Store Co., Ltd. Nanjing Grand Ocean Department Store Co., Ltd. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Zayton Grand Ocean Department Store Co., Ltd. Shanghai Jing Xuan Business Management Co., Ltd. Fuzhou Jiaruixing Commercial Management Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd.	Automobile Finance leasing company Automobile Finance leasing company Automobile Finance leasing company Automobile Finance leasing company Automobile Finance leasing company Automobile Finance leasing company Automobile Finance leasing company Investment holding company Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Management consulting business, and trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc.	100.00% 100.00% 100.00% 100.00% 100.00% - % 100.00% 100.00% 100.00% 86.67% 100.00% 100.00% 100.00% 100.00% 100.00% 30.00%	100.00% 100.00% 100.00% 100.00% 100.00% - % 100.00% 100.00% 100.00% 86.67% 100.00% 100.00% 100.00% 100.00% 100.00% 30.00%	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 86.67% 100.00% 100.00% 100.00% 100.00% 100.00% 30.00%

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of Investor	Name of Subsidiary	Principal activity		Shareholding	Shareholding	Note
			September 30, 2019	December 31, 2018	September 30, 2018
Nanjing Grand Ocean Department Store Co., Ltd. Nanjing Grand Ocean Department Store Co., Ltd. Nanjing Grand Ocean Department Store Co., Ltd. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Fuzhou Zhongcheng Grand Ocean Department Store Co., Ltd. Fuzhou Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Wuhan Guanggu Grand Ocean Department Store Co., Ltd.	Suzhou Grand Ocean Department Store Co., Ltd Nanjing Grand Ocean Department Hefei Store Co., Ltd. Fuzhou Tiandi Grand Ocean Department Store Co., Ltd. Fuzhou Grand Ocean Department Store Co., Ltd. Fuzhou Tiandi Grand Ocean Department Store Co., Ltd. Wuhan Zhongshan Grand Ocean Department Store Co., Ltd. Fuzhou Tiandi Grand Ocean Department Store Co., Ltd. Wuhan Guanggu Grand Ocean Department Store Co., Ltd. Xiangtan Grand Ocean Department Store Co., Ltd. Chongqing Guanggu Grand Ocean Department Store Co., Ltd. Wuhan Longyang Grand Ocean Department Store Co., Ltd. Hengyang Grand Ocean Department Store Co., Ltd. Shiyan Ocean Modern Shopping Co., Ltd. Xiangtan Grand Ocean Department Store Co., Ltd.	Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc. Trading of cosmetics, furnishings, etc.	6.66% 100.00% 57.13% 100.00% 14.29% 70.00% 14.29% 100.00% 50.00% 50.00% 50.00% 100.00% 100.00% 50.00%	6.66% 100.00% - % 100.00% 50.00% 70.00% 50.00% 100.00% 50.00% 50.00% 50.00% 100.00% 100.00% 50.00%	6.66% 100.00% - % 100.00% 50.00% 70.00% 50.00% 100.00% 50.00% 50.00% 50.00% 100.00% 100.00% 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. The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries 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. The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries The company directly (indirectly) holds more than 50% of its subsidiaries 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.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2. As a lessee

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

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

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

The lease payments included in the measurement of the lease liability comprise the following: i. fixed payments, including in-substance fixed payments;

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

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

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

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

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

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

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

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

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

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

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.

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 Cash equivalents Total	September 30, 2019 $ 34,075 3,884,240 176,814 65,786 $ 4,160,915	December 31, 2018 49,601 5,397,402 21,504 - 5,468,507	September 30, 2018 55,895 3,681,228 21,371 -
			3,758,494

Please refer to note 6(ab) 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 Financial products of bank Total Financial liabilities held-for-trading Embedded derivatives Call and put rights of convertible bonds	September 30, 2019 $ 350,594 12,234 135,959 $ 498,787 $ 2,468	December 31, 2018 140,466 11,502 -	September 30, 2018
			145,605 13,064 - 158,669 -
		151,968 -

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) The Group was resolved by the board of directors on July 22, 2019, through the subsidiary Mariner Far East Limited to invest in 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. As of September 30, 2019, the Group had completed the procedure of settlement.
(iii) Please refer to note 6(ab) for disclosure of credit risk and market risk of all financial instruments mentioned above.
(iv) Please refer to note 6(aa) for the unrealized gain (loss) on valuation of financial assets and liabilities.
(c) Current financial assets at amortized cost

Corporate bond	September 30, 2019 $ -	December 31, 2018 921,600	September 30, 2018 915,900

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 and July 22, 2019, the Group's Board of Directors had agreed to Skyfame Realty Holdings Ltd. redemption US$ 12,800 thousand and US$ 17,200 thousand of unsecured corporate bond in advance. Moreover, the aforesaid amount in financing was zero, $ 468,163 thousand (US$ 15,240 thousand) and $ 462,390 thousand (US$ 15,145 thousand) as of September 30, 2019, December 31, 2018 and September 30, 2018.
The financial assets of the Group had been pledged as collateral for borrowings. Please refer to note 8

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(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	September 30, 2019 $ 117,077 - 117,077 1,007,568 (156,213) (62,790) 788,565 905,642 673,909 (53,987) (38,424) 581,498 $ 1,487,140	December 31, 2018 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		September 30, 2018 143,468 -
				143,468
				1,006,934 (161,088) (10,473)
				835,373
				978,841
				1,023,490 (90,865) (10,645)
				921,980
				1,900,821

(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:

September 30, 2019	September 30, 2019	Loss allowance provision 1,699 1,317 1,395 2,398 94,405
Gross carrying amount of leases payment receivable	Weighted-average loss rate
$ 1,256,837 57,953 9,839 8,047 138,601 $ 1,471,277	0.14% 2.27% 14.18% 29.8% 68.11%
		101,214

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2018	December 31, 2018	Loss allowance provision 2,438 1,826 1,770 1,759 44,232
Gross carrying amount of leases payment receivable

		52,025 Loss allowance provision 8,261 391 35 1,188 11,243
Gross carrying amount of leases payment receivable	Weighted-average loss rate 0.5% 0.5% 0.5% 10% 38.37%
$ 1,652,226 78,085 6,976 11,879 29,305 $ 1,778,471
		21,118

Note: As of September 30, 2019, December 31, 2018 and September 30, 2018 ,the Group had filed lawsuits for colleting the overdue receivables from leasing business with total amount of $ 73,115 thousand (CNY 16,671 thousand), $ 62,494 thousand (CNY 13,962 thousand) and $35,025 thousand (CNY 7,892 thousand). The Group assessed the recoverability of those overdue receivables, and recognized provision for allowance of $48,521 thousand (CNY 10,708 thousand), $ 36,143 thousand (CNY 7,927 thousand) and $ 8,021 thousand (CNY 1,747 thousand) less unearned interests and guarantee deposit.
2) The loss allowance provision in retail business department in China was determined as follows:

September 30, 2019	September 30, 2019	Loss allowance provision -
Gross carrying amount Weighted-average loss rate $ 90,791 - December 31, 2018	Weighted-average loss rate

		Loss allowance provision -
Gross carrying amount Weighted-average loss rate $ 339,792 - September 30, 2018	Weighted-average loss rate

		Loss allowance provision -
Gross carrying amount $ 82,457	Weighted-average loss rate
	-

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

September 30, 2019	September 30, 2019	Loss allowance provision -
Gross carrying amount Weighted-average loss rate $ 24,402 - December 31, 2018	Weighted-average loss rate

		Loss allowance provision -
Gross carrying amount Weighted-average loss rate $ 24,718 - September 30, 2018	Weighted-average loss rate

		Loss allowance provision -
Gross carrying amount $ 31,730	Weighted-average loss rate
	-

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

September 30, 2019	September 30, 2019	Loss allowance provision -
Gross carrying amount Weighted-average loss rate $ 1,884 - December 31, 2018	Weighted-average loss rate

		Loss allowance provision -
Gross carrying amount Weighted-average loss rate $ 20,992 - September 30, 2018	Weighted-average loss rate

		Loss allowance provision -
Gross carrying amount	Weighted-average loss rate
$ 29,281	-

(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 September 30, 2019 and 2018	For the nine months ended September 30 2019 2018 $ 52,025 19,366 51,906 2,337 (2,717) (585) $ 101,214 21,118	For the nine months ended September 30 2019 2018 $ 52,025 19,366 51,906 2,337 (2,717) (585) $ 101,214 21,118	For the nine months ended September 30 2019 2018 $ 52,025 19,366 51,906 2,337 (2,717) (585) $ 101,214 21,118
	2019
	$ 52,025 51,906 (2,717)
	$ 101,214		21,118

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

Below 1 year to 2 year past due to 3 year past due Gross investment in the lease Unearned revenue Present value of minimum lease payments receivable	September 30, 2019
	$ 1,007,568 533,857 140,052
	1,681,477 (210,200)
	$ 1,471,277

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

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

$ 2,014,217	(247,693)	1,766,524
$ 1,006,934 1,023,490	(161,088) (90,865)	845,846 932,625
$ 2,030,424	(251,953)	1,778,471

(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:

September 30,2019

Resale company CDIB International Leasing Corp.	Transferred accounts receivable amount $ 39,397		Credit lines 43,858	Advanced amount(recognized under Short-term borrowings) 30,169	Range of interest rates Guarantee item 6.5% Accounts receivables	Guarantee item

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(e) Other receivables

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	September 30, 2019 $ 18,233 50,874 - 117,582 (18,233) $ 168,456	December 31, 2018 18,608 71,616 725,119 109,780 (18,608)	September 30, 2018
				18,450 26,925 718,960 129,058 (18,450) 874,943
		906,515

(i) The other receivables–loans arise from the demand of short-term financing by the car rental platform, and obtain collateral when necessary. 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.

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 September 30, 2019 December 31, 2018 and September 30, 2018, the outstanding receivables were CNY 162,000 thousand ($ 710,492 thousand ,$ 725,119 thousand and $ 718,960 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.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) 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 September 30, 2019、December 31, 2018 and September 30, 2018, the transfer amount that has not yet been received is $ 18,233 thousand (CNY 4,157 thousand), $ 18,608 thousand (CNY 4,157 thousand) and $ 18,450 thousand (CNY 4,175 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, on February 27, 2019 , the court first sentenced the Group to win the case. As the recovery of the aforementioned amount is still subject to the implementation of the award and the circumstances in which the debtor can be executed and after the Group’s assessment of recoverability of other receivables, the Group recognized all impairment loss in 、
1. As of September 30, 2019 December 31, 2018 and September 30, 2018, the Group recognized impairment loss is CNY 4,157 thousand.

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 September 30, 2019 and 2018		For the nine months ended September 30 2019 2018 $ 18,608 - - 19,087 (375) (637) $ 18,233 18,450	For the nine months ended September 30 2019 2018 $ 18,608 - - 19,087 (375) (637) $ 18,233 18,450
		2019
		$ 18,608 - (375)
		$ 18,233	18,450

(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 (aa).
(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 September 30, 2019 and December 31, 2018, the amount of the non-current assets to be disposed of and the related interests are as follows：

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	September 30, 2019 $ - 252,228 $ 252,228 $ 5,504 33,894 $ 39,398		December31, 2018
			246,147 257,443 503,590 2,981 33,894 36,875

For the three months ended September 30, 2019, and for the nine months ended September 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 impairment loss of $ 92,067 thousand (US$ 2,971 thousand), and $7,738 thousand (US$ 249 thousand), under the other interests and losses of the consolidated income statement. Please refer to Note 6 (aa) for details.

The non-repetitive fair value and investment using the equity method is measured at $ 252,228 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 September 30, 2019, December 31, 2018 and September 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	September 30, 2019 $ 6,659 239,934 - - $ 246,593	December 31, 2018 6,742 120,745 - 1,196,611 1,324,098		September 30, 2018 6,666 136,288 393,874 1,121,686
Beijing ShouHai International Economics and Technology Consultant Service Co., Ltd. Taiwan Environment Scientific Co., Ltd. Sandmartin International Holdings Ltd. Summit Ascent Holdings Ltd.
				1,658,514

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:

are individually insignificant were as	follows:	follows:	follows:	follows:
Carrying amount of individually insignificant associates’ equity Attributable to the Group: Gain(Loss) from continuing operations Other comprehensive income Total comprehensive income	September 30, 2019 December 31, 2018 September 30, 2018 $ 246,593 1,324,098 1,658,514 For the three months ended September 30 For the nine months ended September 30 2019 2018 2019 2018 $ (1,896) (8,569) 5,518 (80,859) (312) 47,051 15,216 72,555 $ (2,208) 38,482 20,734 (8,304)

		2018 (8,569) 47,051	2019 5,518 15,216

		38,482	20,734	(8,304)

(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 $ 2,209,633 thousand (HKD 554,934 thousand), with par value of HKD 1.94, deduct the financing of $ 337,087 thousand when purchased, net cash flow in $ 1,872,546 thousand, and the gain on disposal was $ 1,002,072 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 $ 4,258 thousand that the Group will be reclassified as profit or loss in relation to the related enterprise and recognized in other comprehensive income statement and capital surplus $ 22,233 thousand.
(v) On August 30, 2019 and March 5, 2018, the Group subscribed to the private equity and the issuance of new shares of the investee, Taiwan Environment Scientific Co., Ltd., amounting to $ 147,424 thousand and $ 12,127 thousand. The Group recognizes increase of capital surplus due to not subscribing by shareholding percentage amounting to $ (9,804) thousand , retain earnings amounting to $(6,064) thousand and capital surplus to $ 2,358 thousand.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

As of September 30, 2019 and 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. Except for Taiwan Environment Scientific Co., Ltd. has reviewed by CPA.

(vii) Guarantees

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

(h) Loss of control of subsidiaries

On July 25, 2019 the Group lost controlling power on Lan Hai Engineering Consultants Ltd. by selling 70% of the equity. The proceeds from disposal were $10,900 thousand, with gain on disposal of $2,950 thousand, the payment was received.

The carrying amount of the assets and liabilities of Lan Hai Engineering Consultants Ltd. on July 25, 2019 were as follows:

Cash and cash equivalents Accounts receivable Other receivable Current tax assets Other current assets Property, plant and equipment Other non-current financial assets Other payables Current tax liabilities Carry amount of net assets of former subsidiary	$ 4,717 9,124 6 229 28 488 221 (3,112) (344)
	$ 11,357

(i) Material non-controlling interests of subsidiaries

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

Name of Subsidiary GRAND OCEAN RETAIL GROUP LTD.	Mainoperation/	Percentage of non-controlling interests	Percentage of non-controlling interests	Percentage of non-controlling interests
	place	September 30, 2019 45.47%	December 31, 2018	September 30, 2018
	China/Cayman Islands		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.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

September 30, 2019 December 31, 2018 September 30, 2018 Current assets $ 4,454,456 7,695,337 5,727,477 Non-current assets 20,906,783 13,239,338 13,266,707 Current liabilities (6,428,875) (7,194,719) (5,818,705) Non-current liabilities (10,168,068) (3,910,056) (3,613,095) Non-controlling interests (1,996) (304) (2,942) Net assets $ 8,762,300 9,829,596 9,559,442 Non-controlling interests $ 3,984,218 4,291,602 4,173,652 For the three months ended September 30 For the nine months ended September 30 2019 2018 2019 2018 Sales revenue $ 1,391,295 1,347,883 4,722,915 4,515,909 Profit $ 78 (17,130) 286,769 306,805 Other comprehensive income (298,331) (395,887) (223,574) (272,164) Comprehensive income (loss) $ (298,253) (413,017) 63,195 34,641 Profit (loss), attributable to non-controlling interests $ (1,785) (9,428) 125,265 133,226 Comprehensive income (loss), attributable to non-controlling interests $ (137,548) (182,885) 20,669 14,002 For the nine months ended September 30 2019 2018 Net cash flows from operating activities $ (223,366) (831,371) Net cash flows from investing activities (403,784) (1,181,733) Net cash flows from financing activities (1,068,528) (953,219) Effect of exchange rate changes (48,314) (70,547) Net decrease in cash and cash equivalents $ (1,743,992) (3,036,870)		September 30, 2018
		5,727,477 13,266,707 (5,818,705) (3,613,095) (2,942)
		9,559,442

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(j) Property, plant and equipment

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

Land $ 126,409 - - - -	Vessels 8,152,699 - - - 79,616	Office equipment 320,672 12,505 1,309 (72,818) (4,330) 257,338 323,543 11,451 332 (12,315) (8,054) 314,957 238,024 19,282 (71,203) (2,911)	Leasehold Improvement 7,485,417 101,390 131,880 (510,234) (141,669)	Total 20,129,530 400,997 - (638,861) (149,316)
$ 126,409	8,232,315		7,066,784	19,742,350
$ 126,409 - - - -	7,902,335 905 - - 199,036		6,906,844 181,701 326,087 (19,787) (196,760)	19,514,264 554,176 - (104,477) (113,948)
$ 126,409 $ - - - -	8,102,276		7,198,086	19,850,015
	1,577,649 253,633 - 15,096		4,416,711 320,342 (500,201) (82,915) 4,153,937	6,702,024 681,545 (606,794) (81,207)
$ -	1,846,378	183,192 228,357 19,987 (10,741) - (6,021) 231,582 82,648		6,695,568
$ - - - - -	1,205,218 244,339 - - 35,226		3,830,145 331,676 (11,982) 89,720 (113,560)	5,685,741 674,566 (52,388) 89,909 (96,050)
$ -	1,484,783		4,125,999 3,068,706 2,912,847 3,076,699 3,072,086	6,301,778
$ 126,409	6,575,050			13,427,506
$ 126,409	6,385,937	74,146 95,186		13,046,782
$ 126,409	6,697,117			13,828,523
$ 126,409	6,617,493	83,375		13,548,237

(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 $ 89,909 thousand (CNY 19,583 thousand).
(ii) As of September 30, 2019, December 31, 2018 and September 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 $ 182,498 thousand, $ 286,652 thousand and $ 249,158 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(aa) for gains (loss) on disposal of property, plant and equipment.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(v) Guarantee

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

(k) Right-of-use assets

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

Land	Buildings	Total - 11,009,298 10,671 (57,822) (219,853)
$ - 3,378,465 - - (68,151) $ 3,310,314 $ - 75,211 - (2,416) $72,795 $ 3,237,519	- 7,574,869 4,619 (57,822) (150,423) 7,371,243 - 753,480 (140) (23,930) 729,410 6,641,833
		10,742,294
		- 834,023 (140) (26,503)
		807,380
		9,934,914

(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 $ 57,136 thousand for the right-of-use asset cost and lease liability, please refer to Note 6 (s) 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 September 30, 2018，please refer to note 6(t) for further detail.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(l) Investment properties

Owned	property	Total 166,020
Land and improvement	Buildings
$ 115,769	50,251 50,251 135,322 135,322 21,038 730 21,768 54,549 2,115 56,664 29,213 28,483 80,773 78,658
$ 115,769		166,020
$ 313,005		448,327
$ 313,005		448,327
$ - -		21,038 730
$ -		21,768
$ - -		54,549 2,115
$ -		56,664
$ 115,769		144,982
$ 115,769		144,252
$ 313,005		393,778
$ 313,005		391,663

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

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(m) Intangible assets

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

Goodwill	Trademark	License Plate	Total 2,283,692 17,430 (33,402)
$ 1,396,645 - (27,984)	430,575 - 4,204 434,779 417,399 - - 10,513 427,912 - - - - - - - - 430,575 434,779 417,399 427,912	375,927 - (7,583) 368,344 273,176 109,900 (675) (10,810) 371,591 5,242 - (106) 5,136 5,337 - (140) 5,197 370,685 363,208 267,839 366,394
$ 1,368,661			2,267,720
$ 1,421,771 - - (36,978)			2,173,062 126,558 (675) (39,182)
$ 1,384,793			2,259,763
$ 6,318 - 62			70,270 6,954 (1,307)
$ 6,380			75,917
$ 6,125 - 154			62,609 6,399 (1,299)
$ 6,279			67,709
$ 1,390,327			2,213,422
$ 1,362,281 $ 1,415,646			2,191,803
			2,110,453
$ 1,378,514			2,192,054

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 September 30, 2019 and 2018, and for the nine months ended September 30, 2019 and 2018:

Operating expenses	For the three months ended September 30	For the three months ended September 30		For the nine months ended September 30	For the nine months ended September 30
	2019 $ 2,876	2018		2019 6,954	2018
					6,399

(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.

－
(n) Other financial assets current and non-current

Other financial assets－current Deposits－out for lease Restricted deposits Time deposits Deposits－ready to transaction Others Other financial assets－non-current Deposits－out for lease Restricted deposits Investment and guarantee deposits Others Time deposits	September 30, 2019 $ 69,069 529,982 198,528 4,287 1,606 $ 803,472 $ 167,092 33,021 710,492 22,759 $ 933,364	December 31, 2018 3,900 296,279 - 310,028 3,707 613,914 239,621 255,084 - 31,355 526,060	September 30, 2018	September 30, 2018
				3,122 427,939 - 314,074 22,554
				767,689
				225,087 255,075 - 25,802
				505,964

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

(ii) As of September 30, 2019, December 31, 2018 and September 30, 2018, the Group has collected receipts in advance for securities brokerage business, amounting to $ 4,287 thousand, $ 310,028 thousand and $ 314,074 thousand, respectively. The receipts in advance are reported as other current liabilities.

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

(o) Short-term borrowings

(o) Short-term borrowings
Unsecured bank loans Secured bank loans Other unsecured loans Other secured loans Total Unused credit lines Range of interest rates	September 30, 2019 $ 1,071,583 1,714,553 234,639 134,707 $ 3,155,482 $ 870,730 1.35%~9.5%	December 31, 2018 1,253,516 1,694,854 591,918 - 3,540,288 750,000 1.5%~7%		September 30, 2018
				1,453,685 1,621,055 545,027 - 3,619,767 689,469 1.5%~7%

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

(p) 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	September 30, 2019
	$ 2,908,518 2,338,112 (1,972,169) $ 3,274,461 $ 2,208,778 1.35%~9.5%

(i) Lending and repayment of loans

For the nine months ended September 30, 2019 and 2018, the Group proceeded from long-term borrowings amounting to $863,613 thousand and $2,532,176 thousand, respectively and the repayment amounted to $2,913,885 thousand and $3,644,602 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). On August 13, 2019, the Group has repaid the loan in advance.

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(ab).

(q) Bonds payable

The information of bonds of the Group were as follows:

Total ordinary bonds issued Total convertible bonds issued Less: Current portion	September 30, 2019		December 31, 2018 2,000,000 - (997,668) - (4,664) 997,668 - -	September 30, 2018
				2,000,000 - (997,279) - (5,442)
Cumulative redeemed amount
				997,279
				-
				-

For the three months ended September 30	For the three months ended September 30	For the nine months ended September 30	For the nine months ended September 30
2019	2018 -	2019	2018 - (27,457)
$ 1,388 $ ( 27,343)		4,010
	(9,152)	(76,448)

(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

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

Item	Overseas Guaranteed Convertible Bonds 2018
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 Trading Days on the TWSE
Conversion Procedure	Conversion Period The Bonds may be converted into newly issued common shares of the Issuer at any time after ninety (90) days from the Issue Date (exclusive), and ending on: (1) the seventh (7th) day prior to the Maturity Date or (2) the fifth (5th) Trading Day prior to any date where the Issuer exercises its early redemption 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 usingtheprevailingexchange rate forpayment in US dollars.

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.

(r) 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	September 30, 2019		December 31, 2018 156,481 3,452,100 72,014 3,680,595 801,582 - 286,652 725,178 1,813,412	September 30, 2018
	$ 168,568 1,632,530 102,367 $ 1,903,465 $ - 63,088 182,498 666,107 $ 911,693			70,442 2,081,588 84,059 2,236,089 737,839 - 249,158 446,212 1,433,209

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

(s) Lease liabilities

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

September 30, 2019

September 30, 2019
Current Non- Current Expiration analysis, please refer to Note 6 (ab) for financial instruments.	$ 907,317
	$ 8,492,498

For the nine months ended September 30, 2019, the Group increase of the lease liability for $ 10,671 thousand, decrease of lease modification for $ 57,682 thousand, please refer to Note 6 (k) for right-of-use assets.

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 September 30,2019	For the nine months end September 30,2019	For the nine months end September 30,2019
		$ 117,950 $ 22,912 $ 1,487		$ 369,331 $ 86,597 $ 3,570

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

Total cash outflow for leases	For the nine months end September 30,2019	For the nine months end September 30,2019
		$ 1,125,092

(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.

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.

(t) Operating lease

(i) Long-term prepaid rental

Current Non-current Total	December 31, 2018 $ 190,207 3,279,198 $ 3,469,405	September 30, 2018 231,174 3,298,169
		3,529,343

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. This amount was transferred to the right-of-use asset when the IFRS16 was first applied on January 1, 2019.

(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	September 30, 2018 1,444,750 (43,542) 1,401,208
	$ 1,445,566 (46,545) $ 1,399,021

As stated in Note6 (f), the subsidiary, Suzhou Grand Ocean Department Store Co., Ltd. lease expires early on February 15, 2019. Therefore, the long-term accounts payables of $ 98,709 thousand (CNY 21,449 thousand) were reversed and recognized as the deduction of the rental expenses for the second quarter of 2018.

(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 (j) 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：

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	September 30, 2019 $ 549,848 299,475 164,153 137,000 137,000 190,674
	$ 1,478,150
	September 30, 2019 $ 43,235 30,693 6,867
	$ 80,795

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	September 30, 2018 618,203 885,884 324,680
		1,828,767
		September 30, 2018 24,509 15,883
		40,392

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.

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：

ollows：
Bulk carriers	For the three months end September 30 2019 2018 $ 8,761 5,140		For the nine months end September 30
		2018	2019 19,754	2018
		5,140		15,627

(u) 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 September 30	For the three months end September 30		For the nine months end September 30	For the nine months end September 30
	2019 $ 49	2018		2019	2018 968
		291		148

(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 $ 15,146 thousand, $ 19,954 thousand, $ 47,878 thousand and $ 54,702 thousand for the three months ended September 30, 2019 and 2018 and the nine months ended September 30, 2019 and 2018, respectively.

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

Vacation liability	September 30, 2019		December 31, 2018 11,171	September 30, 2018
	$ 10,946			11,076

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

(v) Income Tax

The components of income tax were as follows:

For the three months ended September 30	For the three months ended September 30	For the nine months ended September 30	For the nine months ended September 30
2019 $ 52,108 - - 42 52,150	2018	2019 237,687 13,767 2,469 (5,155) 248,768	2018 244,316 465 17,303 (421) 261,663
	62,393 465 - -
	62,858 (6,613) 3,389
(165) -		(2,463) - (2,463) 246,305	17,669 10,165
(165)	(3,224)		27,834
$ 51,985	59,634		289,497

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 Development Co., Ltd.	Approved year
	2016 2017 2017 2017

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

(w) 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 September 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.

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	September 30, 2019		December 31, 2018 561,458 748,921 - 13,838 15,967 32,037 430,844 147,039 3,332 1,953,436	September 30, 2018
	$ 561,458 748,921 96,902 13,838 15,967 - 430,844 79,656 3,332 $ 1,950,918			561,458 748,921 - 13,838 15,967 8,175 430,590 147,039 3,332 1,929,320

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(q) for further details.

From January 1 to March 31, 2018, the Group 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.

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

On June 28, 2019, the shareholder's meetings resolved to distribute the 2018 earnings. These earnings were appropriated as follows:

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

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

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 thousand 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 thousand 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.

The subsidiary Grand Ocean Retail Group Ltd., the transfer price deducting taxes was $ 153,776 thousand from January 1 to September 30, 2019 and were recognized as cost of share-based payments awards of $ 30,604 thousand , and capital surplus of $ 28,957 thousand .

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.

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 nine months ended September 30
	2019	2018 6,370 - 6,370
	6,350 6,282
	12,632

The proceeds from transferring treasury shares were recognized as prepaid salary for employees to execute subscription. As of September 30, 2019, December 31, 2018, and September 30, 2018, these prepaid salary amounting to $ 231,453 thousand, $ 115,276 thousand and $ 120,907 thousand were recognized under other current assets and non-current assets, respectively.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) Other equity interests

Exchange differences on translation of foreign financial statements Equity related to non-current assets classified as held for sale	Exchange differences on translation of foreign financial statements Equity related to non-current assets classified as held for sale	Revaluation surplus	Non-controlling Interest	Total
			4,367,340 (428,738) 125,262 (150,582) 251,763 - - (3,407) 142 (104,802) 4,056,978	4,136,488 (428,738) 125,262 (150,582) 251,763 10,958 4,258 (3,407) 2,523 (166,141)
	38,037	-		3,782,384
$ (336,136) - - - - - - - 38,750 - - - (52,056) -		- - - - - 31,805 -	4,382,386 128,535 (99,642) (45,867) 180 1,820 (121,223) 4,246,189	4,046,250 128,535 (99,642) (45,867) 38,930 33,625 (173,279)
$ (349,442) -		31,805		3,928,552

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

(x) Earnings per share

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

For the three months ended September 30 2019 2018 $ (120,235) 1,761	For the three months ended September 30 2019 2018 $ (120,235) 1,761	For the nine months ended September 30 2019 2018 1,204,321 (7,293) 630,883 630,883 1.91 (0.01) 1,204,321 (7,293) 38,092 - 1,242,413 (7,293) 630,883 630,883 648 (Note) 102,588 - 734,119 630,883 1.69 (0.01)	For the nine months ended September 30 2019 2018 1,204,321 (7,293) 630,883 630,883 1.91 (0.01) 1,204,321 (7,293) 38,092 - 1,242,413 (7,293) 630,883 630,883 648 (Note) 102,588 - 734,119 630,883 1.69 (0.01)
		2019 1,204,321 630,883 1.91 1,204,321 38,092 1,242,413 630,883 648 102,588 734,119 1.69
$ (120,235)
630,883	630,883 0.00
$ (0.19)
(120,235) (Note)	1,761 -
$ (120,235)	1,761 630,883 30 -		(7,293) 630,883 (Note) -
630,883 (Note) (Note)
630,883	630,913		630,883
$ (0.19)	0.00		(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.

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

(y) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended September 30, 2019	For the three months ended September 30, 2019	For the three months ended September 30, 2019	For the three months ended September 30, 2019	For the three months ended September 30, 2019	Total 1,208 1,462,178 282,777
Freight department $ - - 274,507	Invest department 1,208 - 8,270	Retail department - 1,391,295 -	Lease department - 70,883 -	Other department - - -
$ 274,507	9,478	1,391,295	70,883	-	1,746,163
	- - 1,208 - 8,270	477,576 415,060 230,118 - 268,541	- - 13,085 54,023 3,775	- - - - -	477,576 415,060 518,918 54,023 280,586
$ 274,507	9,478	1,391,295	70,883	-	1,746,163
For the three months ended September 30, 2018					Total 35,237 1,425,827 332,892
Freight department $ 888 - 277,051	Invest department	Retail department - 1,347,883 -	Lease department 1,974 77,944 -	Other department 32,375 - -
	- - 55,841
$ 277,939	55,841	1,347,883	79,918	32,375	1,793,956
	- - - - 55,841	560,552 354,799 198,963 - 233,569	- - 26,243 46,419 7,256	- - - - 32,375	560,552 354,799 503,145 46,419 329,041
$ 277,939	55,841	1,347,883	79,918	32,375	1,793,956

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	For the nine months ended September 30,2019	For the nine months ended September 30,2019	For the nine months ended September 30,2019	For the nine months ended September 30,2019	Total 53,943 4,954,465 822,031
Freight department $ - - 778,613	Invest department 3,458 - 43,418	Retail department - 4,722,915 -	Lease department 3,058 231,550 -	Other department 47,427 - -
$ 778,613	46,876	4,722,915	234,608	47,427	5,830,439
	- - 3,458 - 43,418	1,734,295 1,381,095 664,704 - 942,821	- - 51,206 168,225 15,177	- - - - 47,427	1,734,295 1,381,095 1,497,981 168,225 1,048,843
$ 778,613	46,876	4,722,915	234,608	47,427	5,830,439
	For the nine months ended September 30,2018				Total 45,966 4,749,440 868,591
Freight department $ 2,559 - 811,235	Invest department - - 57,356	Retail department - 4,515,909 -	Lease department 6,190 233,531 -	Other department 37,217 - -
$ 813,794	57,356	4,515,909	239,721	37,217	5,663,997
	- - - - 57,356	2,002,627 1,158,329 572,565 - 782,388	- - 53,926 165,773 20,022	- - - - 37,217	2,002,627 1,158,329 1,440,285 165,773 896,983
$ 813,794	57,356	4,515,909	239,721	37,217	5,663,997

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

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	September 30, 2019 $ 1,884 - $ 1,884 $ 3,204	December 31, 2018 20,992 -	September 30, 2018 29,281 - 29,281 225,687

		20,992		29,281
		5,173		225,687

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 nine months ended September 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 September 30, 2019 and 2018.

(z) 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 $(2,062) thousand, $57 thousand, $8,002 thousand and $335 thousand, respectively, for the three months and the nine months ended September 30, 2019 and 2018. The remunerations to directors and supervisors amounted to zero, $57 thousand, $1,393 thousand and $335 thousand, respectively, for the three months and the nine months ended September 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.

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.

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

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. The information is available on the Market Observation Post System website.

(aa) Non-operating income and expenses
(i) Other income

The details of other income were as follows:

For the three months ended September 30	For the three months ended September 30	For the nine months ended September 30	For the nine months ended September 30
2019	2018	2019	2018
$ (269) 2,285 261 283 7,874 10,790 3,786 7,484 214 447 $ 11,866 21,289		4,281 7,160 806 827 29,526 37,371 35,574 7,484 3,304 5,601 73,491 58,443
		73,491

(ii) Other gains and losses

The details of other gains and losses were as follows:

For the three months ended September 30 2019 2018 $ (21,722) (38,907) 5,338 (108) (10,052) 1,312 - (1) 1,388 - - 894 (92,067) - - - (7,665) (5,479) 33,871 19,868 $ (90,909) (22,421)	For the three months ended September 30 2019 2018 $ (21,722) (38,907) 5,338 (108) (10,052) 1,312 - (1) 1,388 - - 894 (92,067) - - - (7,665) (5,479) 33,871 19,868 $ (90,909) (22,421)	For the nine months ended September 30 2019 2018 (45,998) (82,662) 1,005,022 (8,297) 8,311 (13,754) - (90) 4,010 - - (89,909) (7,738) - 217,213 - (9,491) (9,357) 115,184 85,375 1,286,513 (118,694)
		2018 (82,662) (8,297) (13,754) (90) - (89,909) - - (9,357) 85,375 (118,694)
$ (21,722) 5,338 (10,052) - 1,388 - (92,067) - (7,665) 33,871	(38,907) (108) 1,312 (1) - 894 - - (5,479) 19,868 (22,421)
$ (90,909)

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 September 30 2019 2018 $ 67,346 76,662 4,187 8,376 23,156 776 117,950 - - 1,357 3,483 11,430 $ 216,122 98,601	For the nine months ended September 30	For the nine months ended September 30
	2019 $ 67,346 4,187 23,156 117,950 - 3,483 $ 216,122	2019 264,409 20,937 55,511 369,331 - 16,526 726,714	2018
			245,321 25,126 2,331 - 13,337 28,302 314,417

(ab) 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 September 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.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Carrying amount $ 3,581,867 8,005,763 2,807,278 9,399,815	Contractual cash flows 3,581,867 8,465,905 3,081,951 11,814,382	1years 2,774,695 5,270,730 1,486,607 1,343,159	1 to 5 years 245,161 3,195,175 1,595,344 5,071,400	Over 5years
				562,011 - - 5,399,823
$ 23,794,723	26,944,105	10,875,191	10,107,080	5,961,834
$ 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 - -
$ 20,740,671	21,428,488	12,470,362	7,395,860	1,562,266
$ 5,311,381 10,093,557 3,712,874	5,311,381 10,771,238 3,834,249	2,995,962 5,311,880 2,800,749	1,294,192 5,459,358 1,033,500	1,021,227 - -
$ 19,117,812	19,916,868	11,108,591	7,787,050	1,021,227

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:

September 30, 2019	September 30, 2019	September 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 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 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 65,624 0.1277 257,443 304,957 0.1277 1,196,611	September 30,	September 30,
Foreign currency	Exchange rate	NTD		Exchange rate	NTD	Foreign currency	Exchange rate
		18,860 156,956 62,836 - 13,386 252,228 -	533 - 10,740 40 551 65,624 304,957	30.72 - 0.1277 0.7050 1.1465 0.1277 0.1277	16,374 - 42,145 861 19,391 257,443 1,196,611

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2019	September 30, 2019	September 30, 2019	December 31, 2018	December 31, 2018	December 31, 2018	September 30,	September 30,
Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate
22,700 - - -	7.0729 - - -	704,161 - - -	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	22,000 303,845 16,600 70,000	6.8792 0.1279 1.1625 0.1454

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 September 30, 2019 and 2018 would have increased or decreased the profit before tax by $ 4,521 thousand and $ 27,233 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 nine months ended September 30, 2019 and 2018, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $ (21,722) thousand, $ (38,907) thousand, $ (45,998) thousand and $ (82,662) 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 $ 12,562 thousand and $ 21,485 thousand for the nine months ended September 30, 2019 and 2018 with all other variable factors remaining constant.

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 nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	Net income 7,280
	2019	Net income 17,530 (17,530)	2018
	Other comprehensive income after tax $ -		Other comprehensive income after tax
Increase 5% Decrease 5%			-
	$ -		-	(7,280)

(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 :

	September 30, 2019	September 30, 2019	September 30, 2019	September 30, 2019	Total 498,787
Carrying amount		Fair	Value
	Level 1	Level 2		Level 3
$ 498,787 $ 2,468		135,959		-
		-			2,468
					Total 151,968
Carrying amount		Fair	Value
	Level 1	Level 2		Level 3
$ 151,968		-		-
					Total 158,669
Carrying amount		Fair	Value
	Level 1	Level 2		Level 3
$ 158,669	158,669	-		-

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, September 30, 2019	Financial liabilities held for trading Embedded derivative instruments
	$ - 6,478 (4,010)
	$ 2,468

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

For the nine months ended September 30, 2019, total gains and losses that were

included in other gains and losses and the financial liabilities were as follows：

Total gains and losses recognized: In profit or loss, and presented in “other gains and losses”	For the three months ended September 30, 2019 $ (1,388)	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019
			(4,010)

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 30.28% at	The estimated fair value would decrease if the volatility were higher
put right			September 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:

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

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

(ac) 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.

(ad) 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	September 30, 2019 $ 24,046,597 (4,160,915) $ 19,885,682 $ 13,303,759 149%	December 31, 2018 21,395,381 (5,468,507) 15,926,874 13,079,712 122%		September 30, 2018 20,005,103 (3,758,494)
				16,246,609
				12,832,541
				127%

The increase in the ratio of debt to equity in September 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.

(ae) 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 nine months ended September 30, 2019 and 2018 were as follows:

1) Acquisition of right-of-use assets by lease. Please refer to Note 6 (k) for details.
2) Adjustment of liabilities from financing activities were as follows:

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

January 1, 2019	Cash flows (362,475) 35 542,300 (2,048,656) (665,594) (123,453) (2,657,843)	Non-cash changes Other (Note1) Foreign exchange movement - (22,331) - - (224,607) - - 33,178 (47,011) (186,671) - (15,339) (271, 618) (271, 618) Non-cash changes Other (Note2) Foreign exchange movement - (25,520) - - 2,331 - - 108,995 - (26,350) 2,331 57,125	September 30, 2019
$ 3,540,288 49,947 1,995,336 7,262,108 10,297,999 953,419 $ 4,099,097 January 1, 2018			3,155,482 49,982 2,313,029 5,246,630 9,399,815 814,627 20,979,565 September 30, 2018
	Cash flows 831,908 31 - (1,112,426) 166,900
		Other (Note2) - - 2,331 - -
$ 2,813,379 49,916 1,992,227 8,407,751 794,622			3,619,767 49,947 1,994,558 7,404,320 935,172
$ 14,057,895	(113,587)	2,331	14,003,764

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.

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 Technology Co., Ltd.	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

(c) Significant transactions with related parties
(i) Leases

1) Lease liabilities

Relationship	Purpose	Right-of-use assets		Lease liabilities September 30, 2019 January 1, 2019 84,060 105,591 56,727 54,577	Interest	expense
		January 1, 2019		September 30, 2019 84,060 56,727	For the three months ended September 30,2019	For the nine months ended September 30,2019
Other related parties Other related parties	office building and department store Energy-saving renovation engineering equipment	$ 98,562 55,018			1,057 715	3,472 2,154

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.

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

2) Operating Leases

Relationship		Rent expense	Rent expense
	For the three months ended September 30,2019	For the three months ended September 30,2018	For the nine months ended September 30,2019	For the nine months ended September 30,2018
Other related parties Relationship	$- 31,683 Payments that are not included in the measurement of the lease liability		- 100,583 Property management fee
	For the three months ended September 30,2019	For the nine months ended September 30,2019	For the three months ended September 30,2019	For the nine months ended September 30,2019
Other related parties	$ 22,912 86,597		327	966

Note：These leases are short-term lease, and the Group chooses to apply the exemption recognition requirement without recognizing its related right-of-use and liabilities.

As of September 30, 2019, December 31, 2018, and September 30, 2018 the balance of Group's rental security deposit to other related parties amounted to $ 9,012 thousand, $ 9,192 thousand, and $ 9,243 thousand.

(ii) Prepayments

Other related parties	September 30, 2019 $ 49,527	December 31, 2018 -	September 30, 2018
			-

Note：It is a short-term prepaid lease fee and a monthly fixed prepaid variable rent of the Group, which is settled at the end of the year.

(iii) Others
1) The Group provided management consulting services and signed service contracts with other related parties. For the three months and the nine months ended September 30, 2019 and 2018, the revenue from consulting services was $ 5,254 thousand, $ 7,073 thousand, $ 16,031 thousand and $ 16,243 thousand, respectively. On September 30, 2019, December 31, 2018, and September 30, 2018, the outstanding amounts were $ 27,411 thousand (CNY 6,250 thousand), $ 11,190 thousand (CNY 2,500 thousand) and $ 11,095 thousand (CNY 2,500 thousand) and which reported as other receivables.
2) The Group had signed an energy-saving reconstruction contract was CNY 35,000 thousand with other related parties in 2018. The total amount of the contract was $155,331 thousand (CNY 35,000 thousand) and which reported as prepaid equipment. 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. For the three months and the nine months ended September 30, 2019 and 2018, the Group purchased energy-saving equipment for zero, zero, $ 406 thousand (CNY 93 thousand) and zero from other related parties and which reported as property, plant and equipment

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

accounts.

  - 3) The energy management fee for other related parties from January 1 to September 30, 2018 is $ 6,812 thousand.

(d) Key management personnel compensation
(i) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits	For the three months ended September 30	For the three months ended September 30	For the nine months ended September 30	For the nine months ended September 30
	2019	2018 15,273	2019	2018 37,927
	$ 14,566		50,847

(ii) The Group granted key management personnel rights to subscribe treasury shares as prepaid salaries. As of September 30, 2019, December 31, 2018 and September 30, 2018, those prepaid salaries amounting to $ 49,206 thousand (CNY 11,220 thousand), $ 25,484 thousand (CNY 5,693 thousand) and $ 26,630 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	September 30,2019 $ - 106,377 563,003 39,397 10,069,954 144,252 -	December 31, 2018 921,600 117,552 551,363 - 10,201,012 144,982 246,147 12,182,656		September 30, 2018
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				915,900 117,587 683,014 - 10,256,020 391,638 -
		$ 10,922,983			12,364,159

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.

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(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 September 30, 2019, December 31, 2018 and September 30, 2018, the Group leased a number of offices and department stores with rental commitments in future years, please refer to note 6(s) and (t)
(ii) The total contract price of the combined company for the purchase of commercial real estate as a department store base on December 7, 2017 and July 5, 2019 was CNY 141,416 thousand and CNY 57,124 thousand. As of September 30, 2019, December 31, 2018 and September 30, 2018 the unpaid amount were $ 67,554 thousand (CNY 15,403 thousand), $ 72,410 thousand (CNY 16,177 thousand) and $ 18,682 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 $ 202,250 thousand (US$ 6,520 thousand) was paid on April, 2019, it is expected to complete the delivery in 2020.
(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 Contract price for building an office building Prepaid Sales contract of land Advance receipts	September 30, 2019		December 31, 2018 665,331 108,309 57,156 48,134 - - 40,196 5,173	September 30, 2018 355,650 51,428 - - 309,681
	$ 665,331 $ 108,309 $ 12,112 $ 10,964 $ - $ - $ 29,972 $ 3,204




				56,881
				106,059 58,010

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

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

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

(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.
(ii) On July 16, 2018, Securities and Futures Investors Protection Center (SFIPC) filed a civil lawsuit against the ex-chairman of the company 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.

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

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 case was filed by the Taipei District Court of Taiwan on October 7, 2019. The responsible person should pay the company $ 2,103 thousand from August 31, 2019 to the date of liquidation, interest calculated at 5% per annum, the case can still be appealed.

(10) Losses due to major disasters: None

(11) Subsequent events

(a) The board of directors of the Group has been approved to increase its holding of Hong Kong listed company Da Yu Financial Holdings Co., Ltd. (Original name: China Agrutech Holding Co., Ltd.). It is expected to obtain 331,660 thousand shares at a price of not more than HK$0.55 per unit. The transaction price is HKD 179,503 thousand.
(b) On July 22, 2019, the board of directors of the Group agreed a resolution during the meeting to purchase the bulk ship for operation. The estimated transaction price does not exceed US$ 33,500 thousand, and it is still in the process of ship purchase.

(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 September 30
By function By item	2019			2018
	Operating Cost	Operating expense	Total	Operating Cost	Operating expense	Total
Employee benefits
Salary	46,106	130,121	176,227	47,467	152,431	199,898
Health and labor insurance	-	1,326	1,326	286	1,105	1,391
Pension	-	15,195	15,195	392	19,853	20,245
Others	4,060	32,279	36,339	4,057	28,336	32,393
Depreciation	90,284	402,081	492,365	102,291	121,134	223,425
Depletion	-	-	-	-	-	-
Amortization	8,761	3,934	12,695	5,140	6,454	11,594

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

	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30
By function By item	2019			2018
	Operating Cost	Operating expense	Total	Operating Cost	Operating expense	Total
Employee benefits
Salary	134,228	485,020	619,248	139,046	506,921	645,967
Health and labor insurance	-	4,166	4,166	856	3,358	4,214
Pension	-	48,026	48,026	1,176	54,494	55,670
Others	12,083	94,853	106,936	11,831	95,648	107,479
Depreciation	269,969	1,246,329	1,516,298	264,433	412,248	676,681
Depletion	-	-	-	-	-	-
Amortization	19,754	10,838	30,592	15,627	23,368	38,995

(b) Seasonality of operations

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

(13) Segment information:

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

For the three months ended September 30, 2019 Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss For the three months ended September 30, 2018 Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss	Freight department $ 274,507 - $ 274,507 $ 41,706 $ 277,939 10,351 $ 288,290 $ 231	Invest department 9,478 17,220 26,698 (133,875) 55,841 - 55,841 30,380	Retail department 1,391,295 - 1,391,295 51,675 1,347,883 - 1,347,883 37,424	Lease department 70,883 - 70,883 (25,679) 79,918 57 79,975 (17,125)	Other segment - -	Reconciliation and elimination - (17,220) (17,220) - - (10,408) (10,408) -	Total 1,746,163 -
					-		1,746,163
					(3,829)		(70,002)
					32,375 -		1,793,956 -
					32,375 3,557		1,793,956 54,467

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Freight department $ 778,613 -	Invest department 46,876 50,713 97,589 792,763 57,356 -	Lease department 234,608 557 235,165 184,717 239,721 514	Reconciliation and elimination - (51,270)	Total
				5,830,439 -
$ 778,613 $ 86,293 $ 813,794 32,766 $ 846,560 $ (24,501)			(51,270)	5,830,439
			-	1,575,888
			- (33,280)	5,663,997 -
	57,356 (95,293)	240,235	(33,280)	5,663,997
		(15,364)	-	410,739

AI assistant

FSC — Interim / Quarterly Report 2019

52157_rns_2019-11-14_49c93813-7aa7-4c3b-a8e4-8933aa37f703.pdf

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

Table of contents

Independent Auditors' Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Emphasis of Matter

KPMG

Notes to Readers

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

Reviewed only, not audited in accordance with the generally accepted auditing standards as of September 30, 2019 and 2018

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2019, December 31, 2018, and September 30, 2018

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2019 and 2018

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

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

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

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

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT ’ D)

For the nine months ended September 30, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Reviewed only, not audited in accordance with generally accepted auditing standards FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2019 and 2018

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

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

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

3) As a lessor

4) Impacts on financial statements

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

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

(4) Summary of significant accounting policies:

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2. As a lessee

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

3. As a lessor

(d) Employee benefits

(e) Income taxes

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

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

(6) Explanation of significant accounts:

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

FSC Interim / Quarterly Report 2019