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Stock Code: 2636

T3EX Global Holdings Corp.

2015 Annual Report

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System: http://newmops.twse.com.tw

T3EX Annual Report is available at: http://www.t3ex-group.com Printed on 05 06, 2016

Spokesperson

Name: Echo Wan Title: Vice President Tel: 886-2-2753-2093 E-mail:[email protected]

Headquarters, Branches and Plant

Headquarters Address: 12F., No.563, Sec.4, Zhongxiao E. Rd., Xinyi District, Taipei 11072, Taiwan Tel: 886-2- 2753-2093

Deputy Spokesperson

Name: Leo Liu Title: CSO Tel: 886-2-2753-2093 E-mail:[email protected]

Stock Transfer Agent

CAPITAL SECURITIES CORP. Address: Capital Center, No.101, Songren Rd., Xinyi Dist., Taipei City 11073, Taiwan, R.O.C. Tel: 886-2-2703-5000 Website: http://www.capital.com.tw

Auditors

KPMG Accounting Firm Auditors: Peggy Chen, HENG- SHENG LIN Address: 68F, TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei, 11049, Taiwan, R.O.C. Tel.: 886-2-8101-6666 Website: http://www.kpmg.com.tw

Overseas Securities Exchange: None

Corporate Website

http://www.t3ec-group.com

Contents

I. Letter to Shareholders ............................................................................................ 4 II. Company Profile 2.1 Date of Incorporation.............................................................................................. 7 2.2 Company History ……… ...................................................................................... 7 III. Corporate Governance Report 3.1 Organization............................................................................................................ 8 3.2 Directors, Supervisors and Management Team………………………………10 3.3 Implementation of Corporate Governance ........................................................... 26 3.4 Information Regarding the Company’s Audit Fee and Independence.................. 54 3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders……………………………………………………………………..55 3.6 Relationship among the Top Ten Shareholders………..……....………...………56 3.7 Ownership of Shares in Affiliated Enterprises…………………………………57 IV. Capital Overview 4.1 Capital and Shares………………………………………………………….……59 4.2 Bonds…………….………………………………………………………….……63 4.3 Global Depository Receipts ….…………………………………………….……65 4.4 Employee Stock Options…………………………………………………………66 4.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions….67 4.6 Financing Plans and Implementation……………………………………...……..68 V. Operational Highlights 5.1 Business Activities……………………………………………………………….71 5.2 Market and Sales Overview…………………………………….………..………84 5.3 Human Resources……….……………………………………………………….90 5.4 Environmental Protection Expenditure………….……………………………….91 5.5 Employee Relations………………………………………………………………91 5.6 Important Contracts………………………………………………………………94 VI. Financial Information 6.1 Five-Year Financial Summary………………………………………….………..95 6.2 Five-Year Financial Analysis…………………………………………….……103 6.3 Supervisors’ Report in the Most Recent Year………………………….……110 6.4 Consolidated Financial Statements for the Years Ended December 31, 2015 and 2014, and Independent Auditors’ Report…………………………………….…110 6.5 Financial Statements for the Years Ended December 31, 2015 and 2014, and Independent Auditors’ Report………………...………………….….110

VII. Review of Financial Conditions, Operating Results, and Risk Management 7.1 Analysis of Financial Status…………………………………………………….111 7.2 Analysis of Financial Performance………………………………………..……112 7.3 Analysis of Cash Flow………………………………………..………………113 7.4 Major Capital Expenditure Items……………………………………………113 7.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year……….…114 7.6 Analysis of Risk Management………………………………………………….114 VIII. Special Disclosure 8.1 Summary of Affiliated Companies……………………………………..….…116 8.2 Private Placement Securities in the Most Recent Years………………………125 8.3 Any Events in 2014 and as of the Date of this Annual Report that had Significant Impacts on Shareholders ‘Right or Security Prices as Stated in Item 2 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan……………………...126

Letter to Shareholders

Now, I hereby thanks to every shareholders on behalf of T3EX group for your cares and support. The Company still keeps the strong business foundation and sensitive market insight through the quick and clear management policies to expand the business scale and increase global operating locations including Taiwan, Hong Kong, China, Japan, Korea, Vietnam, Thailand, Cambodia, Singapore, and Indonesia. By effective group resource integration, the Company not only can provide an international logistics services but also can provide comprehensive logistics such as customs declaration, warehousing, delivering, and supply-chain management. Via deep local culture cultivation and more potential markets development, the Company anticipates that the brand will step to a level of global market leader.

2015 Review

In 2015, the unexpected low global growth, the decrease of international trade activities and the decline of oil price, caused the low freight in sea and air logistics. Under the circumstance, the Company integrated its group resources through the following subsidiaries- through T.H.I. Logistics(THI) to offer long-distance sea and air freight services to international clients, through Taiwan Express(TEC) to provide logistics management services for upstream component supply chain in Asia, through Shanghai Yaohwa (YHI)to provide import customs services, through T-Cube Logistics(T-Cube) to offer warehousing and distribution services, through Shanghai Exer Logistics(EXer) to provide delivery services, and through THI online(e-thi) to provide online customer service and cargo tracking. In order to realize the goal to provide clients the one-stop-shop logistics services so as to achieve synergistic effects.

effects.
Expressed in thousands of New Taiwan Dollars	2015	2014	YoY
Revenue	9,736,912	9,729,513	0.08%
Gross Profit	1,877,272	1,659,065	13.15%
Gross Margin	19.28%	17.05%	2.23%
Operatingincome	312,196	225,141	38.67%
Profit before tax	397,257	273,906	45.03%
Profit after tax	303,900	206,665	47.05%
EPS(Dollars)	2.70	2.14	26.17%

2015 gross margin significantly grew to 19.28% from 17.5% from 2014, with a record-high net profit and an EPS of NT$2.7. The key reasons to the profit growth are as follows:

Developing high-margin long-distance sea freight services: The sea shipping prices started decreasing month by month on marked growth in ship freight supply since 2Q15. Compared with the same period of 2014, the Company’s long-distance sea freight business posted a mild growth. Meanwhile, China’s 2015 total import/export trade volume was down 7% on the back of global economy’s slow growth and sluggish demand growth, according to statistics from the Customs Administration. Hence, the Company’s sea freights slightly decreased

amid the unfavorable global economic conditions. Despite decreasing shipping prices and flat freight growth, the Company still saw increases in gross profit and gross margin, mainly thanks to the Company’s continuous efforts to develop the high-margin long-distance sea freight business for imports/exports to and from the U.S. and Canada as well as strong bargaining power to reduce costs for better earnings performance compared to the previous year.

Developing the CFS and LCL businesses with the collection hub model: The CFS and LCL businesses are expected to blossom following the trend of smaller, lighter, thinner, and diversified products. Therefore, the Company uses major airports and seaports as hubs for traditional cargo collection as well as emerging CFS and LCL businesses to create new cost-effective business opportunities. The hub service may help clients deal with problems caused by unexpected production delays, transportation changes, and coordination difficulties of supply chain. With a tight-knit network in the Asia-Pacific region, we provide SMEs services to send products to anywhere in the world.
Developing integrated logistics services: We provide integrated one-stop-shop services for international shipping, domestic trade warehousing, freight transportation, supply chain management, to e-commerce logistics. We aim to turn “logistics” from a factor for cost management to a creator for value-added services to help enterprises integrate all available internal and external resources to reduce costs, enhance efficiency, and increase market share.

2016 Outlook

Looking forward this year, the speed of global economic growth is as same as last year, the demand of international cargo market is still sluggish, and the oil price is still in the valley. The Company predicts the possibility of rebound of sea and air freight is quietly small. To face this difficult situation, the main strategy of T3EX group as follows:

For the area development plan, the Company aims to continue maintaining strong relations with its 400 plus oversea agencies and building new relation in Middle East and Africa Market. In Asia-Pacific region, the Company will keep on establishing comprehensive locations. And already set up location in Malaysia in 2Q 2016. In 2H, the Company will build joint venture in the Philippines and India.
For the product development plan, the Company aims to focus on horizontal and vertical integration in China. For horizontal integration, the Company will keep looking for targets of supply chain management to extend the deep of comprehensive logistics products, and make import, customs declaration, warehousing and transportation perfect in China. For vertical integration, the Company will target on air freight forwarding companies in China to expand air business scale, and develop more international customers which can bring more one stop solution of import business.
In addition, the policy, “One Belt and One Road”, is still undertaking by China government. Now is the best timing for T3EX to develop the cross-border rail freight business amid policy implementation period. Rail is a competitive new tool, saving 70% cost than airplanes and 50% time than ships. Now, the Company is setting up rail project team in China’s Zhengzhou, Suzhou, Chendu, Chongqing, Hefei, Harbin, and Shenyang to actively promote the new business channel. In the meantime, T3EX has also earned long-term business contracts with several major import/export enterprises.

Looking forward the future, we will continue tracking the goal to become the Great China biggest and best total solution logistics company by strong integration ability. Through the holding structure with multiply-market and diversified products, we can provide customers total solution services such as sea, air, land, customs declaration, warehousing, and transportation. We will continue to strengthen our expertise and create greater values for our shareholders.

Chairman & CEO: David Yen

I. Company Profile

2.1 Date of Incorporation : 02 04, 1987

The date of foundation ： T.H.I. Group was set up on 02 04, 1987. In August 2012,

the Company changed its name- T3EX Global Holdings Corp.

2.2 Company History

MM, Year	Milestones
08, 2012	The Company transformed into holdings company and changed its company name- T3EX Global Holdings Corp through Special Shareholders’ Meeting.
02, 2013	The Company invested 30% shares of Joint venture in Indonesia-PT. Dexter Eurekatama.
10, 2013	The Companyset upT.H.I. Online, enteringinto e-commerce business.
01, 2014	The logistics e-commerce platform T.H.I. Online was built by adopting an O2O logistics business model.
01, 2014	The Company issued NTD 300,000,000 convertible bond to reimburse debts.
03,2014	The Company finished par value NTD 100,000,000 fundraising to increase operatingcapital.
01,2015	The company established T.H.I. GROUP SINGAPORE PTE LTD, the operatingheadquarters in Southeast Asia.
03,2015	The companyraised our shareholdings in THI & Maruzen Inc. to 51%.
08,2015	To reinforce ASEAN plus three regional deployment, the company acquired a 30% stake in Korean logistics company- LOGI International Co., Ltd.
11,2015	To step into e-commerce logistics, the company acquired 68% shares of Shanghai EXer Logistics Co.,Ltd.
12,2015	To deeply develop warehousing and transportation services in China, we acquired 60% shares of T-Cube Global Logistics Co., Ltd.
04,2016	The company established THI Logistics (Malaysia) SDN BHD, the operatingheadquarters in Southeast Asia.

II. Corporate Governance Report

3.1 Organization

3.1.1 Organizational Chart

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General Shareholders Meeting
Supervisors
Board of Directors
Remuneration Committee
Risk Management Committee
Chairman Internal Audit Department
Operating Management Committee
General Manager& CEO
CEO Office
Human Resource Financial Management Information Technology Strategy Department
Department
Department Operating Management Department
Department
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3.1.2 Major Corporate Functions

Department	Functions
Remuneration Committee	To make recommendations to the Board on the Company’s policy and structure for all Directors, and senior management remuneration and on the establishment of a formal and transparent procedure for developing remunerationpolicy.
Risk Management Committee	The company entire risk management structure covers the board of directors, the audit committee, upper management, risk management units and other business units. The board of directors holds ultimate responsibility. Its major goal is promoting and implementing the company’s overall risk management.
Operating Management Committee	The board of directors holds ultimate responsibility. It major goal is assisting group to deal with the big issue and reportingtopresident and the Board.
Internal Audit Department	To identify deficiencies in the internal control system, assess the effectiveness and efficiency of operations, and provide appropriate improvement suggestions to ensure the effectiveness of the internal control system as well as for continuous improvement.
Financial Management Department	Responsible for the summarization and supply of accounting information, management and operation of finance and investment, annual budgeting, credit control.
Human Resource Department	Responsible for the planning and execution of human resource management, and planning and execution of general affairs.
Information Technology Department	Responsible for the planning, controlling, design, and implementation of the dataprocessing.
Strategy Department	To analyze and plan new market, search strategic partners and M&A targets.
Operating Management Department	To maintain the relation of ship companies, airline companies and worldwide agents and dear with the freight quotation forgroup.
CEO Office	Responsible for holding the board of meetings, shareholders meetings and others functional meeting. And maintaining the public relations, investor relations, company branding and stock affairs.

3.2 Directors, Supervisors and Management Team

3.2.1 Directors and Supervisors

3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors
																05 06, 2016
Title	Nationality/ Country of Origin	Name	Date Elected	Ter m (Yea rs)	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience `（`Education`）`	Other Position	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
						Shares	`％`	Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relation
Director	R.O.C.	David Yen	06.17. 2013	3	01.16 1993	993,486	1.37	1,225,197	1.05	0	0	0	0	 The founder of T3EX group  Shipping & Transportation Management in NTOU	 Group chairman & CEO of T3EX  The board of director of Dynamic Ocean Group, T.H.I. logistic, THI Group (H.K.), T-Cube logistics, T.H.I. & Maruzen, Hope Ocean, Taiwan Express, and EXer logistics.  The president of JIN-HUA Investment, THI group (Shanghai), and YHI International	None	None	None

Director	R.O.C.	Jim Chen	06.17. 2013	3	01.16 1993	1,918,677	2.64	2,142,728	1.84	69,405	0.05	 The GM of T3EX group  Sea Wind Shipping Company  Sea Land Shipping Company  Forestry in NTU	 The president of THI Logistics  The GM and board of director of THI Group (H.K.).  The board of director of Dynamic Ocean Group, THI group (Shanghai), YHI International, and Taiwan Express.	None	None	None
Director	BVI	Hope Ocean International Ltd	06.17. 2013	3	06.17. 2013	2,849,003	3.92	3,273,798	2.81	0	0			None	None	None
	R.O.C.	Representative: Jack Lai				1,490,181	2.05	1,865,566	1.60	481,544	0.41	 The associate vice president of T3EX  DBA in National Taipei University.  MBA in National Taipei University	 The GM of Southeast Asia of THI group, T.H.I. GROUP VIETNAM, THI group BANGKOK and THI group COMBODIA  The board of director of PT. Dexter Eurekatama, THI group (Shanghai), YHI International, THI Logistics (Malaysia) SDN BHD and T.H.I. Group Singapore.	None	None	None
Director	Samoa	Dynamic Ocean Group Limited	06.17. 2013	3	06.20 2007	6,664,638	9.17	5,086,865	4.37	0	0			None	None	None
	R.O.C.	Representative: Mao-Jen Chen				0	0	0	0	0	0	 MBA in Tulane University.  Mechanical Engineering in NCKU.  The business minister of Chin Fong MachineIndustrial.	 The president of CHUN-DI Corp.	None	None	None

Director	Samoa	Dynamic Ocean Group Limited	06.17. 2013	3	06.20 2007	6,664,638	9.17	5,086,865	4.37			None	None	None
	R.O.C.	Representative: Tony Lin				875,000	1.2	1,258,116	1.08	 EMBA in NUS  DBA in TIAS  The GM of DIMERCO	 The chairman of THI group Air business  The board of director of T-Cube logistics, T.H.I. & Maruzen, and LOGI International.  The president of EXer Logistics.	None	None	None
Director	R.O.C.	Benison Hsu	06.17. 2013	3	06.28 2011	875,642	1.21	1,153,734	0.99	 MBA in Tulane University.  The founder of Taiwan Express	 The president of Taiwan Express.  The board of director of Hiview Logistics, and Central Taiwan Science Park Logistics.  The supervisor of GGA Corp and Orient Air GeneralSalesAgent.	None	None	None
Director	R.O.C.	Peggy Lin	06.17. 2013	3	06.28 2011	1,588,970	2.19	2,112,404	1.81	 LAW in National Taipei University  MBA of Tulane University.  The partner of TSAR&TSAI LAW FIRM  The partner of CHIEN YEN LAW OFFICES	 The partner-in-charge of PCL TransAsia Law Offices.  The board of director of Super Dragon Technology Corp, Central Motion Picture, Central Motion Picture Management., and CPC Corp.  The supervisor of CMP Inc.	None	None	None

Director	R.O.C.	Li-Chiu Chang	06.17. 2013	3	06.17. 2013	0	0	0	0	 Master of insurance in NCU.  Financial Supervisory Commission  The president of Yuanta Securities.  The GM of Dahwa Securities.  The auditor, chief, and leader of Financial Supervisory Commission  The auditor of National Taxation Bureau of Taipei	 The CEO of Sun Ten Group.  The highest consultant of Yuanta Securities  The board of director of TWSE, TA YA ELECTRIC WIRE & CABLE, ACME Electronics, Sun Ten International, and Tanvex BioPharma.  The supervisor of TPEX and ICHIA TECHNOLOGY Inc.  The convener of Taiwan Securities Association  The president of FOCI Fiber Optic Communications.	None	None	None
Director	R.O.C.	Guo-Yuan Chen	06.17. 2013	3	06.17. 2013	0	0	0	0	 Major in NCTU Electro physics.	 The board of director of WPG Holdings.  The president of Silicon Application Corp.  The board of director of Apollo Group.  The director of TECSA.	None	None	None
Supervisor	R.O.C.	YI-WEI INVESTMENT	06.17. 2013	3	06.17. 2013	411,192	0.57	1,296,889	1.11			None	None	None
	R.O.C.	Representative: Ji-Zhi Hsieh				0	0	0	0	Major in CCU Natural Resource.	 The GM and board of director of Mei-Ton Rubber.  The president of CHIEF OVERSEA Trading.  The board of director of Cambodia Asia Flour Mill Corp.	None	None	None
Supervisor	R.O.C.	CHANG-JIE International	06.17. 2013	3	06.28 2011	5,981,168	8.23	4,822,708	4.14			None	None	None

	R.O.C.	Representative: Tien-Yuan Tsai				0	0	0	0	0	0	0	0	 Certified Public Accountant.  MBA in NCU	 The vice president of Compel Electronics.  The president of Crownpo Technology.	None	None	None
Supervisor	R.O.C.	Shen-Li Liao	06.04 2014	2	06.04 2014	0	0	0	0	0	0	0	0	 MBA in NCU.  The supervisor of Amazing Microelectronic Corp.	 The partner of Candor Taiwan CPAs  The supervisor of Taiwan Express.  The supervisor of SolidPro Technology.	None	None	None

Major shareholders of the institutional shareholders

05 06, 2016

	05 06, 2016
Name of Institutional Shareholders	Major Shareholders
DYNAMIC OCEAN GROUP LIMITED	David Yen (15.58%), Jim Chen (24.59%), Mark Richard Laufer (59.83%)
Hope Ocean International Ltd	David Yen (100%)
CHANG-JIE International Ltd	HAO-BO International Ltd (100%)
YI-WEI INVESTMENT Ltd	JIN-CIN YANG (31.70%), HUA-MEI HUNG HSU (23.05%) SHU- HUA YANG (6.92%), JIN-YI YANG (6.92%), SHU-HUEI PEN (6.92%), SHU- FEN YAN (6.92%), YONG- CHANG LI (6.92%), CHUN-CHIEH CHANG (10.66%)

Major shareholders of the Company’s major institutional shareholders

05 06, 2016

	05 06, 2016
Name of Institutional Shareholders	Major Shareholders
HAO-BO International Ltd (100%)	WEI-CHUNG TSAO (10%), TSAI-TI LIU (90%)

Professional qualifications and independence analysis of directors and supervisors

	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016	05 06, 2016
Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience			Independence Criteria(Note)										Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10
David Yen			V				V			V	V	V	V	None
Jim Chen			V				V			V	V	V	V	None
Hope Ocean International Ltd Representative: Jack Lai			V				V	V		V	V	V		None
Dynamic Ocean Group Limited Representative: Mao-Jen Chen			V	V	V	V	V	V	V	V	V	V		None
Dynamic Ocean Group Limited Representative: TonyLin			V				V	V		V	V	V		None
Benison Hsu			V				V			V	V	V	V	None
PeggyLin		V	V				V			V	V	V	V	1
Li-Chiu Chang			V	V	V	V	V	V	V	V	V	V	V	3
Guo-Yuan Chen			V	V	V	V	V	V	V	V	V	V	V	None
YI-WEI INVESTMENT			V	V	V	V	V	V	V	V	V	V		None

Representative: Ji-Zhi Hsieh			V											None
CHANG-JIE International Representative: Tien-Yuan Tsai		V	V	V	V	V	V	V	V	V	V	V		None
Shen-Li Liao		V	V	V		V	V	V	V	V	V	V	V	None

Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office.
Not an employee of the Company or any of its affiliates.
Not a director or supervisor of the Company or any of its affiliates. Not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares.
Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the Company or who holds shares ranking in the top five holdings.
Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business relationship with the Company.
Not a professional individual who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof. These restrictions do not apply to any member of the remuneration committee who exercises powers

pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the TPEx“.

Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Law.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

3.2.2 Management Team

Title	Nationality/ Country of Origin	Name	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience`（`Education`）`	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship
				Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relation
President / CEO	R.O.C.	David Yen	11 01,2011	`1,225,197`	1.05	0	0	0	0	 The founder of T3EX group  Shipping & Transportation Management in NTOU	 Group chairman & CEO of T3EX  The board of director of Dynamic Ocean Group, T.H.I. logistic, THI Group (H.K.), T-Cube logistics, T.H.I. & Maruzen, Hope Ocean, Taiwan Express, and EXer logistics.  The president of JIN-HUA Investment, THI group (Shanghai), and YHI International	None	None	None
Vice President	R.O.C.	Leo Liu	03,26, 2013	`56,758`	0.04	0	0	0	0	 The CAO & CFO of T3EX.  The in charge of KPMG.  MBA in National Dong Hwa University.  Financial management in NCU.	 The specialist of CEO of T3EX Global Holdings.  The CSO of T3EXGlobal Holdings.  The Supervisor ofT-Cube logistics  The vice president and board of directorof EXer Logistics.	None	None	None
Vice	R.O.C.	Allen	03,26,	`18,423`	0.01	0	0	0	0	 The CFO of massage chairs group of Johnson Health Tech.	 The CFO of T3EX Global Holdings andTaiwan Express.	None	None	None

President		Hou	2013							 The CFO of GRAND HALL ENTERPRISE.  The CFO of Avalue Technology.  Major in NTU Economics.  MBA in CUNY	 The board of directors of THI logistics, Taiwan Express, and T.H.I. & Maruzen Co., Ltd.
Vice President	R.O.C.	Echo Wan	03,14, 2013	`115,318`	`0.09`	`565`	0	0	0	 The CAO of T3EX.  Senior manager of SinoPac securities underwriting department.  MBA of NCU  Major Accountingin Fu Jen Catholic	The spokesman & the specialist of CEO of T3EX.	None	None	None
Senior Manager	R.O.C.	Melonie Lin	03,14, 2016	`137,648`	`0.11`	0	0	0	0	 National Taipei University of Business  Manager of Operator Department of THI Logistics.  Manager of Administrative Department of THI	 The supervisor of Hiview Logistics.  Manager of Internal Audit Department	None	None	None

3.2.3 Remuneration of Directors, Supervisors, President, and Vice President

Remuneration of Directors

Unit: NT$ thousands

Title	Name	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E +F+G) to Net Income (%)	Ratio of Total Compensation (A+B+C+D+E +F+G) to Net Income (%)	Compensatio n Paid to Directors from an Invested Company Other than the Company’s Subsidiary
		Base Compensation (A)		Severance Pay (B)		Bonus to Directors(C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Profit Sharing- Employee Bonus (G)				Exercisable Employee Stock Options (H)		New Restricted Employee Shares(I)
		The com pan y	All companies in the consolidate d financial statements	The compan~~y~~	Companies in the consolidated financial statements	The compan~~y~~	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The compan	~~y~~ Companies in the consolidate d financial statements	The company	Companies in the consolidated financial statements	The compa ny	Companies in the consolidate d financial statements	The company		Companies in the consolidated financial statements		The company	Compani es in the consolida ted financial statement s	The compa ny	Comp anies in the consoli dated financi al statem ents	The compa ny	Compani es in the consolida ted financial statement s
																Cash	Stock	Cash	Stock
Presi dent	David Yen	0	0	0	0	4,596	4,596	960	960	1.89	1.89	4,627	31,143	511	1,154	200	0	200	0	~~1~~11,750	111,750	0	0	3.71	12.95	00
Dire ctors	Jim Chen

Dire ctor	Hope Ocean Internationa l Ltd Representat ive: Jack Lai
Dire ctor	Dynamic Ocean Group Limited Representat ive: Mao-Jen Chen
Dire ctor	Dynamic Ocean Group Limited Representat ive: TonyLin
Dire ctor	Li-Chiu Chang
Dire ctor	Guo-Yua n Chen
Dire ctor	Peggy Lin	0	0	0	0	657	657	120	120	0.26	0.26	0	2,340	0	0	0	0	0	0	37,500	37,500	0	0	0.26	1.06	0
Dire ctor	Benison Hsu	0	0	0	0	657	657	120	120	0.26	0.26	0	8,386	0	0	0	0	0	0	45,000	45,000	0	0	0.26	3.11	0

Range of Remuneration	Name of Directors	Name of Directors	Name of Directors	Name of Directors
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements
Under NT$ 2,000,000	David Yen, Jim Chen, Jack Lai, Benison Hsu, Peggy Lin, Tony Lin, Li-Chiu Chang, Guo-Yuan Chen Mao-JenChen	David Yen, Jim Chen, Jack Lai, Benison Hsu, Peggy Lin, Tony Lin, Li-Chiu Chang, Guo-Yuan Chen, Mao-Jen Chen	Jim Chen, Jack Lai, Benison Hsu, Peggy Lin, Tony Lin, Li-Chiu Chang, Guo-Yuan Chen,Mao-Jen Chen	Li-Chiu Chang, Guo-Yuan Chen Mao-Jen Chen
NT$2,000,001 ~ NT$5,000,000	0	0	0	Jack Lai,PeggyLin
NT$5,000,001 ~ NT$10,000,000	0	0	David Yen	Benison Hsu,TonyLin
NT$10,000,001 ~ NT$15,000,000	0	0	0	Jim Chen
NT$15,000,001 ~ NT$30,000,000	0	0	0	David Yen
NT$30,000,001~ NT$50,000,000	0	0	0	0
NT$50,000,001 ~ NT$100,000,000	0	0	0	0
Over NT$100,000,000	0	0	0	0
Total	9	9	9	9

Remuneration of Supervisors

Unit: NT$ thousands

Title	Name			Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C) to Net Income (%)	Ratio of Total Remuneration (A+B+C) to Net Income (%)	Compensation Paid to Supervisors from an Invested Company Other than the Company’s Subsidiary
		Base Compensation (A)		Bonus to Supervisors(B)		Allowances (C)
		The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements
Supervisors	YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh	0	0	1,313	1,313	240	240	0.53	0.53	None
Supervisors	Shen-Li Liao
Supervisors	CHANG-JIE International Representative: Tien-Yuan Tsai	0	0	657	657	120	120	0.26	0.26	None

Range of Remuneration Under NT$ 2,000,000	Name of Supervisors	Name of Supervisors
	Total of (A+B+C)
	The company	Companies in the consolidated financial statements
	Shen-Li Liao, YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh, CHANG-JIE International Representative: Tien-Yuan Tsai	Shen-Li Liao, YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh, CHANG-JIE International Representative:Tien-Yuan Tsai

NT$2,000,001 ~ NT$5,000,000	0	0
NT$5,000,001 ~ NT$10,000,000	0	0
NT$10,000,001 ~ NT$15,000,000	0	0
NT$15,000,001 ~ NT$30,000,000	0	0
NT$30,000,001 ~ NT$50,000,000	0	0
NT$50,000,001 ~ NT$100,000,000	0	0
Over NT$100,000,000	0	0
Total	3	3

Remuneration of the President and Vice President

Unit: NT$ thousands

Title	Name	Salary(A)	Salary(A)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C)	Bonuses and Allowances (C)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Ratio of total compensation (A+B+C+D) to net income (%)	Ratio of total compensation (A+B+C+D) to net income (%)	Exercisable Employee Stock Options	Exercisable Employee Stock Options	New Restricted Employee Shares	New Restricted Employee Shares	Compensation paid to the President and Vice President from an Invested Company Other Than the Company’s Subsidiary
		The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company		Companies in the consolidated financial statements		The company	Compani es in the consolida ted financial statement s	The company	Companies in the consolidate d financial statements	The company	Companie s in the consolidat ed financial statements
								Cash	Stock	Cash	Stock
President	David Yen	14,147	23,111	4,812	4,812	5,008	6,194	520	0	520	0	8.33	11.79	80,000	80,000	0	0	None
Vice President	Leo Liu
Vice President	Allen Hou
Vice President	Echo Wan
Vice President	Shellin Liu

Mike Guo
	Range	of Remuneration			Name of President and		Vice President
				The company			Companies in the consolidated financial statements
Under NT$ 2,000,000				-			-
NT$2,000,001 ~ NT$5,000,000			Leo Liu, Echo Wan, Shellin Liu, Allen Hou, Mike Kuo			Leo Liu, Echo Wan, Shellin Liu,Allen Hou, Mike Kuo
NT$5,000,001 ~ NT$10,000,000			David Yen			-
NT$10,000,001 ~ NT$15,000,000			-			-
NT$15,000,001 ~ NT$30,000,000			-			David Yen
NT$30,000,001 ~ NT$50,000,000			-			-
NT$50,000,001 ~ NT$100,000,000			-			-
Over NT$100,000,000			-			-
Total			6			6

Unit: NT$ thousands

						Unit: NT$ thousands
	Title	Name	Employee Bonus - in Stock (Fair Market Value)	Employee Bonus - in Cash	Total	Ratio of Total Amount to Net Income (%)
Executive Officers	President	David Yen	0	620	620	0.21
	Vice President	Leo Liu
	Vice President	Echo Wan
	Vice President	Allen Hou
	Senior Manager	Melonie Lin

3.2.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Vice Presidents

A. The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, supervisors, presidents and vice presidents of the Company, to the net income.

Year		2015		2014
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements
Total remuneration paid to directors and supervisors.	14,778	52,663	14,070	49,177
Ratio of total remuneration paid to directors and supervisors to net income(%).	5.03%	17.92%	7.09%	24.77%
Total remuneration paid to presidents and vicepresidents.	24,487	34,637	19,089	28,720
Ratio of total remuneration paid to presidents and vice presidents to net income (%).	8.33%	11.79%	9.62%	14.47%

A. Comparing to 2014, the decline of the ratio of total remuneration paid to directors,
supervisors, president, and vice president to net income in 2015 was caused by increasing of income profit of 2015.
B. According to the Company’s Article of Incorporation, more than 0.5% of profit of the current year distributable as employees' compensation and less than 0.3% of the current year distributable as directors and supervisors’ compensation shall be definitely specified in the Articles of Incorporation. However, the company's accumulated losses shall have been covered.
C. The remuneration of presidents and vice presidents shall be propose by the Remuneration Committee which evaluated and determined in accordance with the individual performance, achievements and the market trends, and submitted to Board of Directors for discussion before sent to the shareholders’ meeting for resolution.

3.3 Implementation of Corporate Governance

3.3.1 Board of Directors

A total of 11 (A) meetings of the Board of Directors were held in the previous period.

The attendance of directors were as follows:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%)`【Ｂ`/`Ａ】`
Chairman	David Yen	11	0	100%
Director	Jim Chen	8	3	72.73%
Director	Hope Ocean International Ltd Representative: `Jack Lai`	10	0	90.91%
Director	Dynamic Ocean Group Limited Representative: Mao-Jen Chen	10	1	90.91%
Director	Dynamic Ocean Group Limited Representative: TonyLin	11	0	100%
Director	Peggy Lin	9	1	81.82%
Director	Benison Hsu	9	1	81.82%
Independent director	Li-Chiu Chang	10	1	90.91%
Independent director	Guo-Yuan Chen	9	2	81.82%
Other mentionable items: 1. If there are circumstances referred to in Article 14-3 of the Securities and Exchange Act and resolutions of the directors’ meetings objected to by independent directors or subject to qualified opinion and recorded or declared in writing, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: None 2. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None 3. Measures taken to strengthen the functionality of the board: The Company has followed the `“`Rules and Procedures of Board of Directors ” , disclosed the related information at website and established the IR Contact institute to maintain shareholders’ relations. Besides, the Board of Directors also has established a Remuneration Committee to assist the board in carrying out its various duties.

3.3.2 Attendance of Supervisors at Board Meetings

A total of 11 (A) meetings of the Board of Directors were held in the previous period. The attendance of supervisors was as follows:

Title	Name	Attendance in Person (B)	Attendance Rate (%) `【Ｂ`/`Ａ】`
Supervisor	YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh	10	90.91%
Supervisor	Shen-Li Liao	8	72.73%
Supervisor	CHANG-JIE International Representative: Tien-Yuan Tsai	11	100%
Other mentionable items: 1. Composition and responsibilities of supervisors: (1) Communications between supervisors and the Company's employees and shareholders (e.g. communication channels and methods, etc.): The Company has set up a supervisor’s mailbox: [email protected], so that employees and shareholders have adequate access to the supervisors for communications. (2) Communications between supervisors and the Company's chief internal auditor and CPA (e.g. items, methods and results of the audits of corporate finance or operations, etc.): A. Communications with the chief internal auditor: Supervisors hold the supervisors meeting each quarter and maintain minutes of the meetings. The directors, president and the Company's top management are then notified of important discussions and resolutions. All supervisors had attended on each occasion, and the chief internal auditor was also present at the meetings to report on audit operations and major internal auditing matters, including execution, reporting, and monitoring of the supervisors’ instructions. In addition, supervisors obtained audit reports on a monthly basis, which were submitted by the chief internal auditor. B. Communications with the CPA: Supervisors have held supervisors examination meeting and have obtained the examined reports. All supervisors attended on each occasion, and the CFO, chief internal auditor and CPAs were also present at the meetings to discuss related subjects, including execution, reporting and monitoring of the supervisors’ instructions. 2. If a supervisor expresses an opinion during a meeting of the Board of Directors, the dates of the meetings, sessions, contents of motion, resolutions of the directors’ meetings and the company’s response to the supervisor’s opinion should be specified: The board of directors have followed the supervisor’s suggestion to execute the related issues.

3.3.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	V		The Company has established the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”. The information has been disclosed on the Company’s website.	None
2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure?	V		In addition to the existing hotline and email channels, the Company has established an internal operating procedure, and has designated appropriate departments, such as Investor Relations, Public Relations, and stock affairs to handle shareholders’ suggestions, doubts, disputes and litigation.	None

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?	V V V		The CEO office is responsible for collecting the updated information of major shareholders and the list of ultimate owners of those shares. Rules are made to strictly regulate the activities of trading, endorsement and loans between the Company and its affiliates. In addition, the “Criteria of Internal Control Mechanism for a Public Company”, outlined by the Financial Supervisory Commission when drafting the guidelines for the “Supervision and Governance of Subsidiaries”, was followed in order to implement total risk control with respect to subsidiaries. To protect shareholders’ rights and fairly treat shareholders, the Company has established the internal rules to forbid insiders trading on undisclosed information. The Company has also stronglyadvocated these rules in order toprevent

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			any violations.
3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members? (2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?	V V		Member diversification is considered by the Board members. Factors taken into account include, but are not limited to gender, age, cultures, educational background, race, professional experience, skills, knowledge and terms of service. The Board objectively chooses candidates to meet the goal of member diversification. In order for the sound supervision and reinforcement of management, the Company established the Nomination and Risk Management Committee in addition to the Remuneration Committee. These functional committees shall be responsibilities for the	None

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(3) Does the company establish a standard to measure the performance of the Board, and implement it annually? (4) Does the company regularly evaluate the independence of CPAs?	V V		Board of Directors. The Remuneration Committee has evaluated annually the Board’s performance and conducts. The Company evaluates the independence of CPAs annually, ensuring that that they are not stakeholders such as a Board member, supervisor, shareholder or person paid by the Company.
4. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?	V		The Company provides detailed contact information, including telephone numbers and email addresses in the “IR Relations” section of the corporate website. In addition, personnel are in place to exclusively deal with issues of social responsibility, ensuringthat various interested	None

Evaluation Item			Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			parties have channels to communicate with the Company.
5. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	V		The Company designates CAPITAL SECURITIES CORP. to deal with shareholder affairs.	None
6. Information Disclosure (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?	V V		The Company has set up a Chinese/English website (www.t3ex-group.com.tw) to disclose information regarding the Company’s financials, business and corporate governance status. The Company has assigned an appropriate person to handle information collection and disclosure. Contact person: Linda Hsu, TEL: +886-2-2753-2093 The Company has established a spokesman system. Investor conference information is disclosed on the corporate website.	None
7. Is there any other important information to facilitate	V		Employee rights and wellness are stated in	None

Evaluation Item			Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?			internal policies as required by relevant laws and regulations. The Company maintains good relationship with customers and suppliers and fulfills its duties as a responsible corporate citizen. Internal control, auditing and self-evaluation procedures are in place, while the Company also purchases insurance coverage for its directors.
8. Has the company implemented a self-evaluation report on corporate governance or has it authorized any other professional organization to conduct such evaluation? If so, please describe the opinion from the Board, the result of self or authorized evaluation, the major deficiencies, suggestions, or improvements.	V		The Company has purchased D&O insurance for its directors and supervisors since year 2014.	None

Note: 1. Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation.

A self-evaluation report is defined as the company assessing its corporate governance evaluation items with appropriate explanations on current corporate operations and implementation.

3.3.4 Composition, Responsibilities and Operations of the Remuneration Committee

The Remuneration Committee assists the Board in discharging its responsibilities relating to the Company’s compensation and benefits policies, plans and programs, and the evaluation of the directors’ and executives’ compensation.

The Chairman of the Remuneration Committee convened four regular meetings in 2015. The Remuneration Committee Charter is available on the Company’s corporate website.

A. Professional Qualifications and Independence Analysis of Remuneration Committee Members

Title	Criteria Name	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Remuneration Committee Member
		An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A judge, public prosecutor, attorney, Certified Public Accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Has work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8
Independent director	Li-Chiu Chang			V	V	V	V	V	V	V	V	V	2
Independent director	Guo-Yuan Chen			V	V	V	V	V	V	V	V	V	None
Other	Ruei-Men g Chang			V	V	V	V	V	V	V	V	V	None

Note: Please tick the corresponding boxes that apply to a member during the two years prior to being

elected or during the term(s) of office.

Not an employee of the Company or any of its affiliates.
Not a director or supervisor of affiliated companies. Not applicable in cases where the person is an independent director of the parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares.
Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company, or ranking in the top 10 in holdings.

Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three sub-paragraphs.
Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the Company, or who holds shares ranking in the top five holdings.
Not a director, supervisor, officer, or shareholder holding 5% or more of the shares of a specified company or institution which has a financial or business relationship with the Company.
Not a professional individual, who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof.
Not a person of any conditions defined in Article 30 of the Company Law.

B. Attendance of Members at Remuneration Committee Meetings

There are 3 members in the Remuneration Committee. A total of 3 (A) Remuneration Committee meetings were held in the previous period. The attendance record of the Remuneration Committee members was as follows:

Title	Name	Attendanc e in Person(B)	By Proxy	Attendance Rate (%)`【Ｂ`/`Ａ】`	Remarks
Convener	`Li-Chiu` `Chang`	2	1	66.67	None
Committee Member	`Guo-Yuan` `Chen`	3	0	100	None
Committee Member	`Ruei-Meng` `Chang`	2	1	66.67	None
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

3.3.5 Corporate Social Responsibility

Evaluation Item			Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
1.Corporate Governance Implementation (1) Does the company declare its corporate social responsibility policy and examine the results of the implementation? (2) Does the company provide educational training on corporate social responsibility on a regular basis?	V V		CSR management system has been established to oversee the Company’s corporate social responsibility, environmental and occupational health, and implementation of safety measures. Based on the management system, CSR, environmental, safety, and health issues can be monitored and addressed. The Company not only sets up CSR objectives and targets, but also performs internal & external audits. After each audit, proposals containing corrective and preventive actions are reviewed by the management to ensure compliance. The Company carries out regular trainings sessions and propaganda on corporate social responsibility with its employees every year. For new employees, training on personnel rules, management systems, business ethics, morals, and all other CSR-related subjects are carried out on their first working day to clarifytheir due responsibilities and obligations.	None None
(3) Does the company establish exclusively (or concurrently) dedicated first-line managers authorized bythe board to be in	V		Under the hands-on leadership of our company Chairman and first-line managers, we have designated dedicated personnel, striven to internalize CSR aspart of T3EXgroupemployees'	None

Evaluation Item			Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
charge of proposing the corporate social responsibility policies and reporting to the board?			DNA, and embraced international standards in an effort to become model international corporate citizens.
(4) Does the company declare a reasonable salary remuneration policy, and integrate the employee performance appraisal system with its corporate social responsibility policy, as well as establish an effective reward and disciplinary system?	V		For 2014, the salary remuneration policy has been instituted. In order to focus our employees on improving their performance and enhancing the value of T3EX Group, the objective of the remuneration policy is to ensure that a competitive remuneration package is maintained and benchmarked with others. In addition, T3EX Group recently established a new reward and disciplinary system based on the employee performance appraisal system which includes our corporate social responsibility policy as one of the most important criteria for evaluation.	None
2.Sustainable Environment Development (1) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	V		The major business of the company is international logistics forwarding which has low impact on environment. At the same time, the company still focus on enhancing the utilization of resource and increasing the efficient of trucks and warehouses through developingsmart logistics.	None
(2) Does the company establish proper environmental management systems based on the characteristics of their industries?	V		The company has utilized the smart technology to develop smart logistics. In order to increase the efficient of the trucks and warehouses and reduce the emission of the CO2.	None
(3) Does the companymonitor the impact of	V		The companyis the logistics services industryso the impact of	None

Evaluation Item			Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
climate change on its operations and conduct greenhouse gas inspections, as well as establish company strategies for energy conservation and carbon reduction?			climate change would not have important impact on it. The company still has strictly controlled the electricity and water utilization and energy conservation.
3. Preserving Public Welfare (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	V		T3EX group not only complies with local regulations but also upholds the internationally-recognized human rights of workers and respects the United Nations Universal Declaration on Human Rights, and the International Labor Organization’s fundamental conventions on core labor standards. T3EX group hires all employees equally based on his or her job qualifications regardless of gender, religion, race, nationality or political affiliation.	None
(2) Has the company set up an employee hotline or grievance mechanism to handle complaints with appropriate solutions?	V		T3EX Group offers an Employee Relations Hotline on website that provides a channel for employees to express their opinions regarding their work and the overall work environment. The employee relations team ensures all cases are handled with care under the supervision of the first-line managers.	None
(3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?	V		The company has provided a healthy and safe working environment and organize training on health and safety for employees. The subsidiary also award the AEO certification which stands for thequalityof workingenvironment.	None

Evaluation Item			Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2

(4) Does the company setup a communication channel with employees on a regular basis, as well as reasonably inform employees of any significant changes in operations that may have an impact on them?	V		T3EX Group values two-way communications and is committed to keeping the communication channels between the management level and their subordinates, as well as among peers, open and transparent. To ensure that employees’ opinions and voices are heard, and their issues are addressed effectively, impartial submission mechanisms, including quarterly labor-management communication meetings, are in place to provide timely support. Continuous efforts are made to reinforce mutual and timely employee communications, based on multiple channels and platforms, which, in turn, fosters harmonious labor relations and creates a win-win situation for the Company and its employees. At the same time, efforts are made to ensure that employees are informed of currentpolicies.	None
(5) Does the company provide its employees with career development and training sessions?	V		T3EX Group not only assesses and provides feedback on employees’ skills and interests, but also offers training and development activities that match their career development objectives andjob needs.	None
(6) Does the company establish any consumer protection mechanisms and appealing procedures regarding research development, purchasing, producing, operating and service?	V		The company set up the stakeholder area on www.t3ex-group.com which can provide the appealing channel for the customers. At the same time, the company also build an online service team, THI ONLINE platform to serve customers.	None

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
(7) Does the company advertise and label its goods and services according to relevant regulations and international standards?	V		When labeling and advertising its products worldwide, T3EX Group consistently honors regional and national regulations without misleading its customers by exaggerating the informationprovided.	None
(8) Does the company evaluate the records of suppliers’ impact on the environment and society before taking on business partnerships?	V		The Company has hundreds of suppliers in different regions, and engages in mutual learning for common progress in the areas of social and environmental matters, such as hazardous substance control, environmental protection, labor safety and health, human rights, conflict metals, and carbon footprint. At the same time, suppliers are required to voluntarily inform the Company of any violations against the corporate social responsibility policy.	None
(9) Do the contracts between the company and its major suppliers include termination clauses which come into force once the suppliers breach the corporate social responsibility policy and cause appreciable impact on the environment and society?	V		The employees will follow the supplier management policy of the company when signing contracts with suppliers. If suppliers breach the corporate social responsibility policy and cause appreciable impact on the environment and society, T3EX Group may terminate any agreements depend on the supplier management policy.	none
4.Enhancing Information Disclosure (1) Does the company disclose relevant and reliable information regarding its corporate social responsibility on its	V		The company set up the stakeholder area on www.t3ex-group.com which disclosed the relevant and reliable information regarding the corporate social responsibility.	None

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1
	Yes	No	Abstract Explanation2
website and the Market Observation Post System(MOPS)?
5. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”, please describe anydiscrepancybetween the Principles and their implementation: None
6. Other important information to facilitate better understanding of the company’s corporate social responsibility practices`：` A. Since 2013, T3EX Group has been committed to joining the social contributions through cnYES for the disadvantage group. B. The colleagues of T3EX Group helped the intellectually disabled children to sell cookies in one day for showing their caring. C. The subsidiary, Taiwan Express, donated the funds for making angel cakes with Sunny Hills. The funds will help the disadvantage children to finish their study.
7. A clear statement shall be made below if the corporate social responsibilityreports were verified byexternal certification institutions: None

A clear statement shall be made below if the corporate social responsibility reports were verified by external certification institutions: None Note: 1. Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation. 2. Companies who have compiled CSR reports may cite the source from specific pages of their CSR reports instead.

3.3.6 Ethical Corporate Management

Evaluation Item			Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Establishment of ethical corporate management policies and programs (1) Does the company declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (2) Does the company establish policies to prevent unethical conduct with clear statements	V V		The Company’s Ethical Corporate Management Best-Practice Principles is a guideline to provide high ethical standards for all employees. The principles are disclosed in the annual report and on the company website. The Board of Directors and the management place the greatest importance in adopting the highest standards of integrity and ethics in corporate management and employee work conduct. Bribery, corruption, deception, and all other forms of improper conduct are prohibited. The Company’s Ethical Corporate Management Best-Practice Principles have established	None

Evaluation Item			Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies? (3) Does the company establish appropriate precautions against high-potential unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate			preventive measures against the following: (a) offering and accepting bribes; (b) illegal political donations; (c) improper charitable donations or sponsorship; (d) Offering or accepting unreasonable gifts or hospitality, or other inappropriate benefits. The aforementioned principles and related regulations were announced and disseminated to employees, managers and Board of Directors to enhance integrity and self-discipline. In order to prevent any unethical conduct, all employees must disclose any matters that have or may have the appearance of undermining the Principle, such as anyactual orpotential conflict

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
Management Best-Practice Principles for TWSE/TPEx Listed Companies?			of interest.
2. Fulfill operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity?	V V		The Company holds annual business meetings, conveying our integrity requirements to all our business partners. In addition, an ethic-related clause is included in every business contract. If there is any breach of the clause, the Company may terminate the partnership at any time without any further obligation or compensation. The Company assigned CEO office under the Board’s supervision and submits reports to the Board of Directors.	None

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Has the company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are	V V		The Company follows the Company Act, the Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Law Against Accepting Bribes Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest and other relevant regulations for listed companies. The Company also conducts due diligence before trading with upstream and downstream companies to minimize the risks. At the same time, the Company has made a hotline available for submissions of regarding conflicts of interest. The Company has established accounting and internal control systems to ensure integrity in our operations. After internal auditors have analyzed

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
they audited by either internal auditors or CPAs on a regular basis? (5) Does the company regularly hold internal and external educational trainings on operational integrity?	V		and reviewed the annual audit program according to the risk evaluation results, the Company will compiles them into an audit report. The Company carries out regular training for employees every quarter. For new employees, training on ethical rules, conflicts of interest, business morals, and all other related subjects are carried out during their first week of work. All employees are required to receive integrity training for at least two hours each year.
3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached byan	V		The Company establishes various reporting channels so that employees and relevant people can report improper business behaviors through	None

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
appropriate person for follow-up? (2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases? (3) Does the company provide proper whistleblower protection?	V V		the system. After a confidential investigation, anyone who violates the regulations on operational integrity will be punished according to the Company’s regulations on reward and punishment. In cases of illegal conduct, legal actions will be taken as well. The Company has in place SOPs authorized by the Board which could be applied on any confidential investigations on such cases. The Company takes whistleblower protection seriously since the core purpose is protection from unlawful reprisal for diligent employees who step forward to identify potential wrongdoing. The

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			Company has a dedicated hotline for whistleblower protection whether first-line managers and the Board if necessary, can directly review and determine appropriate actions against reprisal of complaints.
4. Strengthening information disclosure (1) Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?	V		The Company’s Ethical Corporate Management Best-Practice Principles and the results of our implementation have been posted on the Company’s Chinese / English website and MOPS.	None
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation. There have been no differences.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend itspolicies).None.

Note: Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation.

3.3.7 Corporate Governance Guidelines and Regulations

Please refer to the Company’s website at www. t3ex-group.com.

3.3.8 Other Important Information Regarding Corporate Governance

In Year 2014 and 2015, T3EX has gained the top 20 percent of companies in the Corporate Governance Evaluation results.

3.3.9 Internal Control Systems

Statement of Internal Control System:

T3EX Global Holdings Corp

Statement of Internal Control System

Date: March 14, 2016

Based on the findings of self-assessment, T3EX Global Holding Corp states the following with regard to its internal control system in 2015:

T3EX is fully aware that establishing, operating and maintaining an internal control system are the responsibilities of its Board of Directors and management. The aim of the internal control system is to provide reasonable assurance to operating effectiveness and efficiency (including profitability, performance and safeguarding of assets), reliability of financial reporting and compliance of applicable laws and regulations.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only provide reasonable assurance of accomplishing the aforementioned three objectives. Moreover, the effectiveness of an internal control system may be subject to changes of environmental or circumstances. Nevertheless, the internal control system of T3EX contains self-monitoring mechanism and T3EX takes corrective actions whenever a deficiency is identified.
T3EX evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal

Control System by Public Companies (herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal control based on the process of management control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Each component further contains several items. Please refer to the Regulations for details.

T3EX has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
Based on the findings of the evaluation mentioned in the preceding paragraph, T3EX believes that,

as of December 31, 2015, its internal control system (including its supervision and management of subsidiaries), as well as its internal controls to monitor the achievement of its objectives concerning operational effectiveness and efficiency, reliability of financial reporting, and compliance with the applicable laws and regulations, were effective in design and operation, and reasonably assured the achievement of the above-stated objectives.

This Statement will be integral part of T3EX’s Annual Report for the year 2015, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Law.
This Statement has been passed by the Board of Directors in their meeting held on March 14, 2016 with zero of night attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

T3EX Global Holdings Corp. David Yen Chairman

David Yen

President and Chief Executive Officer

If the Company is requested by the SEC to retain CPA’s service for examining internal control system, the Independent Auditor’s Report must be disclosed: None

3.3.10 Major Resolutions of Shareholders’ Meeting and Board Meetings

 Shareholders’ meeting:

Date	Major resolutions	Implementation of Resolutions
06,03,2016	1. Approval of the 2014 business report and financial statements. 2. Approval of the distribution of 2014 retained earnings and employee profit sharing. 3. Proposal for a new share issue through capitalization of earnings. 4. Approval of amendment to the Articles of Incorporation. 5. Amendment to the Rules of Procedure for Shareholder Meetings. 6. Amendment to Rules for Director and Supervision Elections.	All resolutions of the Shareholders’ Meeting have been implemented in accordance with the resolutions.

 Board meeting:

Date:	Major resolutions
03,12,2015	1. Approval of the 2014 financial statements. 2. Approval of the 2014 Audited financial statements. 3. Approval of the distribution of 2014 retained earnings and employee profit sharing. 4. Proposal for a new share issue through capitalization of earnings. 5. THI Logistics’ earnings distribution of 2014. 6. Proposal for 0 payout ratio of major subsidiaries’ 2014 earnings. 7. Proposal of capital injection. 8. Issue of the Third Domestic Unsecured Convertible Corporate Bonds. 9. Approval of the Company’s “Statement of Internal Control System”. 10. Approval of amendment to the Articles of Incorporation. 11. Amendment to the “Rules of Procedure for Shareholder Meetings”. 12. Amendment to the “Rules for Director and Supervision Elections”. 13. Amendment to the “Ethical Corporate Management Best-Practice Principles”. 14. Amendment to the “Guidelines for the Adoption of Codes of Ethical Conduct”. 15. Approved the scheduling of 2015 annual general shareholders’ meeting. 16. The rotation of Taiwan Express’s CEO. 17. Evaluation of 2015 the Company’s audit fee. 18. Approval of the bank financial contracts 19. Approval of the bank financial contracts with subsidiaries.
04,24,2015	1. Proposal for bid the shares of A company for enlarging the scale of international logistics. 2. Proposal for acquisition the shares of F company for developingcross border e-commerce logistics.
05,06,2015	1. Proposal for acquisition the shares of C company for enhancing supply-chain management logistics. 2. Approved the major subsidiary to loan funds for Taiwan Express. 3. Assignment the Board of Director for THI Logistics.
07,01,2015	1. Set the issue price, date and other details of capital injection. 2. Discussion of the transaction conditions of acquiring the shares of C Company. 3. Approval forloaning funds to Taiwan Express. 4. Approved the major subsidiary to endorse and guaranty for Taiwan Express.

08,12,2015	1. Approved the record date for distribution of year 2014 dividend. 2. Proposal for applying to China Three New Board Listed of YHI Logistics. 3. Signed the stock purchase agreement of Shanghai EXer Logistics with Shanghai COD Logistics. 4. Amendment to the Rules of Procedure for Board Meeting. 5. Purchase D&O insurance for directors and supervisors. 6. Approved of endorsing and guarantying for YHI Logistics. 7. Set the Company’s subsidiaries’ the “Procedures of Acquisition and Disposal of Assets”, the`“`Operational Procedures for Endorsements and Guarantees” and the “Proceduresfor Loaningof Funds.
08,28,2015	1. Implementation of the Fourth Share Buyback Program. 2. Approved Shanghai THI logistics to loan funds for Shanghai COD Logistics. 3. Proposal for fundraisingYHI Logistics.
11,06,2015	1. Signed the stock purchase agreement of T-Cube Logistics withNEW CONCEPT INVESTMENTS LIMITED. 2. Changed the program of applying to list in China capital market. 3. Changed the investment entity of EXer Logistics. 4. Set the Rules of Procedure for applying to TPEx for a halt of trading. 5. Set the Guideline of the corporate social responsibility policy. 6. Approval of loaning funds toT.H.I. GROUP SINGAPORE PTE LTD.
12,18,2015	1. Approval of the Year 2016 business plan and financial budget. 2. Approval of the Year 2016 audit plan. 3. Assignment the Board of Director forFRESH BEAUTY ENTERPRISES LTD. 4. Implementation of the Fifth Share Buyback Program. 5. Set the Rules of Managers Retirement Policy. 6. Approval of the proposal of“The plan of how to enhance the Company’s ability to edit financial statement” 7. Set the “Rules of Stock Affairs Management Policy”. 8. Approval of loaningfunds to Taiwan Express.
03,14,2016	1. Approval of the distribution of the 2015 compensation of directors and supervisors and employee bonus. 2. Approval of the 2015 financial statements. 3. Approval of the 2015 audited financial statements. 4. Approvalofthe distributionof 2015retained earnings.

Proposal for a new share issue through capitalization of earnings. 6. The subsidiaries’ earnings distribution of 2015. 7. Proposal for 0 payout ratio of major subsidiaries’ 2015 earnings. 8. 2016 financial budget Amendment 9. Approval of the Company’s “Statement of Internal Control System”. 10. Amendment to the “Internal Audit Implementation Rules”. 11. Amendment to the “Operational Procedures for Endorsements and Guarantees”. 12. The assignment of manager of internal audit department. 13. Directors and supervisors election 14. Proposal of the nomination list of the Company’s directors and supervisors. 15. Proposal of release the prohibition on directors from participation in competitive business 16. Approved the scheduling of 2016 annual general shareholders’ meeting. 17. Evaluation of 2016 the Company’s audit fee and independence. 18. Approval of the bank financial contracts with subsidiaries. 04,12,2016 Check the qualification of the directors, independent directors and supersaver’s nomination list for 2016 shareholders’ meeting. 05,06,2016 1. Proposal of the Company’s investment plan. 2. Approval of loaning funds to the Company’s joint venture-PT. Dexter Eurekatama. 3. Approval of loaning funds to the Company’s subsidiaryEXer Logistics from the Company’s subsidiary- THI (Shanghai) group. 4. Set the Company’s subsidiaries’ the “Procedures of Acquisition and Disposal of Assets”, the “ Operational Procedures for Endorsements and Guarantees” and the “Procedures for Loaning of Funds. 5. Amend the Company’s subsidiaries’ the “Procedures of Acquisition and Disposal of Assets”. 6. Approval of the bank financial contracts 7. Approval of the bank financial contracts with

subsidiaries.

3.3.11 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Directors: None.
3.3.12 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit and R&D

R&D
				05, 06, 2016
Title	Name	Date of Appointment	Date of Termination	Reasons for Resignation or Dismissal
Chief Internal Auditor	Stanley Chang	03, 14, 2014	01, 07, 2016	Position rotation

Mr. Stanley Chang, the original CIA of the Company rotated his position to specialist assistant of T3EX group’s CEO, and Melonie Lin took over his job temporary. On 03 14, 2016, the board of director officially appointed Melonie Lin to be the manager of the internal audit department.

3.4 Information Regarding the Company’s Audit Fee and Independence

3.4.1 Audit Fee

Accounting Firm	Name of CPA	Period Covered by CPA’s Audit	Remarks
KPMG Accounting Firm	Peggy Chen & HENG- SHENG LIN	2015.01.01~2015.12.31

Note: If the Company has changed CPA or Accounting Firm during the current fiscal year, the company shall report the information regarding the audit period covered by each CPA and the replacement reason.

Fee Items Fee Range	Fee Items Fee Range	Audit Fee	Non-audit Fee	Total
1	Under NT$ 2,000,000		879,000	879,000
2	NT$2,000,001 ~ NT$4,000,000

==> picture [483 x 305] intentionally omitted <==

----- Start of picture text -----

3 NT$4,000,001 ~ NT$6,000,000 5,920,000 5,920,000
4 NT$6,000,001 ~ NT$8,000,000
5 NT$8,000,001 ~ NT$10,000,000
6 Over NT$100,000,000
Unit: NT$ thousands
Non-audit Fee
Accounting Name Audit System Period Covered by
Remarks
Firm of CPA Fee of Company Human Others Subtotal CPA’s Audit
Design Registration Resource
Peggy 2015/1/1~2015/12/31
Chen None-Audit
Fee Others:
KPMG
Accounting HENG- 5,920 - 360 - 519 879 TP Fee and
Firm SHENG
LIN
Tax
Consultant.
----- End of picture text -----

3.4.2 Replacement of CPA: None

3.4.3 Audit Independence

The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates during 2015.

3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Unit: Shares

Title	Name	2015	2015	As of May. 6,2016	As of May. 6,2016
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman and Group CEO	David Yen	133,257	0	0	0
Director	Jim Chen	(11,428)	0	0	0
Director	Hope Ocean International Ltd	228,489	0	0	0
Director	Dynamic Ocean Group Limited	(507,051)	0	0	0
Independent Director	Li-Chiu Chang	0	0	0	0

Independent Director	Guo-Yuan Chen	0	0	0	0
Director	Benison Hsu	188,365	187,000	0	(1,117,000)
Director	PeggyLin	130,404	0	0	0
Supervisor	YI-WEI INVESTMENT	89,543	0	0	0
Supervisor	CHANG-JIE International	317,817	354,000	0	(1,590,000)
Supervisor	Shen-Li Liao	0	0	0	0
Vice President	Leo Liu	28,973	0	0	0
Vice President	Allen Hou	18,423	0	0	0
Vice President	Echo Wan	42,415	0	0	0
Vice President	Shellin Liu	8,260	0	It does not apply
Chief Internal Auditor	Stanley Chang	25,547	0
Vice President	Mike Kuo	29,631	0
Manager of The Internal Audit Department	Melonie Lin (2016.01.07 on Board)	It does not apply		0	0

3.5.1 Shares Trading with Related Parties: None. 3.5.2 Shares Pledge with Related Parties: None. 3.6 Relationship among the Top Ten Shareholders

As of 04/02/2016

Name	Current Shareholding	Current Shareholding	Spouse’s/minor’s Shareholding	Spouse’s/minor’s Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Rem arks
	Shares	%	Shares	%	Shares	%	Name	Relationship
JIN-HUA Investment	5,700,921	4.90%	-	-	-	-	HOPE OCEAN INTERNATIONAL LIMITED, DYNAMIC OCEAN GROUP LIMITED, YI-WEI INVESTMENT	Same Representative and the relative within two degrees with the representative of YI-WEI INVESTMENT	-
Representative: David Yen	1,225,197	1.05%
DYNAMIC OCEAN GROUP LIMITED	5,086,865	4.37%	-	-	-	-	HOPE OCEAN INTERNATIONAL LIMITE, JIN-HUA Investment, YI-WEI INVESTMENT	Same Representative	-
Representative: David Yen	1,225,197	1.05%
CHANG-JIE International	4,822,708	4.14%	-	-	-	-	PEI-SI LIMITED	Spouses with the representative.	-
Representative: Benison Hsu	1,153,734	0.99%

PEI-SI LIMITED	4,518,889	3.88%	-	-	-	-	CHANG-JIE International	Spouses with the representative.	-
Representative: TSAI- CHUAN Liu	0	0%
HOPE OCEAN INTERNATIONAL LIMITED	3,273,798	2.81%	-	-	-	-	JIN-HUA Investment, DYNAMIC OCEAN GROUP LIMITED, YI-WEI INVESTMENT	Same Representative and the relative within two degrees with the representative of YI-WEI INVESTMENT	-
Representative: David Yen	1,225,197	1.05%
LI-SHEN International	2,317,340	1.99%	-	-	-	-	Peggy Lin	Same Representative	-
Representative: PeggyLin	2,112,404	1.81%
Jim Chen	2,142,728	1.84%	69,405	0.05%	-	-	None	None	-
Peggy Lin	2,112,404	1.81%	-	-	-	-	LI-SHEN International	Same Representative	-
Jack Lai	1,865,566	1.60%	481,544	0.41%	-	-	None	None	-
YI-WEI INVESTMENT	1,296,889	1.11%	-	-	-	-	HOPE OCEAN INTERNATIONAL LIMITED, DYNAMIC OCEAN GROUP LIMITED, JIN-HUA Investment	The relative within two degrees with the representative.	-
Representative: CHUN- CHU YEN	31,538	0.02%

3.7 Ownership of Shares in Affiliated Enterprises

Unit: shares/ %

Affiliated Enterprises	Ownership by the Company	Ownership by the Company	Direct or Indirect Ownership by Directors, Supervisors, Managers	Direct or Indirect Ownership by Directors, Supervisors, Managers	Total Ownership	Total Ownership
	Shares	%	Shares	%	Shares	%
T.H.I. GroupLtd(in BVI)	1,000,000	100	0	0	1,000,000	100
Greatline International Limited	4,050,000	100	0	0	4,050,000	100
T.H.I. GROUP VIETNAM CO.,LTD	0	51	0	0	0	51
T.H.I. GROUP (BANGKOK) CO., LTD.	0	49	0	0	0	49

THI & Maruzen Co.,Ltd.	0	51	0	0	51
T.H.I. GROUP SINGAPORE PTE. LTD.	320,000	80	0	320,000	80
THI Logistics (Malaysia) SDN BHD	1,350,000	90	0	1,350,000	90
Fresh Beauty Enterprise Ltd.	60	60	0	60	60
Eastern union holdings limited	0	60	0	0	60
LOGI International Co., Ltd.	16,285	30	0	16,285	30
Taiwan Express Logistic Co.,Ltd.	35,958,400	100	0	35,958,400	100
T.H.I. Logistics Ltd	13,000,000	100	0	13,000,000	100
T.H.I. GROUP (CAMBODIA)CO.,LTD.	0	100	0	0	100
PT. Dexter Eurekatama	12,000	30	0	12,000	30
T.H.I. GroupLtd(in HK)	12,480,000	100	0	12,480,000	100
T.H.I. Group (Shanghai)Ltd.	0	100	0	0	100
Shanghai Yaohwa International Forwarder Co.,Ltd.	0	100	0	0	100
Taiwan Express (HK)Co.,Ltd.	0	100	0	0	100
EXer Logistics Co.,Ltd.	0	68	0	0	68
T-Cube Global Logistics Co.,Ltd	0	60	0	0	60
TEC Logistics Co.,Ltd	1,000,000	100	0	1,000,000	100
Orient Air General Sales Agent Co.,	60,000	30	0	60,000	30
Hiview Logistics Co.,Ltd	5,000,000	97.51	% 0	5,000,000	97.51
Taiwan Express (USA) INC.	1,000,000	100	0	1,000,000	100
TEC LOGISTICS(USA), INC	290,000	100	0	290,000	100
TEC Logistics (Shenzhen)Co.,Ltd.	0	100	0	0	100
Wai Hung (China-HK) Cargo Transport Co. Ltd.	0	100	0	0	100

IV. Capital Overview

4.1 Capital and Shares

4.1.1 Source of Capital

A. Issued Shares

						As of 04/02/2016	As of 04/02/2016	As of 04/02/2016
Month/ Year	Par Value (NT$)	Authorized Capital		Paid-in Capital		Remark
		Shares	Amount (NT$ thousands)	Shares	Amount (NT$ thousands)	Sources of Capital	Capital Increased by Assets Other than Cash	Other
04,2015	10	120,000	1,200,000	101,477	1,014,755	Issuing new shares for conversion of Convertible bond NT$74,310 thousand and issuing employee stock option NT$300thousand.	none	04/02/2015 Jin So Son Tzi No.10401056120
08,2015	10	120,000	1,200,000	111,478	1,114,776	Issuing new shares for capital fundraising NT$100,000 thousand.	none	08/19/2015 Jin So Son Tzi No.10401172110
09,2015	10	120,000	1,200,000	115,107	1,151,067	Issuing new shares for earnings capitalization NT$36,291 thousand.	none	09/25/2015 Jin So Son Tzi No.10401199780
12,2015	10	120,000	1,200,000	116,042	1,160,421	Issuing new shares for conversion of Convertible bond NT$6,049 thousand and issuing employee stock option NT$3,305thousand.	none	12/01/2015 Jin So Son Tz NO.10401250280

B. Type of Stock

Share Type		Authorized Capital	Authorized Capital
	Issued	Shares	Un-issued Shares	Total Shares
	Public Shares	Private Shares Note1
Common Share	105,181,208	11,090,452	3,728,340	120,000,000

C. Information for Shelf Registration: None.

4.1.2 Status of Shareholders

					As of 12/31/2016	As of 12/31/2016
Item	Government Agencies	Financial Institutions	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	1	4	45	12,964	31	13,045
Shareholding (shares)	316,481	1,459,227	26,910,561	73,895,608	13,689,783	116,271,660
Percentage (%)	0.27	1.25	23.14	63.55	11.77	100

4.1.3 Shareholding Distribution Status

A. Common Shares

A. Common Shares
		As of 4/2/2016
Class of Shareholding (Unit: Share)	Number of Shareholders	Shareholding (Shares)	Percentage
1 ~ 999	7,017	519,423	0.45
1,000 ~ 5,000	4,008	8,407,545	7.23
5,001 ~ 10,000	893	6,464,491	5.56
10,001 ~ 15,000	381	4,591,316	3.95
15,001 ~ 20,000	158	2,792,181	2.40
20,001 ~ 30,000	188	4,638,380	3.99
30,001 ~ 40,000	99	3,459,214	2.97
40,001~50,000	62	2,774,255	2.39
50,001 ~ 100,000	116	7,865,463	6.76
100,001 ~ 200,000	58	8,158,557	7.02
200,001 ~ 400,000	22	6,350,904	5.46
400,001 ~ 600,000	10	4,979,278	4.28
600,001 ~ 800,000	8	5,917,544	5.09
800,001 ~ 1,000,000	5	4,643,255	3.99
1,000,001 or over	20	44,709,854	38.45
Total	13,045	116,271,660	100.00

B. Preferred Shares: The Company did not issue any preferred shares.

4.1.4 List of Major Shareholders

4.1.4 List of Major Shareholders
	As of 4/2/2016
Shareholder's Name	Shareholding
	Shares	Percentage
JIN-HUA Investment	5,700,921	4.90%
DYNAMIC OCEAN GROUP LIMITED	5,086,865	4.37%
CHANG-JIE International	4,822,708	4.14%
PEI-SI LIMITED	4,518,889	3.88%
HOPE OCEAN INTERNATIONAL LIMITED	3,273,798	2.81%
LI-SHEN International	2,317,340	1.99%
Jim Chen	2,142,728	1.84%
PeggyLin	2,112,404	1.81%
Jack Lai	1,865,566	1.60%
YI-WEI INVESTMENT	1,296,889	1.11%

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

Unit: NT$

			Unit: NT$
Items	2014	2015	01/01/2016-03/31/2016
Market Price per Share
Highest Market Price	36.70	41.95	30.30
Lowest Market Price	23.00	22.65	23.75
Average Market Price	29.33	33.35	27.86
Net Worth per Share
Before Distribution	20.43	21.6	21.12
After Distribution	18.59	-`（`Note 4`）`	-
Earnings per Share
Weighted Average Shares (thousand shares)	90,326	108,662	114,798
Diluted Earnings Per Share	2.20	2.7	0.10
Adjusted Diluted Earnings Per Share	2.14	0	-
Dividends per Share
Cash Dividends	1.4560	1.8	-
Stock Dividends
 Dividends from Retained Earnings	0.3639	1.8`（`Note 4`）`	-
 Dividends from Capital Surplus	0	0.2`（`Note 4`）`	-
Accumulated Undistributed Dividends	-	-	-
Return on Investment
Price / Earnings Ratio (Note 1)	13.33	12.35	-
Price / Dividend Ratio (Note 2)	20.14	18.53	-
Cash Dividend Yield Rate (Note 3)	4.96%	5.40%	-

Note 1: Price / Earnings Ratio = Average Market Price / Earnings per Share Note 2: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share Note 3: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price Note 4: Earning Distribution was already approved by the Company’s board of director on 03/14/2016 but not be approved by shareholders’ meeting.

4.1.6 Dividend Policy and Implementation Status

A. Dividend Policy

The distribution of the dividends of the Company will coordinate with the surplus of that year based on the principle of stabilization. The board of directors shall propose the allocation ratio and propose it at the shareholders’ meeting. The appropriated earnings shall more than 50% of the current year after tax profit. If the earnings available for appropriation less than the current year after tax profit, it shall be allocated in earnings available for appropriation. Cash dividends shall not

be less 10% of total shareholder dividends.

B. Proposed Distribution of Dividend

The proposal for the distribution of 2015 profits was passed at the meeting of the board of directors on 03 14, 2016. The Company had a proposal for withdrawing NT$ 206,341,310 from distributable earnings for cash dividends and withdrawing NT$22,926,820 from distributable earnings to issue dividends stocks of NT$2,292,682 shares and the par value of per share is NT$10. It will be discussed at the annual shareholders’ meeting.

4.1.7The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate:

Pursuant to Regulations Governing the Publication of Financial Forecasts of Public Companies, the Company don’t disclose financial forecast. It does not apply.

4.1.8 Employee Bonus and Directors' and Supervisors' Remuneration ：

A. Information Relating to Employee Bonus and Directors’ and Supervisors’ Remuneration in the Articles of Incorporation: More than 0.5% of profit of the current year distributable as employees' compensation and less than 0.3% of the current year distributable as directors and supervisors’ compensation shall be definitely specified in the Articles of Incorporation. However, the company's accumulated losses shall have been covered.
B. The Estimated Basis for Calculating the Employee Bonus and Directors’ and Supervisors’ Remuneration
I. The Company’s 2015 profit before distribution is NT$304,268,488, which distributed 0.5% (NT$1,521,343) employee bonus and distributed 2.5895% (NT$ 7,879,231) compensation of directors and supervisors with cash.
II.Shall there be any difference between the actual amount of dividend approved by Annual Shareholders’ Meeting and that of the estimation, it will be deemed as the changes in accounting estimates and will be recognized in the profit and loss account of the distributing year.
C. Profit Distribution for Employee Bonus and Directors’ and Supervisors’ Remuneration for 2015 Approved in Board of Directors Meeting
I. Proposed distribution of cash dividend to employees and remuneration to directors.

Item	Approved in Board of Directors Meeting	2015 Income Statement	Variation	Resolution
Employee Bonus – in Cash	1,521,343	1,521,343	0	None
Directors' and Supervisors' Remuneration	7,879,231	7,879,231	0

II.Proposed stock dividend to employees and its ratio to total net income and total dividend to employees: None.
III. Distribution of cash dividend to employees and remuneration to directors and supervisors in 2014 resolved by the Annual Shareholders Meeting on Jun. 3, 2015.

Item Approved in Board 2015 Variation Resolution

	of Directors Meeting	Income Statement
Employee Bonus – in Cash	1,,786,715	1,,786,715	0	None
Directors' and Supervisors' Remuneration	5,360,144	5,360,144	0

4.1.9 Buyback of Treasury Stock

Treasury stocks: Batch Order	3rdBatch	4thBatch	5thBatch
Purpose of buy-back	Transfer to employee	Transfer to employee	Transfer to employee
Timeframe of buy-back	2012/11/05~2012/12/27	2015/09/09~2015/09/11	2015/12/22~2016/02/16
Price range	15.00~25.00per share	18.00~39.00per share	21.00~33.00per share
Class, quantity of shares bought back	508,000 shares	220,000 shares	1,188,000 shares
Value of shares bought-back (in NT$ thousands)	9,122,202	5,697,700	32,846,365
Shares sold/transferred	508,000 shares	0	0
Accumulated number of company shares held	0	220,000 shares	1,408,000 shares
Percentage of total company sharesheld (%)	0%	0.18%	1.21%

4.2 Bonds

4.2.1 Corporate Bonds

4.2.1 Corporate Bonds
Corporate Bond Type	2nd Domestic Unsecured Convertible Bond	3rd Domestic Unsecured Convertible Bond
Issue date	January23,2014	June9,2015
Denomination	NT$10,000,000	NT$10,000,000
Issuing and transaction location	Taipei Exchange	Taipei Exchange
Issueprice	Issue bydenomination	Issue bydenomination
Totalprice	NT$300,000,000	NT$300,000,000
Coupon rate	0%	0%
Tenor	3 years Maturity: January 23, 2017	3 years Maturity: June 9, 2018
Guarantee agency	None	None

Consignee	Consignee	E.SUN Bank	E.SUN Bank
Underwriting institution		KGI SECURITIES	KGI SECURITIES
Certified lawyer		Handsome Attomeys-at-law, YA-WEN CHIU	Handsome Attomeys-at-law, YA-WEN CHIU
CPA		KPMG Accounting Firm Peggy Chen & HENG- SHENG LIN	KPMG Accounting Firm Peggy Chen & HENG- SHENG LIN
Repayment method		Unless repurchased and cancelled or converted, the bonds will be repay in lump sum upon maturity with cash.	Unless previously redeemed, repurchased and cancelled or converted, the bonds will be repay in lump sum upon maturitywith cash.
Outstanding principal		NT$106,500,000	NT$299,500,000
Terms of redemption or advance repayment		Pursuant on the Rules of 2nd Domestic Unsecured Convertible Bond	Pursuant on the Rules of 3rd Domestic Unsecured Convertible Bond
Restrictive clause		Pursuant on the Rules of 2nd Domestic Unsecured Convertible Bond	Pursuant on the Rules of 3rd Domestic Unsecured Convertible Bond
Name of credit rating agency, rating date, rating of corporate bonds		None	None
Other rights attached	As of the printing date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs or other securities	The bond has converted 7,501,394 shares.	The bond has converted 16,835 shares.
	Issuance and conversion (exchange or subscription) method	Pursuant on the Rules of 2nd Domestic Unsecured Convertible Bond	Pursuant on the Rules of 3rd Domestic Unsecured Convertible Bond
Issuance and conversion, exchange or subscription method, issuingcondition		I. The funding is used to support the company’s operation and business development, which shall benefit shareholders’ equityin the longterm.

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dilution, and impact on II. The convertible price of 2 [nd] Domestic Unsecured
existing shareholders’ Convertible is 23.5. If bondholders execute their
equity right to convert the whole bonds, which would
increase 4,531,914 common
shares.(NT$106,500,000/NT$23.5)
III. The convertible price of 3 [rd ] Domestic Unsecured
Convertible is 29.7. If bondholders execute their
right to convert the whole bonds, which would
increase 10,084,175 common
shares.(NT$299,500,000/NT$29.7)
IV. As of the printing date of this annual report, the
Company’s outstanding shares are 116,271,660. If
adding the un-convertible shares, the dilution extent of
existing shareholders’ equity may reach 11.16%.
Transfer agent None None
4.2.2 Convertible Bonds
Corporate bond type 2nd Domestic Unsecured 3rd Domestic Unsecured
Convertible Bond Convertible Bond
Year 2014 2015 As of the 2015 As of the
Item printing date printing date
of this of this annual
annual report
report
Market Highest 142.00 115.00 - 115.00 109.00
price of the Lowest 100.55 100.10 - 100.10 102.65
convertible Average
111.77 105.43 - 105.43 104.65
bond
Convertible Price
NT$25.9 NT$23.5 NT$23.5 NT$29.7 NT$29.7
per share
Issue date and Issue Date: 2014/1/23 Issue Date: 2015/6/9
conversion price at Conversion price at issuance: Conversion price at
issuance NT$28.1/share issuance: NT$32.6/share
Conversion methods Issuing of new stocks Issuing of new stocks
----- End of picture text -----

4.2.3 Exchangeable Bonds: None

4.2.4 Shelf Registration for Issuing Bonds: None

4.2.5 Corporate Bonds with Warrants: None

4.3 Global Depository Receipts: None

4.4 Employee Stock Options

4.4.1 Issuance of Employee Stock Options

Type of Stock Option	First Grant of 2011
Approval date	2011//07/18
Issue date	2012/07/11
Units issued	2,000,000 shares(2000 units)
Shares of stock options to be issued as apercentage of outstandingshares	1.97%
Duration	5 years. From the second anniversary of the grant date, except that all or partial options revoked by the company, 100% vested options can be exercised without conditions
Conversion measures	Issuingof new stocks
Conditional conversion periods and percentages	From the second anniversary of the grant date :50% From the third anniversary of the grant date: 75% From the fourth anniversaryof thegrant date: 100%
Converted shares	1,084,500 shares
Exercised amount	NT$16,380,100
Number of sharesyet to be converted	915,500 Shares
Adjusted exercise price for those who haveyet to exercise their rights	NT$ 14.2 per share
Unexercised shares as a percentage of total issued shares	0.78%
Impact on possible dilution of shareholdings	As of the printing date of this annual report, the Company’s outstanding shares are 116,271,660. If adding the un-convertible shares, the dilution extent of existingshareholders’ equityonlyimpact 0.78%.

4.4.2 List of Executives Receiving Employee Stock Options and the Top Ten Employees with Stock Options

									As of 05/06/2016	As of 05/06/2016	As of 05/06/2016
	Title	Name	No. of Stock Options	Stock Options as a Percent age of Shares Issued			Exercised			Unexercised
					No. of Shares Converted	Strike Price (NT$)	Amount (NT$ thousands)	Converted Shares as a Percentage of Shares Issued	No. of Shares Converted	Strike Price (NT$)	Amount (NT$ thousands)	Converted Shares as a Percentage of Shares Issued
Executives	Chairman	David Yen	130,000	0.11%	91,250	15.5 14.2	1,380,250	0.07%	38,750	14.2	550,250	0.03%
	Vice President	Leo Liu
	Vice President	Echo Wan
	Executive of Internal Audit Department	Melonie Lin

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----- Start of picture text -----

Project Charlie
Director Hsu
Chairman Benison
(Note 1) Hsu
General
Manager Jack Lai
(Note 2)
Director Julie
(Note 1) Chen
Vice
Sean
President
Wu
(Note 1)
Manager Andys 130,000 0.11% 91,250 1,380,250 0.07% 38,750 550,250 0.03%
(Note 1) Yen
General
Teresa
Manager
Wu
(Note 3)
General
Billy
Manager
Yuen
(Note 4)
Vice
Joan
President
Lee
(Note 5)
Director Irene
(Note 5) Lee
Top Ten Employees
----- End of picture text -----

Note 1 ： The employee of the Company’s subsidiary-Taiwan Express Logistic Co., Ltd.

Note 2 ： The employee of the Company’s subsidiary-T.H.I Group VIETNAM CO.

Note 3 ： The employee of the Company’s subsidiary- Hiview Logistics Co., Ltd.

Note 4 ： The employee of the Company’s subsidiary- T.H.I. Group (Shanghai) Ltd.

Note 5 ： The employee of the Company’s subsidiary- THI Group Limited (H.K).

Note 6: As of Sep 14, 2015, the strike price per share has been adjusted due to distribution of 2014 earning.

4.4.3 Issuance of New Restricted Employee Shares: None.

4.1.4 List of Executives Receiving New Restricted Employee Shares and the Top Ten Employees with New Restricted Employee Shares: None.
4.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.

4.6 Financing Plans and Implementation

In the Company’s past three years and as of the date the annual report is printed, for the previous capital increase plans which have not been completed, or the implementation completion dates of which are less than three years away from the reporting (application) dates, the relevant plan contents and implementation status are explained as follows:

4.6.1. Capital increase plan in 2013 and the 2nd domestic unsecured convertible bond:
Total funds required for the plan: NT$520 million
Source of funds:
(1) 10,000,000 ordinary shares for capital increase were issued with a par value of NT$10 each and an issuing price of NT$22. The expected amount to be raised was NT$220 million. The case was declared to the FSC and effective based on the FSC’s letter dated January 8, 2014 ref. Jin-Guan-Zheng-Fa No. 1020053635.
(2) 3,000 2nd domestic unsecured convertible bonds were issued with a par value of NT$100,000 each and a same issuing price as the par value. The expected amount to be raised was NT$300 million with a duration of three years and a coupon rate of 0%. The case was declared to the FSC and effective based on the FSC’s letter dated January 8, 2014 ref. Jin-Guan-Zheng-Fa No. 10200536351.
3.The Plan and Progress Schedule：

Unit: NT$ thousands

Item	The End of Projected Date	Total Amount	Progress Schedule
			1Q 2014
Repayment Bank Debt	1Q 2014	520,000	520,000
The Projected Benefits	The Company in the financing projects expects to use NT$520 million for the repayment of bank loans to reduce the interest burden of borrowing from financial institutions. It is expected that in 2014 the interest expense can be reduced by about NT$5,063,000, and in 2015 the interest expense can be reduced by about NT$6,752,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks.

The implementation of financing plan：

			Unit: NT$ thousands	Unit: NT$ thousands
Item	Total Amount		Accumulated 1Q 2014	The Reason of Ahead or Behind of Schedule
Repayment Bank Debt	Amount	Projected	520,000	On Schedule
		Actual	520,000
	Executive Progress (%)	Projected	100%
		Actual	100%

This financing project (capital increase +CB) is mainly for repayment of
bank loans to improve the financial structure and enhance the

competitiveness of the Company’s operation:

Note:	Current Ratio	Total Liabilities/Total Assets
Before Fundraising (Year 2013)	138.36	56.18
After Fundraising (1Q2014)	206.67	46.77

Note: Audited Financial Report

4.6.2. Capital increase plan in 2015 and the 3rd domestic unsecured convertible bond:
Total funds required for the plan: NT$600.6 million
Source of funds:
(1) 10,000,000 ordinary shares for capital increase were issued with a par value of NT$10 each and an issuing price of NT$25. The expected amount to be raised was NT$250 million. The case was declared to the FSC and effective based on the FSC’s letter dated May 13, 2015 ref. Jin-Guan-Zheng-Fa No. 1040014509.
(2) 3,000 3rd domestic unsecured convertible bonds were issued with a par value of NT$100,000 each and a same issuing price as the par value. The expected amount to be raised was NT$300 million with a duration of three years and a coupon rate of 0%. The case was declared to the FSC and effective based on the FSC’s letter dated May 13, 2015 ref. Jin-Guan-Zheng-Fa No. 10400145091.
The Plan and Progress Schedule ：

Unit: NT$ thousands

Item	The End of Projected Date	Total Amount	Progress Schedule
			2Q 2015
Repayment Bank Debt	2Q 2015	250,000	520,000
The Projected Benefits	The Company in the financing projects expects to use NT$250 million for the repayment of bank loans to reduce the interest burden of borrowing from financial institutions. It is expected that the interest expense can be reduced by about NT$5,177,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks

			NT$5,177,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks	NT$5,177,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks	NT$5,177,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks	NT$5,177,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks	NT$5,177,000 which will appropriately alleviate the financial burden of the Company and enhance the solvency, as well make the financial structure sound to facilitate the Company's overall operation development and reduce liquidityrisks
			Unit: NT$ thousands
Item	The End of Projected Date	Total Amount	Progress Schedule 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016
				3Q 2015	4Q 2015	1Q 2016	2Q 2016
Operation Capital Increasing	2Q 2016	350,600	40,000	175,000	45,000	45,000	45,600
The Projected Benefits	In the project NT$350.6 million will be used to replenish working capital. According to the Company’s average short-term bank borrowing rate of 1.30%, it is expected that the interest expense can be reduced by about NT$1,899,000 in 2015 and NT$4,558,000 in each of the following years.

4. The implementation of finance plan：

Unit: NT$ thousands

Item	Total Amount	Implementation	Accumulated 4Q 2015	Accumulated 4Q 2015	1Q 2016	1Q 2016	Accumulated 1Q2015	Accumulated 1Q2015	The Reason of Ahead or Behind of Schedule
Repayment Bank Debt	250,000	Amount	Projected	250,000	-	-	Projected	250,000
			Actual	250,000	-	-	Actual	250,000
		Executive Progress (%)	Projected	100%	-	-	Projected	100%
			Actual	100%	-	-	Actual	100%
Operation Capital Increasing	350,600	Amount	Projected	260,000	Projected	45,000	Projected	305,000	The expense expenditure was higher than projected plan.
			Actual	302,156	Actual	48,444	Actual	350,600
		Executive Progress (%)	Projected	74.16%	Projected	12.84%	Projected	86.99%
			Actual	86.18%	Actual	13.82%	Actual	100%
Total	600,600	Amount	Projected	510,000	Projected	45,000	Projected	555,000
			Actual	552,156	Actual	48,444	Actual	600,600
		Executive Progress (%)	Projected	84.91%	Projected	7.49%	Projected	92.40%
			Actual	91.93%	Actual	8.07%	Actual	100%

This financing project (capital increase +CB) is mainly for repayment of bank

loans and increase operating capital to improve the financial structure and enhance the competitiveness of the Company’s operation:

Note:	Current Ratio	Total Liabilities/Total Assets
Before Fundraising (Year2014)	138.36	56.18
After Fundraising (Year 2015)	206.67	46.77

Note: Audited Financial Report

V. Operational Highlights

5.1 Business Activities

With the fast pace of development, today the business scope of the Company and its subsidiaries includes ocean freight, air freight, customs declaration, warehousing, inland transportation, supply chain management, e-commerce, logistics and other integrated logistics services. There are global operating locations throughout Taiwan, China, Northeast Asia, Southeast Asia and other areas. As a professional integrated logistics service provider, in addition to

actively expand overseas strongholds, it works with strategic alliance partners both at home and abroad to enhance its competitive advantage. Internally the Company adopts professional information management and strictly requires the operation norm of staff and services to provide customers with a full range of logistic services.

5.1.1 Business Scope

(1)The main content of business:
A. International freight:
a. Ocean freight.
b. Air freight.
B. Domestic logistics:
a. Customs declaration.
b. Warehousing.
c. Inland transportation.
C. Supply chain management and customize services.

D.E-commerce logistics.

E. The design and plan of logistics
F. The logistics related investments.
(2) Revenue distribution:

Unit ； NT$ thousands

Main Business	2013	2013	2014	2014	2015	2015
	Sales	%	Sales	%	Sales	%
International Ocean Freight	5,084,376	61.08	5,743,989	59.04	5,932,345	60.93
International Air Freight	1,942,486	23.34	2,594,178	26.66	2,538,009	26.07
Logistics	1,296,652	15.58	1,391,346	14.30	1,266,558	13.01
Total	8,323,514	100	9,729,513	100.00	9,736,912	100.00

(3) Main products:
A. Ocean freight

The Company and its subsidiaries have flexible price and cargo space abilities and decades of stable cooperation with shipping companies and

agents with a NVOCC business certificate. In the 11th China Freight Industry Awards sponsored by China Shipping Weekly which is regarded by the industry as the "Oscar for the shipping industry", the subsidiary T.H.I. group (Shanghai) Ltd. received a top 10 award on integrated freight forwarding services and top three on network coverage, and has cargo space contracts with Yangming Marine, Evergreen Marine, China Shipping Container Lines, OOCL, COSCO, CMA, Maersk, HAPAG, APL, Hanjin, NYK, Kline, Zim, and other global major shipping companies. The focus is mainly the Transpacific Coast lines, and it constantly opens up new lines in North Continental Port, Middle East, South America, Eastern Mediterranean and Southeast Asia. Based on its dense service locations in Greater China and the Asia Pacific region, combined with cooperative agencies throughout the world, the Company provides customers with Less than full container load (LCL) single container order services, Full container load (FCL) services, Special container transport, Door-to-door services, Sea-air transport service , and Sea-air-land transport services.

B. Air freight

The Company and its subsidiaries provide transnational corporate service and customized cargo transportation planning capability, are issued Class I and II air accreditation certificates by Civil Aviation Administration of China, and received air freight agent qualification from major global airlines such as EVA, China Airlines (CI), Cathay Pacific (CX), GSA, China Eastern Airlines (MU), Dragon (KA), Hong Kong Aviation (HX), XIAMEN Airlines (MF) etc., as well as the general freight agent qualification in Taiwan area from Air New Zealand (NZ), Russian Aviation (RU), Norwegian Aviation (DY), Tampa La (TA) and Brunei Airlines (BI).

The Company cooperates with global agents to provide global transportation arrangements, Less than full container load (LCL) services, combined land, sea and air multimodal transport, import transportation, bill of lading production and goods packaging services, special cargo export arrangements, commodity inspection, sanitation inspection and animal and plant quarantine service.

C. Domestic logistics:

a. Customs declaration: The Company is an AA grade customs broker in China with locations in major ports and airports. It has set up customs departments to provide enterprises of all types with inspection, customs clearance/declaration, customs inspection, checking and other services,

and according to the customer’s business nature customizes logistic solutions in special customs-supervised areas.

b. Warehousing services: With the support of advanced WMS system, the Company’s warehousing management team has advanced management and application equipment, is equipped with an upscale safety control system and obtained ISO9001 2008 international quality management system certification to provide versatile storage management services. The Company has its own warehouses in major locations, and cooperates with local warehousing and storage vendors in other service locations to provide customers with a base for transit.
c. Inland transportation: The Company’s customized delivery team is supported with a TMS system and full cargo transportation tracking mechanism (GPS), has formed vehicle fleets in the operations locations in Taiwan, Hong Kong, Shenzhen, Guangzhou and Shanghai, and cooperates with local transportation vendors in other locations. The modes of transportation include roads and railways, and the distribution objects cover factories, dealers, shopping malls and supermarkets.
d. E-commerce logistics: The Company has cultivated the B2C delivery logistic market of China, and the service network covers Greater Shanghai, Jiangsu and other regions over 100 spots, which includes extending to the East and Center China regions. The Company has been dedicated to E-commerce, TV shopping, finance and communication etc. fields, providing customers with comprehensive logistics warehousing distribution solutions, integrating the group resources, and customized terminal delivery services which truly solve the customer's logistics, capital flow, and information flow problems.
e. Cross Border China-Europe Rail Transport: The Company has more than 30 offices in China and the long-term cooperation of dozens of agencies in Europe and Asia. It provides door-to-door domestic transportation, transit, and bonded warehouse arrangements.

==> picture [305 x 191] intentionally omitted <==

D. Supply chain management `：`

The Company uses the Group’s sea, air and land resources and global cooperative agents to provide customers with services for procurement of raw materials, warehousing management of raw materials and finished products in the production process, packaging, sorting, labeling, inspection, transit and distribution, as well as helping customers in marketing channel establishment and maintenance. The Company provides a full range of logistics management services for customer relationship management and maintenance and information feedback.

E. Customized services `：`

a. With the customized sea and air transport, sea and river transport, sea and railway transport and joint sea transport, the Company provides cross-border logistic services via sea, air, road and rail transport to connect Chinese inland with Southeast Asia, Central Asia and European inland.

b. Reverse logistic services: After delivering customer goods to the destination, the Company provides disposal, recycling and recovery related transport services for second-hand assets to save operating expenses for customers.

c. Cold chain logistics: The Company develops specialized logistic transport of chemicals, agricultural and marine products and biotechnological products to provide consumers, suppliers and retailers with a cold chain logistics model for integrated demands.

d. Cargo insurance broker: The Company is awarded a license for the cargo insurance brokerage business by the China Insurance Regulatory Commission, and provides customer cargo insurance, acts as an agent for customers to make claims

to insurance companies, and acts on behalf of insurance companies to issue original insurance certificates.

F. Logistics information services `：`

Through the Group’s information system, the Company provides booking information, bill of lading information query, status of the global cargo tracking system and statistical reports. The Company provides information services for every link from order taking to cargo delivery to the destination, and gives rapid and timely information feedback.

G. Introduce the AEO (Authorized Economic operator) system ：

To provide customers with safer, faster and more convenient services, the Company’s subsidiary T.H.I. Logistics and Taiwan Express introduced the AEO supply chain security management system and passed the certification. This system emphasizes that every link in the entire cargo process shall comply with safety regulations to ensure reduction of human errors, sabotages and information leakage in the supply chain system which may result in a risk of damage to the cargo. In particular, European and American countries attach considerable importance to the security of supply chain management, and this system will be promoted to the whole world. Enterprises which are AEO certified will enjoy at the customs clearance of all countries preferential treatments, such as a lower cargo sample testing rate and a shortened testing process, to improve market competitiveness and provide customers with better protection.

H. The logistics service planform of T3EX group:

==> picture [286 x 229] intentionally omitted <==

5.1.2 Industry Overview

(1) Current industry status and development

A. China is still the mainstream of the logistics market, and "technology" will lead logistics enterprises to enter a new era.

According to the data of Armstrong & Associates, the global logistics market development is still quite fast; the size is expected to go up to US$920 million in 2015, and China will be the largest market. With the rapid growth of the logistics market, the construction of logistics infrastructure is also making a synchronous progress at the same time. According to the statistics of Wind, from 2006 to 2013 the highway mileage increased by 26%, the number of civil aviation routes increased by 94%, the railway mileage increased by 10%, and the inland waterway mileage increased by 2%.

In addition to the infrastructure, “technology” can improve the operational efficiency of logistics enterprises, and significantly enhance their competitive advantages. In recent years, big data, cloud computing, internet of things and other emerging technologies have brought logistics enterprises the opportunity to upgrade themselves. For example, SF uses an automated sorting system which through vouchers, computer bar code technology, wireless radio frequency recognition technology and other automatic sorting methods to effectively realize its efficient and accurate sorting operation and enhance the response speed for customer orders. Ririshun cooperated with Tmall and built a new standard of “delivery according to contract, delivery and installation together” logistics and distribution of large objects, and successfully broke through the bottleneck of online home appliances shopping. The “Mid and Long-Term Planning for the Development of Logistics Industry (2014-2020)" released by the Chinese government also proposed the establishment of a modern logistics service system by 2020 to improve logistics industry standards, information, intelligence and level of concentration and improve the overall economic efficiency and effectiveness. Though China’s logistics standardization ushered in a favorable policy, it is still behind in its implementation, and a rapid increase of logistics industry standardization has a very important significance in the strengthening of China's position in the competition of international max logistics.

B . China's economic restructuring causes a close integration of enterprises with logistics

The Chinese government released the "Made in China 2025" plan and set the goal of transforming China from a "large manufacturing country" to a "strong manufacturing country", and integrating information and industrialization with

scientific and technological innovation to transform from "manufacturing" into "intelligent manufacturing". The keys in the transformation of China's manufacturing industry are in the new generation of information and communication technology, smart manufacturing equipment, aviation and aeronautic equipment, biological medicine and high-performance medicine. The logistic demand is not simple or standardized, but covers a full range of logistics and supply chain solutions including production, storage, sorting, packaging, distribution and information processing. According to statistics, China has more than 40 million small and medium enterprises, accounting for 99% of the total number of enterprises and contributing 60% of the country's GDP. As China's manufacturing industry is rapidly developing, the rapid development of small and medium enterprises will promote the transformation of manufacturing industries, and effective logistics and supply chain management will enable Chinese small and medium-sized manufacturing enterprises to reduce customers’ transportation cost and make the use of storage resources efficient.

On the other hand, with the rising labor costs in China's coastal areas, enterprises are gradually moving to the central and western areas, the Chinese manufacturing industry’s demand for logistics is correspondingly expanding, and the relationship between enterprises and logistic companies will become closer. Logistics companies need to provide a more deeply integrated supply chain to address the imbalance in regional logistics while increasing the efficiency of logistics in order to obtain a greater market space.

C. Cross-border competition and allied logistics and e-commerce enterprises

The rapid rise of e-commerce deeply influences China's consumer goods retail business and promotes the development of the logistics industry. However, it is also subject to the threat from the logistics industry. The rapid development of e-commerce companies’ setup of their own logistics and cooperation with third-party courier companies have to a certain extent squeezed the market space of traditional logistic enterprises which mainly rely on route transport and warehousing logistics as the main business. Therefore, how to fully utilize the existing advantages and strengthen the cooperation between logistics and e-commerce has become the problem that traditional logistic enterprises must solve. However, the integration between traditional logistics enterprises and e-commerce has begun, and some traditional logistics enterprises have opened up new markets and achieved their integration with e-commerce logistics by seizing the upstream and downstream of e-commerce logistics, developing large-object courier logistics and participating in the supporting services of e-commerce parks.

D. Cross-border e-commerce logistics will become the next mainstream

According to the forecast of the Ministry of Commerce, China's cross-border import and export volume in 2016 will increase to RMB6.5 trillion, at a continuing annual growth rate of over 30%. Due to strong demand of Chinese consumers for foreign goods, the current major e-commerce companies and traditional logistic companies have to accelerate their layout for overseas import markets. On the export side, 70% of the parcels of cross-border Chinese e-commerce companies’ export business are delivered through the postal system, mainly because the products for export are mostly small in size, light in weight, low in unit price, and a small volume of goods for each order. Some large cross-border e-commerce companies established overseas distribution warehouses and transport goods to overseas warehouses in advance through shipping and other low-cost modes of transport based on sales forecast, and after the order is received their foreign partners will allocate and deliver goods to buyers. This mode subverts the relationship between sellers and logistics businesses and turns it into the sellers’ active control of the logistics supply chain. On the import side, China's import e-commerce is more than three times the size of its export e-commerce. Currently there are the three modes of direct mail, set of goods and bonded, wherein the bonded mode has the highest value for money and is most popular. E-commerce through data forecast enables the delivery of goods in advance to the bonded warehouse in the territory, and after the customer places the order the goods will be picked and allocated from the bonded warehouse and distributed by the domestic logistics and the courier companies directly to the consumer.

E. "Belt and Road Initiative" brings new opportunities for logistics

The new development opportunities brought by the "Belt and Road Initiative" for the logistics industry are both reflected in the integration of logistic resources in the territory of China and the connection with international logistic channels. The implementation of the "Belt and Road Initiative" strategy, in the context of national logistic development strategies and national new urbanization construction, both aims to construct railways, highways, civil aviation and other multimodal max logistics, and has to consider "the last mile" micro-logistics of urban distribution. In addition, China is speeding up port construction to improve the efficiency of trade flow and logistic operations. Surrounding the "Belt and Road Initiative", the Customs Department in its "13th Five-Year Plan" port development plan proposed a focus on the following areas to promote liberalization: First on coastal ports, the focus is on promoting the formation of a number of important hub ports to fully play their leading role; secondly on the border area, through increased cooperation

with neighboring countries and following national development strategies such as the "Belt and Road Initiative" and the Yangtze River economic belt, accelerates and expands the opening of border area ports; thirdly on inland areas, through port legislative reform expands the opening of ports in inland areas to increase inland areas’ railroad ports.

Meanwhile, because the "Belt and Road Initiative" involves complex geopolitical situations and the culture, system and interests of each country are different, the integration and sharing of resources and benefits not only requires the establishment of a negotiation mechanism between China and the countries along the Belt, its requires a lot of platform-based companies for implementation. Therefore, in the future platform-based companies which are able to integrate business flow, logistics, capital flow, information flow and cultural patterns will reap the market and the value in the "Belt and Road Initiative" construction process.

(2)Relationship with Up-, Middle- and Downstream Companies

==> picture [451 x 282] intentionally omitted <==

(3) Product Trends and Competition

In the background of global financial crisis and energy and environmental problems which have caused widespread concerns, low-carbon logistics, logistics with increased value-added services as well as information and intelligence-based logistics have become the trend of logistics development overseas. The modern logistics industry’s level of development has become an important tool for measuring the overall competitiveness of a country and a region.

Therefore, a professional logistic company must have the ability to provide related value-added services to meet customer needs and enhance industrial competitiveness to survive internationally in this era of globalization.

==> picture [460 x 240] intentionally omitted <==

----- Start of picture text -----

Product Trends
3PL & 4PL
Global competition Green logistics Trend Cost Management
China domestic logistics Customers need change Creative operating model
Complicated information Supply chain risk increasing
International multiple logistics
----- End of picture text -----

5.1.3 Research and Development

5.1.3.1 Research and Development Expense in Recent Year: It not apply.

5.1.3.2 Research and Development Accomplishments in the Recent Year: It not

apply

5.1.4 Long Term and Short Term Business Development Plans

5.1.4.1 Short Term Business Development Plan

A. Developing high-margin long-distance services:
Based on International logistics, the Company has 400 plus oversea agencies which located in the global main cities such as United States, Canada, Europe, Asia, New Zealand and Australia. The Company will continue to maintain a strong relations with its agencies to develop high-margin long-distance service and increase LCL business which regard the Greater China Market as based market in order to decrease operating cost as well as increase management efficiency.
B. Horizontal integration- expand air logistics business:

To balance the profit of ocean, air and domestic business, the Company plans to merger air freight forwarding companies in China to expand the scale of air logistics and develop more international customers which can bring more one stop solution of import business.

C. Vertical integration –build comprehensive supply chain management:

The Chinese enterprises want their third party logistics partners to become the professional logistics consultants who can provide more customize and multiple total solution services. Therefore, the Company will keep looking for the targets of supply chain management to extend the deep of comprehensive logistics products, and make import, customs declaration, warehousing and transportation perfect in China.

D. Set up rail project team to develop the cross-border rail freight business:

To following the China policy of the "Belt and Road Initiative", the Company has setting up rail project team in China’s Zhengzhou, Suzhou, Chendu, Chongqing, Hefei, Harbin, and Shenyang to actively promote the new business channel with European agencies. In the future, the Company will continue to earned long-term business contracts with several major import/export enterprises and keep maintain the original customers including high-technology industry, clothing industry, toy industry and food industry to reach economic benefits.

E. Continuing the expansion of overseas bases, and cultivating the next blue-ocean logistic market:

In view of the fact that ASEAN Economic Community (AEC) will be established by the end of 2015 and a free trade area will be established in the region to remove the obstacles to the flow of goods, services, capital and personnel, and as the world's factory will gradually shift to this region, T3EX Group will continue to expand its locations in this region, and India, Myanmar and the Philippines will be the targets for the Group’s next layout in order to grasp business opportunities arising from the ten ASEAN countries and three regional trade agreements.

F. Enhancing information flow and capacity:

To follow the trend of rapid development of information technology and globalization, in addition to providing professional global delivery services, the Company is actively strengthening its global real-time information service system, and has internally completed the integration of the Group’s sea and air import and export, transit, accounting and finance information systems, and is in the process of establishing a customer management information system and a business marketing system to streamline the internal operating procedures and improve work efficiency. Externally the Group combines the computer information systems for customers and

overseas agents to enhance the information exchange capacity and efficiency, extend the supply and tracking of cargo information in order to provide to customers real-time information and reporting required for supply chain management, and accurately control the goods in transit. In response to the rapid development of e-commerce and the visualization requirement for supply chain management, the Group uses IT technology to create an integrated logistics information platform for e-commerce companies’ orders and expand e-commerce companies’ logistics business.

G. Continuing the cultivation of logistic talents with international perspectives:

The number-one business philosophy of the Company and its subsidiaries: people-oriented - emphasis on "professionalism". The professional services related to international sea and air transport are not only transport arrangements, but also interaction and contact with agents, maintenance of good partnerships with airlines or shipping companies and cultivation of long-term relationships with customers. All these must rely on professional knowledge and rich experience.

The Company and its subsidiaries through sound internal pre-service and in-service training provide every employee with the most comprehensive preparation to offer to customers professional and complete services. Meanwhile, through annual meetings and regular overseas job rotations employees can have a broader view of the world for their provision of the most professional service.

5.1.4.2 Long Term Business Development Plan

5.2 Market and Sales Overview

5.2.1 Market Analysis

5.2.1.1 Sales (Service) Regions

The Company and its subsidiaries are logistic service providers, and the main service targets are importers and exporters around the world. The current main business contents are import and export shipping contracts, import and export air cargo contracts and customs clearance, warehousing and land transport services, and the business pattern is mainly export-oriented freight services with export to markets mainly in North America, Europe, Asia, Japan and other advanced countries.

5.2.1.2 Market Share

Among the world’s top ten container ports in 2015, Chinese ports accounted for 68%. In the Group's shipping business, 90% is export business, and nearly 70% is export from China to Europe, the United States and Canada. The Group has set up its own locations or has agents in the world's top ten container ports, and in the total throughput of the world's top ten container ports in 2015, in the unit of TEU for export, the Group's export was 246,866 TEU in 2015, representing about 0.11% of the world's top ten container ports’ throughput.

The world’s top ten container ports in 2015:

2015	2014	Port	Country	10 Thousand TEU	YoY`（`%`）`
1	1	Port of Shanghai	China	3660~3690	4.1~5.0
2	2	Port of Singapore	Singapore	3480~3510	2.7~3.6
3	3	Port of Shenzhen	China	2430~2450	2.5~3.4
		Port of
4	5		China	2160~2180	12.1~13.2
		Ningbo-Zhoushan

		Port of Hong
5	4		China	2130~2150	-4.2~-3.3
		Kong

6	6	Port of Busan	Korea	1925~1940	3.2~4.0
7	7	Port of Qingdao	China	1740~1755	4.7~5.6
		Port of
8	8		China	1712~1728	5.7~6.7
		Guangzhou

9	9	Dubai Port		1655~1670	8.9~9.9
			United Arab

			Emirates
10	10	Port of Tianjin	China	1490~1505	6.2~7.3
		Total		22,382-22,578

Resource: Chinse Academy of sciences

On the global air cargo market, according to the data of International Air Transport Association (IATA), in 2015 the global air cargo transport volume was about 51.3 million tons, and in 2015 the Group's total air cargo volume was 60,577 tons, accounting for about 0.12% of the global air cargo volume.

5.2.1.3 Market Demand, Supply and Growth

On the demand of the ocean logistics market, according to the "Global Port Development Report (2015)" released by the Shanghai International Shipping Center, in 2016 the world's major ports will encounter a turning point in growth and face a zero-growth challenge. However, benefiting from low international oil prices and other factors, in 2016 global ports’ container throughput growth is expected to remain above 3%. On the supply of the shipping market, according Alphaliner’s data, this year the growth of global fleets will slow down, and the expected delivery of new vessels is about 770,000 TEU. Compared with the 8.5% shipping capacity supply in 2015, the current shipping capacity supply is only 3.9%.

In an environment with weak overall market fundamentals and increasingly competitive prices, some liner companies begin to try a new round of mergers and acquisitions. In the short term, the current number of the shipping alliance camp members will change, and their respective market shares will be re-divided. In the mid and long term, the reduction in the number of market players will enhance market concentration of the industry, and impact the existing competitive landscape.

On the air logistics market, in 2015 the global air cargo traffic was weak due to the continued downturn in the global economy and the flat global trade development. IATA’s data shows that in 2015 the air cargo transport volume was about 51.3 million tons, and the world’s scheduled air cargo traffic, measured in freight tonne-kilometers (FTKs), grew by only about 2%, far less than the 4.9% in 2014. More and more airlines use passenger aircrafts instead of dedicated cargo aircrafts to transport goods in order to improve the utilization of cargo capacity. In 2016 it is expected to reach 52.7 million tons, an increase of 2.8%. In 2015 the global air cargo trade volume was about US$5.712 trillion, down 11.3%. In 2016 the total global air cargo trade amount will grow by 3.5% to US$5.911 trillion. On the freight, the unit cost of air cargo transport has been declining. In 2015 the per tonne-kilometer freight revenue was only

about 49% of that in 1995. In 2016 it is expected to further decline to 46%. The continued decline in air freight will stimulate air cargo traffic growth.

Trends in global trade indices and global air cargo traffic

==> picture [377 x 208] intentionally omitted <==

Since the Group’s domestic logistics business is mainly in the Greater China market, the development of China's logistics market will determine the future of the Group's logistics business. 2016 is the start of China's 13th Five-Year Plan, and as China is a market where the economy is affected by the policy, the 13th Five-Year Plan will bring the following policy dividends to the logistics industry:

(1) Prompting professionalism in production related service industries
(2) Speeding up the convergence of the internet in multiple fields
(3) Emergence of several large international integrated transport hubs
(4) Accelerating the pace of the transport and logistics construction in the central region
(5) High-quality integrated three-dimensional transport corridors
(6) "Belt and Road Initiative" as an important economic corridor

In addition, the rapid development of e-commerce in China enables the continued expansion of third-party logistics express delivery market. According to the data of China State Post Bureau, China's express delivery volume is number one in the world. Since 2008, the business volume increased from 1.5 billion 20.67 billion, with an average compound growth rate of 43.9%. In 2015 China's total income of above-scale express delivery business was nearly RMB280 billion, and the seven-year compound annual growth rate reached 31.4%. Driven by e-commerce, express logistics will continue to develop rapidly in the future, particularly in urban distribution and local

home delivery. In addition, according to the data from China Electronic Commerce Research Center, in China there are over 20 cross-border e-commerce companies and more than 5000 platform enterprises. In the first half of 2015, China's total cross-border e-commerce transaction value has exceeded RMB2 trillion, an increase of 42.8% from the previous year, of which imports accounted for 15.2% and exports accounted for 84.8%. 35% of Chinese online shoppers have overseas shopping experience in 2015 and the percentage is increasing rapidly. 73% of the respondents said that price is the main reason for considering cross-border shopping. Thus, cross-border e-commerce logistics will also be the mainstream of the future growth of the logistics industry.

5.2.1.4 Competitive Advantages

A. International layout strategy.

The Company and its subsidiaries already had a clear market positioning at their inception, and their market layout process can be broadly divided into three stages. In the beginning stage the Taiwanese electronics industry and other basic industries already had a larger base, so the Company and its subsidiaries targeted the domestic market demand and provided basic trade services. The second stage started from 1990, when domestic manufacturers started moving overseas for cheap raw materials and labor, especially in Southeast Asia and China. To serve customers the Company also expanded from Taiwan to mainland China and broadly set up business locations in China. To cope with the continuing growth of international trade, the Company and its subsidiaries also expanded the scope of business and transitioned from the early ocean freight services into a logistics investment holding company. Under the holding company platform, the sub-groups can not only provide customers with more services and customer coverage by the complement of product lines and talents, but can also make more effective use of resources and enhance logistics management efficiency. The Company and its subsidiaries have so far set up more than 70 service locations in Hong Kong, mainland China, Vietnam, Thailand, Cambodia, Indonesia, Singapore, Japan, Korea and Malaysia, and established their own international network of agents in more than 100 countries and regions with the service network covering more than 400 locations.

B. A wealth of logistics experience and professionals.

The Company and its subsidiaries have many years of experience and expertise as well as logistic operations professionals, are very familiar with the Chinese lifestyle

and vendors’ sales models and can provide customers with door-to-door and even end-to-end transport. In the future the scope of services will expand to a full-range logistics service mode covering "warehousing and storage management" and "logistics center". When multinational companies cannot agree with the quality of service of the local logistics industry in China, and the foreign logistics industry is unable to grasp the mainland’s market ecology, the Company and its subsidiaries will become their most suitable supply chain partners.

C. Long-term and stable cooperative relations with many shipping companies and airlines.

The Company has established long-term and close business relationships with a number of shipping companies such as the three largest container shipping companies Yangming Shipping, Evergreen Shipping, Wan Hai Lines, and also has cooperation with world-class airlines such as NYK, CMA, OOCL, COSCO, Evergreen, Macau, Cathay Pacific and China Eastern Airlines. The Company has signed a freight forwarding agreement and become a market strategy partner with Shanghai Dazhong Transportation Group to jointly develop the business in Taiwan and the mainland. Greater benefits can be reaped with the mutual and complementary advantages of both parties.

5.2.1.5 Disadvantages and Responsive Strategies

The main targets of international freight services are importers and exporters. The current rapid development of liberalization and globalization of international trade has provided a good niche for the development of the logistics industry. Presently the Company and its subsidiaries have the following advantages to move towards a large-scale professional logistic group.

Advantage ：

Brand: A Taiwanese brand, acting as a platform for integrated services in Taiwan, Hong Kong and China, has the advantage of bridging localization and internationalization.
Distribution: The Company has a complete network of location in Asia and a global network of agents.
Product: The Company offers sea, land, air, river, railway transport, warehousing and a full range of supply chain logistics management services.
Stable cooperative relations: The Company has established long-term and close business relationships with a number of shipping companies.

Human: The Company has a team of professional, innovative and dedicated logistics specialists.
Information: T3EX’s advanced ERP system, WMS, SCM and e-commerce management enable us to provide customized information management services.

Disadvantage:

Risk of variation in currency exchange rate.
Inflation: The cost increase and the consumption decline.
Unstable reginal political and economic circumstance.

Responsive Strategies

For external market changes, immediate react and adjust the business strategy; adjust business and route configuration, and continue to expand cooperation with the industry as well as upstream and downstream manufacturers through acquisitions and strategic alliances to reduce operational risks.

5.2.2 Application of Major Products

Services of the Company and its subsidiaries are mainly integrated international logistics services, which cover comprehensive supply chain management services from the procurement of goods and raw materials and sea, air or land freight transport services for raw materials used in the production process to the packaging, sorting, storage, transit, distribution of semi-finished products and finished products as well as the final document production and management services for customers, the establishment of marketing channels and information feedback.

5.2.3 Supply of Major Material: It not apply.

5.2.4 M Major Suppliers in the Last Two Calendar Years: It not apply.

5.2.4.1 Major Clients in the Last Two Calendar Years: It not apply.

5.2.5 Production in the Last Two Years (Group)

Unit: NT$ thousands

						Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year	2014					2015
Quantity/ Amount	Quantity				Amount	Quantity				Amount
Major Products	TEU	CBM	TON	Shipment		TEU	CBM	TON	Shipment
Sea Export	230,041	619,071	-	-	4,344,089	225,775	548,383	-	-	4,383,845
Sea Import	18,963	38,100	-	-	448,693	22,225	56,673	-	-	449,970
Air Export	-	-	39,880	-	1,887,012	-	-	38,272	-	1,705,967
Air Import	-	-	18,293	-	336,315	-	-	22,304	-	381,261

-	-	-	207,381	1,054,339	-	-	-	209,916	938,597
249,004	657,171	58,173	207,381	8,070,448	248,000	605,056	60,577	209,916	7,859,640

Variation: Through the strategy of developing the total solution logistics, the Company could more effectively control cost and increase gross margin.

5.2.6 Shipments and Sales in the Last Two Years (Group)

Unit: NT$ thousands

						Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year	2014					2015
Quantity/ Amount	Quantity				Amount	Quantity				Amount
Major Products	TEU	CBM	TON	Shipment		TEU	CBM	TON	Shipment
Sea Export	230,041	619,071	-	-	5,220,923	225,775	548,383	-	-	5,382,415
Sea Import	18,963	38,100	-	-	523,066	22,225	56,673	-	-	549,930
Air Export	-	-	39,880	-	2,192,056	-	-	38,272	-	2,061,876
Air Import	-	-	18,293	-	402,122	-	-	22,304	-	476,133
Logistics	-	-	-	207,381	1,391,346	-	-	-	209,916	1266,558
Total	249,004	657,171	58,173	207,381	9,729,513	248,000	605,056	60,577	209,916	9,736,912

Variation ： Through the strategy of developing the total solution logistics, the Company increased businesses and profit.

5.3 Human Resources

I. T3EX Global Holdings Corp.

	Year	2014	2015	Data as of ending data in the current year
Number of Employees	Sales	0	0	0
	Administrative Person	31	38	35
	Total	31	38	35
Average Age		38.76	42	41
Average Years of Service		5.35	4.4	4.6
Education	Ph.D.	0.00	0.00%	0.00%
	Masters	26.00%	23.68%	22.86%
	Bachelor’s Degree	74.00%	76.32%	77.14%
	Senior High School	0.00%	0.00%	0.00%
	Below Senior High School	0.00%	0.00%	0.00%

II. T3EX Group

	Year	2014	2015	Data as of ending data in the current year
Number of Employees	Sales	1,214	1,213	1,197
	Administrative Person	348	334	329
	Total	1,562	1,547	1,526
Average Age		38.76	31.39	32.38
Average Years of Service		5.35	3.90	4.79
Education	Ph.D.	0.06%	0.06%	0.05%
	Masters	1.00%	1.75%	1.72%
	Bachelor’s Degree	84.15%	78.35%	81.40%
	Senior High School	9.57%	15.19%	12.21%
	Below Senior High School	5.22%	4.65%	4.62%

5.4 Environmental Protection Expenditure

In 2015 and as of the date of this annual report, the Company did not incur any loss or receive any penalty for major environmental pollution. There are designated personnel within the company who are in charge of environmental protection in compliance with the legal requirements. Waste clearance and disposal, emission discharge and environmental measurement have been conducted and controlled by management procedures.

5.5 Employee Re lations

5.5.1 Employee’s Welfare and Benefit

a. Employee welfare and benefit

Employee welfare and benefit are provided by both the Company and the Company’s Employee Welfare Committee. Corporate benefit program offered to employees include group insurance, travel insurance on business trips, meal subsidies, year-end bonus, performance bonus, etc. The details of welfare and benefit will be announced through announcement, company’s website and e-hr system.

b. Professional training program

We place great emphasis on career planning and talent development for employees by encouraging employees to attend internal and external training programs. Internal training programs include courses for core competence and professional development

to enhance employees’ capabilities, while external training programs include seminars or conferences organized by external parties that provide excellent training opportunities for employees.

Internal Training	Times	Training Expense
560 classes	2,305hours	NT$ 631,000
Internal Program`：` a. The Middle East Market Analysis b. The Production of Central China Logistics c. The Basic Program of ISO 9001 Regulation d. The Training of ISO 9001 Internal Quality Audit e. The application of New Account Receivable Management f. The Training of the Evaluation of AEO Risk. g. The Development of International Green Logistics h. The Introduction of Internal forms. i. Supply Chain Management. j. The Training of ETP Program k. The Operation of Export and Import. l. New Employees Training m. PowerPoint Training n. Project Management Training o. The Plan and Implementation of International Logistics Distribution Center

l. New Employees Training m. PowerPoint Training n. Project Management Training o. The Plan and Implementation of International Logistics Distribution Center	l. New Employees Training m. PowerPoint Training n. Project Management Training o. The Plan and Implementation of International Logistics Distribution Center	l. New Employees Training m. PowerPoint Training n. Project Management Training o. The Plan and Implementation of International Logistics Distribution Center
p. The Input of ERP and CRM System
External Training	Times	Training Expense
55classes	170hours	NT$ 385,000
External Program`：` a. The Fraud Audit Training b. The Management of Account Receivable Risk estimation c. The Training of New Internal Audit Regulation d. The hedge of the investment of board of directors e. The Labor Standard Act Amendment f. The Training of Labor Safety Management g. Supply Chain Management h. The Training of Dangerous Logistics i. China and Taiwan customs declaration business j. The Regulations of Dangerous Products

k. The Skill of Strategic Audit

l. Transform and Enhance for Corporation

m. The Tax and IFRS

n. AEO Program

o. The Recognition of the Safety of Mail Boxes

c. Retirement system

The Company’s retirement policy is in accordance with the provisions in the Labor Standards Law and Labor Pension Act of the Republic of China.

d. Employee rights

The Company always emphasizes employee benefits as well as harmonious labor relations, and we highly value employee’s opinions and feedbacks, which can be submitted via employee mailbox, conferences and emails. Employees can fully express their opinions, raising any labor issues to promote and maintain a positive labor relationship.

e. Employees code of conduct

Pursuing sustainable corporate development and embracing integrity is our highest guiding principle, and the Company has established Business Ethic Guidelines. Based on the Business Ethic Guideline, employees are required to strictly follow the moral standards and advocate honesty, integrity and confidentiality to protect the rights of the Company and shareholders and enhance the Company’s competitiveness.

5.5.2 Any current or potential loss resulting from labor disputes and prevention actions for the past two years and as of the date of this annual report.

There have not been any material losses resulting from major labor disputes for the past two years and as of the date of this annual report.

5.6 Important Contracts

Agreement	Counterparty	Period	Major Contents	Restrictions
Directors and Officers Liability Insurance	Cathay Century Insurance	2015/9/11~2016/9/11	For losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers.	The Coverage Limit is US$3,000,000
Software Contract	Advanced TEK International Corp	2013/08/20	Oracle Software Contract	None
Server Foundation	BOX Solutions Corp	2014/09/08	The Mail Server Foundation and Maintain	None
Software Contract	Internet Information Co., Ltd.	2014/05/01	HR System	None

VI. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheet

A. Consolidated Condensed Balance Sheet – Based on IFRS

Unit: NT$ thousands

ear Item	ear Item	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	1Q2016
		2011	2012	2013	2014	2015
Current assets		NA	2,090,051	2,360,757	3,011,312	3,385,769	3,125,005
Property, Plant and Equipment			286,190	265,059	276,664	337,171	329,041
Intangible assets			339,375	333,371	326,560	720,469	717,479
Other assets			238,933	271,542	325,738	315,250	374,344
Total assets			2,954,549	3,230,729	3,940,274	4,758,659	4,545,869
Current liabilities	Before distribution		1,687,596	1,706,197	1,627,457	1,564,095	1,557,262
	After distribution		1,716,226	1,774,276	1,772,621	-	-
Non-current liabilities			79,607	108,953	283,346	558,519	410,460
Total liabilities	Before distribution		1,767,203	1,815,150	1,910,803	2,122,614	1,967,722
	After distribution		1,795,833	1,883,229	2,055,967	-	-
Equity attributable to shareholders of the parent			1,164,644	1,388,541	1,992,136	2,506,418	2,455,227
Capital stock			726,648	794,297	983,981	1,160,421	1,162,717
Capital surplus			356,942	410,144	629,395	867,214	870,167
Retained earnings	Before distribution		150,795	201,493	284,581	390,641	402,622
	After distribution		97,113	104,237	103,126	-	-
Other equity interest			(48,508)	3,840	115,412	98,778	57,285
Treasury stock			(21,233)	(21,233)	(21,233)	(10,636)	(37,564)
Non-controlling interest			22,702	27,038	37,335	129,627	122,920
Total equity	Before distribution		1,187,346	1,415,579	2,029,471	2,636,045	2,578,147
	After distribution		1,158,716	1,347,500	1,884,307	-	-

B. Consolidated Condensed balance sheet – Based on ROC GAAP

Unit: NT$ thousands

Year Item	Year Item	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
		2011	2012	2013	2014	2015
Current assets		2,050,671	2,104,413	NA
Funds & Long-term investments		46,255	46,482
Fixed assets		304,807	288,640
Intangible assets		347,122	365,918
Other assets		177,303	176,156
Total assets		2,926,158	2,981,609
Current liabilities	Before distribution	1,136,125	1,684,660
	After distribution	1,173,656	1,713,290
Long-term liabilities		506,237	21,089
Other liabilities		24,978	49,877
Total liabilities	Before distribution	1,667,340	1,755,626
	After distribution	1,704,871	1,784,256
Capital stock		639,076	726,648
Capital surplus		355,808	356,942
Retained earnings	Before distribution	205,277	147,943
	After distribution	167,746	94,261
Unrealized gain or loss on financial instruments		-	-
Cumulative translation adjustments		51,610	3,102
Net loss unrecognized aspension cost		-	(10,121)
Total equity	Before distribution	1,258,818	1,225,983
	After distribution	1,221,287	1,197,353

6.1.2 Condensed Individual Balance Sheet

A. Condensed Individual Balance Sheet- Based on IFRS

Unit: NT$ thousands

ear Item	ear Item	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
		2011	2012	2013	2014	2015
Current assets		NA	57,718	307,659	120,195	308,347
Property, Plant and Equipment			184,176	183,414	198,954	198,754
Intangible assets			6,460	7,001	6,560	11,227
Other assets			1,666,968	1,890,329	2,233,894	2,792,687
Total assets			1,915,322	2,388,403	2,559,603	3,311,015
Current liabilities	Before distribution		727,298	940,106	345,360	306,249
	After distribution		755,928	1,008,185	635,688	-
Non-current liabilities			23,380	59,756	222,107	498,348
Total liabilities	Before distribution		750,678	999,862	567,467	804,597
	After distribution		779,308	1,067,941	712,631	-
Capital stock			726,648	794,297	983,981	1,160,421
Capital surplus			356,942	410,144	629,395	867,214
Retained earnings	Before distribution		150,795	201,493	284,581	390,641
	After distribution		97,113	104,237	103,126	-
Other equity interest			(48,508)	3,840	115,412	98,778
Treasury stock			(21,233)	(21,233)	(21,233)	(10,636)
Total equity	Before distribution		1,164,644	1,388,541	1,992,136	2,506,418
	After distribution		1,136,014	1,320,462	1,846,972	-

B. Condensed Individual Balance Sheet- Based on ROC GAAP

Unit: NT$ thousands

Year Item	Year Item	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
		2011	2012	2013	2014	2015
Current assets		243,917	58,097	NA
Funds & Long-term investments		1,575,033	1,689,934
Fixed assets		192,930	184,176
Intangible assets		6,051	6,790
Other assets		18,122	14,130
Total assets		2,036,053	1,953,127
Current liabilities	Before distribution	322,765	726,152
	After distribution	360,296	754,782
Long-term liabilities		452,373	-
Other liabilities		23,692	23,694
Total liabilities	Before distribution	798,830	749,846
	After distribution	836,361	778,476
Capital stock		639,076	726,648
Capital surplus		355,808	356,942
Retained earnings	Before distribution	205,277	147,943
	After distribution	80,174	94,261
Unrealized gain or loss on financial instruments		-	-
Cumulative translation adjustments		-	(10,121)
Net loss unrecognized	aspension cost	(14,548)	(21,233)
Total equity	Before distribution	1,237,223	1,203,281
	After distribution	1,119,969	1,174,651

6.1.3 Condensed Statement of Comprehensive Income/Condensed Statement of

Income

A. Consolidated Condensed Statement of Comprehensive Income – Based on

IFRS

Unit: NT$ thousands

	Unit: NT$	Unit: NT$	Unit: NT$	Unit: NT$	Unit: NT$	thousands
ear Item	Financial Summary for The Last Five Years					1Q2016
	2011	2012	2013	2014	2015
Operatingrevenue	NA	8,643,377	8,323,514	9,729,513	9,736,912	2,213,862
Grossprofit		1,264,574	1,395,725	1,659,065	1,877,272	414,972
Income from operations		101,830	166,796	225,141	312,196	7,966
Non-operating income and expenses		(2,276)	(2,896)	48,765	85,061	14,237
Income before tax		99,554	163,900	273,906	397,257	22,203
Net income (Loss)		64,612	108,691	206,665	303,900	6,336
Other comprehensive income (income after tax)		(48,508)	52,373	111,077	(24,070)	(43,694)
Total comprehensive income		16,104	161,064	317,742	279,830	(37,358)
Net income attributable to shareholders of theparent		63,505	104,380	199,512	293,820	11,981
Net income attributable to non-controllinginterest		1,107	4,311	7,153	10,080	(5,645)
Comprehensive income attributable to Shareholders of theparent		14,997	156,728	307,445	270,881	(29,512)
Comprehensive income attributable to non-controllinginterest		1,107	4,336	10,297	8,949	(7,846)
Earningsper share		0.89	1.40	2.14	2.70	0.10

B. Consolidated Condensed Statement of Income – Based on ROC GAAP

Unit: NT$ thousands

Yea r Item	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
	2011	2012	2013	2014	2015
Operatingrevenue	7,935,051	8,643,377	NA
Grossprofit	1,332,124	1,264,574
Income from operations	220,041	106,094
Non-operatingincome	21,918	27,612
Non-operatingexpenses	55,243	29,888
Income before tax	186,716	103,818
Income from operations of continued segments - after tax	145,769	68,876
Income from discontinued operations	-	-
Extraordinary gain or loss	-	-
Cumulative effect of accounting principle changes	-	-
Net income	145,769	68,876
Net income attributable to shareholders of theparent	142,024	67,769
Earningsper share	2.37	0.95

100

6.1.3 Condensed Individual Statement of Income

A. Condensed Individual Statement of Income- Based on IFRS

Unit: NT$ thousands

	Unit: NT$	Unit: NT$	Unit: NT$	Unit: NT$	Unit: NT$
ear Item	Financial Summary for The Last Five Years
	2011	2012	2013	2014	2015
Operatingrevenue	NA	972,860	149,770	272,824	415,213
Grossprofit		201,352	101,936	190,484	292,966
Income from operations		74,435	101,936	190,484	292,966
Non-operating income and expenses		(10,972)	2,450	10,107	1,902
Income before tax		63,463	104,386	200,591	294,868
Net income(Loss)		63,505	104,380	199,512	293,820
Other comprehensive income (income after tax)		(48,508)	52,348	107,933	(22,939)
Total comprehensive income		14,997	156,728	307,445	270,881
Net income attributable to shareholders of theparent		63,505	104,380	199,512	293,820
Net income attributable to non-controllinginterest		-	-	-	-
Comprehensive income attributable to Shareholders of theparent		14,997	156,728	307,445	270,881
Comprehensive income attributable to non-controllinginterest		-	-	-	-
Earningsper share		0.89	1.40	2.14	2.70

101

B. Condensed Individual Statement of Income- Based on ROC GAAP

Unit: NT$ thousands

Yea r Item	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years	Financial Summary for The Last Five Years
	2011	2012	2013	2014	2015
Operatingrevenue	1,040,925	895,565	NA
Grossprofit	159,114	131,070
Income from operations	6,779	(4,389)
Non-operatingincome	155,557	86,871
Non-operatingexpenses	21,807	14,755
Income before tax	140,529	67,727
Income from operations of continued segments - after tax	142,024	67,769
Income from discontinued operations	-	-
Extraordinary gain or loss	-	-
Cumulative effect of accounting principle changes	-	-
Net income	142,024	67,769
Earningsper share	2.37	0.95

6.1.4 Auditors’ Opinions from 2011 to 2015

Year	CPA’s Name	CPA Firm	Auditing Opinion
2011	GUAN-WEN LU& TZU-HUEI LI	KPMG	Modified Unqualified
2012	Peggy Chen & HENG- SHENG LIN	KPMG	Modified Unqualified
2013	Peggy Chen & HENG- SHENG LIN	KPMG	Modified Unqualified
2014	Peggy Chen & HENG- SHENG LIN	KPMG	Modified Unqualified
2015	Peggy Chen & HENG- SHENG LIN	KPMG	Modified Unqualified

102

6.2 Five-Year Financial Analysis

6.2.1 Consolidated Financial Analysis

A. Consolidated Financial Analysis – Based on IFRS

Item	Year	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	1Q2016
		2011	2012	2013	2014	2015
Financial structure (%)	Debt Ratio	NA	59.81	56.18	48.49	44.61	43.29
	Ratio of long-term capital to property, plant and equipment		442.70	575.17	835.97	947.46	908.28
Solvency (%)	Current ratio		123.85	138.36	185.03	216.47	200.67
	Quick ratio		121.14	134.93	182.72	213.68	197.82
	Interest earned ratio(times)		5.72	12.75	25.67	41.73	4.22
Operating performance	Accounts receivable turnover (times)		6.48	5.91	6.21	6.20	6.35
	Average collectionperiod		56.31	61.78	58.78	58.87	57.48
	Inventoryturnover(times)		-	-	-	-	-
	Accounts payable turnover (times)		12.76	10.58	10.28	9.88	11.05
	Average days in sales		-	-	-	-	-
	Property, plant and equipment turnover(times)		30.09	30.20	35.92	31.72	26.58
	Total assets turnover(times)		2.94	2.69	2.71	2.24	1.90
Profitability	Return on total assets(%)		2.80	3.89	6.02	6.94	0.38
	Return on stockholders' equity (%)		5.38	8.35	12.00	13.06	0.48
	Pre-tax income to paid-in capital(%)		13.70	20.63	27.84	34.23	1.91
	Profit ratio(%)		0.75	1.31	2.12	3.12	0.29
	Earningsper share(NT$)		0.89	1.40	2.21	2.70	0.10
Cash flow	Cash flow ratio (%)		8.80	5.64	13.90	32.73	Note2
	Cash flow adequacy ratio (%)		107.24	97.83	69.22	90.20	173.89
	Cash reinvestment ratio (%)		10.72	5.09	7.35	13.75	Note2
Leverage	Operating leverage		5.19	3.63	3.19	2.96	15.07
	Financial leverage		1.26	1.09	1.05	1.03	7.44
Analysis of financial ratio differences for the last two			years.
1. Interest earned ratio (times):The ratio increased in 2015 due to the increase in profit before tax
and the decrease in expense.
2. Ratios of profitability: The ratios increased in 2015 due to the increase in profit and profit
before tax. 3. Ratios of cash flow: The ratios increased in 2015 due to the increase in net cash flow in operating activity.

Note 1: Equations:

103

1. Capital Structure

(1) Debt ratio = Total liability / Total assets

(2) Ratio of long-term capital to property, plant and equipment = (Net shareholders’ equity + Long-term liability) / Net property, plant and equipment

2. Solvency

(1) Current ratio: Current assets / current liability

(2) Quick ratio = (Current assets – Inventory – Prepaid expense) / current liability

(3) Times interest earned = Net income before tax and interest expense / Interest expense of the year

3. Operating ability

(1) Account receivable turnover (including accounts receivable and notes receivable derived from business operations) = Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business

operation)

(2) Days sales in accounts receivable = 365 / Account receivable turnover

(3) Inventory turnover = Cost of goods sold / Average inventory amount

(4)Account payable turnover (including accounts payable and notes payable derived from business operation) = Cost of goods sold / Average accounts payable (including accounts payable and notes payable derived from business operation)

(5) Average days in sales = 365 / Inventory turnover

(6) Fixed assets turnover = Net sales / Net fixed assets
(7) Total assets turnover = Net sales / Total assets
Profitability

(1) Return on assets = (Net income (loss) + interest expense x (1-tax rate)) / Average total assets

(2) Return on shareholders’ equity = Net income (loss) / Net average shareholders’ equity

(3) Return to issued capital stock = Net income before tax / Issued capital stock

(4) Profit ratio = Net income (loss) / Net sales

(5) Basic earnings per share = (Net income – preferred stock dividend) / Weighted average stock shares issued

Cash flow

(1) Cash flow ratio = Bet cash flow from operating activity / Current liability

(2) Cash flow adequacy ratio = Net cash flow from operating activity in the past 5 years / (Capital expenditure + Inventory interest + Cash dividend) in the past 5 years

(3) Cash + reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Fixed assets + Long term investment + Other assets + Working capital)

Balance

(1) Degree of operating leverage = (Net operating income – Variable operating cost and expense) / Operating income)

(2) Degree of financial leverage = Operating income / (Operating income – interest expense)

Note 2: The net cash flow in operating activity is negative, it not apply.

104

B. Consolidated Financial Analysis – Based on ROC GAAP

Item	Year	Year	Financial Analysis for the Past Five Years	Financial Analysis for the Past Five Years	Financial Analysis for the Past Five Years	Financial Analysis for the Past Five Years	Financial Analysis for the Past Five Years
			2011	2012	2013	2014	2015
Financial structure (%)	Debt Ratio		56.98	58.88
	Ratio of long-term capital to fixed assets		568.28	432.05
Solvency (%)	Current ratio		180.50	124.92
	Quick ratio		170.71	118.42
	Interest earned ratio(times)		9.78	5.93
Operating performance	Accounts receivable turnover (times)		6.66	6.48
	Average collectionperiod		55	56
	Inventoryturnover(times)		-	-
	Accounts payable turnover (times)		30.25	28.60
	Average days in sales		-	-
	Fixed assets turnover(times)		27.23	29.13
	Total assets turnover(times)		2.89	2.93
Profitability	Return on total assets(%)		5.95	2.92
	Return on stockholders' equity (%)		13.54	5.54
	Ratio to issued capital (%)	Operating income	34.43	14.60
		Pre-tax income	29.22	14.29
	Profit ratio	(%)	1.84	0.80
	Earningsper share(NT$)		2.37	0.95
Cash flow	Cash flow ratio (%)		Note	9.14
	Cash flow adequacy ratio (%)		46.76	98.57
	Cash reinvestment ratio (%)		Note	8.07
Leverage	Operating leverage		1.21	1.51
	Financial leverage		1.11	1.25

Note 1: Equations:

Capital Structure
(1) Debt ratio = Total liability / Total assets

(2) Ratio of long-term capital to fixed assets = (Net shareholders’ equity + Long-term liability) / Net fixed assets

Solvency
(1) Current ratio: Current assets / current liability

(2) Quick ratio = (Current assets – Inventory – Prepaid expense) / current liability

(3) Times interest earned = Net income before tax and interest expense / Interest expense of the year

Operating ability
(1) Account receivable turnover (including accounts receivable and notes receivable derived from business operations) =

105

Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business

operation)

(2) Days sales in accounts receivable = 365 / Account receivable turnover
(3) Inventory turnover = Cost of goods sold / Average inventory amount
(4)Account payable turnover (including accounts payable and notes payable derived from business operation) = Cost of goods sold / Average accounts payable (including accounts payable and notes payable derived from business operation)
(5) Average days in sales = 365 / Inventory turnover
(6) Fixed assets turnover = Net sales / Net fixed assets
(7) Total assets turnover = Net sales / Total assets

4. Profitability

(1) Return on assets = (Net income (loss) + interest expense x (1-tax rate)) / Average total assets

(2) Return on shareholders’ equity = Net income (loss) / Net average shareholders’ equity

(3) Return to issued capital stock = Net income before tax / Issued capital stock
(4) Profit ratio = Net income (loss) / Net sales

(5) Basic earnings per share = (Net income – preferred stock dividend) / Weighted average stock shares issued

5. Cash flow

(1) Cash flow ratio = Bet cash flow from operating activity / Current liability
(2) Cash flow adequacy ratio = Net cash flow from operating activity in the past 5 years / (Capital expenditure + Inventory interest + Cash dividend) in the past 5 years
(3) Cash + reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Fixed assets + Long term investment + Other assets + Working capital)

6. Balance

(1) Degree of operating leverage = (Net operating income – Variable operating cost and expense) / Operating income

(2) Degree of financial leverage = Operating income / (Operating income – interest expense)

Note: The net cash flow in operating activity is negative, it not apply.

106

6.2.2 Individual Financial Analysis

A. Individual Financial Analysis- Based on IFRS

Item	Year	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years
		2011	2012	2013	2014	2015
Financial structure (%)	Debt Ratio	NA	39.19	41.86	22.17	24.30
	Ratio of long-term capital to property, plant and equipment		645.05	789.63	1,112.94	1,511.80
Solvency (%)	Current ratio		7.94	32.73	34.80	100.69
	Quick ratio		6.91	29.98	31.69	97.20
	Interest earned ratio(times)		6.06	10.78	22.12	38.26
Operating performance	Accounts receivable turnover(times)		14.15	15.93	8.70	8.89
	Average collectionperiod		26	23	42	41
	Inventoryturnover(times)		-	-	-	-
	Accounts payable turnover (times)		92.84	9.65	12.64	43.01
	Average days in sales		-	-	-	-
	Property, plant and equipment turnover(times)		5.16	0.81	1.43	2.09
	Total assets turnover(times)		0.49	0.07	0.11	0.14
Profitability	Return on total assets(%)		3.75	5.26	8.38	10.23
	Return on stockholders' equity (%)		5.39	8.18	11.80	13.06
	Pre-tax income to paid-in capital(%)		8.73	13.14	20.39	25.41
	Profit ratio(%)		6.53	69.69	73.13	70.76
	Earningsper share(NT$)		0.89	1.40	2.20	2.70
Cash flow	Cash flow ratio (%)		0.03	Note1	Note1	Note1
	Cash flow adequacy ratio (%)		74.42	48.73	14.84	7.58
	Cash reinvestment ratio (%)		Note1	Note1	Note1	Note1
Leverage	Operating leverage		1.53	1.00	1.00	1.00
	Financial leverage		1.20	1.12	1.05	1.03

107

Analysis of financial ratio differences for the last two years. 1. Ratio of long-term capital to property, plant and equipment: The ratio increased in 2015 due to the increase in equity. 2. Current ratio & quick ratio: The ratios increased in 2015 due to the increase in cash. 3. Interest earned ratio (times): The ratio increased in 2015 due to the increase in profit before tax and the decrease in expense. 4. Accounts payable turnover: The ratio increased in 2015 due to the increase in operating cost. 5. Property, plant and equipment turnover & Total assets turnover: The ratio increased in 2015 due to the increase in sales. 6. Ratios of profitability: The ratios increased in 2015 due to the increase in profit and profit before tax. 7. Cash flow adequacy ratio: The ratio increased in 2015 due to the increase in net cash flow in operating activity.

Note1: it was negative.

Note2:

1. Capital Structure

(1) Debt ratio = Total liability / Total assets

(2) Ratio of long-term capital to property, plant and equipment = (Net shareholders ’ equity + Long-term liability)

/ Net property, plant and equipment

Solvency
(1) Current ratio: Current assets / current liability

– – (2) Quick ratio = (Current assets Inventory Prepaid expense) / current liability

(3) Times interest earned = Net income before tax and interest expense / Interest expense of the year

3. Operating ability

(1) Account receivable turnover (including accounts receivable and notes receivable derived from business

operations) =

Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from

business operation)

(2) Days sales in accounts receivable = 365 / Account receivable turnover

(3) Inventory turnover = Cost of goods sold / Average inventory amount

(4)Account payable turnover (including accounts payable and notes payable derived from business operation) =

Cost of goods sold / Average accounts payable (including accounts payable and notes payable derived from

business operation)

(5) Average days in sales = 365 / Inventory turnover

(6) Fixed assets turnover = Net sales / Net fixed assets

(7) Total assets turnover = Net sales / Total assets

4. Profitability

(1) Return on assets = (Net income (loss) + interest expense x (1-tax rate)) / Average total assets

(2) Return on shareholders ’ equity = Net income (loss) / Net average shareholders ’ equity

108

(3) Return to issued capital stock = Net income before tax / Issued capital stock
(4) Profit ratio = Net income (loss) / Net sales
(5) Basic earnings per share = (Net income preferred stock dividend) / Weighted average stock shares issued
Cash flow
(1) Cash flow ratio = Bet cash flow from operating activity / Current liability

(2) Cash flow adequacy ratio = Net cash flow from operating activity in the past 5 years / (Capital expenditure + Inventory interest + Cash dividend) in the past 5 years

– (3) Cash + reinvestment ratio = (Net cash flow from operating activity Cash dividend) / (Fixed assets + Long

term investment + Other assets + Working capital)

Balance

– (1) Degree of operating leverage = (Net operating income Variable operating cost and expense) / Operating income)

– (2) Degree of financial leverage = Operating income / (Operating income interest expense)

109

6.3 Supervisors’ Report in the Most Recent Year

T3EX Global Holdings Corp. Audit Report by Supervisors

Date: March 14, 2016

The Board of Directors has prepared the T3EX Global Holdings Corporation’s (“the Company)” 2015 Business Report, financial statements, and proposal for earning distribution. The CPA firm of KPMG was retained to audit the Company’s financial statements and has issued an audit report relating to the financial statements. The above Business Report, financial statements, and earning distribution proposal have been examined and determined to be correct and accurate by the Supervisor of T3EX Global Holdings Corporation. Pursuant to Article 219 of the Company Act, we hereby submit this report.

Submitted to:

2016 Regular Shareholders’ Meeting of the Company

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Supervisor: Tien-Yuan Tsai

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Supervisor: Ji-Zhi Hsieh

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Supervisor: Shen-Li Liao

6.4 Consolidated Financial Statements of the Parent Company and Subsidiary in

the Most Recent Year: Please refer page 127~199

6.5 Non-Consolidated Financial Statements of the Most Recent Year:

Please refer page 200~265

6.6 Financial Difficulties Encountered By the Company and the Related Party in the Most Recent Year and Up to the Date of the Annual Report: None.

110

VII. Review of Financial Position, Management Performance and Risk

Management.

7.1 Analysis of Financial Status

Unit: NT$ thousands

			Unit: NT$ thousands	Unit: NT$ thousands
Year Item	2014	2015	Difference
			Amount	%
Current Assets	3,011,312	3,385,769	374,457	12.44
Fixed Assets	276,664	337,171	60,507	21.87
Intangible Assets	326,560	720,469	393,909	120.62
Other Assets	325,738	315,250	(10,488)	(3.22)
Total Assets	3,940,274	4,758,659	818,385	20.77
Current Liabilities	1,627,457	1,564,095	(63,362)	(3.89)
Long-term Liabilities	283,346	558,519	275,173	97.12
Total Liabilities	1,910,803	2,122,614	211,811	11.08
Capital stock	983,981	1,160,421	176,440	17.93
Capital surplus	629,395	867,214	237,819	37.79
Retained Earnings	284,581	390,641	106,060	37.27
Other Equity	115,412	98,778	(16,634)	(14.41)
Treasury Stock	(21,233)	(10,636)	10,597	(49.91)
Non-controlling interests	37,335	129,627	92,292	247.20
Total Stockholders' Equity	2,029,471	2,636,045	606,574	29.89
Analysis of changes in financial ratios: Fixed Assets: The increase was mainly due to new subsidiaries’investments. Intangible Assets: The increase was mainly due to new subsidiaries investments. Long-term Liabilities: The increase was due to issue the 3rdDomestic Unsecured Convertible Bonds. Capital surplus: The increase was due to execute the capital increase plan in 2015 and the 3rd domestic unsecured convertible bond. Retained Earnings: The increase in 2015 was due to the increase in net profit. Treasury Stock: The employees transferred treasury stock resulted in the increase of treasury stock. Non-controllinginterests:The increase was mainly due to new subsidiaries’investments.

 Effect of changes on the company’s future business and Future response action:

111

The Company acquired new shares of subsidiaries resulted in the increase of total assets and liabilities.

7.2 Analysis of Financial Performance

Unit: NT$ thousands

Year Item	2014	2015	Difference	Difference
			Amount	%
Sales	9,729,513	9,736,912	7,399	0.08
Cost of Sales	8,070,448	7,859,640	(210,808)	(2.61)
Gross Profit	1,659,065	1,877,272	218,207	13.15
OperatingExpenses	1,433,924	1,565,076	131,152	9.15
OperatingIncome	225,141	312,196	87,055	38.67
Non-operatingIncome and Expenses	48,765	85,061	36,296	74.43
Income Before Tax	273,906	397,257	123,351	45.03
Tax Expense	67,241	93,357	26,116	38.84
Net Income	206,665	303,900	97,235	47.05
Analysis of changes in financial ratios: Operating Income: The increase was due to the increase of gross profit. Non-operating Income and Expenses: The increase was due to the gain of exchange rate. Income Before Tax: The increase was due to the increase of gross profit. Tax Expense: The increase was due to the increase of income before tax. Net Income: The increase was due to the increase ofgrossprofit.

 Effect of changes on the company’s future business and Future response action:

The Company will continue to develop international logistics business with oversea, expand new locations, and deeply develop warehousing, customs declaration, and inland transport to become a total solution logistics company.

112

7.3 Analysis of Cash Flow

7.3.1 Cash Flow Analysis for the Current Year

Unit: NT$ thousands

Year Item	2014	2015	Variance	Variance
			Amount	(%)
Cash flows from operatingactives	226,274	511,974	285,700	126.26
Cash flows from investingactives	(58,555)	(111,382)	(52,827)	90.22
Cash flows from financingactives	86,630	202,476	115,846	133.73
Net cash flows	254,349	603,068	348,719	137.10
Analysis of financial ratio change: Cash flows from operating actives: The increase were due to the increase of profit before tax and
the decrease of account receivables. Ch fl frm intin ti Th Cmn intd n bidiri rltd in th h
as ows o vesg acves: e opay vese ew susaes esue e cas outflow. Cash flows from financing actives: The increase was due to issue the 3rdunsecured convertible bond and capital increasing plan.

7.3.2 Remedy for Cash Deficit and Liquidity Analysis:

In light of positive cash flows, remedial actions are not required.

7.3.3 Cash Flow Analysis for the Coming Year

Estimated Cash and Cash Equivalents, Beginning of Year (1)	Estimated Net Cash Flow from Operating Activities (2)	Estimated Net Cash Flow from Investing Activities (3)	Estimated Net Cash Flow from Financing Activities (4)	Cash Surplus (Deficit) (1)+(2)+(3)+(4)
1,667,479	300,000	(250,000)	150,000)	1,867,479
Analysis of 2016 cash flow: Cash flows from operating actives: The Company will continue to develop business to bring more cash flows. Cash flows from investing actives: The Company will continue to search new investment plans and purchase IT equipment. Cash flows from financing actives: The Company will continue to do some financial plans for developing business. Remedy for Cash Deficit and Liquidity Analysis: In light ofpositive cash flows,remedial actions are not required.

Cash flows from operating actives: The Company will continue to develop business to bring more cash flows.

Cash flows from investing actives: The Company will continue to search new investment plans and purchase IT equipment.

Cash flows from financing actives: The Company will continue to do some financial plans for developing business. Remedy for Cash Deficit and Liquidity Analysis: In light of positive cash flows, remedial actions are not required.

7.4 Major Capital Expenditure Items: None.

113

7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses,

Improvement Plans and Investment Plans for the Coming Year

7.5.1 Investment policy:

The policy is pursuant on the “Procedures of Acquisition and Disposal of Assets” and Internal Control System.

7.5.2 The reason of profits or Losses:

T3EX group’s investment profit in 2015 were mainly due to the profits of THI Logistics, THI Group (Shanghai) Ltd, and THI Group (HK) Ltd.

7.5.3 Investment plans for the coming year:

The Company will continue to invest locations in China and Southern Asia.

7.6 Analysis of Risk Management

7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures

(1) Interest rate

In 2015, the interest expenses of the Company represented 0.10% of annual revenue. Going forward, the Company will continue to carefully monitor interest rate movements, adopt proper hedging strategies, and make use of capital markets financing instruments to ensure that our financing costs are at a comparatively low level.

(2) Foreign exchange rates

The income from foreign exchange transactions in 2015 was an amount equivalent to 0.49% of annual revenue. The Company has a clear operating strategy and risk control procedure to respond to changes in the spot exchange rate, stays in close contact with financial institutions, and adjusts its foreign exchange strategy to minimize the risk of exchange rate accordingly.

(3) Inflation

The impact of inflation does not currently have a significant impact on the Company’s profits and business operations. The Company will continue to maintain a good relations with shipping companies, airline companies, and overseas agencies to decrease the risk of inflation or deflation.

7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with

Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions

(1) High-Risk, High-Leverage Investment:

In 2015 and as of the date of this annual report, the Company has not conducted any high-risk and/or high-leverage investment.

(2) Loaning or Endorsement Guarantees:

114

The Company conducts loaning or endorsement guarantees according to the internal policy

“Operational Procedures for Endorsements and Guarantees” and the “Procedures for Loaning of

Funds.”. Procedures and risk evaluation are conducted in accordance with this policy.

(3) Derivatives Transactions:

The Company did not conduct any derivative transactions in 2015.

7.6.3 Future Research & Development Projects and Corresponding Budget

The Company did not conduct any research & development projects.

7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales

The Company consistently pays close attention to any changes in local and foreign policies and makes appropriate amendments to our systems when necessary. During 2015 and as of the date of publication of this annual report, changes in related laws have not had a significant impact on our operations.

7.6.5 Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Sales

The Company attaches great importance to improvements in technology and carefully monitors market trends and assesses the impact they may have on the company’s operations.

7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures

Since its inception, the Company has consistently maintained an ethical business philosophy and fulfilled its social responsibilities. Aside from working to strengthen internal management and conforming to all relevant corporate governance requirements, the Company has also organized numerous public welfare activities.

7.6.7 Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans

The Company has no ongoing merger and acquisition activities. In considering future M&A activities, the Company will evaluate their efficiency, risks, vertical integration and other factors in accordance with its internal control system.

7.6.8 Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans

The Company has no factory expansion plans.

7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration

115

The Company has consistently focused on identifying alternative sources for purchasing, and has worked to diversify its customer base in order to reduce the concentration of sales.

7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, Supervisors, or Shareholders with Shareholdings of over 10%

The shareholdings of the Company’s directors and supervisors have been stable during the last few years. The Company has no shareholders of 10%.

7.6.11 Effects of, Risks Relating to and Response to the Changes in Management

Rights

The structure of our principal shareholders is solid. A strong professional management team is in place to maximize both shareholders and the Company’s best interest. Accordingly, we believe that the risk of changing in management rights that would cause damage to the Company is mitigated. In addition, our risk management department is responsible to monitor any related risks and report to the Board. Our policy is to maintain a steady ownership and management structure. As of the date of this Annual Report, such risks were not identified by the Company.

7.6.12 Litigation or Non-litigation Matters

(1) Major ongoing lawsuits, non-lawsuits or administrative lawsuit: None.

(2) Major ongoing lawsuits, non-lawsuits or administrative lawsuits caused by directors, supervisors or shareholders with over 10% shareholdings: None.

7.6.13 Other Major Risks: None.

VIII. Special Disclosure

8.1 Summary of Affiliated Companies:

8.1.1 Affiliated Companies Cha

116

T3EX Global Holdings Corp.

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----- Start of picture text -----

100% 100% 100% 60% 100% 51% 49% 100% 30%
T.H.I. Logistics Greatline T.H.I. Group Fresh Beauty Taiwan Express T.H.I. GROUP T.H.I. GROUP T.H.I. GROUP PT. Dexter
Ltd Internation Ltd enterprises LTD Logistic Co., Ltd. Vietnam Co., Ltd (BANGKOK) Co., (CAMBODIA) Co., Eurekatama
100%
100% 100% TEC Logistics 80%
Eastern union
51%
THI Group Limited Co., Ltd T.H.I.GROUP
holdings limited
(H.K) SINGAPORE THI &
100% 100% 97.51%
Hiview Logistics PTE LTD Maruzen Co.,
T-Cube Global
Shanghai Yaohwa Co., Ltd Ltd
Logistics Co., Ltd
International
Forwarder Co., Ltd. 100% Taiwan Express 30% LOGI
100% (USA),INC International
Co., Ltd.
T.H.I. Group 100%
TEC LOGISTICS 90%
(Shanghai) Ltd.
(USA),INC
THI LOGISTICS
68% 30%
Orient Air General (MALAYSIA)
EXer Logistics
Co.,Ltd. Sales Agent Co., SDN.BHD
100%
Taiwan Express
(HK) Co., Ltd.
100% 100%
TEC Logistics Wai Hung Cargo
(Shenzhen) Co., Ltd. Transport Co., Ltd.
----- End of picture text -----

117

8.1.2 The Detail Information of Affiliated Companies

Unit: thousands

				Unit: thousands
Name of Subisidary	Foundation Date	Address	Share Capital	Major Business
Greatline International Limited	2001.06.08	P.O.Box 438, Road Town, Tortola, British Virgin islands.	USD4,050	Offshore holdings company
T.H.I. GroupLtd(BVI)	2001.03.22	P.O.Box 3444, Road Town, Tortola, British Virgin Islands.	USD1,000	Offshore settlement company
T.H.I. Group Limited (HK)	1988.04.29	Room 501-2, 5/F., Stanhope House, 734 King's Road, Quarry Bay,H.K.	HKD12,480	Air & sea freight forwarding
T.H.I. Group (Shanghai) Ltd.	2001.03.05	10F, Kaikai Plaza, No 888 Wanhangdu Road, Jinan District, Shanghai,200042	USD3,060	Air & sea freight forwarding and customs clearance
Shanghai Yaohwa International Forwarder Co.,Ltd	2004.07.28	Room 5F/Room F2, No.61 YangShuPu Road, Shanghai, P.R. China	USD1,700	Air & sea freight forwarding and customs clearance
T.H.I. Logistics Ltd	2012.06.21	12F. , No. 563 , Sec . 4, Zhongxiao E. Rd . Xinyi District , Taipei City11072,Taiwan	NTD130,000	Air & sea freight forwarding
T.H.I. Group Vietnam Co., Ltd	2007.12.24	Floor 7, No 09 Dinh Tien Hoang, Dakao, Ward,Dist 1, , Hochiminh city	VND5,000,000	Air & sea freight forwarding and packaging
T.H.I. GROUP (BANGKOK) COMPANY LIMITED	2009.04.07	2/22 Iyara Tower, 6th Fl., Unit 603,Chan Rd., Thungwatdon, Sathorn,Bangkok	THB5,000	Air & sea freight forwarding andpackaging
T.H.I. GROUP (CAMBODIA) Co., Ltd.	2012.03.19	5th Floor, #66 SSN Building, Norodom Bvld, Phnom Penh, Cambodia	USD150	Air & sea freight forwarding
T.H.I.GROUP SINGAPORE PTE LTD	2014.11.06	115 AIRPORT CARGO ROAD#06-19 CARGO AGENTS BUILDING C SINGAPORE (819466)	SGD400,000	Air & sea freight forwarding
THI & Maruzen Co., Ltd	2010.07.14	5F, Sailor No.3 BLDG 1-21-4 Nihonbashi Kakigaracho Chuo-ku,Tokyo Japan 103-0014	JPY60,000,000	Air & sea freight forwarding
Taiwan Express Logistic Co., Ltd.	1992.09.04	3F, No. 16, Section 1, Nánjīng East Rd, Jhongshan District Taipei City,Taiwan	NTD359,584	Air & sea freight forwarding and customs clearance

118

Taiwan Express (HK) Co., Ltd.	1997.11.17	13005E-13006E,13/F., ATL Logistics Centre B, Berth 3, Kwai ChungContainer Terminal,Kwai Chung,N.T.	HKD70,550	Freight forwarding, customs clearance,and distribution
TEC Logistics Co., Ltd	2003.10.13	3F, No. 16, Section 1, Nánjīng East Rd, Jhongshan District Taipei City,Taiwan	NTD10,000	Freight forwarding, customs clearance,and distribution
Taiwan Express (USA) INC.	2010.02.18	409 N. OAK STREET, INGLEWOOD, CA 90302	USD1,000	Freight forwarding, customs clearance,and distribution
Hiview Logistics Co., Ltd	1970.01.20	802, 8F, No. 6, Lìxíng 6th Rd, Dong District Hsinchu City, Taiwan	NTD68,000	Freight forwarding, customs clearance,and distribution
TEC Logistics (Shenzhen) Co., Ltd.	2005.02.06	Room28B-C, Office Building, Wan Chen Square, Wong-KwongPort Shenzhen,China	HKD48,550	Freight forwarding, customs clearance,and distribution
TEC LOGISTICS(USA), INC	2010.08.04	167-16 146th Ave. Jamaica, NY11434, USA	USD290	Freight forwarding, customs clearance,and distribution
Wai Hung(China-HK) Cargo Transport Co.,Ltd	2003.09.29	10/F, Parklance Centre, 25 kin Wing Street, Tuen Mun, N.T., HongKong	HKD100	Warehousing and distribution
Fresh Beauty enterprises LTD.	2014.08.21	Level 5,Development Bank of Samoa Building, Beach Road,Apia,Samoa	USD1,751	Offshore holdings company
Eastern union holdings limited	2014.08.15	Room 7C WORLD TRUST TOWER 50 STANLEY STREET CENTRAL,HK.	USD1,751	Offshore holdings company
T-Cube Global Logistics Co., Ltd	2015.08.07	Rm.803,8F`，`Changhui building.,No.799,yin xiang road,Shanghai,P.R.China 201802	RMB10,000	Warehousing and distribution
EXer Logistics Co.,Ltd.	2015.08.12	No.536, ShenglongRoad, SongjiangDistrict, Shanghai	RMB14,000	Express
THI LOGISTICS (MALAYSIA) SDN.BHD	2016.01.26	13-2, Jalan Mahogani 5/KS7,Bandar Botanic, 41200 Selangor Darul Ehsan Malaysia	USD350	Air & sea freight forwarding andpackaging

119

8.1.3: Shareholding of Directors, Supervisors, Managers of Affiliated Companies

Affiliated Companies	Position	Name	Current shareholding	Current shareholding
			Shares	Sharehold ing ratio
GREATLINE INTERNATIO NAL LIMITED	Investor	T3EX Global Holdings Corp.	4,050,000	100%
	Representative	David Yen	-	-
THI GROUP LIMITED(H.K)	Investor	GREATLINE INTERNATIONAL LIMITED	12,480,000	100%
	Director	David Yen	-	-
	Director & GM	Jim Chen	-	-
T.H.I Group Ltd	Investor	T3EX Global Holdings Corp.	1,000,000	100%
T.H.I. Group (Shanghai) Ltd.	Investor	THI GROUP LIMITED(H.K)	-	100%
	Chairman	David Yen	-	-
	Representative	WEN-MEI LIN YANG
	Director	Jim Chen	-	-
	Director	`Jack Lai`	-	-
	Supervisor	Irene Lee	-	-
Shanghai Yaohwa International Forwarder Co., Ltd	Investor	THI GROUP LIMITED(H.K)	-	100%
	Chairman	David Yen	-	-
	Representative	Michael Chang
	Director	Jim Chen	-	-
	Director	Jack Lai	-	-
	Supervisor	Joan Lee	-	-
T-Cube Global Logistics Co., Ltd	Investor	Eastern union holdings limited	-	100%
	Chairman	Michael Chang	-	-
	Representative	Peter Liu	-	-
	Director	David Yen	-	-
	Director	`Tony Lin`	-	-
	Director	HUI- CHAO HU	-	-
	Supervisor	Leo Liu	-	-
EXer Logistics Co.,Ltd.	Investor	T.H.I. Group (Shanghai) Ltd.	-	68%
	Investor	`CHUN-TSANG Investment`		7.68%
	Chairman	`Tony Lin`	-	-
	Representative	`LE-HUA LIU`	-	-

120

	Director	LE-HUA LIU	-	11%
	Director	CHIEN- HUA LIU	-	13.32%
	Director	David Yen	-	-
	Director	RU- SHIU CHANG	-	-
	Director	Leo Liu	-	-
	Director	Allen Hou	-	-
	Director	HSIAO- CHENG SHE	-	-
	Supervisor	YU- LEI	-	-
Eastern union holdings limited	Investor	Fresh Beauty enterprises LTD.	-	100%
	Chairman	Michael Chang	-	-
	Director	Tony Lin	-	-
	Director	Peter Liu	-	-
Fresh Beauty enterprises LTD.	Investor	T3EX Global Holdings Corp.	60	60%
		NEW CONCEPT INVESTMENT LIMITED	40	40%
	Chairman	Michael Chang	-	-
	Director	`Tony Lin`	-	-
T.H.I. Group Vietnam Co., Ltd	Investor	T3EX Global Holdings Corp.	-	51%
		DAI HOA INTERNATIONAL TRANSPORTATION CO., LTD	-	49%
	Representative	`Jack Lai`	-	-
T.H.I. GROUP (BANGKOK) COMPANY LIMITED	Investor	T3EX Global Holdings Corp.	-	49%
		Boonpen Chuparkpien	-	30%
		Parnurut Punputtapong	-	20%
	Representative	`Jack Lai`	-	1%

121

T.H.I. GROUP (CAMBODIA) Co., Ltd.	Investor	T3EX Global Holdings Corp.	-	100%
	Director	`Jack Lai`	-	-
T.H.I.GROUP SINGAPORE PTE LTD	Investor	T3EX Global Holdings Corp.	320,000	80%
	Investor	KANG LEE CHING SHAREEN	80,000	20%
	Director	`Jack Lai`	-	-
	Director	`Tony Lin`	-	-
	Director	KANG LEE CHING SHAREEN	-	-
THI LOGISTICS (MALAYSIA) SDN.BHD	Investor	T3EX Global Holdings Corp.	1,350,000	90%
		`Cindy Thong LAI YOONG`	75,000	5%
		`Chang KOK KEONG`	75,000	5%
	Director	`Jack Lai`	-	-
	Director	`Cindy Thong LAI YOONG`	-	-
	Director	`Chang KOK KEONG`	-	-
THI & Maruzen Co., Ltd	Investor	T3EX Global Holdings Corp.	3,060	51%
		`Satoshi Ikeda`	2,000	33.33%
		`Maruzen Showa Co., ltd`	940	15.67%
	Representative	`Satoshi Ikeda`	-	-
	Director	`Satoshi Ikeda`	-	-
	Director	`Tony Lin`	-	-
	Director	`Allen Hou`	-	-
	Director	David Yen	-	-
	Director	`Hideaki Suzuki`	-	-
Taiwan Express Logistic Co., Ltd.	Investor	T3EX Global Holdings Corp.	35,958,400	100%
	Chairman	Benison Hsu	-	-
	Director	Peggy Lin	-	-
	Director	Allen Hou	-	-
	Director	David Yen	-	-
	Director	Michael Chang	-	-
	Supervisor	Shen-Li Liao	-	-
	GM	Benison Hsu	-	-
T.H.I. Logistics Ltd	Investor	T3EX Global Holdings Corp.	13,000,000	100%
	Chairman	Jim Chen	-	-
	Director	David Yen	-	-
	Director	`Tony Lin`	-	-

122

	Director	Benison Hsu
	Director	Allen Hou
	Supervisor	Ji-Zhi Hsieh	-	-
	GM	Jim Chen	-	-
Taiwan Express (USA) INC.	Investor	Taiwan Express Logistic Co., Ltd.	1,000,000	100%
	Director	Benison Hsu	-	-
	Director	Peggy Lin	-	-
	Director	TSAI- CHUAN Liu	-	-
	GM	Sean Wu	-	-
TEC Logistics (USA ) INC.	Investor	Taiwan Express Logistic Co., Ltd.	290,000	100%
	Director	Benison Hsu	-	-
	Director	TSAI- CHUAN Liu	-	-
	GM	Sean Wu	-	-
TEC Logistics Co., Ltd	Investor	Taiwan Express Logistic Co., Ltd.	1,000,000	100%
	Chairman	Peggy Lin	-	-
	Director	Charlie Hsu	-	-
	Director	TSAI- CHUAN Liu	-	-
	Supervisor	Benison Hsu	-	-
Hiview Logistics Co., Ltd	Investor	Taiwan Express Logistic Co., Ltd.	5,000,000	97.51%
	Chairman	Julie Chen	-	-
	Director	Benison Hsu	-	-
	Director	LU-BIN LYU	-	-
	Supervisor	Melonie Lin	-	-
	Manager	YUAN- HUANG LIN	-	-
	Manager	WEN-HAO Huang	-	-
	Manager	Teresa Wu	-	-
Taiwan Express (HK) Co., Ltd.	Investor	Taiwan Express Logistic Co., Ltd.	-	100%
	Director	Benison Hsu	-	-
TEC Logistics (Shenzhen) Co., Ltd.	Investor	Taiwan Express (HK) Co., Ltd.	-	100%
	Director	Benison Hsu	-	-
	Director	Peggy Lin	-	-
	Director	TSAI- CHUAN Liu	-	-

123

	Director	MING-SHIN JOU	-	-
Wai Hung(China-H K) Cargo Transport Co., Ltd	Investor	Taiwan Express (HK) Co., Ltd.	-	100%
	Director	Benison Hsu	-	-
	Director	Peggy Lin	-	-
	Director	Amigo Huang	-	-

8.1.4 The Operating Condition of Affiliated Companies ：

Unit: NT$ thousands

Share Capital	Total Assets	Total liabilities	Total equity	Revenue	Operating Income	Net Income	EPS
	Amount	Amount
35,000	96,801	23,930	72,871	4,424	(15,774)	(11,060)	0
134,428	1,355,412	346	1,355,066	0	(1,602)	264,813	0
130,000	279,757	112,599	167,158	1,009,290	18,313	27,674	0
48,448	1,450,191	104,702	1,345,489	1,013,699	132,479	266,103	0
116,268	1,451,786	507,637	944,149	4,737,067	151,051	142,874	0
65,413	245,876	146,553	99,323	627,703	15,490	12,141	0
9,534	73,980	8,539	65,441	208,107	9,809	10,413	0
4,841	27,536	7,352	20,184	95,684	8,839	8,563	0
4,462	9,534	1,528	8,006	26,473	1,207	944	0
9,536	14,134	8,823	5,311	26,963	(5,088)	(3,903)	0
15,660	44,809	23,639	21,170	87,549	3,277	4,242	0
57,411	68,963	0	68,963	0	0	12,271	0

124

Eastern union holdings limited	57,411	68,963	0	68,963	0	6	12,271
T-Cube Global Logistics Co., Ltd	49,920	165,435	102,702	62,733	110,420	15,813	12,265
EXer Logistics Co.,Ltd.	19,288	134,182	67,542	66,640	83,243	(3,554)	(4,199)
Taiwan Express Logistic Co., Ltd.	359,584	967,481	441,732	525,749	1,226,735	21,834	68,049
Taiwan Express (USA) INC.	31,629	49,109	8,682	40,427	102,072	5,622	4,763
TEC Logistics Co., Ltd	10,000	32	195	(163)	0	0	18
Hiview Logistics Co., Ltd	68,000	100,953	29,182	71,771	161,988	1,426	1,228
Taiwan Express (HK) Co., Ltd.	266,807	422,512	51,059	371,453	561,816	(1,744)	32,512
TEC Logistics (Shenzhen) Co., Ltd.	194,268	223,060	61,299	161,761	365,145	23,024	22,901
TEC LOGISTICS(USA), INC	8,549	16,845	1,502	15,343	26,166	487	291
Wai Hung Cargo Transport Co., Ltd.	375	29,899	16,577	13,322	122,862	463	367

8.2 Private Placement Securities in the Most Recent Years:

Item Securities under privateplacement Date of resolution and approved quantity Basis and rationale forprice setting Selection method of specifiedparties Reasons for private placement Date of payment and completion	First Grant of 2011 Private Placement Issue Date: 05 16,2011
	Common stock
	8,400,000 shares / 03 24, 2011
	For strategic specified parties, the price setting based on the related regulation.
	The original shareholders of Taiwan Express, who can help T3EX future business development.
	To maintain a long-term relationship with the strategic specified parties.
	03 29, 2011

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Information on contributing parties	Target	Eligibility	Quantity Purchased	Relationship with the Company	Participation in Company Operations
	CHANG-JIE International	Article 43-6 of Securities and Exchange Act	5,000,000	The original shareholders of Taiwan Express	None
	Benison Hsu		732,000	The president of Taiwan Express	Vice president
	Peggy Lin		1,138,000	The vice president of Taiwan Express	CSO
	CHOU- CHIEH Huang		355,000	None	None
	CHUNG- CHING CHEN		689,000	None	None
	FU- HSIEN WENG		182,000	None	None
	RONG-JHAN HSIEH		154,000	None	None
	HUO- WANG CHEN		50,000	None	None
	CHUNG- MING TSAI		100,000	None	None
Actual purchase (or conversion) price	27.81/ per share
Difference between the actual purchase (or conversion) price and the referenceprice	Actual purchase price was 89.97% of the reference price.
Impact of private placement on shareholders’ equity (ex. causing an increase in accumulated losses)	This plan can enhance the Company’s competitiveness and increase the value of shareholders’ equity.
Use of funds from private placement and progress of proposedplans	This plan was finished on 03 29, 2011.
Effectiveness of private placement	Compared with 03 31, 2011, the consolidate total liabilities/ total assets was 57.8% (YOY -0.8%) Compared with 03 31,2011,the consolidate current ratio was 183%(YOY 3%)

8.3 Any Events in 2014 and as of the Date of this Annual Report that had

Significant Impacts on Shareholders ’ Right or Security Prices as Stated in Item

2 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan: None.

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Independent Auditors’ Audit Report

The Board of Directors T3EX Global Holdings Corp.

We have audited the accompanying consolidated balance sheets of T3EX Global Holdings Corp. (the “Company”) and its subsidiaries (the “Group”) as of December 31, 2015 and 2014 (restated), and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to issue an audit report on these consolidated financial statements based on our audits. We did not audit the financial statements of equity-accounted investees of the Group as of December 31, 2014, constituting 0.06% of the consolidated total assets, nor the share of profit of equity-accounted investees for the year then ended, constituting 0.36% of the consolidated net income before tax. Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included above, is based solely on the report of the other auditors.

We conducted our audits in accordance with the generally accepted auditing standards and the “Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants” in the Republic of China. Those standards and regulations require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the accompanying consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of the Group as of December 31, 2015 and 2014 (restated), and the results of its operations and its cash flows for the years then ended, in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission, R.O.C..

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As disclosed in Note 3 of the consolidated financial statements, The Company and its subsidiaries have applied the 2013 version of IFRS, IAS, IFRIC and SIC (excluded IFRS 9) endorsed by the Financial Supervisory Commission, R.O.C. and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers since January 1, 2015, and restated the financial statements as of December 31, 2014 and for the year ended retrospectively.

We have also audited the individual financial statements of the Company as of and for the years ended December 31, 2015 and 2014, and have issued a modified unqualified audit report thereon.

Taipei, Taiwan (the Republic of China)

March 14, 2016

Note to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by the Financial Supervisory Commission, R.O.C.. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying 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 auditors’ report and financial statements, the Chinese version shall prevail.

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(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2014, December 31, 2015 (Expressed in thousands of New Taiwan dollars)

Assets Current assets Cash and cash equivalents (notes 6(1), (23) & (25)) Financial assets at fair value through profit or loss－current (notes 6(2) & (23)) Available-for-sale financial assets－current (notes 6(3) & (23)) Notes receivable (notes 6(5) & (23)) Accounts receivable (notes 6(5) & (23)) Accounts receivable－related parties (notes 6(5) & (23) and 7) Other current assets (notes 6(5),(10) & (23) and 8) Current assets Non-current assets Financial assets at fair value through profit or loss－non-current (notes 6(2),(13) & (22)) Financial assets measured at cost－non-current (note 6(4) &(23)) Equity-accounted investees (note 6(6)) Property, plant and equipment (notes 6(7) & (8) and 8) Goodwill (notes 6(7) & (9)) Intangible assets (notes 6(7) & (9)) Deferred tax assets (note 6(16)) Refundable deposits (note 6(23)) Other assets (notes 6(5),(10) & (23) and 8) Non-current assets Total assets		December 31,	2015 % 35 - 1 1 30 - 4 71 - 1 1 7 13 2 1 3 1 29 100		December 31, 2014 (Restated) Amount % 1,071,484 27 8,609 - 67,070 2 44,085 1 1,610,056 42 17,930 - 192,078 4 3,011,312 76 15 - 38,800 1 59,641 2 276,664 7 277,895 7 48,665 1 40,191 1 114,084 3 73,007 2 928,962 24 3940274 100 Liabilities and Equity Current liabilities Short-term borrowings (notes 6(11) & (23)) Short-term notes and bills payable (notes 6(11) & (23)) Notes payable (note 6(23)) Accounts payable (note 6(23)) Accounts payable－related parties (notes 6(23) and 7) Other payable (note 6(23)) Current tax liabilities Current provision for employee benefits Current portion of long-term borrowings (notes 6(12) & (23)) Other current liabilities (notes 6(7) & (23)) Current liabilities Non-current liabilities Convertible bond payable (notes 6(13) & (23)) Long-term borrowings (notes 6(12) & (23)) Net defined benefit liability (note 6(15)) Other liabilities (notes 6(7) & (23)) Non-current liabilities Total liabilities Equity (notes 6(13), (16), (17) & (18)): Share capital Capital surplus Retained earnings Other equity Treasury stock Equity attributable to owners of the parent company Non-controlling interests Total equity (note 6(25)) Total equity and liabilities		December 31, 2	015 % 2 - - 15 - 10 1 - - 5 33 8 - 2 2 12 45 24 18 8 2 - 52 3 55 100		December 31, 2014 (Restated)	December 31, 2014 (Restated)
		Amount 1,667,479 7,086 25,326 33,682 1,435,594 1,421 215,181 3,385,769 141 38,800 61,131 337,171 607,244 113,225 42,008 132,910 40,253 1,372,890 4758659			Amount 1,071,484 8,609 67,070 44,085 1,610,056 17,930 192,078 3,011,312 15 38,800 59,641 276,664 277,895 48,665 40,191 114,084 73,007 928,962 3940274		Amount 116,000 20,000 15,185 701,139 170 450,175 55,734 2,936 1,141 201,615 1,564,095 393,988 - 84,911 79,620 558,519 2,122,614 1,160,421 867,214 390,641 98,778 (10,636) 2,506,418 129,627 2,636,045 4,758,659			Amount 245,000 5,000 13,979 859,882 193 345,231 46,849 2,936 90,000 18,387 1,627,457 194,819 8,750 79,777 - 283,346 1,910,803 983,981 629,395 284,581 115,412 (21,233) 1,992,136 37,335 2,029,471 3,940,274	%
	$ $					$ $					6 - 22 - 9 1 - 2 1 41 5 - 2 - 7 48 25 16 8 3 (1) 51 1 52 100

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(English Translation of Financial Report Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

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

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130

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131

(English Translation of Financial Report Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(Expressed in thousands of New Taiwan dollars)

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132

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2015 and 2014

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

1. Group history

T3EX Global Holdings Corp. (the “Company”; originally named T.H.I. Global Holdings Corp.) was incorporated on February 4, 1987, as a company limited by shares and registered with the Ministry of Economic Affairs, R.O.C.. The address of the Company’s registered office is 12F, No. 563, Sec. 4, Zhongxiao E. Rd., Xinyi Dist., Taipei City, R.O.C.. The Company and its subsidiaries (the “Group”) mainly engage in sea and air freight forwarding, distribution, packaging, warehousing, logistics, and customs clearance.

Pursuant to a restructuring plan of the Company, which was approved by the shareholders on June 6, 2012, to transform into a holding company and to provide professional service, T.H.I. Logistics Co., Ltd. (T.H.I. Logistics) was formed to acquire the net assets spun off from the Company’s sea and air freight forwarding business. The restructuring plan was approved by the GTSM on July 2, 2012, and the restructuring date was set as November 1, 2012.

2. Approval date and procedures of the consolidated financial statements

The consolidated financial statements were authorized for issue by the board of directors on March 14, 2016.

3. Application of new and revised standards and interpretations

(1) The impact of the International Financial Reporting Standards (“IFRSs”) 2013 issued and endorsed by the Financial Supervisory Commissions R.O.C. (“FSC”).

The Group prepared the financial reports using the IFRSs 2013 (which does not include IFRS 9 Financial Instruments) with fully adoption starting 2015. Relevant new releases, modifications and amendments to standards and interpretations are as following:

New, Revised or Amended Standards and Interpretations Amendment to IFRS 1 “Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters” Amendment to IFRS 1 “Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters” Amendment to IFRS 1 “Government Loans” Amendment to IFRS 7 “Disclosures—Transfers of Financial Assets”	Effective date prescribed by International Accounting Standards Board
	July 1, 2010 July 1, 2011 January 1, 2013 July 1, 2011

133

Effective date prescribed by New, Revised or Amended International Accounting Standards and Interpretations Standards Board

－ Amended IFRS 7 “Disclosure Offsetting of January 1, 2013 Financial Assets and Financial Liabilities” IFRS 10 “Consolidated Financial Statements” January 1, 2013 (effective date for investment entities will be on January 1, 2014) IFRS 11 “Joint Arrangements” January 1, 2013 IFRS 12 “Disclosure of Interests in Other Entities” January 1, 2013 IFRS 13 “Fair Value Measurement” January 1, 2013 Amendment to IAS 1“Presentation of Items of Other July 1, 2012 Comprehensive Income” Amendment to IAS 12 “Deferred Tax Assets: January 1, 2012 Recovery Underlying Assets” Amendment to IAS 19 “Employee Benefits” January 1, 2013 Amendment to IAS 27 “Separate financial statement” January 1, 2013 Amendment to IAS 32 “Financial assets and liabilities January 1, 2014 offsetting” IFRIC 20 “Stripping Costs in the Production Phase of January 1, 2013 a Surface Mine”

The Company assessed that the 2013 version of IFRSs do not have any significant impact on the financial statements except for the following:

A. Amendments to IAS 19 “Employee Benefits”

The amendments to IAS 19 require the Group to calculate a “net interest” amount by applying the discount rate to the net defined benefit liability or asset to replace the interest cost and expected return on plan assets used in the previous IAS 19. In addition, the amendments eliminate the accounting treatment of either the corridor approach or the immediate recognition of actuarial gains and losses in profit or loss when they occur, and instead, require companies to recognize all actuarial gains and losses immediately through other comprehensive income. The past service cost, on the other hand, will be expensed immediately when it is incurred and will no longer be amortized over the average period before meeting vesting conditions on a straight-line basis. In addition, the amendments also require a broader disclosure of defined benefit plans.

The Group has measure the defined benefit liabilities, the pension cost and the remeasurement based on all the above revised accounting policy. The Group recognized all the unrecognized remeasurement of defined benefit plan and adjusted the retain-earning retrospectively due to the elimination of corridor approach. The impact of the above adoption was disclosed in section E.

134

B. Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

In accordance with the amendments to IAS 1, the items of other comprehensive income was grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. In addition, income tax on items of other comprehensive income is also required to be allocated on the same basis. The Group applied the aforementioned standard to prepare the Consolidated Statements of Comprehensive Income for the years ended December 31, 2015 and 2014.

C. IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates, and unconsolidated structured entities. The Group will disclose the information on consolidated entities and unconsolidated entities as the standard requires.

D. IFRS 13 “Fair Value Measurement”

The standard defines fair value, provides a framework for measuring fair value, and requires disclosures on fair value measurement. The Group has followed the new required disclosures on fair value measurements. Please refer to Note 6(23). Based on its assessment, the Group is not expecting the standard have a significant impact on its financial position and the results of operations.

E. Significant impact on adopting the 2013 IFRS on the Group’s consolidated financial statements are summarized as follows:

Effect on Consolidated Balance Sheets	Amounts before e Restatement $ 61,018 $ 201,493 Amounts before Restatement $ 61,597 $ 302,761	Effect on changes in accounting policy Defined benefitplan 15,529 (15,529) Effect on changes in accounting policy Defined benefitplan 18,180 (18,180)	Restated Amounts
2014.01.01 Net defined benefit liabilities - non-current Retained earnings Effect on Consolidated Balance Sheets			76,547 185,964 Restated Amounts
2014.12.31 Net defined benefit liabilities - non-current Retained earnings	$ $		79,777 284,581

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Effect on Consolidated Comprehensive income statement	Amounts before Restatement $ 9,729,513 (8,070,448) (1,434,912) 48,765 (67,241) 205,677 90,839 23,877 - - - 114,716 $ 320,393 $ 2.13 $ 1.93	Effect on changes in accounting policy Defined benefitplan - - 988 - - 988 - - - (3,639) - (3,639) (2,651) 0.01	Restated Amounts

2014.1.1~2014.12.31 Revenue Cost Operating expense Non-operating income and expense Income tax expense Profit for the year Exchange differences on translation in the financial statements of foreign operation Unrealized gains (losses) on available-for sale financial assets Income tax related to items that may be reclassified subsequently Remeasurement of defined benefit obligation Income tax related to items that will not be reclassified subsequently Other comprehensive income (loss) for the year, net of income tax Total comprehensive income Basic earnings per share Diluted earnings per share	$ $ $ $		9,729,513 (8,070,448) (1,433,924) 48,765 (67,241) 206,665 90,839 23,877 - (3,639) - 111,077 317,742 2.14 1.94
		0.01

(2) The new standards and amendments issued by the International Accounting Standards Board (“IASB”) but yet to be endorsed by the FSC.

A summary of the new standards and amendments to IFRSs issued by the IASB that has yet to be endorsed and issued by the FSC are as following:

New, Revised or Amended Standards and Interpretations

Effective date prescribed by IASB

IFRS 9 “Financial Instruments”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment Entities: Applying the Consolidation Exception” Amendments to IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” IFRS 14 “Regulatory Deferral Account” IFRS 15 “Revenue from Contracts with Customers” IFRS 16 “Lease”

Amendment to IAS 1 “Disclosure Initiative” Amendment to IAS 7 “Disclosure Initiative” Amendment to IAS 12 “Recognition of Deferred Tax Assets for Unrealized Losses” Amendments to IAS16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortization”

January 1, 2018 Depend on IASB

January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2018 January 1, 2019 January 1, 2016 January 1, 2017 January 1, 2017 January 1, 2016

136

New, Revised or Amended Standards and Interpretations
Amendments to IAS16 and IAS 41 “Bearer Plants”
Amendments to IAS 19 “Defined Benefit Plans: Employee
Contributions”
Amendment to IAS 27 “Equity Method in Separate Financial
Statements”
Amendments to IAS 36 “Recoverable Amount Disclosures for
Non-Financial Assets”
Amendments to IAS 39 “Novation of Derivatives and Continuation
of Hedge Accounting”
Annual Improvements to IFRSs 2010-2012 and 2011-2013 Cycle
Annual Improvements to IFRSs 2012-2014 Cycle
IFRIC 21 “Levies”

Effective date
prescribed by IASB

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

The Group is currently evaluating the impact of the abovementioned standards and amendments on the financial position and operating results. Any related impacts will be disclosed when the evaluation is completed.

4. Significant accounting policies

The significant accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

(1) Statement of compliance

These consolidated financial statements are prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the Regulations) and the IFRSs, International Accounting Standards (IAS), IFRIC Interpretations, and Standard Interpretations Committee (SIC) Interpretations endorsed by the FSC.

137

(2) Basis of preparation
A. Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis except for the following material items in the balance sheets:

(a) Financial instruments measured at fair value through profit or loss are measured at fair value (including derivative financial instruments);
(b) Available-for-sale financial assets are measured at fair value;
(c) Net defined benefit liability (asset) is recognized as plan assets, on fair value measurement, less the present value of the defined benefit obligation.
B. Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The Group’s consolidated financial statements are presented in New Taiwan dollars, which are the Company’s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(3) Basis of consolidation
A. Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and its subsidiaries.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

138

B. List of subsidiaries included in the consolidated financial statements

Name of investor The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Fresh Beauty Eastern Union Greatline T.H.I. HK T.H.I. HK T.H.I. Shanghai Shanghai Yaohwa TEC TEC TEC TEC TEC TEC HK TEC HK	Name of subsidiary T.H.I. Group Ltd. (B.V.I.) Greatline International Limited (Greatline) T.H.I.Group Vietnam Co., Ltd. T.H.I. Group (Bangkok) Co., Ltd. Taiwan Express Logistic Co., Ltd. (TEC) T.H.I. Logistics Ltd. T.H.I. Group Cambodia) Co., Ltd. T.H.I. Group Singapore Pte. Ltd. (Singapore) T.H.I. & Maruzen Co., Ltd. Fresh Beauty Enterprises Ltd. (Fresh Beauty) Eastern Union Holdings Limited (Eastern Union) T-Cube Global Logistics Co., Ltd. T.H.I. Group Limited (HK) (T.H.I. HK) T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) Shanghai Yaohwa International Forwarder Co., Ltd. (Shanghai Yaohwa) EXer Logistics Co., Ltd. Shanghai Kai Hua Co., Ltd. (Shanghai Kai Hua) Taiwan Express (HK) Co., Ltd. (TEC HK) Taiwan Express (USA), Inc. TEC Logistic Co., Ltd. TEC Logistics (USA), Inc. Hiview Logistics Co., Ltd. TEC Logistics (Shenzhen) Co., Ltd. Wai Hung Cargo Transport Co., Ltd.	Principal activity Offshore settlement center Offshore holding company Air & sea freight forwarding and packaging Air & sea freight forwarding and packaging Air & sea freight forwarding and customs clearance Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Offshore holding company Offshore holding company Warehousing and company Air & sea freight forwarding Air & sea freight forwarding and customs clearance Air & sea freight forwarding and customs clearance Express logistics company Transport and logistics Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and delivery services Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Warehousing and distribution	Percentage of shares held 2015.12.31 2014.12.31 100% 100% 100% 100% 51% 51% 49% 49% 100% 100% 100% 100% 100% 100% 80% 80% 51% 33.33% 60% - 100% - 100% - 100% 100% 100% 100% 100% 100% 68% - - 100% 100% 100% 100% 100% 100% 100% 100% 100% 97.51% 97.51% 100% 100% 100% 100%	Remark
			2015.12.31 100% 100% 51% 49% 100% 100% 100% 80% 51% 60% 100% 100% 100% 100% 100% 68% - 100% 100% 100% 100% 97.51% 100% 100%
				A subsidiary since 2015.3.31 Please refer to Note 6(7) Please refer to Note 6(7) Please refer to Note 6(7) Please refer to Note 6(7) Liquidated

139

C. Subsidiaries which are not included in the consolidated financial statements

None.

(4) Foreign currency

A. Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between the amortized cost in the functional currency at the beginning of the period adjusted for the effective interest and payments during the period.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of transactions.

Foreign currency differences arising on retranslation are recognized in profit or loss except for the retranslation of non-monetary available-for-sale equity instruments, whose differences are recognized in other comprehensive income.

B. Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Group’s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Group’s functional currency at the average rate. Foreign currency differences are recognized in other comprehensive income.

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

140

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, the foreign currency gains and losses arising from such items are considered to form part of net investment in the foreign operation and are recognized in other comprehensive income, and presented in the translation reserve in equity.

(5) Classification of current and non-current assets and liabilities

An asset is classified as current when:

A. It is expected to be realized as an asset or is intended to be sold or consumed in the entity’s normal operating cycle;
B. It is held primarily for the purpose of trading;
C. It is expected to be realized within twelve months after the reporting period; or
D. It is cash or a cash equivalent, unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

A. It is expected to be settled in the entity’s normal operating cycle;
B. It is held primarily for the purpose of trading;
C. It is due to be settled within twelve months after the reporting period; or
D. The entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(6) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

The time deposits with maturity of three months or less from the acquisition date are listed in cash and cash equivalents because they are held for the purpose of meeting short-term cash commitments instead of investment or other purposes. They are readily convertible to a fixed amount of cash, and are subject to an insignificant risk of changes in value.

141

(7) Financial instruments

Financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instruments.

A. Financial assets

The Group classifies financial assets into the following categories: financial assets at fair value through profit or loss, available-for-sale financial assets, and loans and receivables.

(a) Financial assets at fair value through profit or loss

A financial asset is classified in this category if it is held for trading or is designated as such on initial recognition. A financial assets is classified as held for trading if it is acquired principally for the purpose of selling in the short term. The Group designates financial assets, other than those classified as held for trading, as at fair value through profit or loss at initial recognition under one of the following situations:

i.Designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise.
ii. Performance of the financial asset is evaluated on a fair value basis.
iii. A hybrid instrument contains one or more embedded derivatives.

At initial recognition, financial assets classified in this category are measured at fair value. Attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein, which take into account any dividend and interest income, are recognized in profit or loss. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade-date accounting.

(b) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the other categories of financial assets. Available-for-sale financial assets are recognized initially at fair value, plus any directly attributable transaction cost. Subsequent to initial recognition, they are measured at fair value, and changes therein, other than impairment losses, interest income calculated using the effective interest method, dividend income, and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognized, the gain or loss accumulated in equity is reclassified to profit or loss, and recognized in other gains or losses under non-operating income and expenses. A regular way purchase or sale of financial assets shall be recognized and derecognized, as applicable, using trade-date accounting.

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables comprise trade receivables and other receivables. At initial recognition, these assets are recognized at fair value, plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are

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measured at amortized cost using the effective interest method, less any impairment losses other than insignificant interest on short-term receivables. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade-date accounting. (d) Impairment of financial assets

A financial asset which is not at fair value through profit or loss is evaluated for impairment at every reporting date. A financial asset is impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a loss event) that occurred subsequent to the initial recognition of the asset and that a loss event (or events) has an impact on the future cash flows of the financial asset that can be estimated reliably

Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults, or the disappearance of an active market for a security.

All individually significant receivables are assessed for specific impairment. Receivables that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics. In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries, and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than those suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of its estimated future cash flows discounted at the asset’s original effective interest rate.

An impairment loss in respect of a financial asset measured at cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss is not reversible in subsequent periods.

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An impairment loss in respect of a financial asset is deducted from the carrying amount except for trade receivables, for which an impairment loss is reflected in an allowance account against the receivables. When it is determined a receivable is uncollectible, it is written off against the allowance account. Any subsequent recovery from a written-off receivable is recorded in the allowance account. Changes in the allowance accounts are recognized in profit or loss.

If, in a subsequent period, the amount of impairment loss on a financial asset measured at amortized cost decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the decrease in impairment loss is reversed through profit or loss to the extent that the carrying value of the asset does not exceed its amortized cost before the impairment loss is recognized at the reversal date.

Impairment losses recognized on available-for-sale equity security are not reversed through profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in other comprehensive income, and accumulated in equity. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then impairment loss is reversed, with the amount of the reversal recognized in profit or loss.

(e) Derecoginition of financial assets

The Group derecognizes financial assets when the contractual rights of the cash inflow from the assets are terminated, or when the Group transfers substantially all the risks and rewards of ownership of the financial assets.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received or receivable and any cumulative gain or loss shall be recognized in profit and loss.

The Group separates the part that continues to be recognized and the part that is derecognized based on the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part derecognized and the amount of the consideration received or receivable for the part derecognized shall be recognized in profit or loss.

B. Financial liabilities and equity instruments

(a) Classification of debt or equity instruments

Debt or equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

Equity instruments issued are recognized based on the amount of consideration received, less the direct issuance cost.

Compound financial instruments issued by the Group comprise convertible bonds payable that can be converted to share capital at the option of the holder when the number of shares to be issued is fixed.

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The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognized initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition.

Interest related to the financial liability is recognized in profit or loss. On conversion, the financial liability is reclassified to equity, without recognizing any gain or losses.

(b) Financial liabilities at fair value through profit or loss

A financial liability is classified in this category if it is classified as held for trading or is designated as such on initial recognition.

A financial liability is classified as held for trading if it is acquired principally for the purpose of selling or repurchasing in the short term. The Group designates financial liabilities, other than those classified as held for trading, as at fair value through profit or loss at initial recognition under one of the following situations:

i. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring the assets or liabilities or recognizing the gains and losses thereon on a different basis;
ii. Performance of the financial liabilities is evaluated on a fair value basis;
iii. A hybrid instrument contains one or more embedded derivatives.

Attributable transaction costs are recognized in profit or loss as incurred. Financial liabilities at fair value through profit or loss are measured at fair value, and changes therein, which take into account any interest expense, are recognized in profit or loss.

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(c) Other financial liabilities

Financial liabilities not classified as held for trading or designated as at fair value through profit or loss, which comprise loans and borrowings, and trade and other payables, are measured at fair value, plus any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method. Interest expense not capitalized as capital cost is recognized in profit or loss.

(d) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligation has been discharged or cancelled, or has expired. The difference between the carrying amount of a financial liability derecognized and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(e) Offsetting of financial assets and liabilities

The Group presents financial assets and liabilities on a net basis when the Group has the legally enforceable right to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

C. Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Derivatives are recognized initially at fair value, and attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(8) Investment in associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of investment includes transaction costs. The carrying amount of investment in associates includes goodwill arising from the acquisition, less any accumulated impairment losses.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align their accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

Unrealized profits resulting from transactions between the Group and an associate are eliminated to the extent of the Group’s interest in the associate. Unrealized losses on transactions with associates are eliminated in the same way, except to the extent that the underlying asset is impaired.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of the investment, including any long-term interests that form part thereof, is reduced to zero, and the

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recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

(9) Property, plant and equipment
A. Recognition and measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the asset. The cost of software is capitalized as part of the property, plant and equipment if the purchase of the software is necessary for the property, plant and equipment to be capable of operating.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately, unless the useful life and depreciation method of that part are the same as those of another significant part of that same item.

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as other gains and losses.

B. Subsequent cost

Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to the Group. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

C. Depreciation

The depreciable amount of an asset is determined after deducting the asset ’ s residual value, and it shall be allocated on a systematic basis over the asset ’ s useful life. Items of property, plant and equipment with the same useful life may be grouped together in determining the depreciation charge. The remainder of the items may be depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

If there is reasonable certainty that the lessee will obtain ownership by the end of the lease term, the period of expected use will be the useful life of the asset; otherwise, the asset is depreciated over the shorter of the lease term and its useful life.

Land has an unlimited useful life and therefore is not depreciated.

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

(a) Building 5~50 years (b) Transportation 5~7 years (c) Office and other equipment 2~6

years

Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

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(10) Leased assets

A. Lessor

A finance leased asset is recognized on a net basis as lease receivable. Initial direct costs incurred in negotiating and arranging an operating lease is added to the net investment of the leased asset. Finance income is allocated to each period during the lease term in order to produce a constant periodic rate of interest on the remaining balance of the receivable.

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

Contingent rents are recognized as income in the period when the lease adjustments are confirmed.

B. Lessee

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

Contingent rent is recognized as expense in the periods in which they are incurred.

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(11) Intangible assets

A. Goodwill

(a) Recognition

Goodwill arising from the acquisition of subsidiaries is recognized as intangible assets.

(b) Measurement

Goodwill is measured at its cost, less impairment losses. Investments in associates are accounted for using the equity method. The carrying amount of the investment in associates includes goodwill, and impairment losses on such investment are recognized as part of the carrying amount of the investment and are not associated with goodwill or any other assets.

B. Other intangible assets

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

C. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures, including expenditure on internally generated goodwill and brands, are recognized in profit or loss as incurred.

D. Amortization

The depreciable amount of an intangible asset is calculated as the cost of the asset, less its residual value.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill and intangible assets with an indefinite useful life, from the date when they are made available for use. The estimated useful lives for the current and comparative periods are 3~10 years.

The residual value, amortization period, and amortization method for an intangible asset with a finite useful life shall be reviewed at least annually at each fiscal year-end. Any changes shall be accounted for as changes in accounting estimates.

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`－` (12) Impairment non-derivative financial assets

The Group assesses non-derivative financial assets for impairment (except for deferred income tax assets and employee benefits) at every reporting date, and estimates the recoverable amounts.

If it is not possible to determine the recoverable amount for an individual asset, then the Group will have to determine the recoverable amount for the asset’s cash-generating unit (CGU).

The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair value, less costs to sell, and its value in use. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Such is deemed as an impairment loss, which is recognized immediately in profit or loss.

The Group assesses at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amount of that asset is estimated.

An impairment loss recognized in prior periods for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. In this case, the carrying amount of the asset is increased to its recoverable amount by reversing an impairment loss.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Notwithstanding whether indicators exist, recoverability of goodwill and intangible assets with indefinite useful lives or those not yet in use are required to be tested at least annually. Impairment loss is recognized if the recoverable amount is less than the carrying amount.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the acquirer’s cash-generating units, or groups of cash-generating units, from the acquisition date, irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

If the carrying amount of a cash-generating units exceeds the recoverable amount of the unit, impairment loss is recognized and is allocated to reduce the carrying amount of each asset in the unit.

Reversal of an impairment loss for goodwill is prohibited.

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(13) Treasury stock

Repurchased shares are recognized as treasury shares (a contra-equity account) based on their repurchase price (including all directly accountable costs), net of tax. Gains on disposal of treasury － shares are accounted for as “capital reserve treasury share transactions”. Losses on disposal of treasury shares are offset against existing capital reserve arising from similar types of treasury shares. If the capital reserve is insufficient, such losses are charged to retained earnings. The carrying amount of treasury shares is calculated using the weighted-average method for different types of repurchase.

－ When treasury shares are cancelled, “capital reserve share premiums” and “share capital” are debited proportionately. Gains on cancellation of treasury shares are charged to capital reserves arising from similar types of treasury shares. Losses on cancellation of treasury shares are offset against existing capital reserves arising from similar types of treasury shares. If capital reserve is insufficient, such losses are charged to retained earnings

(14) Revenue

Revenue of the Group is mainly generated from providing logistic services. Revenue is recognized when service is rendered. Costs are recognized with revenues when they occur. Expenses are recognized as incurred on an accrual basis.

(15) Employee benefits

A. Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

B. Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of the defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The discount rate is the yield at the reporting date on market yields of government bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

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The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realizable during the life of the plan, or on settlement of the plan liabilities.

When the benefits of a plan are improved the expense of the increased benefit relating to past service by employees is recognized immediately in profit or loss.

Remeasurements of the net defined benefit liability (asset), which comprise (1) actuarial gains and losses, (2) the return on plan assets (excluding interest) and (3) the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Group reclassify the amounts recognized in other comprehensive income to retained earnings.

The Group recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of plan assets, any change in the present value of the defined benefit obligation.

C. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(16) Share-based payment

The grant-date fair value of share-based payment awards granted to employees is recognized as employee expenses, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions, and there is no true-up for differences between expected and actual outcomes.

(17) Income tax

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

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Current taxes include tax payables and tax deduction receivables on taxable gains (losses) for the year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as well as tax adjustments related to prior years.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are not recognized for the following:

A. Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) at the time of the transaction.
B. Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
C. Initial recognition of goodwill.

Deferred taxes are measured based on the statutory tax rate on the reporting date or the actual legislative tax rate during the year of expected asset realization or debt liquidation.

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

A. The entity has the legal right to settle tax assets and liabilities on a net basis; and
B. The taxing of deferred tax assets and liabilities fulfills one of the scenarios below:
(a) levied by the same taxing authority; or
(b) levied by different taxing authorities, but where each such authority intends to settle tax assets and liabilities (where such amounts are significant) on a net basis every year of the period of expected asset realization or debt liquidation or where the timing of asset realization and debt liquidation is matched.

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A deferred tax asset should be recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized. Such unused tax losses, unused tax credits, and deductible temporary differences shall also be re-evaluated every year on the financial reporting date, and adjusted based on the probability that future taxable profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized.

(18) Business combinations

Goodwill is measured as the excess of the acquisition-date fair value of consideration transferred (including any non-controlling interest in the acquiree) over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed (generally at fair value). If the residual balance is negative, the Group shall re-assess whether it has correctly identified all of the assets acquired and liabilities assumed and recognize any additional assts or liabilities that are identified in that review, and shall recognize a gain on the bargain purchase thereafter.

In a business combination achieved in stages, the Group shall re-measure its previously held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss, if any, in profit or loss. In prior reporting periods, the Group may have recognized changes in the value of its equity interest in the acquiree in other comprehensive income. If so, the amount that was recognized in other comprehensive income shall be recognized on the same basis as would be required if the Group had directly disposed of the previously held equity interest. If the disposal of the equity interest required a reclassification to profit or loss, such amount shall be reclassified to profit or loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Group shall retrospectively adjust the provisional amounts recognized at the acquisition date, or recognize additional assets or liabilities to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period shall not exceed one year from the acquisition date.

All the transaction costs incurred for the business combination are recognized immediately as the Group’s expenses when incurred, except for the issuance of debt or equity instruments.

Upon conversion to the IFRSs endorsed by the FSC, the Group can choose to restate all business combinations that occurred after January 1, 2012 (inclusive). For those acquisitions that occurred prior to January 1, 2012, the amount of goodwill is recognized in accordance with the “Regulations Governing the Preparation of Financial Reports” issued by the FSC on January 10, 2009, and the financial accounting standards and interpretations issued by the Accounting Research and Development Foundation (Generally Accepted Accounting Principles).

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(19) Earnings per share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. The calculation of basic earnings per share is the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is the profit attributable to ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds, employee stock options, and employee bonus.

(20) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

5. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the consolidated annual financial statements in conformity with the IFRSs 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.

Management continuously reviews the estimates and basic assumptions. Changes in accounting estimates are recognized in the period of change.

Information on critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in note 6(9), Intangible assets.

6. Significant account disclosures

(1) Cash and cash equivalents

Cash on hand Demand and checking deposits Time deposits		2015.12.31 12,697 1,554,174 100,608 1,667,479	2014.12.31
	$ $		15,320 938,504 117,660 1,071,484

Refer to note 6(23) for the sensitivity analysis of the financial assets and liabilities of the Group.

(2) Financial assets/liabilities at fair value through profit or loss
A. Financial assets/liabilities at fair value through profit or loss were as follows:

2015.12.31 2014.12.31

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Financial assets designated as at fair value through profit or loss $ Financial assets held for trading Total $ Current $ Non-current Total $	148 7,086 7,234 7,086 148 7,234	15 8,609 8,624 8,609 15 8,624

B. Non-hedge derivatives

The Group uses derivative financial instruments to hedge certain foreign exchange risks arising from its operating activities. The Group held the following derivative financial instruments, presented as held-for-trading financial assets and liabilities, on December 31, 2014.

Forward exchange sold		2014.12.31
	Contract amount USD900 thousand	Currency USD to CNY	Maturity date
			2015.1.30～2015.3.31

(3) Available-for-sale financial assets

Investment in listed securities Stocks listed on domestic markets

	2015.12.31 25,326	2014.12.31
$		67,070

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If the equity prices had changed, and if it had been on the same basis for both years and assuming that all other variables had remained the same, the impact on other comprehensive income would have been as follows:

Equity price at reporting date Increase 1% Decrease 1%	2015 After-tax other comprehensive income After-tax profit (loss) $ 253 - $ (253) -	2015	2015	2014 After-tax other comprehensive income After-tax profit (loss) 671 - (671) -	2014	2014
			After-tax profit (loss)			After-tax profit (loss)
	$ $		- -			- -

As of December 31, 2015 and 2014, there was no available-for-sale financial asset factored or provided as collateral.

－
(4) Financial assets measured at cost non-current

Domestic unlisted common shares		2015.12.31 38,800	2014.12.31
	$		38,800

The aforementioned investments held by the Group are measured at amortized cost at year-end. Given that the range of reasonable fair value estimates is large and the probability for each estimate cannot be reasonably determined, the Group management has determined that the fair value cannot be measured reliably.

As of December 31, 2015 and 2014, there was no financial asset measured at cost factored or provided as collateral.

(5) Notes receivable, accounts receivable, and other receivables (including amount due from related parties)

Notes receivable Accounts receivable Other receivables (including doubtful receivables) Less: Allowance for impairment loss		2015.12.31 33,682 1,459,655 46,520 (36,252) 1,503,605	2014.12.31
	$ $		44,085 1,645,855 18,124 (24,102)
			1,683,962

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The Group’s aging analysis for past-due but not impaired receivables are as follows:

Past due less than 60 days Past due 61~90 days More than 90 days past due		2015.12.31 370,561 30,843 5,844 407,248	2014.12.31
	$ $		444,705 54,879 24,150 523,734

The Group believes that the unimpaired past-due amounts are still collectible, based on historical payment behavior and extensive analysis of customers’ financial position.

The movement in the allowance for impairment loss with respect to notes receivable, accounts receivable, and other receivables (including doubtful receivables) of the Group during fiscal years 2015 and 2014 was as follows:

Beginning balance as of January 1, 2015 Impairment loss recognized Receivables written off Exchange rate effects and others Balance as of December 31, 2015 Beginning balance as of January 1, 2014 Impairment loss recognized Receivables written off Exchange rate effects and others Balance as of December 31, 2014		Individually assessed impairment 11,441 1,743 - 428 13,612 Individually assessed impairment 16,631 5,256 (10,571) 125 11,441	Collectively assessed impairment 12,661 3,480 (125) 6,624 22,640 Collectively assessed impairment 12,533 11,672 (12,056) 512 12,661	Total 24,102 5,223 (125) 7,052 36,252 Total 29,164 16,928 (22,627) 637 24,102
	$ $
	$ $

As of December 31, 2015 and 2014, there was no receivable factored or provided as collateral.

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(6) Equity-accounted investees

A. A summary of the Group’s financial information for equity-accounted investees at the reporting date is as follows:

Associates		2015.12.31 61,131	2014.12.31
	$		59,641

No publicly quoted prices were available for the above associates.

In August of 2015, the Group acquired 30% of the shares of LOGI International Co., Ltd. at a cost of $9,666 in order to improve its business performance and competitiveness.

The Group’s share of profit of associates in 2015 and 2014 is summarized as follows:

The Group’s share of profit of associates		2014 2,330	2013
	$		2,548

The financial information on associates of Group was as follows (before adjustment for the Group’s proportionate share):

Total profit of the Group’s minor associates		2015.12.31 106,970	2014.12.31
	$		109,198

The Group does not share any contingent liabilities of an associate incurred jointly with other investors. The Group also does not have any contingent liabilities because the Group is severally liable for all or part of the liabilities of the associate.

There are no significant restrictions on the ability of associates to transfer funds to the Group.

B. Guarantees

As of December 31, 2015 and 2014, there was no equity-accounted investment factored or provided as collateral.

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(7) Acquisition of subsidiaries

As approved by the board of directors on December 18, 2014, the Group set up T.H.I. Group Singapore Pte. Ltd., registered in December 2014.

The Group invested $7,629 to acquire 80% ownership of T.H.I. Group Singapore Pte. Ltd.

For the purpose of business development in Japan, in March 2015, the Group purchased an additional 17.67% of equity interest from its previously held 33.33% for a total of 51% in THI & Maruzen Co., Ltd; consequently, obtaining majority ownership and control of this company. The loss on disposal of investment totaled $1,988, and the gain on bargain purchase totaled $260, which are recognized in the consolidated statements of comprehensive income.

(a) Consideration

Consideration type was as follows

Cash $		Amount
		2,916

(b) The fair value of the acquired assets and liabilities at the acquisition date were as follows:

Cash and cash equivalents $ Accounts receivable Prepaid expenses Other assets Accounts payable Other liability Long-term borrowings Net assets $	18,756 16,032 1,172 906 (16,734) (1,051) (2,069) 17,012

(c) Via business combination and strategic alliance, the Group set up a total solution provider for freight, warehousing and custom clearing business in Mainland China. The Group acquired 60% ownership of Fresh Beauty Enterprises Ltd. (Fresh Beauty) in December 31, 2015. Furthermore, Fresh Beauty acquired 100% ownership of T-Cube Global Logistics Co., Ltd. through Easter Union Holdings Limited. The primary businesses of T-Cube Global Logistics Co., Ltd are warehousing and transportation services.

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The type and amounts of considerations the assets, acquired the liabilities taken, and goodwill are listed below:

(i) The type and fair value of consideration on the acquisition date are as follows:

Cash $ Contingent considerations Total $	164,428 118,347
	282,775

The above cash consideration includes the prepayments from the prior year amounting to $28,961 thousand. The unpaid balance as of December 31, 2015 amounted to $135,476 thousand which is recorded in other current liabilities. According to the share purchase agreement, the upper limit of contingent considerations, which shall be deposited into its designated trust account, amounted to CNY 27,504 thousand, and based on the operating performance, the contingent consideration will be paid in installment basis for three years. The fair value of the aforementioned contingent considerations on December 31, 2015 amounted to $118,347 thousand, of which $38,727 was recorded as other current liabilities, and $79,620 was recorded as other non-current liabilities.

(ii) Assets acquired and liabilities assumed at the date of acquisition

Cash $ Accounts receivable Property, plant, and equipment (Note 6(8)) Intangible assets (Note 6(9)) Other assets Accounts payable Current tax liabilities Other payables Fair value of identifiable net assets acquired $ Goodwill arising from acquisition Consideration transferred $ Add: Non-controlling interest Less: Fair value of identifiable net assets acquired Goodwill $	51,843 79,370 34,118 38,454 9,157 (37,719) (4,053) (60,930) 110,240 282,775 44,096 (110,240) 216,631

(iii) Goodwill arising from acquisition

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(iv) To enhance the strategic of logistics service in China, the Group purchased 68% ownership of EXer Logistics Co., Ltd. in December 2015. The primary services of EXer Logistics Co., Ltd are freight, general cargo logistics, agency and warehouse management.

The primary types of consideration, assets acquired, liabilities assumed, and goodwill recognized are as followed:

(1) The main consideration in cash amounted to $177,246.
(2) The details of identifiable assets acquired and liabilities assumed at the date of acquisition are listed below:

Cash $ Accounts receivable Other assets Property, plant, and equipment (Note 6(8)) Intangible assets (Note 6(9)) Accounts payable Other payables Fair value of identifiable net assets acquired $	31,328 88,774 1,368 12,711 29,961 (36,173) (31,369) 96,600

(3) Goodwill

Consideration $ Add: Non-controlling interest Less: Fair value of identifiable net assets acquired Goodwill $	177,246 30,911 (96,600) 111,557

(8) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Group for the years ended December 31, 2015 and 2014, were as follows:

Cost or deemed cost Balance on January 1, 2015 Additions Addition through acquisition Disposals Effect of movement in exchange rates and others Balance on December 31, 2015 Balance on January 1, 2014 Additions Prepayment for equipment transferred Disposals Effect of movement in exchange rates and others Balance on December 31, 2014 Depreciation and impairment loss		Land 132,594 - - - - 132,594 132,594 - - - - 132,594		Buildings 69,299 - - - - 69,299 69,299 - - - - 69,299	Transportation Equipment 159,866 35,268 10,168 (13,258) (971) 191,073 149,100 13,878 - (6,821) 3,709 159,866	Office and Other Equipment 119,302 16,604 48,943 (6,880) (580) 177,389 90,660 9,952 25,571 (10,724) 3,843 119,302	Total
	$ $ $ $						481,061 51,872 59,111 (20,138) (1,551) 570,355 441,653 23,830 25,571 (17,545) 7,552 481,061

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Balance on January 1, 2015 Depreciation Depreciation through acquisition Disposals Effect of movement in exchange rates and others Balance on December 31, 2015 Balance on January 1, 2014 Depreciation Disposals Effect of movement in exchange rates and others Balance on December 31, 2014 Net book value: At December 31, 2015 At December 31, 2014 At January 1, 2014		Land - - - - - - - - - - - 132,594 132,594 132,594		Buildings 23,213 1,064 - - - 24,277 22,150 1,063 - - 23,213 45,022 46,086 47,149	Transportation Equipment 108,437 19,859 7,373 (11,863) (1,195) 122,611 91,214 20,346 (5,546) 2,423 108,437 68,462 51,429 57,886	Office and Other Equipment 72,747 15,692 4,910 (6,603) (450) 86,296 63,230 15,490 (8,886) 2,913 72,747 91,093 46,555 27,430	Total
	$ $ $ $ $ $ $						204,397 36,615 12,283 (18,466) (1,645) 233,184 176,594 36,899 (14,432) 5,336 204,397 337,171 276,664 265,059

A summary of pledged assets as of December 31, 2015 and 2014 is found in note 8.

(9) Intangible assets

The costs, amortization, and impairment loss of the intangible assets of the Group for the years ended December 31, 2015 and 2014, were as follows:

Cost: Balance on January 1, 2015 Additions Addition through acquisition Effect of movement in exchange rates Balance on December 31, 2015 Balance on January 1, 2014 Additions Effect of movement in exchange rates Balance on December 31, 2014 Amortization and impairment loss Balance on January 1, 2015 Amortization Effect of movement in exchange rates Balance on December 31, 2015 Balance on January 1, 2014 Amortization Effect of movement in exchange rates Balance on December 31, 2014 Book value:		Goodwill 277,895 - 328,188 1,161 607,244 276,219 - 1,676 277,895 - - - - - -		Other Intangible Assets 96,534 9,164 68,415 516 174,629 90,486 5,306 742 96,534 47,869 13,129 406 61,404 33,334 14,124 411 47,869		Total
	$ $ $ $ $ $ $ $					374,429 9,164 396,603 1,677 781,873 366,705 5,306 2,418 374,429 47,869 13,129 406 61,404 33,334 14,124 411 47,869

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At December 31, 2015 At December 31, 2014 At January 1, 2014		Goodwill 607,244 277,895 276,219		Other Intangible Assets 113,225 48,665 57,152		Total
	$ $ $					720,469 326,560 333,371

Amortization of intangible assets of the Group for the years ended December 31, 2015 and 2014, was recognized as operating expenses in the consolidated profit and loss.

As of December 31, 2015 and 2014, there was no impairment loss based on the impairment testing for intangible assets and goodwill.

(10) Other current assets and other assets

The Group’s other current assets and other assets were as follows:

Prepayment for investment Other receivables Other financial assets－current Other financial assets－non-current Others Total		2015.12.31 - 32,908 102,798 31,167 88,561 255,434	2014.12.31
	$ $		28,961 11,891 86,302 31,354 106,577
			265,085

Other financial assets consisted of time deposits with a maturity period over three months, restricted bank deposits, and restricted time deposits.

(11) Short-term borrowings and short-term notes and bills payable

Unsecured bank loans Secured bank loans Commercial paper payable Total Unused credit facilities Interest rate		2015.12.31 116,000 - 20,000 136,000 1,436,594 1.64%~1.79%	2014.12.31
	$ $ $		105,000 140,000 5,000 250,000 1,288,381 1.27%~1.79%

Refer to note 8 for details of the related assets pledged as collateral.

(12) Long-term borrowings

Long-term borrowings were as follows:

2015.12.31

2014.12.31

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Unsecured bank loans $ Less: Current portion $ Unused credit facilities $ Interest rate	1,142 (1,142) - - 0.3%~1.75%	98,750 (90,000) 8,750 21,250 2.00%~2.13%

A. Increase in and repayment of borrowings

For the year 2015, the increases in bank loans amounted to $45,000, with an interest rate of 1.75%, for the year ended December 31, 2015, long term loans have been returned in full. For the year 2014, the increases in bank loans amounted to $232,000, with interest rates of 2.00%~2.13%, and the maturity dates were January 2015 to November 2016. For the year ended December 31, 2015 and 2014, the repayments of bank loans were $144,678 and $156,250, respectively.

B. Security

Refer to note 8 for details of related assets pledged as collateral.

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(13) Convertible bond payable

Proceeds from issue of convertible bond payable Bond discount Cumulative redeemed amount Cumulative converted amount Carrying amount of liability Less: Current portion Embedded derivative`－`put and call options (accounted for as financial assets (liabilities) at fair value through profit or loss `－`current and non-current) Equity components－conversion options (accounted for as capital surplus) Embedded derivative－put and call options (accounted for as evaluation gain (loss) on financial instruments) Interest expense		2015.12.31 1,100,000 (17,512) (332,600) (355,900) 393,988 - 393,988 148 20,597 2015 29 6,286	2014.12.31 800,000 (8,381) (332,600) (264,200) 194,819 - 194,819 15 10,969 2014 (18) 6,373
	$ $ $ $
	$ $

As of January 27, 2011, and January 23, 2014, and June 9, 2015, the Company had issued the 1st, 2nd and 3rd unsecured convertible bonds, respectively, amounting to $500,000, $300,000 and $300,000, respectively.

The terms and conditions of the bonds are as follows:

A. Coupon rate

Both are zero.

B. Issuance period

Five years for the 1st convertible bonds; three years for the 2nd, and 3rd.

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C. Redemption option

For the 1st convertible bonds, at any time on or after February 28, 2011, and prior to December 18, 2015, when the closing price of the Company’s common shares on the Gre Tai Securities Market is equal to or greater than 130% of the conversion price of the convertible bonds for 30 consecutive trading days, or more than 90% of the bonds have been redeemed, repurchased, or converted, the Company may redeem the bonds in cash at face value.

There is no redemption option for the 2nd convertible bonds.

For the 3rd convertible bonds, at any time on or after June 10, 2016, and prior to April 30, 2018, when the closing price of the Company’s common shares on the Gre Tai Securities Market is equal to or greater than 130% of the conversion price of the convertible bonds for 30 consecutive trading days, or more than 90% of the bonds have been redeemed, repurchased, or converted, the Company may redeem the bonds in cash at face value.

D. Put option of bondholders

On January 27, 2013, bondholders may request the Company to repurchase the 1st convertible bonds at face value. The Company had a $26,296 loss from repurchasing $332,600 of bonds.

There is no put option of bondholders for the 2nd and 3rd convertible bonds.

E. Terms of conversion
(a) At any time one month after the issuing date to ten days before the expiry date, bondholders may request the Company to convert the bonds into stock.

(b) Conversion price

After the bonds were issued, whenever the numbers of common shares of the Company changes, or other convertible bonds are issued with a conversion price lower than the market price, the conversion price will be adjusted by the formula set in the terms. On December 31, 2015, the conversion prices of the 1st, 2nd, and 3rd convertible bonds were $20.0 (dollars), 23.5 (dollars), and $29.7 (dollars), respectively.

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(14) Operating leases

Non-cancellable operating lease rentals are payable as follows:

Less than one year Between one and five years Over five years		2015.12.31 254,060 282,040 41 536,141	2014.12.31
	$ $		118,375 183,370 -
			301,745

For the years ended December 31, 2015 and 2014, operating lease expenses were $173,374 and $176,020, respectively.

(15) Employee benefits

A. Defined benefit plan

The Group determined the movement in the present value of defined benefit obligations and the fair value of plan assets as follows:

Total present value of defined benefit obligations Fair value of plan assets Net defined benefit (liability) asset		2015.12.31 (122,414) 37,503 (84,911)	2014.12.31 (113,785) 34,008 (79,777)
	$ $

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

(a) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

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As of December 31, 2015, the pension fund account balance at Bank of Taiwan and the manager pension fund balance amounted to $18,654 and $18,849, respectively. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Labor Pension Fund Supervisory Committee.

(b) Movements in the present value of defined benefit obligation

The movements in the present value of the defined benefit obligation for the years ended December 31, 2015 and 2014 were as follows:

At January 1 Service costs and interest Actuarial losses At December 31		2015 113,785 2,274 6,355 122,414	2014 106,800 3,498 3,487
	$ $
			113,785

The movements in the fair value of the plan assets for the years ended December 31, 2015 and 2014 were as follows:

At January 1 $ Net remeasurements of defined benefit liabilities －Return on plan assets (excluding the amounts included in net interest expense) Contributions Actuarial losses (gain) At December 31 $		2015 34,008 455 2,927 113 37,503	2014 30,287 619 3,297 (195) 34,008

(d) Expenses recognized in profit or loss

The Group’s pension expenses recognized in profit or loss for the years ended December 31, 2015 and 2014, were as follows:

Current service cost Net interest on the net defined benefit liabilities		2015 51 2,304 2,355	2014 1,387 1,829 3,216
	$ $

(e) Actuarial assumptions

The following are the Group’s primary actuarial assumptions at the reporting date:

The rate applied in calculating the present value of defined benefit obligation.

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Discount rate Future salary increasing rate	2015.12.31 1.50%~1.875% 2.50%~3.50%	2014.12.31
		1.75%~2.00% 2.50%~3.50%

The Group expects to make contributions of $2,747 to the defined benefit plans in the next year starting from December 31, 2015. The weighted average period of the defined benefit plans is 10.5~18.6 years.

(f) Sensitivity analysis

When calculating the present value of the defined benefit obligations, the Group uses judgments and estimations to determine the actuarial assumptions, including the discount rates and future salary changes, as of the end of the reporting period. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligations.

The changes in the main actuarial assumptions might have an impact on the present value of the defined benefit obligation:

2015.12.31 Discount rate Future salary increasing rate	Effects to the defined benefit obligation	Effects to the defined benefit obligation
	Increase by 0.25%	Decrease by 0.25%
	(2,778) 2,774	2,883 (2,752)

There is no change in other assumptions when performing the above-mentioned sensitivity analysis. In practice, assumptions may be interactive with each other. The method used in sensitivity analysis is consistent with that of the calculation used in the net pension liabilities.

The method and assumptions used on current sensitivity analysis is the same as those of the prior year.

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B. Defined contribution plan

The Company contributes an amount at the rate of 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. After the Group’s contributions to the Bureau of Labor Insurance, there is no further legal or constructive obligation.

The Group’s pension costs under the defined contribution method were $71,917 and $64,912 for the years ended December 31, 2015 and 2014, respectively. Payments were made to the Bureau of Labor Insurance.

(16) Income tax

A. The income tax expense for the years ended December 31, 2015 and 2014, was as follows:

Current income tax expense Deferred income tax expense (benefit) Income tax expense		2015 91,540 1,817 93,357	2014 80,118 (12,877) 67,241
	$ $

The reconciliation of income tax expense and profit before tax for the years ended December 31, 2015 and 2014 were as follows:

Profit before income tax Income tax on pre-tax financial income calculated at the Company’s income tax rate Effect of foreign jurisdiction tax rate differences Changes in unrecognized temporary differences Others		2015 397,257 67,534 22,116 1,737 1,970 93,357	2014
	$ $		273,906
			46,396 15,192 2,876 2,777
			67,241

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B. Deferred tax assets and liabilities

(a) Unrecognized deferred tax assets and liabilities

As of December 31, 2015 and 2014, the temporary differences associated with investments in subsidiaries were not recognized as deferred income tax assets and liabilities as the Group has the ability to control the timing of reversal of these temporary differences which are not expected to reverse in the foreseeable future. Deferred tax assets have not been recognized in respect of tax losses because the management determined that it is probable that there will be sufficient taxable gains in the future. The related amounts were as follows:

Unrecognized deferred tax assets

Aggregate temporary differences associated with investments in subsidiaries Tax losses		2015.12.31 696 8,130 8,826	2014.12.31
	$ $		17 6,150 6,167

The tax losses are tax credits from the Company and Taiwan Express (HK) Co., Ltd., which have 10 year expiration and no expiration date, respectively.

Unrecognized deferred tax liabilities

Aggregate temporary differences associated with investments in subsidiaries	$	2015.12.31 214,087	2014.12.31
			164,473

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(b) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2015 and 2014 were as follows:

Deferred tax assets: Balance, January 1, 2014 Credited (debited) to profit or loss Balance, December 31, 2014 Balance, January 1, 2015 Credited (debited) to profit or loss Balance, December 31, 2015	Defined benefit plans $ 7,094 (235) $ 6,859 $ 6,859 56 $ 6,915	Accrued expense 16,277 12,967 29,244 29,244 1,800 31,044	Others 3,943 145 4,088 4,088 (39) 4,049	Total
	$ $ $ $			27,314 12,877 40,191 40,191 1,817 42,008

(c) Examination and approval

The Company’s income tax returns through 2013 have been examined and approved by the Tax Authority.

(d) Imputation credit account and creditable ratio

Undistributed earnings commencing from January 1, 1998 Balance of imputation credit account Creditable ratio for earnings distribution to R.O.C. residents
	$

The related information on the aforesaid imputation credit tax was prepared in accordance with Ruling No. 10204562810 issued by the Ministry of Finance, R.O.C., on October 17, 2013.

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(17) Share capital and other equity

By the approval of the board of directors on March 12, 2015 and December 18, 2013, the Company issued 10,000 thousand common shares and 10,000 thousand common shares, totaling $249,000 and $217,500, respectively. The common stock issuance through cash was approved by the FSC. The date of issuance of common stock was July 29, 2015 and February 18, 2014, respectively, and the Company had registered the amendment to the authority.

As of December 31, 2015 and 2014, the authorized capital of the Company consisted of 120,000 thousand shares, of which 8,000 thousand shares were reserved for employee share options, with a par value of $10 (dollars) per share, and the issued capital was 116,042 thousand shares and 98,398 thousand shares, respectively.

The movements in outstanding shares for the years ended December 31, 2015 and 2014 were as follows:

Beginning balance, January 1 Issuance of common stock for cash Addition: Stock dividend Convertible bonds converted Exercise of employee stock options Ending balance, December 31		2015 98,398 10,000 3,629 3,654 361 116,042		2014 79,430 10,000 2,918 5,326 724
	$ $
				98,398

A resolution was approved during the shareholders’ meeting on March 24, 2011, for the issuance of common shares for cash within a year under private placement; with the number of shares issued not to exceed 8,400 thousand shares. Subsequently, a resolution was approved during the board meeting held on March 24, 2011, for the issuance of 8,400 thousand common shares under private placement, with a face value of $10 (dollars) per share, at $27.81 (dollars) per share, amounting to $233,604. The capital increase was registered on March 30, 2011. The relevant statutory registration procedures have since been completed.

The aforementioned private placement of common shares and the transfer of any subsequently obtained bonus shares would be subject to section 43(8) requirements under the Securities and Exchange Act. The Company can only apply for these shares to be traded on the GTSM after a three-year period has elapsed from the delivery date of the private placement securities, and after applying for a public offering with the Financial Supervisory Commission.

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A. Capital surplus

The components of capital surplus were as follows:

Paid-in capital derived from premium on issuance of common shares Surplus arising from bond conversion option Surplus arising from treasury stock transactions Surplus arising from long-term equity investments－ donated surplus and others Surplus arising from premium from merger Surplus arising from stock options		2015.12.31 561,694 218,314 21,060 18,004 2,912 45,230 867,214	2014.12.31
	$ $		404,818 161,264 5,975 18,004 2,912 36,422
			629,395

In accordance with the R.O.C. Company Act amended in 2012, realized capital reserve can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned realized capital reserve includes share premiums and donation. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserve to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

B. Retained earnings

Pursuant to the Company’s articles of incorporation, current-period earnings should first be used to offset any deficit in previous years and to set aside a legal reserve in accordance with the R.O.C. Company Act, and after the recognition or reversal of special reserve, 1% and 3% of the remaining net earnings are to be set aside as employees’ bonus and directors’ emoluments, respectively. After the above appropriations, current- and prior-period earnings that remain undistributed will be proposed for distribution by the board of directors, and a meeting of shareholders will be held to decide on this matter.

In order to maintain the shareholders’ return on investment, the dividend distribution shall not be lower than 50% of the current earnings or unappropriated earnings, whichever is lower. However, the cash dividend shall not be lower than 10% of the total distribution of dividends.

In accordance with the amended ROC Company Act in May 2015, the compensation of employees, director and supervisors are no longer subject to earnings distribution. The Company will make all the necessary amendments in its Articles of Incorporation, which will be approved at the 2016 annual shareholders’ meeting, to coincide with the aforementioned ROC Company Act.

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(a) Legal reserve

In accordance with the Company Act as amended in 2012, 10 percent of net income should be set aside as statutory legal reserve until it is equal to share capital. If the Company experienced profit for the year, the meeting of shareholders shall decide on the distribution of the statutory legal reserve, either by new shares or by cash, of the portion that exceeds 25 percent of the actual share capital.

(b) Special reserve

By choosing to apply exemptions granted under IFRS 1 “First-time Adoption of International Financial Reporting Standards” during the Company’s first-time adoption of the International Financial Reporting Standards (IFRSs) endorsed by the Financial Supervisory Commission, cumulative translation adjustments (gains) shall be reclassified as retained earnings. The net increase in retained earnings due to the first-time adoption of IFRSs amounted to $7,116. In accordance with Ruling No. 1010012865 issued by the Financial Supervisory Commission on April 6, 2012, an increase in retained earnings due to the first-time adoption of IFRSs shall be reclassified as special earnings reserve during earnings distribution, and when the relevant asset is used, disposed of, or reclassified, this special earnings reserve shall be reversed as distributable earnings proportionately. The carrying amount of special earnings reserve was $7,116 on December 31, 2015 and December 31, 2014.

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

(c) Earnings distribution

The actual distributions of employee bonuses and directors’ emoluments for 2014 were 1,787 and 5,360, respectively.

The differences between the actual emoluments to the directors and the recognized amounts in 2014 were not significant; therefore, they were recognized in profit or loss in 2015.

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Earnings distribution for 2014 and 2013 was decided via the general meeting of the shareholders held on June 3, 2015 and June 4, 2014, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to common shareholders: Cash Shares Total	2014	2014	Total amount 145,164 36,291 181,455	2013 Amount per share (dollars) Total amount 0.77 68,079 0.33 29,177 97,256	2013 Amount per share (dollars) Total amount 0.77 68,079 0.33 29,177 97,256
	Amount per share (dollars)			Amount per share (dollars) 0.77 0.33
	$ 1.456 0.3639	$			68,079 29,177 97,256

C. Treasury stock

The Company has acquired treasury stock and transferred it to its employees as an incentive. For the year ended December 31, 2015, the movements of the treasury stock were as below.

Item Treasury stock acquired for transfer to employees－shares (in thousands) Treasury stock acquired for transfer to employees－amount		2015.1.1 1,089 21,233	Increase 427 11,624	Decrease 1,089 22,221	2015.12.31
	$				427
					10,636

As of December 31, 2015 and 2014, a total of 427 and 1,089 thousand shares, respectively, were not yet cancelled.

For the year ended December 31, 2015, the compensation cost arising from employee purchase of treasury stocks amounted to $14,523, which was recognized as operating expense and capital surplus.

In accordance with the Securities and Exchange Act requirements, the number of shares repurchased should not exceed 10 percent of all shares outstanding. Also, the value of the repurchased shares should not exceed the sum of the Company’s retained earnings, share premium, and realized capital reserves. As of December 31, 2015, the balance of treasury stock was in compliance with the requirement. In accordance with the Securities and Exchange Act requirements, treasury shares held by the Company cannot be pledged and do not have any shareholders’ rights before their transfer.

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(18) Share-based payment

Information on share-based payment transactions as of December 31, 2015, was as follows:

Option grant date Options grant units Contract period Grant recipients Vesting conditions	Employee stock options
	2012/7/11 2000 Five years Employees of the Company and its subsidiaries Provide service for the next five years

A. Determining the fair value

The Company adopted the Black-Scholes model to calculate the fair value of the stock options at the grant date, and the assumptions adopted in this valuation model were as follows:

Fair value at grant date Share price at grant date Exercise price Expected volatility Expected duration Risk-free interest rate	2012
	Employee stock options
	4.5 20.50 20.50 25.998% 4.00 0.951%

Expected volatility was decided on the basis of the historical weighted-average volatility and was adjusted based on publicly available information; the duration is decided based on the Group’s regulations on issuance; the expected dividend and risk-free interest rate are decided on the basis of government bonds. When the fair value is decided, conditions of service and non-market price performance are not taken into consideration.

B. Information on share-based payment plan

As of December 31, 2015 and 2014, outstanding units were 592 and 952, respectively.

For the year ended December 31, 2014, there were 724 units exercised at $15.5 (dollars).

For the year ended December 31, 2015, there were 360 units, of which 30 units were exercised of 15.5 (dollars), 330 units at 14.2 (dollars).

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C. Employee expense and liabilities

The Group’s expenses for share-based payment for the years ended December 31, 2015 and 2014 were $802 and $2,093, respectively.

D. Issuance of new shares

For the year ended December 31, 2015 and 2014, the compensation cost arising from issuance of new shares subscribed by employees for cash injection amounted to $4,700 and $4,250, respectively recognized as operating expenses.

(19) Earnings per share (EPS)

A. Basic earnings per share

The basic earnings per share for the years ended December 31, 2015 and 2014, were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares. Calculations were as follows:

(a) Profit attributable to common shareholders

Profit attributable to common shareholders		2015 Continuing operations		2014 (Restated) Continuing operations

	$	293,820		199,512

(b) Weighted-average number of outstanding common shares

Common shares as of January 1 Effect of treasury stock Effect of stock dividends Effect of issuance of common stock Effect of employee stock options Effect of conversion of convertible bonds Weighted-average number of outstanding common shares on December 31 Weighted-average number of outstanding common shares on December 31－retrospectively adjusted		2015 98,398 (542) 3,629 4,247 109 2,821 108,662		2014 79,430 (1,089) 2,918 8,219 246 602 90,326 93,168
	$ $

B. Diluted earnings per share

The diluted earnings per share for the years ended December 31, 2015 and 2014 were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares, with all potential common shares retroactively adjusted. Calculations were as follows:

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(a) Profit attributable to common shareholders (diluted)

Profit attributable to common shareholders (basic) Interest on convertible bonds Gains on revaluation of put and call options of convertible bonds measured at fair value		2015 Continuing operations			2014 (Restated) Continuing operations

	$ $	293,820 6,286 (29) 300,077			199,512 6,373 18 205,903

(b) Weighted-average number of outstanding common shares (diluted)

Weighted-average number of outstanding common shares (basic) Effect of conversion of convertible bonds Effect of employee stock dividends Effect of stock options Weighted-average number of outstanding common shares on December 31 (diluted) Weighted-average number of outstanding common shares on December 31 (diluted)－retrospectively adjusted		2015 108,661 15,679 78 350 124,768		2014
	$			90,326 12,247 67 523 103,163 106,005

When the dilutive effect of stock options is calculated, the average market value is decided on the basis of the market price of the option during the outstanding period.

180

(20) Employees and directors, supervisors reward

By the approval of the board of directors, the Company’s articles of association, pending shareholders’ approval meeting, states if the Company profits this period they will set aside no less than 0.5% towards employee compensation and no more than 3% towards remuneration to directors and supervisors. If the Company has accumulated loss they must first reserve to cover the loss amount. The compensations mentioned afore include persons who meet the preset conditions of employees of the affiliate Company.

The Company accrued and recognized the employee compensation and the directors’ and supervisors’ compensation amounting to $1,522 and $7,879 for the year 2015, respectively. These amounts are calculated by using the Company’s pre-tax net profit for the period before deducting the amount of the remuneration to the employees and directors, multiplied by the distribution ratio of remuneration to the employees and directors under the Company’s articles of association, and expensed under operating costs or expenses for the year ended December 31, 2015. If there would be any changes after the reporting date in the following year, the change of the amount would be treated as changes in accounting estimates and recognized as profit or loss in that year.

(21) Other income

The Group’s other income for the years ended December 31, 2015 and 2014, was as follows:

Interest income Dividend income Other		2015 5,139 2,780 12,473 20,392	2014 3,981 3,104 14,592
	$ $
			21,677

(22) Other gains and losses

The Group’s other gains and losses for the years ended December 31, 2015 and 2014, were as follows:

Foreign exchange gains (losses) Gains on valuation of fair value of financial assets and liabilities through profit or loss Gain on sale of fixed assets Gain on sale of available-for-sale financial assets Gain on sale of fair value financial assets through profit or loss Gain on bargain purchase Other		2015 47,281 65 7,518 22,525 (684) 260 (2,884) 74,081	2014 (6,283) 26 - 8,838 36,322 - (3,258) 35,645
	$ $

(23) Financial instruments

A. Credit risk

(a) Exposure to credit risk

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The carrying amount of financial assets represents the Group’s maximum credit exposure.

(b) Concentration of credit risk

Based on the characteristic of the industry, the Group has no significant transactions with any single customer.

For the years ended December 31, 2015 and 2014, there was no significant concentration of credit risk from the sales of the Group.

B. Liquidity risk

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

December 31, 2015 Non-derivative financial liabilities Bank borrowings Convertible bond payable Trade and other payables Short-term notes and bills payable Investment payable (other current and non－current liabilities) December 31, 2014 Non-derivative financial liabilities Bank borrowings Convertible bond payable Trade and other payables Short-term notes and bills payable Derivative financial liabilities Forward exchange contracts Outflow Inflow	Carrying amount		Contractual cash flow	Within 6 months		6~12 months (460) - - - - (460) (93) - - - - (93)	1~2years - (111,500) - - (47,691) (159,191) (8,888) (13,700) - - - (22,588)	2~5years		Over 5years
	$ 117,141 393,988 1,166,669 20,000 253,814 $ 1,951,612 $ 343,750 194,819 1,219,285 5,000 - (2) $ 1,762,852		(117,351) (411,500) (1,166,669) (20,000) (273,732) (1,989,252) (344,594) (203,200) (1,219,285) (5,000) (28,449) 28,967 (1,771,561)	(116,891) - (1,166,669) (20,000) (174,377) (1,477,937) (335,613) - (1,219,285) (5,000) (28,449) 28,967 (1,559,380)				- (300,000) - - (51,664) (351,664) - (189,500) - - - (189,500)		- - - - - - - - - - - -

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

182

C. Currency risk

(a) Exposure to foreign currency risk

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

Unit: thousand

	2015.12.31	Foreign currency	2014.12.31
Foreign currency	Exchange rate		Exchange rate	TWD
47,014 40,223 6,325 194,009 10,840 2,658 74,185 120,715	32.84 4.2370 5.0573 1 32.84 4.2370 5.0573 1	30,348 30,319 4,085 184,096 9,145 6,163 33,803 104,694	31.61 4.0754 5.1659 1 31.61 4.0754 5.1659 1	959,305 123,562 21,104 184,096 289,066 25,115 174,624 104,694

(b) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the foreign currency exchange gains and losses on the translation of cash and cash equivalents, accounts receivable, other receivables, loans, accounts payable, and other payables that are denominated in foreign currency. A 1% depreciation of the USD, HKD and CNY against the TWD as of December 31, 2015 and 2014 would have decreased the net income before tax by $9,306 and $5,358, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for both periods.

Due to the variety of the Group’s functional currency, the Group discloses its exchange gains and losses of monetary items collectively. For the years ended December 31, 2015 and 2014, the Group’s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $47,281 and $(6,283), respectively.

D. Interest rate analysis

The following sensitivity analysis is based on the exposure to interest rate risk for derivative and non-derivative financial instruments on the reporting date.

For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year.

If the interest rate had increased/decreased by 1%, the Group’s net income before tax would have decreased/increased by $1,371 and $3,438 for the years ended December 31, 2015 and 2014, respectively, assuming all other variable factors had remained constant. This is mainly

183

due to the Group’s variable-rate borrowing.

E. Fair value

(a) Fair value hierarchy
i.Categories and fair value of financial instruments

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It shall not include fair value information of the financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value and investments in equity instruments which do not have any quoted price in an active market in which the value cannot reasonably measured.

			2015.12.31
Book value			Fair Value
		Level 1 7,086 - 7,086 25,326 - 25,326 - - - - - - - - - - - - - 32,412	Level 2 - 148 148 - - - - - - - - - - 393,988 - - - - 393,988 394,136 2014.12.31	Level 3	Total
$ 7,086 148 7,234 25,326 38,800 64,126 1,667,479 1,503,605 133,965 3,305,049 132,910 116,000 20,000 393,988 1,141 716,494 450,175 253,814 1,951,612 $ 5,328,021				- -	7,086 148 7,234 25,326 - 25,326 - - - - - - - 393,988 - - - - 393,988 426,548
	7,234			-
	25,326 38,800			- -
	64,126			-
	1,667,479 1,503,605 133,965			- - -
	3,305,049			-
	132,910			-
	116,000 20,000 393,988 1,141 716,494 450,175 253,814			- - - - - - -
	1,951,612			-
	5,328,021			-

	Book value		Fair Value
		Level 1 8,609 - 8,609 67,070 - 67,070 - - - - -	Level 2 - 15 15 - - - - - - - -	Level 3	Total
$ 8,609 15 8,624 67,070 38,800 105,870 1,071,484 1,683,962 127,029 2,882,475 114,084				- -	8,609 15 8,624 67,070 - 67,070 - - - - -
	8,624			-
	67,070 38,800			- -
	105,870			-
	1,071,484 1,683,962 127,029			- - -
	2,882,475			-
	114,084			-

184

Short term borrowings Short term notes and bills payable Convertible bonds Long term borrowings (including current portion) Note and accounts payables Other payable $	245,000 5,000 194,819 98,750 874,054 345,231 1,762,854 4,759,823	- - - - - - - 75,679	- - 194,819 - - - 194,819 194,834	- - - - - - - -	- - 194,819 - - -
					194,819
					270,513

ii. Fair value of financial tools and measurement of fair price.

－ Derivative financial derivatives non hedging

On the basis of a valuation model which is widely accepted by market, for example discount method and Black-Scholes Option Pricing Model. Forward foreign exchange contract is usually base on the current forward foreign exchange rate.

iii. Transfers in level one and level two

In the year 2015 and 2014 there were no significant transfers of level two and level one.

iv.Details of changes in level 3: None.

The favorable and unfavorable movement of the Group’s fair value fluctuations, the fair value is on the basis of different levels of unobservable input of parameter, achieved by using the assessment tools. If the fair value market tools are affected by more than one input, the above table will only take into consideration the effect of one input, it will not consider the correlation of the effect of more than one factor.

185

(24) Financial risk management

A. Overview

The nature and the extent of the Group’s risks arising from financial instruments, which include credit risk, liquidity risk, and market risk, are discussed below. Also, the Group’s objectives, policies, and procedures for measuring and managing risks are discussed below.

For more quantitative information about financial instruments, please refer to related notes to the financial statements.

B. Risk management framework

The board of directors has overall responsibility for the establishment and oversight of the risk management framework.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The board of directors oversees how management monitors the risks, which should be in compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation of the risks faced by the Group. Internal Audit undertakes regular reviews of the risk management controls and procedures and exception management, the results of which are reported to the Board of Directors.

C. Credit risk

Credit risk means the potential loss to the Group if the client or the counterparty involved in a financial instrument transaction defaults. The primary potential credit risk is from the accounts receivable and investments of the Group.

(a) Accounts receivable and other receivables

The Group has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available, and in some cases bank references. These limits are reviewed periodically. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis.

To monitor credit risk, clients are grouped by their credit characteristics, including the amounts of accounts receivable, the period of aging, and the margin contribution for the Group. The major customers of the Group are concentrated in overseas agencies and large clients. Clients with high credit risk after evaluation would be placed on the restricted client list and be monitored by the board. Transactions with such clients would only be in cash in the future.

186

The Group establishes an impairment allowance that represents its estimate of incurred losses in respect of trade receivables, other receivables, and investment. The components of this impairment allowance are a specific loss component that relates to individually significant exposure and a collective loss component for which a loss was incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

(b) Investments

The credit risk exposure of the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Group’s finance department. As the Group deals with banks and other external parties with good credit standing and financial institutions, corporate organizations, and government agencies which are graded above investment level, the management believes that the Group does not have any compliance issues, and therefore, there is no significant credit risk.

(c) Guarantees

The Group has determined that financial guarantees can only be provided to the following companies:

(i) Companies with a transaction relationship with the Group.
(ii) Companies in which the Group has more than 50% of the voting shares.
(iii) Companies which directly or indirectly hold more than 50% of the voting shares of T3EX Global Holdings Corp.

D. Liquidity risk

Liquidity risk is a risk that the Group is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as much as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

187

The Group actively expands its business to generate operating cash flow while it simultaneously manages the accounts receivable in a strict manner and controls its expenditure. In addition, the Group keeps good relationships with banks to obtain a sufficient credit limit for necessary cash demands in the operating cycle. Generally, the Group ensures that there is sufficient cash to cover expected operating expenditure, but excluding the potential influence of unexpected extreme conditions (i.e. nature disasters). The total amount of unused credit as of December 31, 2015, was $1,439,594.

E. Market risk

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

The types of financial assets at fair value through profit or loss held by the Group are open-end funds and convertible bonds which are measured at fair value. Therefore, the Group is exposed to the risk of price changes in the beneficiary certificate market. The Group engages a professional agent to manage its financial assets. Parts of bank deposits, accounts receivable, and accounts payable are evaluated for foreign currency exposure. To manage the currency risk, the Group maintains its foreign currency net position within a certain limit. The convertible bonds held and issued by the Group are measured at fair value. This results in exposure to the risk of price changes in the equity and bond markets.

(a) Currency risk

The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily the New Taiwan Dollar (TWD), Chinese Yuan (CNY), US Dollar (USD), Hong Kong Dollar (HKD), Vietnam Dong (VND), and Thai Baht (THB).

Regarding the currency risk from appreciation of the CNY, the Group uses foreign exchange contracts in order to manage its foreign exchange risk, and the contractual maturities are within one year of the reporting date.

Interest is denominated in the same currency as borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, which mainly uses the TWD.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates.

188

(b) Interest rate risk

Except for bank loans, there are no financial assets or financial liabilities with floating interest rates. The Group negotiates the price case by case to control the interest rate risk.

(c) Other market risk

The Group signs contracts with large customers and vendors to keep sales and sources of supply stable. To maintain stable sales prices, the contents of contracts are reviewed every year in light of international economic conditions and market change.

(25) Capital management

The board’s policy is to maintain a strong capital base in order to maintain investor, creditor, and market confidence and to sustain future development of the business. Capital consists of common shares, capital surplus, retained earnings, and non-controlling interests of the Group. The board of directors monitors the level of dividends to common shareholders.

The distribution of dividends of the Group follows the earnings of the year and is on a sustainable basis. When the board of directors drafts a proposal on appropriation and distribution of retained earnings, the dividend distribution shall not be lower than 50% of current earnings or unappropriated earnings, whichever is lower. However, the cash dividend shall not be lower than 10% of the total distribution of dividends.

The Group’s debt-to-equity ratios at the end of the reporting periods were as follows.

Total liabilities $ Less: cash and cash equivalents Net debt $ Total equity $ Less: amounts accumulated in equity relating to cash flow hedges Adjusted capital $ Debt-to-equity ratio		2015.12.31 2,122,614 1,667,479 455,135 2,636,045 - 2,636,045 17.27%	2014.12.31 (Restated)
			1,910,803 1,071,484
			839,319
			2,029,471 -
			2,029,471
			41.36%

From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares are intended to be used for issuing shares under the Group’s share option scheme for employees. The purchase of treasury stock did not impact the Group’s capital management.

There were no changes in the Group’s approach to capital management during the year.

(26) Investing and financing activities without cash flows

Convertible bonds were converted into common stock. Please refer to notes 6(13) and (17).

7. Related-party transactions

189

(1) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Group.

(2) Transactions with key management personnel
A. Guarantees

As of December 31, 2015 and 2014, certain directors had provided bank loan facility guarantees for the Group.

B. Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits Share-based payments	2015 $ 65,203 3,918 368 $ 69,489	2014
		52,399 4,236 381
		57,016

(3) Other related-party transactions
A. Revenue

Associates		Revenue	Revenue	Revenue		Accounts receivable	Accounts receivable
		2015		2014		2015.12.31 1,421	2014.12.31 17,930
	$	51,304		87,022

Trading terms of the above transactions require payment within 30 to 60 days or depending on funding needs, and are not significantly different from those of third-party customers.

190

B. Cost of revenue

Associates		Cost of revenue	Cost of revenue	Cost of revenue		Accounts	payable
		2015		2014		2015.12.31 170	2014.12.31
	$	14,458		14,954			193

Trading terms of the above transactions require payment within 30 to 60 days or depending on funding needs, and are not significantly different from those of third-party vendors.

8. Pledged assets

Pledged assets	Object	2015.12.31 $ 180,690 16,612 132,910 31,167 $ 361,379	2014.12.31
Property, plant, and equipment Other financial assets－current Refundable deposits Other financial assets－non-current	Short-term/long-term credit facility and bank guarantees Forward exchange guarantees/credit facility/logistics-related guarantees Logistics-related guarantees Logistics-related guarantees		192,342 9,373 114,084 31,354 347,153

9. Contingencies and commitments

(1) Guarantees issued by financial institutions for the Group for freight forwarding services were as follows:

HKD TWD	2015.12.31 $ 1,500 34,750	(in thousands) 2014.12.31
		6,150 61,150

(2) In order to improve the quality of customer service, decrease operating costs, and increase competitiveness, the Group signed annual contracts with American-line sea cargo companies for a predetermined volume of containers.

191

(3) Promissory notes issued to the bank as collateral for short-term bank borrowings, logistics business, etc., were as follows.

Promissory notes

2015.12.31 2014.12.31 $ 292,810 411,746

10. Significant casualty loss: None.

11. Subsequent events: None.

12. Other

The personnel cost and depreciation and amortization expenses, categorized by function, were as follows.

Personnel cost Salaries Labor and health insurance Pension Others Depreciation expenses Amortization expenses	2015 Operating costs Operating expenses Total 139,270 774,516 913,786 10,603 53,456 64,059 6,630 67,642 74,272 2,549 58,414 60,963 13,651 22,964 36,615 - 13,129 13,129	2014(Restated) Operating costs Operating expenses Total 105,024 771,518 876,542 8,029 57,756 65,785 6,914 61,214 68,128 5,267 50,901 56,168 13,787 23,112 36,899 - 14,124 14,124

13. Other Disclosure Items

(a) Significant transaction relevant information

The information on the significant transactions in 2014 required by the Guidelines Governing the Preparation of Financial Reports of Securities issuers was as follows:

(1) Lending to other parties:

No	Name of lender	Name of	Account	affiliates	Highest balance durin the eriod	aance as o December 31,	pproprate credit as of	ange o interest rates	Type of financin	Transaction	Purpose of fund financin of the	Allowance for bad	uar	antee	mtaton on fund financing	Limitation on fund financin
(Note 1) 0	The Company	borrower T.H.I. Group Singapore Pte. Ltd. Taiwan Express Logistic Co., Ltd. T.H.I. Logistics Co. Ltd.	name Other	Y	g p 4,926	2015 (Note 4) 4,926	December 31, 2015 4,926	during the period Quarterly	g (Note 2) 2	amounts -	g borrower Trading turnover	debt -	Item -	Value -	to individual party 501,283	g 1,002,567
			receivables-					changes in
			related					interest rates
			patties
0	The Company		Other	Y	180,000	180,000	90,000	1.36%	2	-	Trading turnover	-	-	-	501,283	1,002,567
			receivables-
			related
			patties
0	The Company		Other	Y	50,000	-	-	1.35%	2	-	Trading turnover	-	-	-	501,283	1,002,567
			receivables-
			related
			patties
1	Taiwan Express	Taiwan Express Logistic Co., Ltd. Taiwan Express Logistic Co., Ltd. Taiwan Express Logistic Co., Ltd.	Other	Y	50,000	-	-	2.25%	2	-	Trading turnover	-	-	-	74,291	148,582
	(HK) Co., Ltd.		receivables-
			related
			patties
2	T.H.I. Logistics Co.		Other	Y	65,000	40,000	40,000	1.36%	2	-	Trading turnover	-	-	-	40,182	80,364
	Ltd.		receivables-
			related
			patties
3	T.H.I. Group		Other	Y	77,433	-	-	2.05%	2	-	Trading turnover	-	-	-	247,598	495,197
	Limited (in HK)		receivables-
			related
			patties
4	T.H.I. Group	EXer Logistics Co.,Ltd.	Other	N	25,852	-	-	7%	2	-	Trading turnover	-	-	-	188,829	377,659
	(Shanghai)Ltd.		receivables

192

Note 1: The numbers indicated above represent the following: 0 for investor, 1 to 4 for investee.

Note 2: Nature of lending: 1 for counterparties with transactions, and 2 for short-term operating capital.

Note 3: The ceiling on total loans granted by the Company to all parties is 40% of the net assets in the financial statements; the ceiling on total loans granted by the Company to each entity is 20% of the net assets in the financial statements.

Note 4: Ending facility balance approved by BOD.

Note 5: The above transaction have been reversed in this financial report.

(2) Guarantees and endorsements for other parties:

No.	Endorsement/gua rantee Provider	Counter- guarantee	party/ receiver	Limit of guarantee/ endorsement amount for receiving party	Maximum balance	Ending balance	Actual amount used	Endorsement and guarantee secured by assets	Percentage of accumulated guarantee amount to net assets value from the latest financial statement	Limit of total guarantee/ endorsement amount	Classified as endorsement and guarantee to subsidiary by parent company	Classified as endorsement and guarantee to parent company by parent subsidiary	Classified as endorsement and guarantee to companies in Mainland China
		Name	Relation
0 0 0	The Company Taiwan Express Logistic Co., Ltd. Shanghai Yaohwa International Forwarder Co., Ltd.	Shanghai Yaohwa International Forwarder Co., Ltd. Taiwan Express (HK) Co., Ltd. T.H.I. Group (Shanghai) Ltd.	2 2 3	250,641 105,150 9,932	62,044 63,220 3,619	60,688 - 3,540	- - -	- - -	2.42% - 3.56%	1,002,567 210,299 39,729	Y N N	N N N	Y N Y

Note 1: The numbers indicated above represent the following: 0 for investor, 1 onwards for investee

Note 2: The relationship between the guarantee provider and the receiver is as follows:

(1) The Company has transactions with its counterparties.
(2) The Company holds more than 50% of common shares of its subsidiary.
(3) The Company and its subsidiaries hold more than 50% of common shares of the investee company.

193

(4) The parent company holds more than 50% of its outstanding common shares (directly or indirectly) through a subsidiary.
(5) Companies within the same architectural field have signed a contractual agreement to provide mutual endorsements/ guarantees for the need of a specific construction project.
(6) The shareholders provide endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.
Note 3: (1) Total guarantees amount should not exceed 40% of the Company’s net assets in the financial statements if the following conditions are met:

Ownership of the Company should exceed 50%: Guarantee amount should not exceed 20% of the Company’s net assets

Ownership of the Company should not exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

The net assets stated above refer to the net assets from the Company’s most recently audited financial statements.

(2) Apart from the conditions listed above, guarantees for the purpose of business relations should not exceed the total amount of business transactions between the two parties, whichever is lower. The definition of business transactions could either be purchases or sales, whichever is higher.
(3) Information regarding securities held:

Unit: thousand shares

Company’s m	Types and issuer of marketable securities	Nature of the relationship	Account name		Endingb	alance		Notes
				Number of shares	Book value	Ownership %	Fair value
The Company The Company T.H.I. Logistics Co. Ltd. Taiwan Express Logistic Co., Ltd.	Fund Yuanta Wan Tai Fund Stock Aerospace Industrial Development Corporation Stock Aerospace Industrial Development Corporation Stock Central Taiwan Science Park Logistics Co.,Ltd.	- - - -	Financial assets at fair value through profit or loss－current Available-for-sale financial assets －current Available-for-sale financial assets －current Financial assets measured at cost－ non-current	473,454 370,000 260,000 3,880,000	7,086 14,874 10,452 38,800	- - - -	7.086 14,874 10,452 -	(note1)

Note 1: due to lack of market information, will not include in this report

(4) Information regarding purchase or sale of securities for the period which exceeded $300 million or 20% of the Company’s paid-in capital: None.
(5) Information on acquisition of real estate for which the purchase amount exceeded $300 million or 20% of the Company’s paid-in capital: None.
(6) Information regarding the amount from disposal of real estate exceeding NT$300 million or 20% of the Company’s paid-in capital: None.

194

(7) Information regarding related-party purchase and sale transactions for which the amount exceeded $100 million or 20% of the Company’s paid-in capital:

	Name of counter-party	Relationship with the Coman		Transact	ion details Percentae		Reasons and description	Reasons and description
							on how the transaction
Name of company which urchased							conditions differ from the general transactions		Acc receiv	ounts/notes able(payable) Percentage
p or sold		py	Purchase / sale	Amount	g of total purchases / sales	Credit terms	Amount	Credit terms	Ending balance	of total notes/accounts receivable (payable)
Wai Hung Cargo Tt C	Taiwan Express (HK) Co., Ltd	Associates	Sales	112,067	1.15%	The sales prices and payment	-	-	6,201	0.42%
ranspor o., Ltd.					t	terms of intercompany
						sales are not
						significantly
						different from
						hose of the third
						parties.

Note 1: The above transactions have been reversed in this financial report.

(8) Information regarding receivables from related parties for which the amount exceeded $100 million or 20% of the Company’s paid-in capital:

Name of company which has accounts receivable	Counterparty	Relationship	Ending balance of accounts receivable (in thousands)	Turnover	Past-due rec relate	eivables from d party	Received subsequently (in thousands)	Allowance for bad debt
					Amount	method
T.H.I. Group (Shanghai) Ltd. T.H.I. Group (Shanghai) Ltd. T.H.I. Logistics Co. Ltd. T.H.I. Group Ltd. (B.V.I.) Wai Hung Cargo Transport Co.,Ltd.	T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK) T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK) Taiwan Express (HK)Co.,Ltd.	Associates Parent company Associates Associates Associates	Other receivables 118,369 Other receivables 276,213 Other receivables 118,308 Other receivables 170,653 Other receivables 121,981	- - - - -	- - - - -	- - - - -	- - - 185,148 (Note 1) - - - - - -

Note 1: The amount is to be collected on March 7, 2016.

(9) Information regarding trading in derivative financial instruments: Please refer to note 6(2)&(10).
(10) Significant business transactions between the Parent company and its subsidiary:

Number (Note 1)	Company Name	Counterparty	Nature of the relationship (Note 2)		Tra	nsaction Details
				Account	Amount	Transaction Terms	Percentage of Consolidated Total Operating Revenues or Total Assets
1 1 2 3 4	T.H.I. Group (Shanghai) Ltd. T.H.I. Group (Shanghai) Ltd. T.H.I. Logistics Co. Ltd. T.H.I. Group Ltd. (B.V.I.) Wai Hung Cargo Transport Co., Ltd.	T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK) T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK) Taiwan Express (HK) Co., Ltd.	3 3 3 3 3	Other recrivables Other recrivables Other recrivables Other recrivables Operating revenues	118,369 276,213 118,308 170,653 112,067	The sales prices and payment terms of intercompany sales are not significantly different from those of the third parties. 〝〝〝〝	2.49% 5.80% 2.49% 3.59% 1.15%

Note 1: The numbers indicated above represent the following: 0 for the Parent company, 1 to 4 for its subsidiaries.

Note 2: The relations of the transactions represent the following:

The Parent company to its subsidiaries.
Subsidiaries to the Parent company.
Subsidiaries to subsidiaries.
Note 3: This chart will disclose sales, accounts and notes receivable, other receivables, purchases, accounts and notes payable, and other payables.

195

Note 4: The above transactions have been reversed in this financial report.

(b) Business and significant transactions among the affiliates (investees of Mainland China are not included)

Relevant information about reinvestment for 2015 is as follows:

Unit: thousand shares

Investor	Investee	Location	Main Businesses and Products	Investmen	t Amount	Balance	as of December	31,2015	Net Income (Loss) of the Investee	Share of profit loss of invest	Note
				December31, 2015	December 31,2014	Shares	Percentage of Ownership	Carrying Value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Greatline Fresh Beauty TEC TEC TEC TEC TEC TEC TEC HK	T.H.I. Group Ltd. (B.V.I.) Greatline nternational Limited (Greatline) T.H.I Group Vietnam Co., Ltd. T.H.I. Group (Bangkok) Co., Ltd. T.H.I. & Maruzen Co., Ltd. Taiwan Express Logistic Co., Ltd. (TEC) T.H.I. Logistics Co. Ltd. T.H.I. Group (Cambodia) Co., Ltd. PT. Dexter Eurekatama T.H.I. Group Singapore Pte. Ltd. (Singapore) LOGI International Co., Ltd. Fresh Beauty Enterprises Ltd. (Fresh Beauty) T.H.I. Group Limited (HK) (T.H.I. HK) Eastern Union Holdings Limited (Eastern Union) Taiwan Express (HK) Co., Ltd. (TEC HK) TEC Logistic Co., Ltd. Orient Air General Sales Agent Co., Ltd. Hiview Logistics Co., Ltd. Taiwan Express (USA), Inc. TEC Logistics (USA), Inc. Wai Hung Cargo Transport Co., Ltd.	British Virgin Islands British Virgin Islands Vietnam Thailand Japan Taiwan Taiwan Cambodia Indonesia Singapore Korea Samoa Hong Kong Hong Kong Hong Kong Taiwan Taiwan Taiwan United States United States Hong Kong	Offshore settlement center Offshore holding company Air & sea freight forwarding and packaging Air & sea freight forwarding and packaging Air & sea freight forwarding Air & sea freight forwarding and customs clearance Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Offshore holding company Air & sea freight forwarding Offshore holding company Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and delivery services Freight forwarding, customs clearance, and delivery services Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Warehousing and distribution	35,000 (1,000USD) 134,428 (4,050USD) 4,862 (159USD) 2,372 (72USD) 10,365 (31,130JYP) 704,200 130,000 4,462 (150USD) 47,381 (1,598USD) 7,629 (320SGD) 9,666 (300USD) 282,775 (55,579CNY) 139,948 (4,314USD) 57,411 (1,751USD) 266,807 (70,550HKD) 6,000 600 76,590 31,629 (1,000USD) 8,549 (290USD) 16,299 (4,238HKD)	35,000 (1,000USD) 134,428 (4,050USD) 4,862 (159USD) 2,372 (72USD) 7,449 (20,000JYP) 704,200 130,000 4,462 (150USD) 47,381 (1,598USD 7,629 (320SGD) - - 139,948 (4,314USD) - 266,807 (70,550HKD) 6,000 600 76,590 31,629 (1,000USD) 8,549 (290USD) 16,299 (4,238HKD	1,000,000 4,050,000 - - 3,060 35,958,400 13,000,000 - 12,000 320,000 16,285 60 12,480,000 - - 1,000,000 60,000 5,000,000 1,000,000 290,000 -	100% 100% 51% 49% 51% 100% 100% 100% 30% 80% 30% 60% 100% 100% 100% 100% 30% 97.51% 100% 100% 100%	72,871 1,355,066 33,375 9,890 10,760 783,732 167,158 8,006 48,337 4,248 9,004 281,331 1,345,226 68,963 371,453 44 3,791 82,174 40,427 15,343 16,024	(11,060) 264,813 10,413 8,563 4,242 68,049 27,674 944 13,263 (3,903) (3,057) 12,271 266,103 12,271 32,512 18 7,421 1,228 4,763 291 367	(11,060) 264,813 5,311 4,196 1,584 62,049 27,674 944 854 (3,123) (917) - 266,103 - 32,512 18 2,226 1,197 4,763 291 (2,238)	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investment under equity method Subsidiaries Investment under equity method Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investment under equity method Subsidiaries Subsidiaries Subsidiaries Subsidiaries

196

(c) Information regarding investments in Mainland China (PRC)
(1) Name, major operations and related information of investee in Mainland China

nvesee companies Shanghai	operations Air & sea freight	pa-n capa (in thousands) 55,031	investment Note 1	awan, egnnng of period (in thousands) 55,031	Remittance -	Repatriation -	Taiwan, end of period (in thousands) 55,031	income 12,141	sareong percentage by the Company 100%	nvesmen recognized (in thousands) 12,141	end of period (in thousands) 99,575	investment, end of period -
Yaohwa	forwarding and	(1,700USD)		(1,700USD)			(1,700USD)
International	customs
Forwarder Co.,	clearance
Ltd.
T.H.I. Group	Air & sea freight	92,883	Note 1	84,861	-	-	84,861	142,874	100%	14,874	974,410	-
(Shanghai) Ltd.	forwarding and	(3,060USD)		(2,600USD)			(2,600USD)
	customs
	clearance
T.H.I. Shanghai	Warehousing and	6,530	Note 1	6,530	-	-	6,530	-	-	-	-	-
Logistic Co.,	logistics	(200USD)		(200USD)			(200USD)
Ltd.
Shanghai Kai	Transport and	7,653	Note 5	-	-	-	-	194	-	194	-	-
Hua Co., Ltd.	logistics	(1,600CNY)
T-Cube Global	Warehousing and	49,920	Note 1	-	28,961	-	28,961	12,265	60%	-	62,733	-
Logistics Co.,	company	(10,000CNY)			(932USD)		(932USD)
Ltd.
EXer Logistics	Express logistics	19,288	Note 6	-	-	-	-	(4,199)	68%	-	177,246	-
Co., Ltd.	company	(3,846CNY)
TEC Logistics	Freight	183,901	Note 7	183,901	-	-	183,901	22,901	100%	22,901	161,760	-
(Shenzhen) Co.,	forwarding,	(48,550HKD)		(48,550HKD)			(48,550HKD)
Ltd.	customs
	clearance, and
	distribution

Note : The above transactions have been reversed in this financial report.

(2) Limit on the amount of investment in Mainland China

	Amount of investment approved by
Cumulative remittance from		Limit on the amount of
	the Investment Commission, Ministry
Taiwan, end of the period (Note3)		investment in Mainland China
	of Economic Affairs (Note4)

175,383	634,140	1,503,850
(5,432USD)	(19,310USD)

Note 1: Investment in Mainland Chain via remittance through a third region.
Note 2: The investment gains or losses under the same period that have been recorded based on the investees’ audited financial statements.
Note 3: The actual amount invested by the Company in Mainland Chain at the end of this period.
Note 4: At the reporting date, the exchange between USD and TWD rate was 1:32.84.
Note 5: Shanghai Yaohwa International Forwarder Co., Ltd. directly invested in Shanghai Kai Hua Co., Ltd.
Note 6: T.H.I. Group (Shanghai) Ltd. directly invested in EXer Logistics Co., Ltd.
Note 7: The Company’s subsidiary, Taiwan Express Logistic Co., Ltd., invested in Mainland China via remittance through a third region. The upper limit of the investments is 60% of Taiwan Express Logistic Co., Ltd.’s net assets in the financial statements based on the “REGULATIONS GOVERNING THE APPROVAL OFINVESTMENT OR TECHNICAL COOPERATION INMAINLAND CHINA” and have been approved by the Investment Commission Ministry of Economic Affairs amounting to $183,901 thousand (HKD 48,550 thousand).

14. Operating segments

(1) General information

The Group’s reportable operating segments are the sea export and air export segments.

(2) Information on reportable segments’ income or loss, assets, liabilities, and measurement base and

197

reconciliation

The Group has two reportable segments, as described below. These two segments are strategic business units of the Group. Each strategic business unit provides different services and is managed separately on account of different professional knowledge and marketing tactics. The Group’s chief operating decision makers review the internal management report on a monthly basis. The Group’s operating segment information and reconciliation were as follows:

		2015
Sea export $ 5,390,293 997,807 (note 1)	Airexport 2,061,876 355,908 (note 1)	Others Adjustment/ elimination Total
		2,292,622 (7,879) 9,736,912 522,794 763 1,877,272 (note 1) (note 1) (note 1) 2014
Sea export $ 5,213,393 875,709 (note 1)	Airexport 2,192,056 305,044 (note 1)	Others Adjustment/ elimination Total
		2,316,533 7,531 9,729,513 477,186 1,126 1,659,065 (note 1) (note 1) (note 1)

Note 1: Segment assets are not reviewed by the Group’s chief operating decision makers, and thus, they are disclosed as zero.

(3) Products and services information

Please refer to note 13(2).

(4) Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of the customers and segment assets are based on the geographical location of the assets. The Group’s main business is the international sea and air freight forwarding services; therefore, external sales to customers are not divided geographically.

198

Non-current assets:

Taiwan China and Hong Kong Others		2015 783,694 271,043 2,903 1,057,640	2014 (Restated)
	$ $		530,108 71,302 1,814 603,224

(5) Major customers

The Group has no single customer that exceeds 10% of its sales.

199

Independent Auditors’ Audit Report

The Board of Directors T3EX Global Holdings Corp.

We have audited the accompanying individual balance sheets of T3EX Global Holdings Corp. (the “Company”) as of December 31, 2015 and 2014 (restated), and the related statements of comprehensive income, changes in equity, and cash flows for the years then ended. These individual financial statements are the responsibility of the Company’s management. Our responsibility is to issue an audit report on these individual financial statements based on our audits. We did not audit the financial statements of some equity-accounted investee of the Company as of December 31, 2014, constituting 0.09% of the total assets, nor the related share of profit of equity-accounted investees for the year then ended, constituting 0.49% of the individual net income before tax. Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included above, is based solely on the report of the other auditors.

We conducted our audits in accordance with the generally accepted auditing standards and the “Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants” in the Republic of China. Those standards and regulations require that we plan and perform the audit to obtain reasonable assurance about whether the individual financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the individual financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall individual financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the accompanying individual financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014 (restated), and the results of its operations and its cash flows for the years then ended, in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

200

As disclosed in Note 3 of the individual financial statements, the Company have applied the 2013 version of IFRS, IAS, IFRIC and SIC (excluded IFRS 9) endorsed by the Financial Supervisory Commission, R.O.C. and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers since January 1, 2015, and restated the individual financial statements as of December 31, 2014 and for the year ended retrospectively.

Taipei, Taiwan (the Republic of China)

March 14, 2016

Note to Readers

The accompanying individual financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

201

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP.

INDIVIDUAL BALANCE SHEETS

December 31, 2015, December 31, 2014 (Expressed in thousands of New Taiwan dollars)

Assets Current assets Cash and cash equivalents (notes 6(1), (19) & (21)) Financial assets at fair value through profit or loss－current (notes 6(2) & (19)) Available-for-sale financial assets－current (notes 6(3) & (19)) Accounts receivable－related parties (notes 6(4) & (19) and 7) Other receivables due from related parties (notes 6(4) & (19) and 7) Other current assets (notes 6(4)) Current assets Non-current assets Financial assets at fair value through profit or loss－non-current (notes 6(2),(10) & (19)) Equity-accounted investees (note 6(5)) Property, plant and equipment (notes 6(7) and 8) Intangible assets (note 6(8)) Deferred tax assets (note 6(12)) Refundable deposits (note 6(19)) Other assets Non-current assets Total assets		December 31,	2015 % 4 - - 2 3 - 9 - 84 6 - - 1 - 91 100		December 31, 2014 (Restated) Amount % 22,153 1 8,609 - 24,189 1 43,943 2 10,000 - 11,301 1 120,195 5 15 - 2,195,934 86 198,954 8 6,560 - 6,549 - 2,176 - 29,220 1 2,439,408 95 2,559,603 100 Liabilities and Equity Current liabilities Short-term borrowings (notes 6(9) & (19)) Notes payable (note 6(19)) Other payable (note 6(19)) Other payables to related parties (note 6(19) and 7) Current tax liabilities Current provision for employee benefits Other current liabilities (note 6(5) & (19)) Current liabilities Non-current liabilities Convertible bond payable (notes 6(10) & (19)) Net defined benefit liability (note 6(11)) Other liabilities (notes 6(5) & (19)) Non-current liabilities Total liabilities Equity (notes 6(12), (13) & (14)): Ordinary Share Capital surplus Retained earnings Other equity Treasury stock Total equity (note 6(21)) Total equity and liabilities		December 31, 2	015 % - - 1 3 - - 5 9 12 1 2 15 24 35 26 12 3 - 76 100		December 31, 2014 (Restated)	December 31, 2014 (Restated)
		Amount 130,883 7,086 14,874 49,430 94,926 11,148 308,347 148 2,783,814 198,754 11,227 6,549 2,176 - 3,002,668 3,311,015			Amount 22,153 8,609 24,189 43,943 10,000 11,301 120,195 15 2,195,934 198,954 6,560 6,549 2,176 29,220 2,439,408 2,559,603		Amount - 1,822 29,472 99,404 - 1,146 174,405 306,249 393,988 24,740 79,620 498,348 804,597 1,160,421 867,214 390,641 98,778 (10,636) 2,506,418 3,311,015			Amount 190,000 3,863 26,992 122,477 593 1,146 289 345,360 194,819 27,288 - 222,107 567,467 983,981 629,395 284,581 115,412 (21,233) 1,992,136 2,559,603	%
	$ $					$ $					7 1 5 - - - 13 8 1 - 9 22 38 24 12 5 (1) 78 100

The individual financial statements of T3EX Global Holdings Corp. was prepared in Chinese originally. The individual financial statements have been translated into English. The translated information is derived from the Chinese language individual financial statements.

202

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(expressed in thousands of New Taiwan dollars, except for earnings per common share)

Net revenue (note 6(17) and 7) Cost of revenue (notes 6(11)) Gross profit Net operating income Non-operating income and expenses Other income (note 7) Other gains and losses (note 6(18)) Interest expense (note 6(10)) Profit before tax Less: tax expense (note 6(12)) Profit for the year Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit obligation Share of gains of subsidiaries, associates, and joint ventures accounted for using the equity method that may be reclassified subsequently Income tax related to items that will not be reclassified subsequently Subtotal Items that may be reclassified subsequently to profit or loss: Exchange differences on translation in the financial statements of foreign operation Unrealized gains (losses) on available-for-sale financial assets Share of gains of subsidiaries, associates, and joint ventures accounted for using the equity method that will not be reclassified subsequently Income tax related to items that may be reclassified subsequently Subtotal Other comprehensive income(loss) for the year, net of income tax Total comprehensive income Earnings per share (note 6(15)) (TWD) Basic earnings per share Diluted earnings per share		2015	% 100 29 71 71 1 1 (2) 71 - 71 - (2) - (2) (1) (1) (2) - (4) (6) 65		2014(Restated)	2014(Restated)
		Amount 415,213 122,247 292,966 292,966 5,520 4,295 (7,913) 294,868 1,048 293,820 1,522 (7,827) - (6,305) (3,214) (2,470) (10,950) - (16,634) (22,939) 270,881 2.70 2.41			Amount 272,824 82,340 190,484 190,484 5,472 14,134 (9,499) 200,591 1,079 199,512 3,087 (6,726) - (3,639) 87,695 8,611 15,266 - 111,572 107,933 307,445 2.14 1.94	%
	$ $ $ $					100 30 70 70 2 5 (4) 73 - 73 1 (2) - (1) 32 3 6 - 41 40 113

203

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

INDIVIDUAL STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(expressed in thousands of New Taiwan dollars)

Balance at January 1, 2014 Effect of retrospective application and restatement Equity at beginning of period after restatement Profit for the year (restated) Other comprehensive income Total comprehensive income (restated) Appropriation and distribution of 2013 retained earnings in 2014 (note1): Legal reserve Reversal of special reserve Cash dividends Stock dividends Issue of common stock Other changes in capital surplus: Share-based payment transactions Issue of common stock for convertible bonds Changes in equity factors from issuance of convertible bonds Issue new stocks for share base payment Balance at December 31, 2014 (Restated) Profit for the year Other comprehensive income Total comprehensive income Appropriation and distribution of 2014 retained earnings in 2015 (note 2): Legal reserve Cash dividends Stock dividends Other changes in capital surplus: Share-based payment transactions Issue of common stock Issue of common stock for convertible bonds Changes in equity factors from issuance of convertible bonds Issue new stocks for share base payment Purchase of treasury share Employee purchases treasury stocks Balance at December 31, 2015	Capital	Capital		Capital surplus 410,144 - 410,144 - - - - - - - 117,500 6,343 75,510 15,916 3,982 629,395 - - - - - - 5,503 149,000 51,996 14,682 1,553 - 15,085 867,214			Retained earnings	Retained earnings		Total 201,493 (15,529) 185,964 199,512 (3,639) 195,873 - - (68,079) (29,177) - - - - - 284,581 293,820 (6,305) 287,515 - (145,164) (36,291) - - - - - - - 390,641		Other equity		Total 3,840 - 3,840 - 111,572 111,572 - - - - - - - - - 115,412 - (16,634) (16,634) - - - - - - - - - - 98,778		Treasury stock (21,233) - (21,233) - - - - - - - - - - - - (21,233) - - - - - - - - - - - (11,624) 22,221 (10,636)		Total equity
	Share capital				Legal reserve 81,068 - 81,068 - - - 10,438 - - - - - - - - 91,506 - - - 19,852 - - - - - - - - - 111,358		Special reserve	Unappropriated earnings 106,290 (15,529) 90,761 199,512 (3,639) 195,873 (10,438) 7,019 (68,079) (29,177) - - - - - 185,959 293,820 (6,305) 287,515 (19,852) (145,164) (36,291) - - - - - - - 272,167			Exchange differences on translation of foreign financial statements 3,840 - 3,840 - 87,695 87,695 - - - - - - - - - 91,535 - (3,214) (3,214) - - - - - - - - - - 88,321	Unrealized gain (loss) on available-for-sale financial assets - - - - 23,877 23,877 - - - - - - - - - 23,877 - (13,420) (13,420) - - - - - - - - - - 10,457
	$ $	794,297 - 794,297 - - - - - - 29,177 100,000 - 53,267 - 7,240 983,981 - - - - - 36,291 - 100,000 36,544 - 3,605 - - 1,160,421					14,135 - 14,135 - - - - (7,019) - - - - - - - 7,116 - - - - - - - - - - - - - 7,116											1,388,541 (15,529) 1,373,012 199,512 107,933 307,445 - - (68,079) - 217,500 6,343 128,777 15,916 11,222 1,992,136 293,820 (22,939) 270,881 - (145,164) - 5,503 249,000 88,540 14,682 5,158 (11,624) 37,306 2,506,418

Note 1: 2013 directors’ emoluments of $3,242 and employee bonus of $1,081 have been deducted from comprehensive income statement

Note 2: 2014 directors’ emoluments of $5,478 and employee bonus of $1,826 have been deducted from comprehensive income statement.

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(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND SUBSIDIARIES

INDIVIDUAL STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(expressed in thousands of New Taiwan dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit and loss Depreciation Amortization Change in fair value of financial assets and liabilities though profit on loss Interest expense Interest income Equity-settled share-based payment transactions Share of profit of equity-accounted investees Gain on disposal of investment and other Loss on disposal of equity-accounted investee Total adjustments to reconcile profit before tax Changes in operating assets and liabilities: Changes in operating assets: Decrease in financial assets held for trading Increase in accounts receivable－related parties Decrease in other current assets Increase in other operating assets Total changes in operating assets Changes in operating liabilities: Decrease in notes payable Decrease in accounts payable to related parties Increase in other payable Decrease in other current liabilities Increase (decrease) in accrued pension liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash used in operating activities Interest received Interest paid Income tax paid Net cash generated from operating activities Cash flows from investing activities: Acquisition of available-for-sale financial assets Proceeds from sales of available-for-sale financial assets Acquisition of equity-accounted investee Acquisition of property, plant and equipment Decrease in refundable deposits Acquisition of intangible assets Decrease (increase) in other receivables－related parties Equity-accounted investee’s cash dividends Net cash used in investing activities Cash flows from financing activities: Decrease in short-term borrowings Proceeds from issuance of convertible bonds Payment of cash dividends Proceeds from issuance of shares Exercise of employee share options Repurchase of treasury stock Proceeds from employee purchase of treasury stock Net cash generated from (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31		2015 294,868 5,494 3,590 (65) 7,913 (1,913) 19,278 (352,325) (5,713) 1,988 (321,753) 1,560 (5,487) 155 - (3,772) (2,041) (23,073) 2,480 (79) (1,026) (23,739) (27,511) (349,264) (54,396) 1,913 (1,628) (1,642) 55,753 - 12,217 (12,582) (5,294) - (8,258) (84,925) 37,171 (61,671) (190,000) 296,000 (145,164) 249,000 5,158 (11,624) 22,784 226,154 108,730 22,153 130,883	2014(Restated) 200,591 4,943 4,985 (17) 9,499 (2,077) 4,395 (218,601) (13,850) - (210,723) 20,006 (25,141) 16,467 (29,220) (17,888) (5,306) (144,752) 15,046 (133) 26 (135,119) (153,007) (363,730) (163,139) 2,077 (3,320) (486) 164,868 (19,118) 5,724 (7,629) (20,483) 750 (4,544) 220,000 - 174700 (460,000) 297,500 (68,079) 217,500 11,222 - - (1,857) 7,975 14,178 22,153
	$ $

205

(English Translation of Financial Report Originally Issued in Chinese)

T3EX GLOBAL HOLDINGS CORP.

NOTES TO FINANCIAL STATEMENTS

December 31, 2015 and 2014

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

15. Group history

T3EX Global Holdings Corp. (the “Company”) was incorporated on February 4, 1987, as a company limited by shares, and registered with the Ministry of Economic Affairs, R.O.C.. The address of the Company’s registered office is 12F, No. 563, Sec. 4, Zhongxiao E. Rd., Xinyi Dist., Taipei City, R.O.C.. The Company mainly engages in industrial investment holdings.

16. Approval date and procedures of the individual financial statements

The individual financial statements were authorized for issue by the board of directors on March 14, 2016.

17. Application of new and revised standards and interpretations

(3) The impact of the International Financial Reporting Standards (“IFRSs”) 2013 issued and endorsed by the Financial Supervisory Commissions R.O.C. (“FSC”).

The Company prepared the financial reports using the IFRSs 2013 (which does not include IFRS 9 Financial Instruments) with fully adoption starting 2015. Relevant new releases, modifications and amendments to standards and interpretations are as following:

New, Revised or Amended Standards and Interpretations Amendment to IFRS 1 “Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters” Amendment to IFRS 1 “Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters” Amendment to IFRS 1 “Government Loans” Amendment to IFRS 7 “Disclosures—Transfers of Financial Assets”	Effective date prescribed by International Accounting Standards Board
	July 1, 2010 July 1, 2011 January 1, 2013 July 1, 2011

206

New, Revised or Amended Standards and Interpretations

Effective date prescribed by International Accounting Standards Board

January 1, 2013

The Company assessed that the 2013 version of IFRSs do not have any significant impact on the financial statements except for the following:

F. Amendments to IAS 19 “Employee Benefits”

The amendments to IAS 19 require the Company to calculate a “net interest” amount by applying the discount rate to the net defined benefit liability or asset to replace the interest cost and expected return on plan assets used in the previous IAS 19. In addition, the amendments eliminate the accounting treatment of either the corridor approach or the immediate recognition of actuarial gains and losses in profit or loss when they occur, and instead, require companies to recognize all actuarial gains and losses immediately through other comprehensive income. The past service cost, on the other hand, will be expensed immediately when it is incurred and will no longer be amortized over the average period before meeting vesting conditions on a straight-line basis. In addition, the amendments also require a broader disclosure of defined benefit plans.

The Company has measure the defined benefit liabilities, the pension cost and the remeasurement based on all the above revised accounting policy. The Group recognized all the unrecognized remeasurement of defined benefit plan and adjusted the retain-earning retrospectively due to the elimination of corridor approach. The impact of the above adoption was disclosed in section E.

207

G. Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

In accordance with the amendments to IAS 1, the items of other comprehensive income was grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. In addition, income tax on items of other comprehensive income is also required to be allocated on the same basis. The Company applied the aforementioned standard to prepare the Statements of Comprehensive Income for the year ended December 31, 2015 and 2014.

H. IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates, and unindividual structured entities. The Company will disclose the information on individual entities and unindividual entities as the standard requires.

I. IFRS 13 “Fair Value Measurement”

The standard defines fair value, provides a framework for measuring fair value, and requires disclosures on fair value measurement. The Group has followed the new required disclosures on fair value measurements. Please refer to Note 6(20). Based on its assessment, the Group is not expecting the standard to have a significant impact on its financial position and the results of operations.

J. Significant impact on adopting the 2013 IFRS on the Group’s individual statements are summarized as follows:

			Effect on changes
	Amounts before		in accounting policy	Restated
Effect on individual Balance Sheets	Restatement		Defined benefitplan	Amounts
2014.01.01
Equity-accounted investees	$	1,880,786	(9,264)	1,871,522
Net defined benefit liabilities - non-current	$	24,084	6,265	30,349
Retained earnings	$	201,493	(15,529)	185,964
			Effect on changes
	Amounts before		in accounting policy	Restated
Effect on individual Balance Sheets	Restatement		Defined benefitplan	Amounts
2014.12.31
Equity-accounted investees	$	2,211,082	(15,148)	2,195,934
Net defined benefit liabilities - non-current	$	24,256	3,032	27,288
Retained earnings	$	302,761	(18,180)	284,581
			Effect on changes
Effect on individual Comprehensive	Amounts before		in accounting policy	Restated
income statement	Restatement		Defined benefitplan	Amounts
2014.1.1~2014.12.31
Revenue	$	271,982	842	272,824
Cost		(82,486)	146	(82,340)
Non-operating income and expense		10,107	-	10,107
	208

Income tax expense Profit for the year Exchange differences on translation in the financial statements of foreign operation Unrealized gains or losses on available-for sale financial assets Share of gains of subsidiaries, associates, and joint ventures accounted for using the equity method that will not be reclassified subsequently Income tax related to items that may be reclassified subsequently Share of gains of subsidiaries, associates, and joint ventures accounted for using the equity method that will not be reclassified subsequently Remeasurement of defined benefit obligation Income tax related to items that will not be reclassified subsequently Other comprehensive income (loss) for the year, net of income tax Total comprehensive income $ Basic earnings per share $ Diluted earnings per share $	(1,079) 198,524 87,695 8,611 15,266 - - - - 111,572 310,096 2.13 1.93	- 988 - - - - (6,726) 3,087 - (3,639) (2,651) 0.01 0.01	(1,079) 199,512 87,695 8,611 15,266 - (6,726) 3,087 - 107,933 307,445 2.14 1.94

(4) The new standards and amendments issued by the International Accounting Standards Board (“IASB”) but yet to be not endorsed by the FSC.

A summary of the new standards and amendments to IFRSs issued by the IASB that has yet to be endorsed and issued by the FSC are as following:

New, Revised or Amended Standards and Interpretations

Effective date prescribed by IASB

IFRS 9 “Financial Instruments”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment Entities: Applying the Consolidation Exception”

Amendments to IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations”

IFRS 14 “Regulatory Deferral Account” IFRS 15 “Revenue from Contracts with Customers” IFRS 16 “Lease”

Amendment to IAS 1 “Disclosure Initiative” Amendment to IAS 7 “Disclosure Initiative”

Amendment to IAS 12 “Recognition of Deferred Tax Assets for Unrealized Losses”

Amendments to IAS16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortization” Amendments to IAS16 and IAS 41 “Bearer Plants”

Amendments to IAS 19 “Defined Benefit Plans: Employee Contributions”

Amendment to IAS 27 “Equity Method in Separate Financial Statements”

Amendments to IAS 36 “Recoverable Amount Disclosures for

January 1, 2018 Depend on IASB

January 1, 2016

January 1, 2016 January 1, 2018 January 1, 2019 January 1, 2016 January 1, 2017 January 1, 2017

January 1, 2016

January 1, 2016 July 1, 2014

January 1, 2016 January 1, 2014

209

Effective date prescribed by IASB

New, Revised or Amended Standards and Interpretations

Non-Financial Assets” Amendments to IAS 39 “Novation of Derivatives and Continuation January 1, 2014 of Hedge Accounting” Annual Improvements to IFRSs 2010-2012 and 2011-2013 Cycle July 1, 2014 Annual Improvements to IFRSs 2012-2014 Cycle January 1, 2016 IFRIC 21 “Levies” January 1, 2014

The Company is currently evaluating the impact of the abovementioned standards and amendments on its financial position and operating results. Any related impacts will be disclosed when the evaluation is completed.

18. Significant accounting policies

(27)

(28) The significant accounting policies have been applied consistently to all periods presented in these individual financial statements.

(21) Statement of compliance

(29) These individual financial statements are prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” (hereinafter referred to as the Regulations) and the IFRSs, International Accounting Standards (IAS), IFRIC Interpretations, and Standard Interpretations Committee (SIC) Interpretations endorsed by the FSC.

210

(30)

(22) Basis of preparation

C. Basis of measurement

(31)

(32) The individual financial statements have been prepared on a historical cost basis except for the following material items in the balance sheets:

(d) Financial instruments measured at fair value through profit or loss are measured at fair value (including derivative financial instruments);

(e) Available-for-sale financial assets are measured at fair value;

(33)

(f) The defined benefit liability (asset) is recognized as plan assets, on fair value measurement, less the present value of the defined benefit obligation.

D. Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The Company’s individual financial statements are presented in New Taiwan dollars, which are the Company’s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(23) Foreign currency

(34)

C. Foreign currency transactions

(35)

Transactions in foreign currencies are translated to the respective functional currencies of the Company’s entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between the amortized cost in the functional currency at the beginning of the period adjusted for the effective interest and payments during the period. (36)

211

D. Foreign operations

(37)

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Company’s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Group’s functional currency at the average rate. Foreign currency differences are recognized in other comprehensive income.

(38)

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

(24) Classification of current and non-current assets and liabilities (39)

An asset is classified as current when:

E. It is expected to be realized as an asset or is intended to be sold or consumed in the entity’s normal operating cycle;
F. It is held primarily for the purpose of trading;
G. It is expected to be realized within twelve months after the reporting period; or
H. It is cash or a cash equivalent, unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
(40)

All other assets are classified as non-current.

A liability is classified as current when:

E. It is expected to be settled in the entity’s normal operating cycle;
F. It is held primarily for the purpose of trading;
G. It is due to be settled within twelve months after the reporting period; or
H. The entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(25) Cash and cash equivalents

212

(41)

(26) Financial instruments

(42)

Financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instruments.

D. Financial assets

(43)

The Company classifies financial assets into the following categories: financial assets at fair value through profit or loss, available-for-sale financial assets, and loans and receivables.

(f) Financial assets at fair value through profit or loss

(44) A financial asset is classified in this category if it is held for trading or is designated as such on initial recognition. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. The Group designates financial assets, other than those classified as held for trading, as at fair value through profit or loss at initial recognition under one of the following situations:

(45)

iv. Designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise.
v. Performance of the financial asset is evaluated on a fair value basis.
vi. A hybrid instrument contains one or more embedded derivatives.
(46)

(47) At initial recognition, financial assets classified in this category are measured at fair value. Attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein, which take into account any dividend and interest income, are recognized in profit or loss. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade-date accounting.

213

(48)

(g) Available-for-sale financial assets

(49)

(50) Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the other categories of financial assets. Available-for-sale financial assets are recognized initially at fair value, plus any directly attributable transaction cost. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, interest income calculated using the effective interest method, dividend income, and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognized, the gain or loss accumulated in equity is reclassified to profit or loss, and recognized in other gains or losses under non-operating income and expenses. A regular way purchase or sale of financial assets shall be recognized and derecognized, as applicable, using trade-date accounting.

(51)

(h) Loans and receivables

(52)

(53) Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables comprise trade receivables and other receivables. At initial recognition, these assets are recognized at fair value, plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses other than insignificant interest on short-term receivables. A regular way purchase or sale of financial assets is recognized and derecognized, as applicable, using trade-date accounting.

(i) Impairment of financial assets

(54) A financial asset which is not at fair value through profit or loss is evaluated for impairment at every reporting date. A financial asset is impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a loss event) that occurred subsequent to the initial recognition of the asset and that a loss event (or events) has an impact on the future cash flows of the financial asset that can be estimated reliably (55)

(56) Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults, or the disappearance of an active market for a security. (57)

214

(58) All individually significant receivables are assessed for specific impairment. Receivables that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics. In assessing collective impairment, the Company uses historical trends of the probability of default, the timing of recoveries, and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than those suggested by historical trends.

(59)

(60) An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of its estimated future cash flows discounted at the asset’s original effective interest rate.

(61)

(62) An impairment loss in respect of a financial asset measured at cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss is not reversible in subsequent periods.

(63)

(64) An impairment loss in respect of a financial asset is deducted from the carrying amount except for trade receivables, for which an impairment loss is reflected in an allowance account against the receivables. When it is determined a receivable is uncollectible, it is written off against the allowance account. Any subsequent recovery from a written-off receivable is recorded in the allowance account. Changes in the allowance accounts are recognized in profit or loss.

(65) If, in a subsequent period, the amount of impairment loss on a financial asset measured at amortized cost decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the decrease in impairment loss is reversed through profit or loss to the extent that the carrying value of the asset does not exceed its amortized cost before the impairment loss is recognized at the reversal date.

(66)

(67) Impairment losses recognized on available-for-sale equity security are not reversed through profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in other comprehensive income, and accumulated in equity. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then impairment loss is reversed, with the amount of the reversal recognized in profit or loss.

(68)

(j) Derecoginition of financial assets

(69)

(70) The Company derecognizes financial assets when the contractual rights of the cash inflow from the assets are terminated, or when the Group transfers substantially all the risks and rewards of ownership of the financial assets.

(71)

(72) On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received or receivable and any cumulative gain or loss shall be recognized in profit and loss.

(73) The Company separates the part that continues to be recognized and the part that is derecognized based on the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part derecognized and the

215

amount of the consideration received or receivable for the part derecognized shall be recognized in profit or loss.

E. Financial liabilities and equity instruments
(f) Classification of debt or equity instruments

(74)

(75) Debt or equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

(76)

(77) Equity instruments issued are recognized based on the amount of consideration received, less the direct issuance cost.

(78)

(79) Compound financial instruments issued by the Company comprise convertible bonds payable that can be converted to share capital at the option of the holder when the number of shares to be issued is fixed.

(80)

(81) The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognized initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

(82)

(83) Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition.

(84)

(85) Interest related to the financial liability is recognized in profit or loss. On conversion, the financial liability is reclassified to equity, without recognizing any gain or losses.

216

(86)

(g) Financial liabilities at fair value through profit or loss

(87)

(88) A financial liability is classified in this category if it is classified as held for trading or is designated as such on initial recognition.

(89)

(90) A financial liability is classified as held for trading if it is acquired principally for the purpose of selling or repurchasing in the short term. The Company designates financial liabilities, other than those classified as held for trading, as at fair value through profit or loss at initial recognition under one of the following situations:

(91)

iv. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring the assets or liabilities or recognizing the gains and losses thereon on a different basis;

v. Performance of the financial liabilities is evaluated on a fair value basis;

vi. A hybrid instrument contains one or more embedded derivatives.

(92)

(93) Attributable transaction costs are recognized in profit or loss as incurred. Financial liabilities at fair value through profit or loss are measured at fair value, and changes therein, which take into account any interest expense, are recognized in profit or loss.

(94)

(h) Other financial liabilities

(95)

(96) Financial liabilities not classified as held for trading or designated as at fair value through profit or loss, which comprise loans and borrowings, and trade and other payables, are measured at fair value, plus any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method. Interest expense not capitalized as capital cost is recognized in profit or loss.

(i) Derecognition of financial liabilities

(97)

(98) The Company derecognizes a financial liability when its contractual obligation has been discharged or cancelled, or has expired. The difference between the carrying amount of a financial liability derecognized and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(99)

(j) Offsetting of financial assets and liabilities

(100) The Company presents financial assets and liabilities on a net basis when the Company has the legally enforceable right to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

217

F. Derivative financial instruments

(101) The Company holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Derivatives are recognized initially at fair value, and attributing transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(102)

(27) Investment in associates

(103)

(104) Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity.

(105)

(106) Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of investment includes transaction costs. The carrying amount of investment in associates includes goodwill arising from the acquisition, less any accumulated impairment losses.

(107) The individual financial statements include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align their accounting policies with those of the Company, from the date that significant influence commences until the date that significant influence ceases.

(108)

(109) Unrealized profits resulting from transactions between the Company and an associate are eliminated to the extent of the Company’s interest in the associate. Unrealized losses on transactions with associates are eliminated in the same way, except to the extent that the underlying asset is impaired.

(110)

(111) When the Company’s share of losses exceeds its interest in an associate, the carrying amount of the investment, including any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on behalf of the investee.

(112)

(28) Investment in subsidiaries

The subsidiaries, which are controlled by the Company, are evaluated using the equity method when preparing their financial statements. Under the equity method, the net income, other comprehensive income and equity of individual financial statements are the same as those of the net income, other comprehensive income and equity in the equity attributable to the owners of the parent company in the consolidated financial statements.

The Company has recognized the changes in equity of its subsidiaries under shareholder’s equity.

218

(29) Property, plant and equipment

D. Recognition and measurement

(113)

(114) Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the asset. The cost of software is capitalized as part of the property, plant and equipment if the purchase of the software is necessary for the property, plant and equipment to be capable of operating.

(115) Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately, unless the useful life and depreciation method of that part are the same as those of another significant part of that same item.

(116)

(117) The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as other gains and losses.

E. Subsequent cost

(118)

(119) Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to the Company. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

(120)

F. Depreciation

(121)

(122) The depreciable amount of an asset is determined after deducting the asset ’ s residual value, and it shall be allocated on a systematic basis over the asset ’ s useful life. Items of property, plant and equipment with the same useful life may be grouped together in determining the depreciation charge. The remainder of the items may be depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

(123) If there is reasonable certainty that the lessee will obtain ownership by the end of the lease term, the period of expected use will be the useful life of the asset; otherwise, the asset is depreciated over the shorter of the lease term and its useful life.

(124)

(125) Land has an unlimited useful life and therefore is not depreciated.

219

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

(127)

(d) Building 5~50 years (e) Office and other equipment 3~5

years

(128) Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

(30) Leased assets

C. Lessor

(129)

(130) A finance leased asset is recognized on a net basis as lease receivable. Initial direct costs incurred in negotiating and arranging an operating lease is added to the net investment of the leased asset. Finance income is allocated to each period during the lease term in order to produce a constant periodic rate of interest on the remaining balance of the receivable. (131) (132) Lease income from operating lease is recognized in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease is added to the carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease income. Incentives granted to the lessee to enter into the operating lease are spread over the lease term on a straight-line basis so that the lease income received is reduced accordingly.

(133) (134) Contingent rents are recognized as income in the period when the lease adjustments are confirmed.

(135)

D. Lessee

(136) Payments made under operating lease (excluding insurance and maintenance expenses) are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense over the term of the lease. (137) (138) Contingent rent is recognized as expense in the periods in which they are incurred. (139)

(140) (141) (142) (143) (144) (145)

(31) Intangible assets

E. Other intangible assets (146)

220

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

(148)

F. Subsequent expenditure

(149)

(150) Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures, including expenditure on internally generated goodwill and brands, are recognized in profit or loss as incurred.

G. Amortization

(151)

(152) The depreciable amount of an intangible asset is calculated as the cost of the asset, less its residual value.

(153) Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill and intangible assets with an indefinite useful life, from the date when they are made available for use. The estimated useful lives for the current and comparative periods are 3~7 years.

(154) The residual value, amortization period, and amortization method for an intangible asset with a finite useful life shall be reviewed at least annually at each fiscal year-end. Any changes shall be accounted for as changes in accounting estimates.

－
(32) Impairment non-derivative financial assets

(155)

(156) The Company assesses non-derivative financial assets for impairment (except for deferred income tax assets and employee benefits) at every reporting date, and estimates the recoverable amounts.

(157)

(158) If it is not possible to determine the recoverable amount for an individual asset, then the Company will have to determine the recoverable amount for the asset’s cash-generating unit (CGU).

(159)

(160) The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair value, less costs to sell, and its value in use. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Such is deemed as an impairment loss, which is recognized immediately in profit or loss.

(161)

(162) The Company assesses at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amount of that asset is estimated.

(163)

(164) An impairment loss recognized in prior periods for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. In this case, the carrying amount of the asset is increased to its recoverable amount by reversing an impairment loss.

(165) An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(166)

221

(167) Notwithstanding whether indicators exist, recoverability of goodwill and intangible assets with indefinite useful lives or those not yet in use are required to be tested at least annually. Impairment loss is recognized if the recoverable amount is less than the carrying amount. (168)

(169) For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the acquirer’s cash-generating units, or groups of cash-generating units, from the acquisition date, irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

(170)

(171) If the carrying amount of cash-generating units exceeds the recoverable amount of the unit, impairment loss is recognized and is allocated to reduce the carrying amount of each asset in the unit. (172) (173) Reversal of an impairment loss for goodwill is prohibited.

(174)

(33) Treasury stock

(175)

(176) Repurchased shares are recognized as treasury shares (a contra-equity account) based on their repurchase price (including all directly accountable costs), net of tax. Gains on disposal of － treasury shares are accounted for as “capital reserve treasury share transactions”. Losses on disposal of treasury shares are offset against existing capital reserve arising from similar types of treasury shares. If the capital reserve is insufficient, such losses are charged to retained earnings. The carrying amount of treasury shares is calculated using the weighted-average method for different types of repurchase.

(177)

－ (178) When treasury shares are cancelled, “capital reserve share premiums” and “share capital” are debited proportionately. Gains on cancellation of treasury shares are charged to capital reserves arising from similar types of treasury shares. Losses on cancellation of treasury shares are offset against existing capital reserves arising from similar types of treasury shares. If capital reserve is insufficient, such losses are charged to retained earnings

222

(179)

(34) Revenue

(180)

(181) Revenue of the Company is mainly generated from investment income and providing management services. Revenue is recognized when service is rendered; and costs are recognized with revenues when they occur.

(35) Employee benefits

D. Defined contribution plans

(182)

(183) Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

E. Defined benefit plans

(184)

(185) A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of the defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The discount rate is the yield at the reporting date on market yields of government bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

(186) The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Company. An economic benefit is available to the Company if it is realizable during the life of the plan, or on settlement of the plan liabilities.

(187) When the benefits of a plan are improved the expense of the increased benefit relating to past service by employees is recognized immediately in profit or loss.

(188) Remeasurements of the net defined benefit liability (asset), which comprise (1) actuarial gains and losses, (2) the return on plan assets (excluding interest) and (3) the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Company reclassify the amounts recognized in other comprehensive income to retained earnings.

223

(189) The Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of plan assets, any change in the present value of the defined benefit obligation.

F. Short-term employee benefits

(190)

(191) Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

(192) A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(193)

(36) Share-based payment

(194)

(195) The grant-date fair value of share-based payment awards granted to employees is recognized as employee expenses, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

(196)

(197) For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions, and there is no true-up for differences between expected and actual outcomes.

(37) Income tax

(198)

(199) Income tax expenses include both current taxes and deferred taxes. Except for expenses that are related to business combinations, expenses recognized in equity or other comprehensive income directly, and other related expenses, all current and deferred taxes are recognized in profit or loss.

(200)

(201) Current taxes include tax payables and tax deduction receivables on taxable gains (losses) for the year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as well as tax adjustments related to prior years.

(202) Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are not recognized for the following:

(203) D. Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) at the time of the transaction.
E. Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.

224

F. Initial recognition of goodwill.

(204) (205) Deferred taxes are measured based on the statutory tax rate on the reporting date or the actual legislative tax rate during the year of expected asset realization or debt liquidation.

(206)

(207) Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

(208)

C. The entity has the legal right to settle tax assets and liabilities on a net basis; and

D. The taxing of deferred tax assets and liabilities fulfills one of the scenarios below:
(c) Levied by the same taxing authority; or
(d) Levied by different taxing authorities, but where each such authority intends to settle tax assets and liabilities (where such amounts are significant) on a net basis every year of the period of expected asset realization or debt liquidation or where the timing of asset realization and debt liquidation is matched.

(209) A deferred tax asset should be recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized. Such unused tax losses, unused tax credits, and deductible temporary differences shall also be re-evaluated every year on the financial reporting date, and adjusted based on the probability that future taxable profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized.

(210)

(38) Business combinations

(211)

(212) Goodwill is measured as the excess of the acquisition-date fair value of consideration transferred (including any non-controlling interest in the acquiree) over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed (generally at fair value). If the residual balance is negative, the Company shall re-assess whether it has correctly identified all of the assets acquired and liabilities assumed and recognize any additional assets or liabilities that are identified in that review, and shall recognize a gain on the bargain purchase thereafter.

(213)

225

(214) In a business combination achieved in stages, the Company shall re-measure its previously held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss, if any, in profit or loss. In prior reporting periods, the Company may have recognized changes in the value of its equity interest in the acquiree in other comprehensive income. If so, the amount that was recognized in other comprehensive income shall be recognized on the same basis as would be required if the Company had directly disposed of the previously held equity interest. If the disposal of the equity interest required a reclassification to profit or loss, such amount shall be reclassified to profit or loss.

(215) If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Company shall retrospectively adjust the provisional amounts recognized at the acquisition date, or recognize additional assets or liabilities to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period shall not exceed one year from the acquisition date.

(216)

(217) All the transaction costs incurred for the business combination are recognized immediately as the Company’s expenses when incurred, except for the issuance of debt or equity instruments.

(218) Upon conversion to the IFRSs endorsed by the FSC, the Company can choose to restate all business combinations that occurred after January 1, 2012 (inclusive). For those acquisitions that occurred prior to January 1, 2012, the amount of goodwill is recognized in accordance with the “Regulations Governing the Preparation of Financial Reports” issued by the FSC on January 10, 2009, and the financial accounting standards and interpretations issued by the Accounting Research and Development Foundation (Generally Accepted Accounting Principles).

(39) Earnings per share

(219)

(220) The Company discloses the basic and diluted earnings per share attributable to ordinary shareholders of the Company. The calculation of basic earnings per share is the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is the profit attributable to ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds, employee stock options, and employee bonus.

(40) Operating segments

(221) (222) The Company discloses the operating segment information in its consolidated financial statements. Therefore, it need not be disclosed in its individual financial statements.

226

19. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the individual financial statements based on the Regulations requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Management continuously reviews the estimates and basic assumptions. Changes in accounting estimates are recognized in the period of change.

Information on critical judgments in applying the accounting policies that have the most significant effect on the amounts recognized in the individual financial statements is included in note 6(5) equity-accounted investees.

20. Significant account disclosures

(223) Cash and cash equivalents

Cash and hand Foreign deposits Demand deposits		2015.12.31	2014.12.31 - - 22,153 22,153
	$ $	278 861 129,744 130,883

Refer to note 6(19) for the sensitivity analysis of the financial assets and liabilities of the Company.

(224) Financial assets/liabilities at fair value through profit or loss

Financial assets/liabilities at fair value through profit or loss were as follows:

Financial assets designated as at fair value through profit or loss Financial assets held for trading Total Current Non-current Total		2015.12.31 148 7,086 7,234 7,086 148 7,234	2014.12.31
	$ $ $ $		15 8,609
			8,624
			8,609 15
			8,624

227

(225) Available-for-sale financial assets

Investment in listed securities Stocks listed on domestic markets		2015.12.31 14,874	2014.12.31
	$		24,189

Equity price at reporting date Increase 1% Decrease 1%	2015 After-tax other comprehensive income After-tax profit (loss) $ 149 - $ (149) -	2015	2015	2014 After-tax other comprehensive income After-tax profit (loss) 242 - (242) -	2014	2014
			After-tax profit (loss)			After-tax profit (loss)
	$ $		- -			- -

As of December 31, 2015 and 2014, there was no available-for-sale financial asset factored or provided as collateral.

(226) Notes receivable, accounts receivable, and other receivables (including amount due from related parties)

Accounts receivable Other receivables (including doubtful receivables) Less: Allowance for impairment loss		2015.12.31 49,430 94,926 - 144,356	2014.12.31
	$ $		43,943 10,000 -
			53,943

As of December 31, 2015, the Company does not have any over-due accounts receivable and other receivables (including those from its related parties).

There were no movements in the allowance of doubtful receivables with respect to notes receivable, accounts receivable, and other receivables for the Company during the fiscal years 2015 and 2014.

As of December 31, 2015 and 2014, no receivables were pledged as collateral.

228

(227) (228) Equity-accounted investees

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

Subsidiary Associates		2015.12.31 2,726,473 57,341 2,783,814	2014.12.31
	$ $		2,138,731 57,203 2,195,934

A. Subsidiary

(229) Please refer to the consolidated financial statements for the year ended December 31, 2015.

B. Associates

(230) No publicly quoted prices were available for the above associates.

(231) In August of 2015, the Company acquired 30% of the shares of LOGI International Co., Ltd. at a cost of $9,666 in order to improve its business performance and competitiveness.

(232) The Company’s share of profit of associates in 2015 and 2014 is follows: (233) 2014 The Company’s share of profit of associates $ 104 (234) The financial information of the associates of the Company was as adjustment for the Company’s proportionate share): (235) 2015.12.31 The equity of the non-significant associates $ 94,334	summarized as 2013 1,568 follows (before 2014.12.31 101,070

(236) The Company does not share any contingent liabilities of an associate incurred jointly with other investors. The Company also does not have any contingent liabilities because the Company is severally liable for all or part of the liabilities of the associate.

(237) There are no significant restrictions on the ability of associates to transfer funds to the Company.

229

C. Guarantees

(238) As of December 31, 2015 and 2014, there was no equity-accounted investment factored or provided as collateral.

(239) Acquisition of subsidiaries
As approved by the board of directors on December 18, 2014, the Company set up T.H.I. Group Singapore Pte. Ltd., registered in December 2014.

The Group invested $7,629 to acquire 80% ownership T.H.I. Group Singapore Pte. Ltd.,.

For the purpose of business development in Japan, in March 2015, the Group purchased an additional 17.67% of equity interest from its previously held 33.33% for a total of 51% in THI & Maruzen Co., Ltd; consequently, obtaining majority ownership and control of this company. The loss on disposal of investment totaled $1,988, and the gain on bargain purchase totaled $260, which are recognized in the individual statements of comprehensive income.

(d) Consideration

Consideration type was as follows

Cash		Amount
	$	2,916

(240)

(e) The fair value of the acquired assets and liabilities at the acquisition date were as follows:

Cash and cash equivalents $ Accounts receivable Prepaid Expenses Other Assets Accounts payable Other liability Long-Term Borrowings Net assets $	18,756 16,032 1,172 906 (16,734) (1,051) (2,069) 17,012

230

(f) Via business combination and strategic alliance, the Group set up a total solution provider for freight, warehousing and custom clearing business in Mainland China. The Group acquired 60% ownership of Fresh Beauty Enterprises Ltd. (Fresh Beauty) in December 31, 2015. Furthermore, Fresh Beauty acquired 100% ownership of T-Cube Global Logistics Co., Ltd. through Easter Union Holdings Limited. The primary businesses of T-Cube Global Logistics Co., Ltd are warehousing and transportation services.

The type and amounts of considerations the assets, acquired the liabilities taken, and goodwill are listed below:

(i) The type and fair value of consideration on the acquisition date are as follows:

(241) Cash $ Contingent considerations Total $	164,428 118,347
	282,775

(i) Assets acquired and liabilities assumed at the date of acquisition

(242)

Cash $ Accounts receivable Property, plant, and equipment (Note 6(8)) Intangible assets (Note 6(9)) Other assets Accounts payable Current tax liabilities Other payables Fair value of identifiable net assets acquired $	51,843 79,370 34,118 38,454 9,157 (37,719) (4,053) (60,930) 110,240

(243)

231

(i) Goodwill arising from acquisition

(244) Consideration transferred $ 282,775 Add: Non-controlling interest 44,096 Less: Fair value of identifiable net assets acquired (110,240) Goodwill $ 216,631

(245) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Company for the years ended December 31, 2015 and 2014 were as follows:

Cost or deemed cost Balance on January 1, 2015 Additions Balance on December 31, 2015 Balance on January 1, 2014 Additions Balance on December 31, 2014 Depreciation and impairment loss Balance on January 1, 2015 Depreciation Balance on December 31, 2015 Balance on January 1, 2014 Depreciation Balance on December 31, 2014 Net book value: At December 31, 2015 At December 31, 2014 At January 1, 2014		Land			Buildings 69,299 - 69,299 69,299 - 69,299 23,213 1,064 24,277 22,150 1,063 23,213 45,022 46,086 47,149	Office and Other Equipment 25,925 5,294 31,219 5,442 20,483 25,925 5,651 4,430 10,081 1,771 3,880 5,651 21,138 20,274 3,671		Total
	$ $ $ $ $ $ $ $ $ $ $	132,594 - 132,594 132,594 - 132,594 - - - - - - 132,594 132,594 132,594						227,818 5,294 233,112 207,335 20,483 227,818 28,864 5,494 34,358 23,921 4,943 28,864 198,754 198,954 183,414

A summary of pledged assets as of December 31, 2015 and 2014 is found in note 8.

232

(246) Intangible assets

The costs, amortization, and impairment loss of the intangible assets of the Company for the years ended December 31, 2015 and 2014, were as follows:

Other Intangible Assets

Cost:
Balance on January 1, 2015
$ Additions

Balance on December 31, 2015
$
Balance on January 1, 2014
$ Additions

Balance on December 31, 2014
$
Amortization and impairment loss
Balance on January 1, 2015
$ Amortization

Balance on December 31, 2015
$
Balance on January 1, 2014
$ Amortization

Balance on December 31, 2014
$
Book value:
At December 31, 2015
$
At December 31, 2014
$
At January 1, 2014
$

21,579
8,258
29,837

17,035
4,544
21,579

15,019
3,590
18,609

10,034
4,985
15,019
11,228
6,560
7,001

(247) Amortization of intangible assets of the Company for the years ended December 31, 2015 and 2014 was recognized as operating expenses in the individual profit and loss.

(248)

(249) Short-term borrowings and short-term notes and bills payable

2015.12.31 Unsecured bank loans $ - Secured bank loans - Total $ - Unused credit facilities $ 1,020,000 Interest rate - (250) (251) Refer to note 8 for details of the related assets pledged as collateral.		2015.12.31		2014.12.31
				50,000 140,000
				190,000
				730,000
				1.27%~1.31%

(252) Convertible bond payable

Proceeds from issue of convertible bond payable Bond discount Cumulative redeemed amount	2015.12.31 $ 1,100,000 (17,512) (332,600)	2014.12.31 800,000 (8,381) (332,600)

233

Cumulative converted amount Carrying amount of liability Less: Current portion Embedded derivative`－`put and call options (accounted for as financial assets (liabilities) at fair value through profit or loss `－`current and non-current) Equity components－conversion options (accounted for as capital surplus) Embedded derivative－put and call options (accounted for as evaluation gain (loss) on financial instruments) Interest expense		2015.12.31 (355,900) 393,988 - 393,988 148 20,597 2015 29 6,286	2014.12.31
	$ $ $		(264,200) 194,819 - 194,819 15 10,969 2014 (18) 6,373
	$ $

(253) As of January 27, 2011, January 23, 2014, and June 9, 2015, the Company had issued the 1[st] , 2[nd] , and 3[rd] unsecured convertible bonds, respectively, amounting to $500,000, $300,000, and $300,000, respectively.

(254) The terms and conditions of the bonds are as follows:

F. Coupon rate

All are zero.

G. Issuance period

Five years for the 1st convertible bonds; three years for the 2nd, and 3[rd]

H. Redemption option

There is no redemption option for the 2nd convertible bonds.

For the 3rd convertible bonds, at any time on or after July 10, 2016, and prior to April 30, 2018, when the closing price of the Company’s common shares on the Gre Tai Securities Market is equal to or greater than 130% of the conversion price of the convertible bonds for 30 consecutive trading days, or more than 90% of the bonds have been redeemed, repurchased, or converted, the Company may redeem the bonds in cash at face value.

I. Put option of bondholders

On January 27, 2013, bondholders may request the Company to repurchase the 1st convertible

234

bonds at face value. The Company had a $26,296 thousand loss from repurchasing $332,600 of bonds.

There is no put option of bondholders for the 2[nd] and 3[rd] convertible bonds.

J. Terms of conversion
(255)
(c) At any time one month after the issuing date to ten days before the expiry date, bondholders may request the Company to convert the bonds into stock.

(d) Conversion price

(256)

After the bonds were issued, whenever the number of common shares of the Company changes, or other convertible bonds is issued with a conversion price lower than the market price, the conversion price will be adjusted by the formula set in the terms. On December 31, 2015, the conversion prices of the 1st, 2nd, and 3rd convertible bonds were $20.0 (dollars), 23.5 (dollars), and $29.7 (dollars), respectively.

(257) Employee benefits

C. Defined benefit plan

The Company determined the movement in the present value of defined benefit obligations and the fair value of plan assets as follows:

Total present value of defined benefit obligations Fair value of plan assets Net defined benefit (liability) asset		2015.12.31 (36,864) 12,124 (24,740)	2014.12.31 (37,711) 10,423 (27,288)
	$ $

235

(g) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

As of December 31, 2015, the pension fund account balance at Bank of Taiwan and the manager pension fund balance amounted to $1,512 and 10,612, respectively. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Labor Pension Fund Supervisory Committee.

(h) Movements in the present value of defined benefit obligation

The movements in the present value of the defined benefit obligation for the years ended December 31, 2015 and 2014 were as follows:

At January 1 Service costs and interest Actuarial gain At December 31		2015 37,711 754 (1,601) 36,864	2014 39,163 1,672 (3,124) 37,711
	$ $

(258)

(i) Movements in the fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2015 and 2014 were as follows:

At January 1 Expected return on plan assets Contributions Actuarial losses At December 31		2015 10,423 224 1,556 (79) 12,124	2014 8,814 188 1,458 (37) 10,423
	$ $

(j) Expenses recognized in profit or loss

The Company’s pension expenses recognized in profit or loss for the years ended December 31, 2015 and 2014 were as follows:

236

Current service cost Net interest on the net defined benefit liabilities		2015 - 530 530	2014 889 595
	$ $
			1,484

(k) Actuarial assumptions

The following are the Company’s primary actuarial assumptions at the reporting date:

Discount rate Future salary increasing rate	2015.12.31 1.625% 3.500%	2014.12.31
		2.000% 3.500%

The Company expects to make contributions of $1,563 to the defined benefit plans in the next year starting from December 31, 2015. The weighted average period of the defined benefit plans is 14.6 years.

(l) Sensitivity analysis

The changes in the main actuarial assumptions might have an impact on the present value of the defined benefit obligation:

(259) (260) 2015.12.31 Discount rate Future salary increasing rate	Effects to the defined benefit obligation	Effects to the defined benefit obligation
	Increase by 0.25%	Decrease by 0.25%
	(261) $ (416) 398	(262) 424 (392)

237

There is no change in other assumptions when performing the above-mentioned sensitivity analysis. In practice, assumptions may be interactive with each other. The method used on sensitivity analysis is consistent with the calculation on the net pension liabilities.

The method and assumptions used on current sensitivity analysis is the same as those of the prior year.

D. Defined contribution plan

The Company contributes an amount at the rate of 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. After the Company’s contributions to the Bureau of Labor Insurance, there is no further legal or constructive obligation.

The Company’s pension costs under the defined contribution method were $1,998 and $945 for the years ended December 31, 2015 and 2014, respectively. Payments were made to the Bureau of Labor Insurance.

(263) Income tax

A. The income tax expense for the years ended December 31, 2015 and 2014, was as follows:

Current income tax expense Income tax expense		2015 1,048 1,048	2014 1,079 1,079
	$ $

The reconciliation of income tax expense and profit before tax for the years ended December 31, 2015 and 2014 were as follows:

Profit before income tax Income tax on pre-tax financial income calculated at the Company’s income tax rate Changes in unrecognized temporary differences Gains that does not affect income tax expense Others		2015 294,868 50,127 (40,950) (15,253) 7,124 1,048	2014 200,591 34,100 (24,580) (12,466) 4,025 1,079
	$ $

238

B. Deferred tax assets and liabilities

(e) Unrecognized deferred tax assets and liabilities

Unrecognized deferred tax liabilities Unrecognized deferred tax assets		2015.12.31 202,329 4,388	2014.12.31
	$ $		157,008 17

(264)

(f) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2015 and 2014 were as follows:

Deferred tax assets: Balance, January 1, 2014 Credited (debited) to profit or loss Balance, December 31, 2014 Balance, January 1, 2015 Credited (debited) to profit or loss Balance, December 31, 2015	Defined benefit plans $ 4,950 (856) $ 4,094 $ 4,094 - $ 4,094	Others 1,599 856 2,455 2,455 - 2,455	Total
	$ $ $ $		6,549 - 6,549 6,549 - 6,549

(g) Examination and approval

The Company’s income tax returns through 2013 have been examined and approved by the Tax Authority.

239

(h) Imputation credit account and creditable ratio

Undistributed earnings commencing from January 1, 1998 Balance of imputation credit account Creditable ratio for earnings distribution to R.O.C. residents
	$

The related information on the aforesaid imputation credit tax was prepared in accordance with Ruling No. 10204562810 issued by the Ministry of Finance, R.O.C., on October 17, 2013.

(265) Share capital and other equity

The movements in outstanding shares for the years ended December 31, 2015 and 2014 were as follows:

Beginning balance, January 1 Issuance of common stock for cash Addition: Stock dividend Convertible bonds converted Exercise of employee stock options Ending balance, December 31		2015 98,398 10,000 3,629 3,654 361 116,042		2014 79,430 10,000 2,918 5,326 724
	$ $
				98,398

A resolution was approved during the shareholders’ meeting on March 24, 2011, for the issuance of common shares for cash within a year under private placement, with the number of shares issued not to exceed 8,400 thousand shares. Subsequently, a resolution was approved during the board meeting held on March 24, 2011, for the issuance of 8,400 thousand common shares under private placement, with a face value of $10 (dollars) per share, at $27.81 (dollars) per share, amounting to $233,604. The capital increase was registered on March 30, 2011. The relevant statutory registration procedures

240

have since been completed.

D. Capital surplus

The components of capital surplus were as follows:

Paid-in capital derived from premium on issuance of common shares Surplus arising from bond conversion option Surplus arising from treasury stock transactions Surplus arising from long-term equity investments－ donated surplus and others Surplus arising from premium from merger Surplus arising from stock options		2015.12.31 561,694 218,314 21,060 18,004 2,912 45,230 867,214	2014.12.31
	$ $		404,818 161,264 5,975 18,004 2,912 36,422
			629,395

241

E. Retained earnings

(d) Legal reserve

(e) Special reserve

242

cumulative changes to other shareholders’ equity pertaining to prior periods due to the first-time adoption of IFRSs. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

(f) Earnings distribution

The actual distributions of employee bonuses and directors’ emoluments for 2014 were 1,787 and 5,360, respectively.

The differences between the actual emoluments to the directors and the recognized amounts in 2014 were not significant; therefore, they were recognized in profit or loss in 2015.

2014 Amount per share(dollars) Dividends distributed to common shareholders: Cash $ 1.456 Shares 0.3639 Total $ Treasury stock The Company has acquired treasury stock and transferred the year ended December 31, 2015, the movements of the Item 2015.1.1 Treasury stock acquired for transfer to employees－shares (in thousands) 1,089 Treasury stock acquired for transfer to employees－amount $ 21,233	2014	2014	2013 Total amount Amount per share(dollars) Total amount 145,164 0.77 68,079 36,291 0.33 29,177 181,455 97,256 it to its employees as an incentive. For treasury stock were as below. Increase Decrease 2015.12.31 427 1,089 427 11,624 22,221 10,636	2013 Total amount Amount per share(dollars) Total amount 145,164 0.77 68,079 36,291 0.33 29,177 181,455 97,256 it to its employees as an incentive. For treasury stock were as below. Increase Decrease 2015.12.31 427 1,089 427 11,624 22,221 10,636
	Amount per share(dollars)
				427 10,636

F. Treasury stock

243

As of December 31, 2015 and 2014, a total of 427 and 1,089 thousand shares, respectively, were not yet cancelled.

For the year ended December 31, 2015, the compensation cost arising from employee purchase of treasury stocks amounted to $14,523, which was recognized as operating expense and capital surplus.

(266) Share-based payment

(267)

(268) Information on share-based payment transactions as of December 31, 2015, was as follows:

(269)

follows: 69)
Option grant date Options grant units Contract period Grant recipients Vesting conditions	Employee stock options
	2012/7/11 2000 Five years Employees of the Company and its subsidiaries Provide service for the next five years

A. Determining the fair value (270)

(271) The Company adopted the Black-Scholes model to calculate the fair value of the stock options at the grant date, and the assumptions adopted in this valuation model were as follows:

Fair value at grant date Share price at grant date Exercise price Expected volatility Expected duration Risk-free interest rate	2012
	Employee stock options
	4.5 20.50 20.50 25.998% 4.00 0.951%

244

(272) Expected volatility was decided on the basis of the historical weighted-average volatility and was adjusted based on publicly available information; the duration is decided based on the Company’s regulations on issuance; the expected dividend and risk-free interest rate are decided on the basis of government bonds. When the fair value is decided, conditions of service and non-market price performance are not taken into consideration.

A. Information on share-based payment plan
(273) (274) As of December 31, 2015 and 2014, outstanding units were 592 and 952, respectively.
(275)
(276) For the year ended December 31, 2014, there were 724 units exercised at $15.5 (dollars).
(277)

(278) For the year ended December 31, 2015, there were 360 units, of which 30 units were exercised of 15.5 (dollars), 330 units at 14.2 (dollars).

A. Employee expense and liabilities
(279)
(280) The Company’s expenses for share-based payment for the years ended December 31, 2015 and 2014 were $55 and $143, respectively.

(281)

(282) The expenses to the subsidiaries of the Company for share-based payment for the years ended December 31, 2015 and 2014 were $747 and $1,950, respectively (283)

A. Issuance of new shares
- (284)
- (285) For the year ended December 31, 2015 and 2014, the compensation cost arising from issuance of new shares subscribed by employees for cash injection amounted to $4,700 and $4,250, , respectively recognized as operating expenses.
- (286)
(287) Earnings per share (EPS)
C. Basic earnings per share

(c) Profit attributable to common shareholders

(288)

Profit attributable to common shareholders		2015 Continuing operations		2014(Restated) Continuing operations

	$	293,820		199,512

(d) Weighted-average number of outstanding common shares

2015 2014

245

Common shares as of January 1 $ Effect of treasury stock Effect of stock dividends Effect of issuance of common stock Effect of employee stock options Effect of conversion of convertible bonds Weighted-average number of outstanding common shares on December 31 $ Weighted-average number of outstanding common shares on December 31－retrospectively adjusted	98,398 (542) 3,629 4,247 109 2,821 108,662	79,430 (1,089) 2,918 8,219 246 602 90,326 93,168

D. Diluted earnings per share

(c) Profit attributable to common shareholders (diluted)

Profit attributable to common shareholders (basic) Interest on convertible bonds Gains on revaluation of put and call options of convertible bonds measured at fair value		2015 Continuing operations			2014 (Restated) Continuing operations

	$ $	293,820 6,286 (29) 300,077			199,512 6,373 18 205,903

246

(d) Weighted-average number of outstanding common shares (diluted)

Weighted-average number of outstanding common shares (basic) Effect of conversion of convertible bonds Effect of employee stock dividends Effect of stock options Weighted-average number of outstanding common shares on December 31 (diluted) Weighted-average number of outstanding common shares on December 31 (diluted)－retrospectively adjusted		2015 108,661 15,679 78 350 124,768		2014
	$			90,326 12,247 67 523
				103,163
				106,005

When the dilutive effect of stock options is calculated, the average market value is decided on the basis of the market price of the option during the outstanding period.

(289) Employees and directors, supervisors reward

(290) By the approval of the board of directors, the Company’s article of association, pending shareholders’ approval meeting, states if the Company profits this period they will set aside no less than 0.5% towards employee compensation and no more than 3% towards remuneration to directors and supervisors. If the Company has accumulated loss they must first reserve to cover the loss amount. The compensations mentioned afore include persons who meet the preset conditions of employees of the affiliated company.

(291)

(292) The Company accrued and recognized the employee compensation and the directors’ and supervisors’ compensation amounting to $1,522 and $7,879 for the year 2015, respectively. These amounts are calculated by using the Company’s pre-tax net profit for the period before deducting the amount of the remuneration to the employees and directors, multiplied by the distribution ratio of remuneration to the employees and directors under the Company’s articles of association, and expensed under operating costs or expenses for the year ended December 31, 2015. If there would be any changes after the reporting date in the following year, the change of the amount would be treated as changes in accounting estimates and recognized as profit or loss in that year.

247

(293)
(294) Net Revenue

(295) (296) The Company’s net revenue for the years ended December 31, 2015 and 2014 were as follows:

(297)

follows: (297)
Management income Shares of profit of equity-accounted investees		2015 62,888 352,325 415,213	2014 54,223 218,601
	$ $
			272,824

(298) Other gains and losses

(299) The Company’s other gains and losses for the years ended December 31, 2015 and 2014 were as follows:

Foreign exchange gain Gain on valuation of fair value of financial assets and liabilities though profit or loss Loss on sale of equity-accounted investees though profit or loss Gain on sale of available-for-sale financial assets Gain on from sale of fair value financial assets Gain on bargain purchase Dividend income Other		2015 885 65 (1,988) 5,373 (684) 260 408 (24) 4,295	2014
	$ $		289 137 - 2,166 11,684 - - 700 14,976

(300) Financial instruments

F. Credit risk
(c) Exposure to credit risk

(301)

(302) The carrying amount of financial assets represents the Company’s maximum credit exposure.

(303)

(d) Concentration of credit risk (304)

(305) Based on the characteristic of the industry, the Company has no significant transactions with any single customer.

248

G. Liquidity risk

(306)

Based on the characteristic of the industry, the Company has no significant transactions with any single customer.

(307)

(307)
December 31, 2015 Non-derivative financial liabilities Convertible bond payable Trade and other payables Investment payable (other current and non－current liabilities) December 31, 2014 Non-derivative financial liabilities Bank borrowings Convertible bond payable Trade and other payables		Carrying amount	Contractual cash flow	Within 6 months	6~12 months - - - - - - - -	1~2years (111,500) - (47,691) (159,191) - (13,700) - (13,700)	2~5years	Over 5years
	393,988 130,698 253,814 $ 778,500 $ 190,000 194,819 153,332 $ 538,151		(411,500) (130,698) (273,732) (815,930) (190,196) (203,200) (153,332) (546,728)	- (130,698) (174,377) (305,075) (190,196) - (153,332)			(300,000) - (51,664) (351,664) - (189,500) - (189,500)	- - - - - - - -
				(343,528)

(308)

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

H. Currency risk

(309)

(310) The Company’s significant exposure to foreign currency risk was as follows:

Unit: thousand

	2015.12.31	Foreign currency	2014.12.31
Foreign currency	Exchange rate		Exchange rate	TWD
176 50,188	32.84 5.0573	20 -	31.61 -	632 -

249

(d) Sensitivity analysis

(311)

(312) The Company’s exposure to foreign currency risk arises from the foreign currency exchange gains and losses on the translation of cash and cash equivalents, accounts receivable, other receivables, loans, accounts payable, and other payables that are denominated in foreign currency. A 1% depreciation of the USD and CNY against the TWD as of December 31, 2015 and 2014 would have decreased the net income before tax by ($2,480) and $6, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for both periods.

(313)

I. Interest rate analysis

(314)

The following sensitivity analysis is based on the exposure to interest rate risk for derivative and non-derivative financial instruments on the reporting date.

For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year.

If the interest rate had increased/decreased by 1%, the Company’s net income before tax would have decreased/increased by $0 and $190 for the years ended December 31, 2015 and 2014, respectively, assuming all other variable factors had remained constant. This is mainly due to the Company’s variable-rate borrowing.

J. Fair value of financial instruments
(b) Fair value hierarchy

(315)

v. Categories and fair value of financial instruments
(316)
(317) The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It shall not include fair value information of the financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value and investments in equity instruments which do not have any quoted price in an active market in which the value cannot reasonably measured.

250

(318)

			2015.12.31
Book value			Fair Value
		Level 1 7,086 - 7,086 14,874 - - - - - - - - - 21,960	Level 2 - 148 148 - - - - - 393,988 - - - 393,988 394,136	Level 3 - - - - - - - - - - - - - -
$ 7,086 148 7,234 14,874 130,883 144,356 275,239 2,176 393,988 1,822 128,876 253,814 778,500 $ 1,075,847
	7,234
	14,874
	130,883 144,356
	275,239
	2,176
	393,988 1,822 128,876 253,814
	778,500
	1,075,847

			2014.12.31
Book value			Fair Value
		Level 1 8,609 - 8,609 24,189 - - - - - - - - - 32,798	Level 2 - 15 15 - - - - - - 194,819 - - 194,819 194,834	Level 3 - - - - - - - - - - - - - -	Total
$ 8,609 15 8,624 24,189 22,153 53,943 76,096 2,176 190,000 194,819 3,863 149,470 538,152 $ 647,061					8,609 15 8,624 24,189 - - - - - 194,819 - - 194,819 227,632
	8,624
	24,189
	22,153 53,943
	76,096
	2,176
	190,000 194,819 3,863 149,470
	538,152
	647,061

(319)

251

(320)

vi.Valuation techniques and assumptions used in fair value determination

(321) Non-derivative financial instruments

(322) The fair value of financial instruments, which are carried at fair value through profit or loss and are traded in active markets, is based on the quoted market price. (323)

(324) When the quoted market prices can be obtained through exchange markets, dealer markets, brokered markets, industrial union, pricing organization or authorities, and transactions which occurred frequently, the financial instruments will be classified to active markets.

(325) When the aforementioned conditions are not met, and there is a significant difference between the buying and the selling prices or transactions which do not occurred frequently, the financial instruments will be classified to inactive market.

(326)

(327) Except for the aforementioned financial instruments, the fair value of other financial instruments is determined by using the valuation techniques or the quoted price from a counter party. The fair value of financial instruments through valuation techniques is determined by the present value of other financial instruments with similar characteristics, discounted cash flow, other valuation techniques and observable data of valuation model on the reporting date.

(328)

(329) Derivative financial instruments

(330) The fair value is based on the general accepted valuation model. The fair value of forward exchange contract is based on the forward exchange rate. Embedded derivative financial instrument is based on the option pricing model or other valuation techniques.

(331) There were no transfers of financial assets from each level for the year ended December 31, 2014 and 2015.

(332)

(333) Financial risk management
A. Overview

(334)

(335) The nature and the extent of the Company’s risks arising from financial instruments, which include credit risk, liquidity risk, and market risk, are discussed below. Also, the Group’s objectives, policies, and procedures for measuring and managing risks are discussed below. (336)

(337) For more quantitative information about financial instruments, please refer to related notes to the financial statements.

A. Risk management framework

(338) (339) The board of directors has overall responsibility for the establishment and oversight of the risk management framework.

(340) The Company’s risk management policies are established to identify and analyze the

252

risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(341)

(342) The board of directors oversees how management monitors the risks, which should be in compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation of the risks faced by the Company. Internal Audit undertakes regular reviews of the risk management controls and procedures and exception management, the results of which are reported to the Board of Directors. (343)

A. Credit risk

(344)

(345) Credit risk means the potential loss to the Company if the client or the counterparty involved in a financial instrument transaction defaults. The primary potential credit risk is from the accounts receivable and investments of the Company.

(346)

(a) Accounts receivable and other receivables

(347)

(348) For the year ended December 31, 2015 and 2014, there was no significant concentration of credit risk from the sales of the Group.

(349)

(350) The source of revenue of the Company is from the Group and its subsidiaries, as such, there is no credit risk.

(351) The Company establishes an impairment allowance that represents its estimate of incurred losses in respect of trade receivables, other receivables, and investment. The components of this impairment allowance are a specific loss component that relates to individually significant exposure and a collective loss component for which a loss was incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

253

(352)

(a) Investments

(353)

(354) The credit risk exposure of the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. As the Company deals with banks and other external parties with good credit standing and financial institutions, corporate organizations, and government agencies which are graded above investment level, the management believes that the Company does not have any compliance issues, and therefore, there is no significant credit risk. (355)

(a) Guarantees

(356) The Company has determined that financial guarantees can only be provided to the following companies:

(iv) Companies with a transaction relationship with the Company.

(v) Companies in which the Company has more than 50% of the voting shares.
(vi) Companies which directly or indirectly hold more than 50% of the voting shares of T3EX Global Holdings Corp.
A. Liquidity risk

(357)

(358) Liquidity risk is a risk that the Company is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as much as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

(359) The Company actively expands its business to generate operating cash flow while it simultaneously manages the accounts receivable in a strict manner and controls its expenditure. In addition, the Company keeps good relationships with banks to obtain a sufficient credit limit for necessary cash demands in the operating cycle. Generally, the Company ensures that there is sufficient cash to cover expected operating expenditure, but excluding the potential influence of unexpected extreme conditions (i.e. nature disasters). The total amount of unused credit as of December 31, 2015, was $1,020,000.

A. Market risk

(360)

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

(362)

(363) The types of financial assets at fair value through profit or loss held by the Company are open-end funds and convertible bonds which are measured at fair value. Therefore, the Company is exposed to the risk of price changes in the beneficiary certificate market. The Company engages a professional agent to manage its financial assets. Parts of bank deposits, accounts receivable, and accounts payable are evaluated for foreign currency exposure. To manage the currency risk, the Company maintains its foreign currency net position within a

254

certain limit. The convertible bonds held and issued by the Company are measured at fair value. This results in exposure to the risk of price changes in the equity and bond markets.

(364)

(d) Currency risk

(365)

(366) Interest is denominated in the same currency as borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Company, which mainly uses the TWD.

(367)

(368) In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates.

(369)

(e) Interest rate risk

(370)

(371) Except for bank loans, there are no financial assets or financial liabilities with floating interest rates. The Group negotiates the price case by case to control the interest rate risk.

(372) Capital management

The board’s policy is to maintain a strong capital base in order to maintain investor, creditor, and market confidence and to sustain future development of the business. Capital consists of common shares, capital surplus, retained earnings, and non-controlling interests of the Company. The board of directors monitors the level of dividends to common shareholders.

The distribution of dividends of the Company follows the earnings of the year and is on a sustainable basis. When the board of directors drafts a proposal on appropriation and distribution of retained earnings, the dividend distribution shall not be lower than 50% of current earnings or unappropriated earnings, whichever is lower. However, the cash dividend shall not be lower than 10% of the total distribution of dividends.

255

The Company’s debt-to-equity ratios at the end of the reporting periods were as follows.

Total liabilities Less: cash and cash equivalents Net debt Total equity Less: amounts accumulated in equity relating to cash flow hedges Adjusted capital Debt-to-equity ratio		2015.12.31 804,597 130,883 673,714 2,506,418 - 2,506,418 26.88%	2014.12.31 (Restated)
	$ $ $ $		567,467 22,153 545,314 1,992,136 - 1,992,136 27.37%

From time to time, the Company purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares are intended to be used for issuing shares under the Company’s share option scheme for employees. The purchase of treasury stock did not impact the Company’s capital management.

There were no changes in the Company’s approach to capital management during the year.

(373) Investing and financing activities without cash flows

(374)

Convertible bonds were converted into common stock. Please refer to notes 6(10) and (13). (375)

21. Related-party transactions

(4) List of subsidiaries

Name of subsidiary	Location	Percentage to shares held 2015.12.31 2014.12.31	Percentage to shares held 2015.12.31 2014.12.31
		2015.12.31
256 T.H.I Group Ltd. (B.V.I.) Greatline International Limited (Greatline) T.H.I Group Vietnam Co., Ltd. T.H.I. Group (Bangkok) Company Limited Taiwan Express Logistics Co., Ltd. (TEC) T.H.I Logistics Co., Ltd. T.H.I. Group (Cambodia) Co., Ltd. T.H.I. Group Singapore Pte. Ltd. (Singapore) T.H.I. & Maruzen Co. Ltd. Fresh Beauty Enterprises Ltd. Eastern Union Holdings Limited T-Cube Global Logistics Co., Ltd. T.H.I. Group Limited (HK) (T.H.I. HK) T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) Shanghai Yaohwa International Forwarder Co., Ltd. (Shanghai Yaohwa) Exer Logistics Co., Ltd. Shanghai Kai Hua Co., Ltd. (Shanghai Kai Hua) Taiwan Express (HK) Co., Ltd. (TEC HK) Taiwan Express (USA), Inc. TEC Logistics Co., Ltd. TEC Logistics (USA), Inc	British Virgin Islands British Virgin Islands Vietnam Thailand Taiwan Taiwan Cambodia Singapore Japan SAMOS Hong Kong China Hong Kong China China China China Hong Kong United States Taiwan United States	100% 100% 51% 49% 100% 100% 100% 80% 51% 60% (Note 1) (Note 2) 100% 100% 100% (Note 3) 68% (Note4) 100% 100% 100% 100%	100% 100% 51% 49% 100% 100% 100% 80% 33.33% - - - 100% 100% 100% - 100% 100% 100% 100% 100%

Name of subsidiary	Location	Percentage to shares held 2015.12.31 2014.12.31	Percentage to shares held 2015.12.31 2014.12.31
		2015.12.31
Hiview Logistics Co., Ltd. TEC Logistics (Shenzhen) Co., Ltd. Wai Hung Cargo Transport Co., Ltd. (Note 1) Acquisition of the equity through Fresh Beauty Enterprises Ltd.	Taiwan China Hong Kong	97.51% 100% 100%	97.51% 100% 100%

(Note 2) Acquisition of the equity through Eastern Union Holdings Limited

(Note 3) Acquisition of 68% shares through the T.H.I. Group (Shanghai) Ltd.

(Note 4) The liquidation process was completed on December 31, 2015.

(5) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Company.

(6) Transactions with key management personnel

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits Share-based payments	2015 $ 25,890 1,956 368 $ 28,214	2014
		16,979 2,361 381 19,721

257

(7) Other related-party transactions

C. Revenue

Subsidiary		Revenue 2015 2014 62,888 54,223	Revenue 2015 2014 62,888 54,223	Accounts receivable	Accounts receivable
		2015		2015.12.31 49,430	2014.12.31
	$	62,888			43,943

Trading terms of the above transactions require payments within 30 to 60 days or depending on the funding needs.

D. Other payables

2015.12.31 Subsidiary $ 99,404 Amounts received on benefit of subsidiary. E. Loans to subsidiary The Company’s loans to subsidiary and interest income are as follow: 2015.12.31 Loans to subsidiary $ 94,926 2015.12.31 Interest income (recorded in other income) $ 1,746 F. Rent Income (recorded in other income) 2015.12.31 Subsidiary $ 3,530	2014.12.31
	122,477 2014.12.31
	10,000 2014.12.31
	1,827 2014.12.31
	3,360

Income from office rental to subsidiary, the rent is based on the market price and being collected monthly.

258

22. Pledged assets

Pledged assets	Object		2015.12.31 177,616	2014.12.31
Property, plant, and equipment	Short-term/long-term credit facility	$		178,680

23. Contingencies and commitments

Promissory notes issued to the bank as collateral for short-term bank borrowings, logistics business, etc., were as follows.

Promissory notes		2015.12.31 -	2014.12.31 50,000
	$

24. Significant casualty loss: None.

25. Subsequent events: None.

26. Other

The personnel cost and depreciation and amortization expenses, categorized by function, were as follows.

Personnel cost Salaries Labor and health insurance Pension Others Depreciation expenses Amortization expenses	2015 Operating costs Operating expenses Total 75,324 - 75,324 3,340 - 3,340 2,528 - 2,528 1,388 - 1,388 5,494 - 5,494 3,590 - 3,590	2014(Restated)
		Operating costs Operating expenses Total 41,051 - 41,051 1,630 - 1,630 2,429 - 2,429 855 - 855 4,943 - 4,943 4,985 - 4,985

In 2015 and 2014, the average number of employees were 35 and 15, respectively.

259

27. Other Disclosure Items

(d)Significant transaction relevant information

The information on the significant transactions in 2014 required by the Guidelines Governing the Preparation of Financial Reports of Securities issuers was as follows:

(11)Lending to other parties:

(376)

No	Name of lender	Name of	Account	affiliates	Highest balance during the period	aance as o December 31,	pproprate credit as of	ange o interest rates	Type of financing	Transaction	Purpose of fund financing of the	Allowance for bad	uar	antee	mtaton on fund financing	Limitation on fund financing
(Note 1) 0	The Company	borrower T.H.I. Group Singapore Pte. Ltd. Taiwan Express Logistic Co., Ltd. T.H.I. Logistics Co. Ltd. Taiwan Express Logistic Co., Ltd. Taiwan Express Logistic Co., Ltd. Taiwan Express Logistic Co., Ltd.	name Other	Y	4,926	2015 (Note 4) 4,926	December 31, 2015 4,926	during the period Quarterly	(Note 2) 2	amounts -	borrower Trading turnover	debt -	Item -	Value -	to individual party 501,283	1,002,567
			receivables-					changes in
			related					interest rates
			patties
0	The Company		Other	Y	180,000	180,000	90,000	1.36%	2	-	Trading turnover	-	-	-	501,283	1,002,567
			receivables-
			related
			patties
0	The Company		Other	Y	50,000	-	-	1.35%	2	-	Trading turnover	-	-	-	501,283	1,002,567
			receivables-
			related
			patties
1	Taiwan Express		Other	Y	50,000	-	-	2.25%	2	-	Trading turnover	-	-	-	74,291	148,582
	(HK) Co., Ltd.		receivables-
			related
			patties
2	T.H.I. Logistics Co.		Other	Y	65,000	40,000	40,000	1.36%	2	-	Trading turnover	-	-	-	40,182	80,364
	Ltd.		receivables-
			related
			patties
3	T.H.I. Group		Other	Y	77,433	-	-	2.05%	2	-	Trading turnover	-	-	-	247,598	495,197
	Limited (in HK)		receivables-
			related
			patties
4	T.H.I. Group	EXer Logistics Co.,Ltd.	Other	N	25,852	-	-	7%	2	-	Trading turnover	-	-	-	188,829	377,659
	(Shanghai)Ltd.		receivables

Note 1: The numbers indicated above represent the following: 0 for investor, 1 to 4 for investee.

Note 2: Nature of lending: 1 for counterparties with transactions, and 2 for short-term operating capital.

Note 3: The ceiling on total loans granted by the Company to all parties is 40% of the net assets in the financial statements; the ceiling on total loans granted by the Company to each entity is 20% of the net assets in the financial statements.

Note 4: Ending facility balance approved by BOD.

(12)Guarantees and endorsements for other parties:

No.	Endorsement/gua rantee Provider	Counter-p guarantee r	arty/ eceiver	Limit of guarantee/ endorsement amount for receiving party	Maximum balance	Ending balance	Actual amount used	Endorsement and guarantee secured by assets	Percentage of accumulated guarantee amount to net assets value from the latest financial statement	Limit of total guarantee/ endorsement amount	Classified as endorsement and guarantee to subsidiary by parent company	Classified as endorsement and guarantee to parent company by parent subsidiary	Classified as endorsement and guarantee to companies in Mainland China
		Name	Relation
0 0 0	The Company Taiwan Express Logistic Co., Ltd. Shanghai Yaohwa International Forwarder Co., Ltd.	Shanghai Yaohwa International Forwarder Co., Ltd. Taiwan Express (HK) Co., Ltd. T.H.I. Group (Shanghai) Ltd.	2 2 3	250,641 105,150 9,932	62,044 63,220 3,619	60,688 - 3,540	- - -	- - -	2.42% - 3.56%	1,002,567 210,299 39,729	Y N N	N N N	Y N Y

Note 1: The numbers indicated above represent the following: 0 for investor, 1 onwards for investee

Note 2: The relationship between the guarantee provider and the receiver is as follows:

(7) The Company has transactions with its counterparties.

(377)

260

(8) The Company holds more than 50% of common shares of its subsidiary.

(378)

(9) The Company and its subsidiaries hold more than 50% of common shares of the investee company.

(379)

(10)The parent company holds more than 50% of its outstanding common shares (directly or indirectly) through a subsidiary.
(11)Companies within the same architectural field have signed a contractual agreement to provide mutual endorsements/ guarantees for the need of a specific construction project.

(380)

(12)The shareholders provide endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.
Note 3: (1) Total guarantees amount should not exceed 40% of the Company’s net assets in the financial statements if the following conditions are met:

Ownership of the Company should exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

Ownership of the Company should not exceed 50%:

Guarantee amount should not exceed 20% of the Company’s net assets

The net assets stated above refer to the net assets from the Company’s most recently audited financial statements.

(2) Apart from the conditions listed above, guarantees for the purpose of business relations should not exceed the total amount of business transactions between the two parties, whichever is lower. The definition of business transactions could either be purchases or sales, whichever is higher.
(13)Information regarding securities held:

Unit: thousand shares

Company’s m	Types and issuer of marketable securities	Nature of the relationship	Account name		Endingb	alance		Notes
				Number of shares	Book value	Ownership %	Fair value
The Company The Company T.H.I. Logistics Co. Ltd. Taiwan Express Logistic Co., Ltd.	Fund Yuanta Wan Tai Fund Stock Aerospace Industrial Development Corporation Stock Aerospace Industrial Development Corporation Stock Central Taiwan Science Park Logistics Co.,Ltd.	- - - -	Financial assets at fair value through profit or loss－current Available-for-sale financial assets －current Available-for-sale financial assets －current Financial assets measured at cost－ non-current	473,454 370,000 260,000 3,880,000	7,086 14,874 10,452 38,800	- - - -	7.086 14,874 10,452 -	(note1)

Note 1: due to lack of market information, will not include in this report
(14)Information regarding purchase or sale of securities for the period which exceeded $300 million or 20% of the Company’s paid-in capital: None.
(15)Information on acquisition of real estate for which the purchase amount exceeded $300 million or 20% of the Company’s paid-in capital: None.
(16)Information regarding the amount from disposal of real estate exceeding NT$300 million or 20% of the Company’s paid-in capital: None.
(17)Information regarding related-party purchase and sale transactions for which the amount exceeded $100 million or 20% of the Company’s paid-in capital:

Name of				Reasons and description
company which	Name of counter-party	Relationship with		on how the transaction		Notes
purchased		the Company		conditions differ from the	Accounts/notes
or sold			Transaction details	general transactions	receivable(payable)

261

			Purchase			Credit			Ending	Percentage of total
					Percentage of total
			/ sale	Amount	purchases / sales	terms	Amount	Credit terms	balance	notes/accounts receivable (payable)
Wai Hung Cargo Transort Co	Taiwan Express (HK) Co., Ltd	Associates	Sales	112,067	1.15%	The sales prices and payment	-	-	6,201	0.42%
p ., Ltd.						terms of intercompany
						sales are not
						significantly
						different from
						those of the third
						parties.

(18)Information regarding receivables from related parties for which the amount exceeded $100 million or 20% of the Company’s paid-in capital:

Name of company which has accounts receivable	Counterparty	Relationship	Ending balance of accounts receivable (in thousands)	Turnover	Past-due rec relate	eivables from d party	Received subsequently (in thousands)	Allowance for bad debt
					Amount	method
T.H.I. Group (Shanghai) Ltd. T.H.I. Group (Shanghai) Ltd. T.H.I. Logistics Co. Ltd. T.H.I. Group Ltd. (B.V.I.) Wai Hung Cargo Transport Co.,Ltd.	T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK) T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK) Taiwan Express (HK)Co.,Ltd.	Associates Parent company Associates Associates Associates	Other receivables 118,369 Other receivables 276,213 Other receivables 118,308 Other receivables 170,653 Other receivables 121,981	- - - - -	- - - - -	- - - - -	- - - 185,148 (Note 1) - - - - - -

Note 1: The amount is to be collected on March 7, 2016.

(19)Information regarding trading in derivative financial instruments: Please refer to note 6(2)&(10).

262

(e) Business and significant transactions among the affiliates (investees of Mainland China are not included)

Relevant information about reinvestment for 2015 is as follows:

Unit: thousand shares

Investor	Investee	Location	Main Businesses and Products	Investmen	t Amount	Balance	as of December	31,2015	Net Income (Loss) of the Investee	Share of profit loss of invest	Note
				December31, 2015	December 31,2014	Shares	Percentage of Ownership	Carrying Value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Greatline Fresh Beauty TEC TEC TEC TEC TEC TEC TEC HK	T.H.I. Group Ltd. (B.V.I.) Greatline nternational Limited (Greatline) T.H.I Group Vietnam Co., Ltd. T.H.I. Group (Bangkok) Co., Ltd. T.H.I. & Maruzen Co., Ltd. Taiwan Express Logistic Co., Ltd. (TEC) T.H.I. Logistics Co. Ltd. T.H.I. Group (Cambodia) Co., Ltd. PT. Dexter Eurekatama T.H.I. Group Singapore Pte. Ltd. (Singapore) LOGI International Co., Ltd. Fresh Beauty Enterprises Ltd. (Fresh Beauty) T.H.I. Group Limited (HK) (T.H.I. HK) Eastern Union Holdings Limited (Eastern Union) Taiwan Express (HK) Co., Ltd. (TEC HK) TEC Logistic Co., Ltd. Orient Air General Sales Agent Co., Ltd. Hiview Logistics Co., Ltd. Taiwan Express (USA), Inc. TEC Logistics (USA), Inc. Wai Hung Cargo Transport Co., Ltd.	British Virgin Islands British Virgin Islands Vietnam Thailand Japan Taiwan Taiwan Cambodia Indonesia Singapore Korea Samoa Hong Kong Hong Kong Hong Kong Taiwan Taiwan Taiwan United States United States Hong Kong	Offshore settlement center Offshore holding company Air & sea freight forwarding and packaging Air & sea freight forwarding and packaging Air & sea freight forwarding Air & sea freight forwarding and customs clearance Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Air & sea freight forwarding Offshore holding company Air & sea freight forwarding Offshore holding company Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and delivery services Freight forwarding, customs clearance, and delivery services Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Warehousing and distribution	35,000 (1,000USD) 134,428 (4,050USD) 4,862 (159USD) 2,372 (72USD) 10,365 (31,130JYP) 704,200 130,000 4,462 (150USD) 47,381 (1,598USD) 7,629 (320SGD) 9,666 (300USD) 282,775 (55,579CNY) 139,948 (4,314USD) 57,411 (1,751USD) 266,807 (70,550HKD) 6,000 600 76,590 31,629 (1,000USD) 8,549 (290USD) 16,299 (4,238HKD)	35,000 (1,000USD) 134,428 (4,050USD) 4,862 (159USD) 2,372 (72USD) 7,449 (20,000JYP) 704,200 130,000 4,462 (150USD) 47,381 (1,598USD 7,629 (320SGD) - - 139,948 (4,314USD) - 266,807 (70,550HKD) 6,000 600 76,590 31,629 (1,000USD) 8,549 (290USD) 16,299 (4,238HKD	1,000,000 4,050,000 - - 3,060 35,958,400 13,000,000 - 12,000 320,000 16,285 60 12,480,000 - - 1,000,000 60,000 5,000,000 1,000,000 290,000 -	100% 100% 51% 49% 51% 100% 100% 100% 30% 80% 30% 60% 100% 100% 100% 100% 30% 97.51% 100% 100% 100%	72,871 1,355,066 33,375 9,890 10,760 783,732 167,158 8,006 48,337 4,248 9,004 281,331 1,345,226 68,963 371,453 44 3,791 82,174 40,427 15,343 16,024	(11,060) 264,813 10,413 8,563 4,242 68,049 27,674 944 13,263 (3,903) (3,057) 12,271 266,103 12,271 32,512 18 7,421 1,228 4,763 291 367	(11,060) 264,813 5,311 4,196 1,584 62,049 27,674 944 854 (3,123) (917) - 266,103 - 32,512 18 2,226 1,197 4,763 291 (2,238)	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investment under equity method Subsidiaries Investment under equity method Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investment under equity method Subsidiaries Subsidiaries Subsidiaries Subsidiaries

263

(f) Information regarding investments in Mainland China (PRC)

(3) Name, major operations and related information of investee in Mainland China

Names of PRC it	Major	Amounts of idi itl	Method of	nvestment transferred from Ti bii	ear ene e	cemer,	Investment transferred from	Investee net	rect an indirect hhldi	urrent gans or losses on itt	Carrying value of investment,	Repatriated gains on
nvesee companies Shanghai	operations Air & sea freight	pa-n capa (in thousands) 55,031	investment Note 1	awan, egnnng of period (in thousands) 55,031	Remittance -	Repatriation -	Taiwan, end of period (in thousands) 55,031	income 12,141	sareong percentage by the Company 100%	nvesmen recognized (in thousands) 12,141	end of period (in thousands) 99,575	investment, end of period -
Yaohwa	forwarding and	(1,700USD)		(1,700USD)			(1,700USD)
International	customs
Forwarder Co.,	clearance
Ltd.
T.H.I. Group	Air & sea freight	92,883	Note 1	84,861	-	-	84,861	142,874	100%	14,874	974,410	-
(Shanghai) Ltd.	forwarding and	(3,060USD)		(2,600USD)			(2,600USD)
	customs
	clearance
T.H.I. Shanghai	Warehousing and	6,530	Note 1	6,530	-	-	6,530	-	-	-	-	-
Logistic Co.,	logistics	(200USD)		(200USD)			(200USD)
Ltd.
Shanghai Kai	Transport and	7,653	Note 5	-	-	-	-	194	-	194	-	-
Hua Co., Ltd.	logistics	(1,600CNY)
T-Cube Global	Warehousing and	49,920	Note 1	-	28,961	-	28,961	12,265	60%	-	62,733	-
Logistics Co.,	company	(10,000CNY)			(932USD)		(932USD)
Ltd.
EXer Logistics	Express logistics	19,288	Note 6	-	-	-	-	(4,199)	68%	-	177,246	-
Co., Ltd.	company	(3,846CNY)
TEC Logistics	Freight	183,901	Note 7	183,901	-	-	183,901	22,901	100%	22,901	161,760	-
(Shenzhen) Co.,	forwarding,	(48,550HKD)		(48,550HKD)			(48,550HKD)
Ltd.	customs
	clearance, and
	distribution

(4) Limit on the amount of investment in Mainland China

	Amount of investment approved by
Cumulative remittance from		Limit on the amount of
	the Investment Commission, Ministry
Taiwan, end of the period (Note3)		investment in Mainland China
	of Economic Affairs (Note4)

175,383	634,140	1,503,850
(5,432USD)	(19,310USD)

Note 1: Investment in Mainland Chain via remittance through a third region.

Note 2: The investment gains or losses under the same period that have been recorded based on the investees’ audited financial statements.

Note 3: The actual amount invested by the Company in Mainland Chain at the end of this period.

Note 4: At the reporting date, the exchange between USD and TWD rate was 1:32.84.

Note 5: Shanghai Yaohwa International Forwarder Co., Ltd. directly invested in Shanghai Kai Hua Co., Ltd.

Note 6: T.H.I. Group (Shanghai) Ltd. directly invested in EXer Logistics Co., Ltd.

264

Note 7: The Company’s subsidiary, Taiwan Express Logistic Co., Ltd., invested in Mainland China via remittance through a third region. The upper limit of the investments is 60% of Taiwan Express Logistic Co., Ltd.’s net assets in the financial statements based on the “REGULATIONS GOVERNING THE APPROVAL OFINVESTMENT OR TECHNICAL COOPERATION INMAINLAND CHINA” and have been approved by the Investment Commission Ministry of Economic Affairs amounting to $183,901 thousand (HKD 48,550 thousand).

(5) Significant transactions:

Direct or indirect significant transactions between the Company and the investee can be referred to the “Significant transactions relevant information” and the “Business and significant transactions among affiliates”.

28. Operating segments

Please refer to the consolidated financial statements for the year ended December 31, 2015.

265

AI assistant

T3EX — Annual Report 2015

52176_rns_2016-12-02_42539e19-aae9-4f96-a082-e1812adc8b8b.pdf

T3EX Global Holdings Corp.

2015 Annual Report

Notice to readers

Spokesperson

Headquarters, Branches and Plant

Deputy Spokesperson

Stock Transfer Agent

Auditors

Overseas Securities Exchange: None

Corporate Website

Letter to Shareholders

2015 Review

2016 Outlook

I. Company Profile

2.1 Date of Incorporation : 02 04, 1987

2.2 Company History

II. Corporate Governance Report

3.1 Organization

3.1.1 Organizational Chart

3.1.2 Major Corporate Functions

3.2 Directors, Supervisors and Management Team

3.2.1 Directors and Supervisors

Major shareholders of the institutional shareholders

Major shareholders of the Company’s major institutional shareholders

Professional qualifications and independence analysis of directors and supervisors

3.2.2 Management Team

3.2.3 Remuneration of Directors, Supervisors, President, and Vice President

Remuneration of Directors

Remuneration of Supervisors

Remuneration of the President and Vice President

3.2.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Vice Presidents

3.3 Implementation of Corporate Governance

3.3.1 Board of Directors

3.3.2 Attendance of Supervisors at Board Meetings

3.3.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

3.3.4 Composition, Responsibilities and Operations of the Remuneration Committee

A. Professional Qualifications and Independence Analysis of Remuneration Committee Members

B. Attendance of Members at Remuneration Committee Meetings

3.3.5 Corporate Social Responsibility

3.3.6 Ethical Corporate Management

3.3.7 Corporate Governance Guidelines and Regulations

3.3.8 Other Important Information Regarding Corporate Governance

3.3.9 Internal Control Systems

T3EX Global Holdings Corp

Statement of Internal Control System

3.3.10 Major Resolutions of Shareholders’ Meeting and Board Meetings

 Shareholders’ meeting:

 Board meeting:

3.4 Information Regarding the Company’s Audit Fee and Independence

3.4.1 Audit Fee

3.4.2 Replacement of CPA: None

3.4.3 Audit Independence

3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

3.5.1 Shares Trading with Related Parties: None. 3.5.2 Shares Pledge with Related Parties: None. 3.6 Relationship among the Top Ten Shareholders

3.7 Ownership of Shares in Affiliated Enterprises

IV. Capital Overview

4.1 Capital and Shares

4.1.1 Source of Capital

B. Type of Stock

C. Information for Shelf Registration: None.

4.1.2 Status of Shareholders

4.1.3 Shareholding Distribution Status

A. Common Shares

4.1.4 List of Major Shareholders

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

4.1.6 Dividend Policy and Implementation Status

A. Dividend Policy

B. Proposed Distribution of Dividend

4.1.7The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate:

4.1.8 Employee Bonus and Directors' and Supervisors' Remuneration ：

4.1.9 Buyback of Treasury Stock

4.2 Bonds

4.2.1 Corporate Bonds

4.2.3 Exchangeable Bonds: None

4.2.4 Shelf Registration for Issuing Bonds: None

4.2.5 Corporate Bonds with Warrants: None

4.4 Employee Stock Options

T3EX Annual Report 2015

D. Supply chain management `：`

E. Customized services `：`

F. Logistics information services `：`