T3EX - Annual Report 2016 | FinancialReports.eu

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Stock Code: 2636

T3EX Global Holdings Corp.

2016 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 19, 2017

Spokesperson

Name: Echo Wan Title: General Manager 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.............................................................................................. 6 2.2 Company History ……… ...................................................................................... 6 III. Corporate Governance Report 3.1 Organization............................................................................................................ 7 3.2 Directors, Supervisors and Management Team………………………………9 3.3 Implementation of Corporate Governance ........................................................... 27 3.4 Information Regarding the Company’s Audit Fee and Independence.................. 58 3.5 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders……………………………………………………………………..59 3.6 Relationship among the Top Ten Shareholders………..……....………...………61 3.7 Ownership of Shares in Affiliated Enterprises…………………………………61 IV. Capital Overview 4.1 Capital and Shares………………………………………………………….……63 4.2 Bonds…………….………………………………………………………….……67 4.3 Global Depository Receipts ….…………………………………………….……69 4.4 Employee Stock Options…………………………………………………………69 4.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions….71 4.6 Financing Plans and Implementation……………………………………...……..71 V. Operational Highlights 5.1 Business Activities……………………………………………………………….73 5.2 Market and Sales Overview…………………………………….………..………85 5.3 Human Resources……….……………………………………………………….90 5.4 Environmental Protection Expenditure………….……………………………….91 5.5 Employee Relations………………………………………………………………91 5.6 Important Contracts………………………………………………………………93 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………………………….……109 6.4 Consolidated Financial Statements for the Years Ended December 31, 2015 and 2014, and Independent Auditors’ Report…………………………………….…109 6.5 Financial Statements for the Years Ended December 31, 2015 and 2014, and Independent Auditors’ Report………………...………………….….109

VII. Review of Financial Conditions, Operating Results, and Risk Management 7.1 Analysis of Financial Status…………………………………………………….110 7.2 Analysis of Financial Performance………………………………………..……111 7.3 Analysis of Cash Flow………………………………………..………………112 7.4 Major Capital Expenditure Items……………………………………………112 7.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year……….…113 7.6 Analysis of Risk Management………………………………………………….113 VIII. Special Disclosure 8.1 Summary of Affiliated Companies……………………………………..….…115 8.2 Private Placement Securities in the Most Recent Years………………………124 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……………………...125

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 to expand the business scale and increase global operating locations including Taiwan, Hong Kong, China, Japan, Korea, Vietnam, Thailand, Cambodia, Singapore, Malaysia, 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.

2016 Review

2016 Review
Expressed in thousands of New Taiwan Dollars	2016	2015	YoY
Revenue	9,744,113	9,736,912	0.07%
Gross Profit	1,794,218	1,877,272	-4.42%
Gross Margin	18.41%	19.28%	-0.87%
Operatingincome	193,165	312,196	-38.13%
Profit after tax	121,176	303,900	-60.13%
EPS(Dollars)	1.11	2.65	-58%

According to the statistics of the US Department of Commerce, US exports declined by 2.3% and imports declined by 1.8% in 2016. According to the statistics of China’s General Administration of Customs, China’s exports declined by 2%, but imports grew 0.6% also in 2016. The information above shows that the global trade weakened in 2016, resulting in a drop in both the cargo volume and the freight prices, thus affecting the company’s operating performance in 2016. Besides, the Company’s newly business- Shanghai EXer logistics which invested in the being of 2016 executed the restructured plan, also affecting the company’s profit in 2016. In order to provide logistic services for e-commerce, Shanghai EXer logistics which specializes in home delivery for e-commerce and television shopping platforms has high labor costs. So far the distribution volume of Exer Logistics has not yet reached a scale of economy in the initial operating period, and a loss was resulted in due to a lower revenue than its operating costs.

On the performance results of various products, ocean freight revenue was NT$5.57 billion, down by 6% over the same period last year. However, due to the 26% growth of the LCL(Less Container Load) business which has a higher gross margin, the gross profit showed a slight growth of 2%. The air freight revenue was NT$2.52 billion, a slight decline of 0.5% over the same period last year due to adjustments by some customers and lower freight prices, However, air freight volume increased by 7% over the same period last year. The domestic logistics revenue was

NT$1.65 billion, an increase of 30% over the same period last year, mainly due to the revenue-increasing merger of T-Cube Global Logistics(Shanghai) which specializes in B2B warehousing and transportation, and Shanghai EXer Logistics in 2016.

2017 Outlook

In 2017Q1, the Company’s revenue increased by 10% and the profit grew by 367% over the same period last year due to the increase of global trade volume and the international freight.

Looking forward this year, the Company expected that throughout the year the annual trade and transportation volume will be relatively active and a growth trend will be maintained. The new US government's recent measures, including the policy of giving priorities to the US domestic manufacturing industry, raising the employment rate and tax reform planning have significantly improved market expectations. With an increase in corporate profits and a strong US dollar policy, the overall US consumption is expected to rise in 2017. In Europe, the substantial depreciation of the pound sterling and the depreciation of Euro resulted in a substantial increase in the European countries’ exports, especially their technology and luxury products to Asia. Therefore, it is expected that in 2017, imports from Europe will continue to grow, and exports to Europe will be relatively stable. In China, many of the manufacturers, particularly the Beijing-Tianjin-Hebei region, East China and the Pearl River Delta region, have moved out mainly to ASEAN, including Indonesia and Vietnam, and this will promote a significant increase in the transportation operations in the Asian region.

The Group’s main strategy for 2017 is to continue strengthening the layout in the US and Europe while developing business requirements in the Asian region, to use the business group as the framework to fully integrate the sea, air and land businesses with the goal of expanding the freight business, and to connect the latter part of warehousing and distribution to form a complete supply chain service. The company will integrate the T3EX group’s 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.

We will continue to strengthen our expertise and create greater values for our shareholders.

Chairman: 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.
12,2016	The company changed its listing from GreTai Securities Market to the Taiwan Stock Exchange.

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
General Manager 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.
General Manager 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
							05 19, 2017
Title	Nationality/ Country of Origin	Name	Sex	Date Elected	Term (Years)	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	Male	05.31. 2016	3	01.16 1993	1,225,197	1.05	796,490	0.67	0	0	3,339,143 (Hope Oce an)	2.82	 The founder of T3EX group  Shipping & Transportation Management in NTOU	 Group chairman of T3EX  The board of director: Dynamic Ocean Group, T.H.I. logistic, T-Cube logistics, T.H.I. & Maruzen, Hope Ocean, Taiwan Express, and EXer logistics.  Chairman: JIN-HUA Investment, THI Logistics, THI group (Shanghai), and YHI International,THI logistics	None	None	None

Director	R.O.C.	Jack Lai	Male	05.31. 2016	3	05.31. 2016	1,865,566	1.60	1,917,552	1.62	0	 The associate vice president of T3EX  DBA in National Taipei University.	 General Manager: Southwest Asia of THI group, and THI ADM.  The board of director: PT. Dexter Eurekatama, THI group (Shanghai), YHI International, THI Malaysia, T.H.I. Singapore., LOGI International, THI HK , and THI & Marauzen.  The chairman and board of director of T-Cube logistics.	None	None	None
Director	R.O.C.	Tony Lin	Male	05.31. 2016	3	05.31. 2016	1,258,116	1.08	1,290,728	1.09	-	 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., THI Singapore, THI group(Shanghai), and Taiwan Express.  The president of EXer Logistics.	None	None	None
Director	BVI	Hope Ocean International Ltd		06.17. 2013	3	05.31. 2016	2,849,003	3.92	3,273,798	2.82	0	-	-	None	None	None
	R.O.C.	Representative: Ji-Zhi Hsieh	Male				0	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
Director	Samoa	Dynamic Ocean Group Limited		05.31. 2016	3	06.20 2007	5,086,865	4.37	3,912,398	3.30	0	-	-	None	None	None

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 DBA in Fu Jen
Catholic
 University.
 Manager of JI YE
Shipping
 Manager of
Taiming
Shipping Agent
Representative: The CEO of THI
R.O.C. Male 143,484 0.12 146,347 0.12 60,309 0.05 0 0  The vice president None None None
Carl Wei Logistics Sea business.
of Kuang Ming
Shipping Corp.
 The senior vice
president of
YANG MING
MARINE
TRANSPORT
CORP.
PCL
TRANSASIA 05.31. 05.31.
Director R.O.C. 3 6,664,638 9.17 3,912,398 3.30 0 0 0 0 - - None None None
INTERNATIO 2016 2016
NAL LTD
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	R.O.C.	Representative: Eric Lin	Male				0	0	0	0	0	0	0	0	 Sr. Director of Samsung Electronics Korea HQ and Taiwan Branch.  Executive Director, Goldman Sachs Asia Pac Investment Research  Executive Director, UBS Securities Taipei Branch  Vice President, Deutsche Bank Securities  International Business MBA ofNTU.	Country Head/Head of Research, CIMB Securities Taiwan Branch.	None	None	None
Director	R.O.C.	Benison Hsu	Male	05.31. 2016	3	06.28 2011	1,153,734	0.99	1,191,762	1.00	0	0	0	0	 MBA in Tulane University.  The founder of Taiwan Express	 The president of Taiwan Express.  The board of director of Hiview Logistics, Central Taiwan Science Park Logistics., and GGA Corp.  The supervisor of Orient AirGeneralSalesAgent.	None	None	None

Director	R.O.C.	Li-Chiu Chang	Male	05.31. 2016	3	06.17. 2013	0	0	0	0	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 TA YA ELECTRIC WIRE & CABLE, ACME Electronics, Sun Ten International, and Tanvex BioPharma.  TECHNOLOGY Inc.  The convener of Taiwan Securities Association  The president of FOCI Fiber Optic Communications.	None	None	None
Director	R.O.C.	Ming-Hsu Tsai	Male	05.31. 2016	3	05.31. 2016	0	0	0	0	0	0	0	0	 Master of Public Administration in NCU.  The senior vice president of YANG MING MARINE TRANSPORT CORP.  The chairman of Kuang Ming Shipping Corp.	None	None	None	None
Supervisor	R.O.C.	YI-WEI INVESTMENT		05.31.	3	06.17.	411,192	0.57	1,296,889	1.11	0	0	0	0			None	None	None

	R.O.C.	Representative: Chin-Chou Hsu	Male			2013	63,256	0.05	64,518	0.05	0	 Master of Economics in NTU.  Master of Economic in Unites State John Hopkins University.  The director of Department of International Affairs of FSC.  The deputy chief of Insurance Bureau of FSC.  The chairman of SinoPac Venture Capital.	None	None	None	None
Supervisor	R.O.C.	BAO-JYUE INVESTMEN T		05.31. 2016	3	05.31. 2016	514,323	0.44	524,588	0.44				None	None	None
	R.O.C.	Representative: Mao-Jen Chen	Male				0	0	0	0	0	 MBA in Tulane University.  Mechanical Engineering in NCKU.  The business minister of Chin Fong Machine Industrial.	The president of CHUN-DI Corp.	None	None	None
Supervisor	R.O.C.	Shen-Li Liao	Male	05.31. 2016	2	06.04 2014	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

05 06, 2016

Major shareholders of the institutional shareholders

Name of Institutional Shareholders	Major Shareholders
DYNAMIC OCEAN GROUP LIMITED	David Yen (21%), Mark Richard Laufer (79%)
Hope Ocean International Ltd	David Yen (100%)
PCL TRANSASIA INTERNATIONAL LTD	Peggy Lin (45%), SHU-HUI Chang (53%)
BAO-JYUE INVESTMENT	SIOU-JIN WANG (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- CHANGLI(6.92%), CHUN-CHIEHCHANG (10.66%)

Major shareholders of the Company’s major institutional shareholders: None

05 06, 2016

Professional qualifications and independence analysis of directors and supervisors

Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet 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)	Independence Criteria(Note)	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	-	-		-	-	-		-						None
Jack Lai	-	-												None
Hope Ocean International Ltd Representative: Ji-Zhi Hsieh	-	-											-	None
Dynamic Ocean Group Limited Representative: Carl Wei	-	-											-	None
TonyLin	-	-												None
Benison Hsu	-	-												None
PCL TRANSASIA INTERNATIONA L LTD Representative: Eric Lin	-												-	None
Li-Chiu Chang	-	-												3
Ming-Hsu Tsai	-	-												None

YI-WEI INVESTMENT	-	-											-	None
Representative: Chin-Chou Hsu	-	-											-	None
BAO-JYUE INVESTMENT Representative: Mao-Jen Chen	-													None
Shen-Li Liao	-	-												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	Sex	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
General Manager & Spokesman	R.O.C.	Echo Wan	Female	05,31 2016	`130,119`	`0.10`	`576`	0	0	0	 The CAO of T3EX.  Senior manager of SinoPac securities underwriting department.  MBA of NCU  Major Accounting in Fu JenCatholic	None	None	None	None
Vice President	R.O.C.	Leo Liu	Male	03,26, 2013	`65,390`	`0.05`	`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 Supervisor of T-Cube logistics  The board of director of EXer Logistics.	None	None	None
Vice President	R.O.C.	Allen Hou	Male	03,26, 2013	`17,790`	0.01	0	0	0	0	 The CFO of massage chairs group of Johnson Health Tech.  The CFO of GRAND HALL ENTERPRISE.  The CFO of Avalue Technology.  Major in NTU Economics.	 The CFO of T3EX Global Holdings and Taiwan Express.  The board of directors of THI logistics, Taiwan Express, EXer Logistics and T.H.I. & Maruzen Co., Ltd.	None	None	None

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 MBA in CUNY
 National Taipei
University of
Business
 The supervisor of Hiview
Senior Melonie 03,14,  Manager of Operator
Logistics.
R.O.C. Female 144,145 0.12 0 0 0 0 Department of THI None None None
Manager Lin 2016 Logistics.  Manager of Internal Audit
Department
 Manager of
Administrative
Departmentof THI
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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 (%)
		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 company	All compani es in the consolida ted financial statement s	The company	Companie s in the consolidat ed financial statement s	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company	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 consolidate d financial statements		The company	Companie s in the consolidat ed financial statements	The comp any	Comp anies in the consoli dated financi al statem ents	The compa ny	Companies in the consolidated financial statements
																Cash	Stock	Cash	Stoc k
Presi dent	David Yen	0	0	0	0	3,113	3,113	1,200	1,200	3.30	3.30	4,191	26,664	477	13,843	0	0	0	0	259,000	259,000	0	0	6.88	34.35
Dire ctors	Tony Lin
Dire ctors	Jack Lai

Dire ctor	Hope Ocean Internationa l Ltd Representat ive: Ji-Zhi Hsieh (Note 1)
Dire ctor	Dynamic Ocean Group Limited Representat ive: Carl Wei (Note 1)
Dire ctor	PCL TRANSAS IA INTERNA TIONAL LTD Representat ive: PeggyLin
Dire ctor	Li-Chiu Chang
Dire ctor	Ming-Hsu Tsai (Note 1)
Dire ctor	Benison Hsu
Dire ctor	Jim Chen (Note2)
Dire ctor	Dynamic Ocean Group Limited Representat ive:Mao-Je n Chen (Note2)

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Guo-Yua
Dire
ctor n Chen
(Note2)
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Note1: 2016/05/31 on board. Note2:2016/05/31 quit.

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-Jen Chen`、` Ming-Hsu Tsai`、`Carl Wei`、` Ji-Zhi Hsieh	David Yen, Jim Chen, Jack Lai, Benison Hsu, Peggy Lin, Tony Lin, Li-Chiu Chang, Guo-Yuan Chen Mao-Jen Chen`、` Ming-Hsu Tsai`、`Carl Wei`、` Ji-Zhi Hsieh	Jim Chen, Jack Lai, Benison Hsu, Peggy Lin, Tony Lin, Li-Chiu Chang, Guo-Yuan Chen,Mao-Jen Chen`、`Ming-Hsu Tsai`、`Carl Wei`、` Ji-Zhi Hsieh	Li-Chiu Chang, Guo-Yuan Chen Mao-Jen Chen Peggy Lin Jim Chen Ming-Hsu Tsai Carl Wei Ji-Zhi Hsieh
NT$2,000,001 ~ NT$5,000,000	0	0	0	Jack Lai,
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	David Yen
NT$15,000,001 ~ NT$30,000,000	0	0	0	0
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	12	12	12	12

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: Chin-Chou Hsu (Note1)	0	0	1,038	1,038	360	360	1.07	1.07	None
Supervisors	Shen-Li Liao
Supervisors	BAO-JYUE INVESTMENT Representative: Mao-Jen Chen (Note1)
Supervisors	YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh (Note2)
Supervisors	CHANG-JIE International Representative: Tien-Yuan Tsai (Note2)

Note1: 2016/05/31 on board.

Note2:2016/05/31 dismissed

Range of Remuneration	Name of Supervisors	Name of Supervisors
	Total of	(A+B+C)
	The company	Companies in the consolidated financial statements
Under NT$ 2,000,000	Shen-Li Liao, YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh, Chin-Chou Hsu CHANG-JIE International Representative: Tien-Yuan Tsai BAO-JYUE INVESTMENT Representative: Mao-Jen Chen	Shen-Li Liao, YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh, Chin-Chou Hsu CHANG-JIE International Representative: Tien-Yuan Tsai BAO-JYUE INVESTMENT Representative: Mao-Jen Chen
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	5	5

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
CEO	David Yen	8,940	15,446	767	767	4,204	4,204	165	0	165	0	10.79	15.77	115,000	115,000	0	0	None
General Manager	Echo Wan
Vice President	Allen Hou
Vice President	Leo Liu

Range of Remuneration
	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, Allen Hou, David Yen	Leo Liu, Echo Wan, Allen Hou
NT$5,000,001 ~ NT$10,000,000		-
NT$10,000,001 ~ NT$15,000,000	-	David Yen

NT$15,000,001 ~ NT$30,000,000	-	-
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	CEO	David Yen	0	430	430	3.39
	General Manager	Echo Wan
	Vice President	Leo Liu
	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		2016		2015
	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements
Total remuneration paid to directors and supervisors.	10,379	46,218	14,778	52,663
Ratio of total remuneration paid to directors and supervisors to net income(%).	7.95	35.42	5.03%	17.92%
Total remuneration paid to presidents and vicepresidents.	14,076	20,582	24,487	34,637
Ratio of total remuneration paid to presidents and vice presidents to net income (%).	10.79	15.77	8.33%	11.79%

A. Comparing to 2015, the decline of the ratio of total remuneration paid to directors, supervisors, president, and vice president to net income in 2016 was caused by of decreasing income profit of 2016.
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 3 (A) meetings of the Board of Directors were held in 2016/1/1 to 2016/5/31. The attendance of directors were as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) `【Ｂ`/`Ａ】`
Chairman	David Yen	3	0	100
Director	Hope Ocean International Ltd Representative: Jack Lai	3	0	100
Director	Benison Hsu	2	0	66.67
Director	Dynamic Ocean Group Limited Representative: Mao-Jen Chen	3	0	100
Director	Jim Chen	3	0	100
Director	Dynamic Ocean Group Limited Representative: TonyLin	3	0	100
Director	PeggyLin	2	1	66.67
Independent director	Li-Chiu Chang	3	0	100
Independent director	Guo-Yuan Chen	3	0	100

A total of 11 (A) meetings of the Board of Directors were held in 2016/5/31 to 2017/5/19.

The attendance of directors were as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) `【Ｂ`/`Ａ】`	Remarks
Chairman	`David Yen`	`11`	`0`	`100`
Director	Hope Ocean International Ltd Representative: Ji-Zhi Hsieh	`7`	`2`	`63.64`
Director	Benison Hsu	`11`	`0`	`100`
Director	Dynamic Ocean Group Limited Representative: Carl Wei	`10`	`1`	`90.91`
Director	`Jack Lai`	`10`	`1`	`90.91`
Director	`Tony Lin`	`10`	`1`	`90.91`
Director	PCL TRANSASIA INTERNATIONAL LTD Representative: Eric Lin	`2`	`0`	`18.18`	`105.2.10` `on board`
Independent director	PCL TRANSASIA INTERNATIONAL LTD Representative: PeggyLin	`5`	`0`	`45.45`	`105.2.10` `dismissed`
Independent	Li-Chiu Chang	`7`	`2`	`63.64`

director
Chairman	`Ming-Hsu Tsai`	`11`	`0`	`100`

Other mentionable items:

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
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.
1. 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 3 (A) meetings of the Board of Directors were held in 2016/1/1 to 2016/5/31. The attendance of directors were as follows:

Title	Name	Attendance in Person(B)	Attendance Rate (%) `【Ｂ`/`Ａ】`
Supervisor	YI-WEI INVESTMENT Representative: Ji-Zhi Hsieh	`3`	`100`
Supervisor	CHANG-JIE International Representative: Tien-Yuan Tsai	`2`	`66.67`
Supervisor	Shen-Li Liao	`3`	`100`

A total of 11 (A) meetings of the Board of Directors were held in 2016/5/31 to 2017/5/19. The attendance of directors were as follows:

Title	Name	Attendance in Person(B)	Attendance Rate (%) `【Ｂ`/`Ａ】`
Supervisor	YI-WEI INVESTMENT Representative: Chin-Chou Hsu	11	100
Supervisor	BAO-JYUE INVESTMENT Representative: Mao-JenChen	10	90.91
Supervisor	Shen-Li Liao	11	100

Other mentionable items:

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.
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	3
Independent director	Ming-Hsu Tsai			V	V	V	V	V	V	V	V	V	None
Other	Guo-Yuan Chen			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 1 (A) meetings of the Remuneration Committee were held in 2016/1/1 to

2016/5/31. The attendance of directors were as follows:

Title	Name	Attendance in Person (B)	Attendance Rate (%) `【Ｂ`/`Ａ】`
Convener	Li-Chiu Chang	1	100
Committee Member	Guo-Yuan Chen	1	100
Committee Member	Ruei-Meng Chang	1	100

A total of 3 (A) meetings of the Remuneration Committee were held in 2016/5/31 to

2017/5/19. The attendance of directors were as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) `【Ｂ`/`Ａ】`
Convener	Li-Chiu Chang	`2`	`1`
Committee Member	`Ming-Hsu Tsai`	`3`	`0`	`100`
Committee Member	Guo-Yuan Chen	`3`	`0`	`100`

Other mentionable items:

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.

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

			Implementation Status1	Deviations from “the Corporate Social
Evaluation Item	Yes	No	Abstract Explanation2	Responsibility Best-Practice Principles for TWSE/TPEx Listed
				Companies” and Reasons
website and the Market Observation Post
System(MOPS)?

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 any discrepancy between the Principles and their implementation: None
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.
D. The company sponsored YANG MING CULTURAL FOUNDATION to hold the 2017 Keelung Child Artist Festival.
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 Taipei Exchange Corporate Governance Evaluation results. In Year 2016 T3EX has gained top 36 percent of companies in the TWSE 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 20, 2017

Based on the findings of self-assessment, T3EX Global Holding Corp states the following with regard to its internal control system in 2016:

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, 2016, 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 2016, 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 20, 2017 with zero of night attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

T3EX Global Holdings Corp.

==> picture [45 x 46] intentionally omitted <==

David Yen Chairman

==> picture [38 x 39] intentionally omitted <==

Echo Wan

General Manager

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:

	Shareholders’ meeting:
Date	Major resolutions	Implementation of Resolutions
05,31,2016	1. Approval of the 2015 business report and financial statements. 2. Approval of the proposal for distribution of 2015 profits 3. Proposal for a new share issue through capitalization of earnings. 4. Approval of amendment to the Articles of Incorporation. 5. Amendment to the“Operational Procedures for Endorsements and Guarantees”. 6. Finish the directors and supervisors election. 7. Approval of release the prohibition on directors from participation in competitive business.	All resolutions of the Shareholders’ Meeting have been implemented in accordance with the resolutions.
11,29,2016	Approval of amendment to 2011 private placement.	All resolutions of the Shareholders’ Meeting have been implemented in accordance

with the resolutions.

 Board meeting:

Board meeting:	with the resolution
Date:	Major resolutions
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. Approval of the distribution of 2015 retained earnings. 5. 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 subsidiary- EXer 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.
05,31,2016	The company’s chairmen election.
05,31,2016	1. The Company’s general manager election. 2. Members of Remuneration Committee election. 3. Approval of loaning funds to the Company’s subsidiary- Taiwan Express.
07,05,2016	1. Assigned to the directors and general manager of the Company’s subsidiary-THI GROUP LIMITED (H.K). 2. Approved the record date for distribution of year 2015 dividend. 3. Approval of the bank financial contracts with subsidiaries. 4. Approval the Company’s endorsement and guarantees to the subsidiary. 5. Amendment to the`“`Rule of Information System management” 6. Instituted the “Rule of Financial and Non-financial information management”. 7. Instituted the “Rule of the Financial Statement Preparation” 8. Amendment to the Financing Internal Control Institution. 9. Amendment to the “Rule of Manager Retirement”.
08,11,2016	1. Proposal of applying for private placement shares in public. 2. Approval of the Company’s “Statement of Internal Control System”. 3. Approval of the re-preparation of the 2013 to 2015 audited financial statements. 4. Amendment to the 2016 budget plan. 5. Amendment to the Institution of Accounting System. 6. Amendment to “Rule of the Transaction of the Subsidiaries, Specific Company and Relationship Parties. 7. Amendment to theProceduresfor HandlingMaterial

	Inside Information. 8. Purchase D&O insurance for directors and supervisors. 9. Approval of the bank financial contracts. 10. Approval of the bank financial contracts with subsidiaries. 11. Approval of endorsement and guarantee to the bank loan contracts for the Company’s subsidiary-YHI International.
09,07,2016	1. Approval of applying to list from GreTai Securities Market to the Taiwan Stock Exchange. 2. Approval of the Company’s “Statement of Internal Control System”. 3. Approval of fundraising to the Company’s subsidiary- EXer Logistics from the Company’s subsidiary- THI (Shanghai) group. 4. Approval of loaning fund to the Company’s subsidiary-T.H.I. GROUP SINGAPORE PTE LTD. 5. Approval of ceasing business of the Company’s subsidiaries- TEC LOGISTICS(USA),INC and Taiwan Express(USA)INC. 6. Instituted to the “Rule of the Scope of Powers of Independent Directors”.
10,11,2016	1. Approval of amendment to 2011 private placement. 2. Approved the scheduling of 2016 temporary shareholders’ meeting.
11,07,2016	1. Proposal of the Company’s CEO leave. 2. Assigned to the directors and general managers of the Company’s subsidiaries. 3. Approvalofthe bank financialcontracts.
12,13,2016	1. Implementation of the sixth and seventh Share Buyback Program. 2. Approval of the Year 2017 business plan and financial budget. 3. Assigned to the directors and supervisors of the Company’s subsidiaries. 4. Assigned to the directors, supervisors and general managers of the Company’s subsidiaries. 5. Approval of loaning funds to the Company’s subsidiary- EXer Logistics from the Company’s subsidiary- THI (Shanghai) group. 6. Approval of fundraising to the Company’s subsidiary- EXer Logistics from the Company’s subsidiary- THI

	(Shanghai) group. 7. Approval of loaning funds to the Company’s subsidiary- Taiwan Express. 8. Approval of the bank financial contracts.
02,06,2017	Approval of investing the private placement shares of YANG MING MARINE TRANSPORT CORP.
03,20,2017	1. Approval of the 2016financial statements. 2. Approval of the 2016 audited financial statements. 3. Approval of the distribution of the 2016 compensation of directors and supervisors and employee bonus. 4. Approval of the distribution of 2016 retained earnings. 5. Proposal for 0 payout ratio of major subsidiaries’ 2016 earnings. 6. Approval of cancellation of the Company’s subsidiary- Wai Hung Cargo Transport Co., Ltd 7. Approval of the Company’s “Statement of Internal Control System”. 8. Proposal of the sixth share buyback cancellation. 9. Amendment to the Operational procedures for Acquisition and Disposal of Assets. 10. Amendment to the Corporate Governance Best Practice Principles. 11. Amendment to the Corporate Social Responsibility Best Practice Principles. 12. Approved the scheduling of 2017 annual general shareholders’ meeting. 13. Evaluation of 2017 the Company’s audit fee and independence. 14. Approval of endorsement and guarantee to the bank loan contracts for the Company’s subsidiary-T-Cube logistics. 15. Approval of the bank financial contracts.
05,05,2017	1. Approval of loaning funds to the Company’s subsidiary- EXer Logistics from the Company’s subsidiary- THI (Shanghai) group. 2. Amendment to the “Rule of Manager Retirement”. 3. Approval of loaning funds to the Company’s subsidiary- Taiwan Express. 4. Approval of endorsement and guarantee to the bank loan contracts for the Company’s subsidiary-EXer logistics. 5. Approval of the bank financial contracts.

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

05, 19, 2017

R&D				05, 19, 2017
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
General Manager	David Yen	11,01,2012	05,31,2016	Company operating plan
CEO	David Yen	11,01,2012	11,07,2016	Position rotation

a. 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.
b. For the future operating need, Mr. David Yen, the original GM of the Company, quit this position, and Echo Wan took over his job.
c. To concentrate on develop the group’s business, Mr. David Yen, the original

CEO of the Company, took over THI logistics’ chairman and quit this job. 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	2016.01.01~2016.12.31

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
2	NT$2,000,001 ~ NT$4,000,000		2,645,000	2,645,000
3	NT$4,000,001 ~ NT$6,000,000
4	NT$6,000,001 ~ NT$8,000,000	6,190,000		6,190,000
5	NT$8,000,001 ~ NT$10,000,000
6	Over NT$100,000,000

Unit: NT$ thousands

Accounting Firm	Name of CPA	Audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Period Covered by CPA’s Audit	Remarks
			System of Design	Company Registration	Human Resource	Others	Subtotal
KPMG Accounting Firm	Peggy Chen	6,190	-	120	-	2,525	2,645	2016/1/1~2016/12/31	None-Audit Fee Others: TP Fee, Tax Consultant, Internal Audit Report.
	HENG- SHENG LIN

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	2016	2016	As of May. 19, 2017	As of May. 19, 2017
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	David Yen	(443,707)	-	15,000	-
Director	TonyLin	32,612	200,000	-	-
Director	Jack Lai	51,986	-	-	-

Title	Name	2016	2016	As of May. 19, 2017	As of May. 19, 2017
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Director	Jim Chen(05,31,2016 dismissed)	-	-	It does not apply
Director	Hope Ocean International Ltd	65,345	-	-	-
	Representative:Ji-Zhi Hsieh	-	-	-	-
Director	Dynamic Ocean GroupLimited	(1,174,467)	-	-	-
	Representative: Carl Wei (05,31,2016 on board)	2,863	-	-	-
Independent Director	Li-Chiu Chang	-	-	-	-
Independent Director	Ming-Hsu Tsai (05,31,2016 on board)	-	-	-	-
Independent Director	Guo-Yuan Chen (05,31,2016 dismissed)	-	-	It does not apply
Director	Benison Hsu	38,028	(507,000)	-	581,000
Director	PCL TRANSASIA INTERNATIONAL LTD(05,31,2016 on board)	932	-	-	-
	Representative:Peggy Lin (05,31,2016 dismissed)	33,163	(1,395,000)	-	-
	Representative: Eric Lin (05,31,2016 on board)	It does not apply		-	-
Supervisor	YI-WEI INVESTMENT	25,885	1,296,000	-	(1,296,000)
	Representative: Chin-Chou Hsu (05,31,2016 on board)	1,262	-	-	-
Supervisor	BAO-JYUE INVESTMENT (05,31,2016 on board)	10,265	-	-	-
	Representative: Mao-Jen Chen	-	-	-	-
Supervisor	CHANG-JIE International (05,31,2016 dismissed)	-	(,1590,000)	It does not apply
	Representative: Tien-Yuan Tsai (05,31,2016 dismissed)	-	-
Supervisor	Shen-Li Liao	-	-	-	-
Vice President	Leo Liu	8,632	-	-	-
Vice President	Allen Hou	(633)	-	-	-
General Manager	Echo Wan	14,801	-	-	-
Manager of The Internal Audit Department	Melonie Lin	6,497	-	-	-

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 04/21/2017 Unit: shares/ %	As of 04/21/2017 Unit: shares/ %	As of 04/21/2017 Unit: shares/ %	As of 04/21/2017 Unit: shares/ %	As of 04/21/2017 Unit: shares/ %	As of 04/21/2017 Unit: shares/ %
Name	Current Shareholding		Spouse’s/min or’s Shareholding		Shareholding by Nominee Arrangement		Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees		Rema rks
	Shares	Shares	Shares	%	Shares	%	Name	Relationship
Dynamic Ocean Group Limited	3,912,398	3.30	-	-	-	-	Hope Ocean International Ltd	Same Representati ve
Representative: David Yen	796,490	0.67
CHANG-JIE International	3,844,969	3.24	-	-	-	-	PEI-SI LIMITED	Spouses with the representative.	-
Representative: Benison Hsu	1,191,762	1.00
PEI-SI LIMITED	3,474,611	2.93	-	-	-	-	CHANG-JIE International	Spouses with the representative	-
Representative: TSAI- CHUAN Liu	-	-
Hope Ocean International Ltd	3,339,143	2.82	-	-	-	-	Dynamic Ocean Group Limited	Same Representative	-
Representative: David Yen	796,490	0.67
LI-SHEN International	2,574,067	2.17	-	-	-	-	Peggy Lin	Same Representative	-
Representative: PeggyLin	2,158,067	1.82
Peggy Lin	2,158,067	1.82	-	-	-	-	LI-SHEN International	Same Representative
CING-LAI YANG	2,106,798	1.77	-	-	-	-	None	None	-
Jim Chen	2,017,960	1.70	-	-	-	-	None	None	-
GUO-YAN LIAO	1,927,000	1.62	-	-	-	-	None	None	-
Jack Lai	1,917,552	1.61	-	-	-	-	None	None	-

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	0	51

T.H.I. GROUP SINGAPORE PTE. LTD.	320,000	80	0	320,000	80
THI Logistics (Malaysia) SDN BHD	180,000	90	0	180,000	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	84.195	0	0	84.195
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.	100,000	100	0	100,000	100
TEC LOGISTICS(USA), INC	200	100	0	200	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 NO.10401250280
08,2016	10	120,000	1,200,000	118,335	1,183,347	Issuing new shares for earnings capitalization NT$22,927 thousand.	none	08/17/2016 Jin So Son Tz No.10501198620
11,2016	10	120,000	1,200,000	118,972	1,189,723	Issuing new shares for conversion of Convertible bond NT$2,296 thousand and issuing employee stock option NT$4,080thousand.	none	11/25/2016 Jin So Son Tz NO.10501272680
04,2017	10	120,000	1,200,000	118,565	1,185,654	Issuing new shares for conversion of Convertible bond NT$19,296 thousand, issuing employee stock option NT$275thousand, and cancelling buy back shares NT$23,640thousand.	none	04/17/2017 Jin So Son Tz No.10601043760

B. Type of Stock	B. Type of Stock
Share Type		Authorized Capital			Remarks
	Issued	Shares	Un-issued Shares	Total Shares
	Public Shares	Private Shares Note1
Common Share	118,565,402	0	1,434,598	120,000,000

C. Information for Shelf Registration: None.

4.1.2 Status of Shareholders

4.1.2 Status of	Shareholders
					As of 12/31/2016
Item	Government Agencies	Financial Institutions	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	0	3	80	20,331	40	20,454
Shareholding (shares)	0	469,000	18,194,809	87,862,044	12,039,549	118,565,402
Percentage (%)	0	0.40	15.35	74.10	10.15	100

4.1.3 Shareholding Distribution Status

A. Common Shares

As of 4/21/2017

Class of Shareholding (Unit: Share)	Number of Shareholders	Shareholding (Shares)	Percentage
1 ~ 999	13,350	515,599	0.43
1,000 ~ 5,000	4,569	9,544,187	8.05
5,001 ~ 10,000	1,106	7,722,942	6.51
10,001 ~ 15,000	511	5,973,236	5.04
15,001 ~ 20,000	222	3,866,702	3.26
20,001 ~ 30,000	243	5,883,665	4.96
30,001 ~ 40,000	125	4,285,653	3.61
40,001~50,000	68	3,065,695	2.59
50,001 ~ 100,000	130	8,829,685	7.45
100,001 ~ 200,000	74	10,027,065	8.46
200,001 ~ 400,000	19	5,204,434	4.39
400,001 ~ 600,000	5	2,453,449	2.07
600,001 ~ 800,000	8	5,607,908	4.73
800,001 ~ 1,000,000	2	1,662,822	1.40
1,000,001 or over	22	43,922,360	37.04
Total	20,454	118,565,402	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 4/21/2017
Shareholder's Name	Shareholding
	Shares	Percentage
Dynamic Ocean GroupLimited	`3,912,398`	`3.30`
CHANG-JIE International	`3,844,969`	`3.24`
PEI-SI LIMITED	`3,474,611`	`2.93`
Hope Ocean International Ltd	`3,339,143`	`2.82`

LI-SHEN International	`2,574,067`	`2.17`
PeggyLin	`2,158,067`	`1.82`
CING-LAI YANG	`2,106,798`	`1.77`
Jim Chen	`2,017,960`	`1.70`
GUO-YAN LIAO	`1,927,000`	`1.62`
Jack Lai	`1,917,552`	`1.61`

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

Unit: NT$

			Unit: NT$
Items	2015	2016	01/01/2017-05/19/2017
Market Price per Share
Highest Market Price	41.95	30.30	22.50
Lowest Market Price	22.65	19.00	20.45
Average Market Price	33.35	23.29	21.34
Net Worth per Share
Before Distribution	21.6	18.90	18.05
After Distribution	19.39	`－`	`－`
Earnings per Share
Weighted Average Shares (thousand shares)	110,955	117,184	116,085
Diluted Earnings Per Share	2.7	1.11	0.27
Adjusted Diluted Earnings Per Share	2.65	`－`	`－`
Dividends per Share
Cash Dividends	1.79640201	0.8`（註`9`）`	`－`
Stock Dividends
 Dividends from Retained Earnings	0.19960029	`－`	`－`
 Dividends from Capital Surplus	`－`	`－`	`－`
Accumulated Undistributed Dividends	`－`	`－`	`－`
Return on Investment
Price / Earnings Ratio (Note 1)	12.35	20.98	`－`
Price / Dividend Ratio (Note 2)	18.53	29.11	`－`
Cash Dividend Yield Rate (Note 3)	5.40%	3.43%	`－`

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 2016 profits was passed at the meeting of the board of directors on 03 20, 2017. The Company had a proposal for withdrawing NT$ 92,637,122 from distributable earnings for cash dividends. 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 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 2016 profit before distribution is NT$138,360,322, which distributed 0.5% (NT691,803) employee bonus and distributed 3% (NT$ 4,150,809) compensation of directors and supervisors with cash.
II.Shall there be any difference between the actual amount of dividend approved by Board of Directors 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 and Directors’ and Supervisors’ Remuneration for 2016 Approved in Board of Directors Meeting
I. Proposed distribution of cash dividend to employees and remuneration to directors.

directors.
Item	Approved in Board of Directors Meeting	2015 Income Statement	Variation	Resolution
Employee Remuneration – in Cash	691,803	691,803	0	None
Directors' and Supervisors' Remuneration	4,150,809	4,150,809	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 2015 resolved by the Board of Directors Meeting on March. 14, 2016.

14,2016.
Item	Approved in Board of Directors Meeting	2015 Income Statement	Variation	Resolution
Employee Remuneration – in Cash	1,521,343	1,521,343	0	None
Directors' and Supervisors' Remuneration	7,879,231	7,879,231	0

4.1.9 Buyback of Treasury Stock

Treasury stocks: Batch Order	4thBatch	5thBatch	6thBatch (Note)	7thBatch
Purpose of buy-back	Transfer to employee	Transfer to employee	Maintain the company's credit and shareholders' rights andinterests.	Transfer to employee
Timeframe of buy-back	2015/09/09~2015/09/11	2015/12/22~2016/02/16	2016/12/14~2017/01/11	2017/01/23~2017/02/10
Price range	18.00~39.00per share	21.00~33.00per share	15.00~25.00per share	15.00~25.00per share
Class, quantity of shares bought back	220,000 shares	1,188,000 shares	2,364,000 shares	1,361,000 shares
Value of shares bought-back (in NT$ thousands)	5,697,700	32,846,365	51,610,776	28,785,357
Shares sold/transferred	0	0	2,364,000 shares cancelled	0
Accumulated number of company sharesheld	220,000 shares	1,408,000 shares	1,408,000 shares	2,769,000 shares
Percentage of total company shares held(%)	0.19%	1.19%	1.19%	2.34%

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	Tenor	3 years Maturity: January 23, 2017	3 years Maturity: June 9, 2018
Guarantee agency		None	None
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		It not apply.	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 9,430,954shares.	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, issuing condition dilution, and impact on existing shareholders’ equity	I. The funding is used to support the company’s operation and business development, which shall benefit shareholders’ equity in the long term. II. The convertible price of 3rdDomestic Unsecured Convertible is 26.9. If bondholders execute their right to convert the whole bonds, which would increase11,133,828common shares.(NT$299,500,000/NT$26.9) III. Deducting 2,769,000 buy back shares, as of the printing date of this annual report, the Company’s outstanding shares are115,769,402. If adding the un-convertible shares, the dilution extent of existing shareholders’ equity may reach 8.77%.	I. The funding is used to support the company’s operation and business development, which shall benefit shareholders’ equity in the long term. II. The convertible price of 3rdDomestic Unsecured Convertible is 26.9. If bondholders execute their right to convert the whole bonds, which would increase11,133,828common shares.(NT$299,500,000/NT$26.9) III. Deducting 2,769,000 buy back shares, as of the printing date of this annual report, the Company’s outstanding shares are115,769,402. If adding the un-convertible shares, the dilution extent of existing shareholders’ equity may reach 8.77%.
Transfer agent	None	None

4.2.2 Convertible Bonds

Corporate bond type	Corporate bond type	2nd Domestic Unsecured Convertible Bond	3rd Domestic Unsecured Convertible Bond	3rd Domestic Unsecured Convertible Bond
Item	Year	2015	2016	As of the printing date of this annual report
Market price of the convertible bond	Highest	109.00	106.55	109.00
	Lowest	100.00	100.65	102.65
	Average	102.90	102.52	104.65
Convertible per share	Price	NT$21.3	NT$26.9	NT$26.9
Issue date and conversion price at issuance		Issue Date: 2014/1/23 Conversion price at issuance: NT$28.1/share	Issue Date: 2015/6/9 Conversion price at issuance: NT$32.6/share
Conversion methods		Issuingof new stocks	Issuingof new stocks

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	1.69%
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	1,520,000shares
Exercised amount	NT$ 21,954,500
Number of sharesyet to be converted	480,000Shares
Adjusted exercise price for those who haveyet to exercise their rights	NT$ 12.8 per share
Unexercised shares as a percentage of total issued shares	0.4%%
Impact on possible dilution of shareholdings	Deducting 2,769,000 buy back shares, as of the printing date of this annual report, the Company’s outstanding shares are115,769,402. If adding the un-convertible shares, the dilution extent of existing shareholders’ equityonlyimpact 0.41%.

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

									As of 05/19/2017	As of 05/19/2017	As of 05/19/2017
	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%	130,000	15.5 14.2 12.8	1,876,250	0.11%	0	15.5 14.2 12.8	0	0
	Vice President	Leo Liu
	Vice President	Echo Wan
	Executive of Internal Audit Department	Melonie Lin
Top Ten Employees	Project Director	Charlie Hsu	451,000	0.38%	442,000		6,301,900	0.37%	9,000		115,200	0.01%
	Chairman (Note 1)	Benison Hsu
	General Manager (Note 2)	Jack Lai

	Director (Note 1)	Julie Chen
	Vice President (Note 1)	Sean Wu
	Manager (Note 1)	Andys Yen
	General Manager (Note 3)	Teresa Wu
	General Manager (Note 4)	Billy Yuen
	Vice President (Note 5)	Joan Lee
	Director (Note 5)	Irene Lee

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.

3.1.4 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 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	Item	The End of Projected Date	The End of Projected Date	Total Amount	Total Amount	Total Amount	Progress Schedule	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

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.

1. 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

IV. 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.
c. Cross Border China-Europe Rail Transport.
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	2014	2014	2015	2015	2016	2016	2017Q1	2017Q1
	Sales	%	Sales	%	Sales	%	Sales	%
International Ocean Freight	5,743,989	59.04	5,932,345	60.93	5,573,415	57.20	1,479,946	60.71
International Air Freight	2,594,178	26.66	2,538,009	26.07	2,524,980	25.91	600,614	24.64
Logistics	1,391,346	14.30	1,266,558	13.00	1,645,718	16.89	357,027	14.65
Total	9,729,513	100.00	9,736,912	100.00	9,744,113	100.00	2,437,587	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 2M Alliance 、 Ocean Alliance 及 THE Alliance. 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), China Eastern Airlines (MU), Air China(CA), China Southern(CZ), Emirates(EK), American Airlines(AA), Singapore Airlines(SQ), Nippon Cargo Airlines(KZ), XIAMEN Airlines (MF), Hong Kong Aviation (HX), Cargolux Airlines (CV), Philippine Airlines(PR), Air Canada(AC), ANA(NH), Turkish Airlines(TK), Thai Airways(TG), British Airways(BA), Mexicana(AM), LATAM Chile(LA), Air Asia(D7), Qatar Airways(QR), KLM Royal Dutch Airlines(KLM), Korean Air(KE),Vietnam Airlines(VN), Asiana Airlines, etc., as well as the general freight agent qualification in Taiwan area from Air New Zealand (NZ), Russian Aviation (RU), Iceland Air (FI), 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.
D. 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.

E. 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.

F. 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.
G. 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.

H. 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.

I. The logistics service planform of T3EX group:

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

(4) Plans to develop new products (services):

A. Logistics information integration services

In addition to the original international and domestic logistics, the Company will continue developing information integration services into fourth-party logistics to provide cash flow (collection of payments for goods), information flow (such as customer sales analysis, inventory forecasting, vendor management of inventory (VMI)) and other multiple functions, and play the role of an integrated service provider.

B. Construction of business to business (B2B2C) all-round logistics services

Based on its international freight forwarding network, supplemented by the warehousing and distribution capabilities of T-Cube Global Logistics and the excellent C-end distribution and delivery expertise of EXer Logistics, T3EX integrates the various advantages of the Group’s reinvestments in the development of the end-distribution and delivery services for e-commerce. This represents that the Group officially cuts into the last mile of home-delivery logistics. On the customer base, in addition to the major e-commerce platform customers, the Group gradually introduces the high-profit TV shopping customer base and promotes well-known brands, hoping to integrate the advantages of the Group's various reinvestments and build all-round B2B2C logistics services.

5.1.2 Industry Overview

(1) Current Industry Status and Development

The Company is an investment holding company of the logistics industry. Its main businesses include comprehensive logistics services such as ocean freight, air freight, customs declaration, warehousing, inland transportation, supply chain management and e-commerce logistics, with its global operations offices located in Taiwan, China, Northeast Asia and Southeast Asia. The trend of the global logistics management model and the advent of a regional logistics era have led to a huge demand for global logistics services, and the freight forwarding industry

therefore must also go global. With the fact that international giants with global logistics and transportation capacities are snatching the Asian market, ocean shipper alliances are reshuffling, the One Belt One Road program is bringing about cross-border competition within the logistics industry and a change in global trade activities, the Company plans to continue seeking domestic and international strategic alliance partners to enhance its competitive advantage, provide customers with comprehensive and all-round logistics services and embed them in the global supply chain systems. An overview of the industries which the Company is in, including the ocean freight market, the air freight market and the logistics market, are described respectively as follows:

A. Ocean Freight Market Overview

On the supply side, the shippers are affected by a long-term capacity gap and the loss continues to expand. In 2016, after the Hanjin bankruptcy, the shippers began to work toward the operating objective of reducing their losses, and implemented corporate consolidation, accelerated shipbreaking, delayed the delivery of new ships and continued to reduce shipping volume and trips, therefore, the slowdown of container supply and the increase in loading rates are reflected in the freight prices as follows:

==> picture [388 x 78] intentionally omitted <==

Source: The Company.

On the demand side, the global economic growth in 2017 will show a moderate recovery, and the global trade will grow over last year. According to the data of the Economic Policy Analysis Bureau of the Netherlands, from November last year to January this year, the global trade of goods shows a growth of 2.4% over the previous three months, being the highest since August 2010, and the growth of emerging markets is particularly good. Furthermore, according to the latest report of the internationally well-known maritime consultant Alphaliner, the estimated supply growth rate of the global container shipping industry is 3.1%, and the demand growth rate is 2.9% in 2017. The supply and demand gap has gradually reduced.

B. Air Freight Market Overview

According to the International Air Transport Association (IATA), the air cargo traffic in 2015 was about 51.3 million tons, and the growth of the world's scheduled air cargo traffic measured in freight-ton-kilometer (FTK) was only about 2%. In 2016, after the weak trade in the beginning of the year, the global freight volume showed a substantial rebound in the second half of the year due to the seasonal effect and the growth of export orders. According to the statistics of IATA, in 2016, the global air freight demand grew 3.8% over the same period last year, almost twice the industry’s average annual growth rate of 2% in the last five years. In 2017, although the global economic recovery is still slow and there is the risk of protectionism, the global freight demand will still show a 3.3% growth rate according to the forecast of IATA. The IATA statistics also display a volume growth rate of 14% in March,

showing the fastest increase since October 2010.

==> picture [362 x 218] intentionally omitted <==

Source: IATA

On the supply side, the global air freight capacity will continue to grow. In 2016, the global commercial aircraft team’s size is expected to reach 27,712 aircrafts, an increase of 3.8% year on year. In 2017, the global commercial aircraft team’s size is expected to increase by about 1000 to 28,718 aircrafts. In 2016, the global air freight capacity ESK (effective seat kilometers) will increase by 6.2% year on year, of which, according to IATA statistics and in freight-ton-kilometer, the global air cargo capacity will increase by 5.3%. In 2017, more and more air freight companies are using passenger aircrafts instead of dedicated cargo aircrafts to transport more cargos, thereby increasing the utilization rate of cargo capacity. The global air freight capacity ASK is forecasted to increase by 5.7%, and the transportation turnover RPK is forecasted to increase by 5.1 %.

C. International Railway Market Overview

The logistics costs of the China-EU Railway are 70% cheaper than the air freight costs, and the logistics time is 50% shorter than the ocean freight time. The China-EU Railway now covers over 10 cities of mainland China, including Chongqing, Zhengzhou, Chengdu, Wuhan, Suzhou, Yiwu, Shihezi, Kunming, Hefei, Dalian and Harbin, and uses these cities as hubs to cover mainland China's main economic regions to reach 11 cities of 7 foreign countries. Since China launched the "One Belt One Road" strategy, the China-EU Railway has opened a number of normalized routes, so that China's non-coastal cities can also develop low-cost and short-duration international logistics business. In 2016, the Sino-European trains run a total of 1,800 trips, and the National Development and Reform Commission plans to increase the number to 5,000 in 2020.

China signed an economic and trade cooperation agreement with 30 countries in the "One Belt One Road" International Cooperation Summit Forum held in Beijing on May 15, 2017, and China Railway Corporation signed a Sino-EU cooperation agreement with the national railway company of Belarus, Germany, Kazakhstan, Mongolia, Poland and Russia. In the future, China’s railway transportation to Central Asia and Central and Eastern Europe

will be more complete, and the two-way trade will also be more frequent. In his visit to EU countries in 2014, China’s President Xi Jinping proposed a target annual trade volume of the China-EU Railway in 2020 of US$1 trillion. In the future, the China-EU Railway will make a huge impact on international logistics.

The freight forwarder of the China-EU Railway does not face the traditional high entry barrier for freight forwarders, while having a good relationship with the railway authorities of various locations, the customer resources of the European overseas agents and a professional business operations team. These will be a breakthrough in the highly competitive logistics market.

D. Logistics Market Overview

On China's economy, driven by the concept of made-in-China, the people's living standards have gradually improved, and the country has become a huge consumer market. According to the McKinsey Global Institute, the consumption of China's urban labor-age population in 2030 will increase by more than 100% from that in 2015 to US$6.7 trillion (NT$216.9 trillion), accounting for 12% of the world's urban consumption, and contributing to 18% of the consumption growth in a time when the developed country's population is aging. China has become the locomotive of global economic growth, and global enterprises are rushing to enter the Chinese market to sell their products, thus increasing China's integrated import logistics needs. Based on the following figures of the quarterly growth of China's transportation, warehousing and postal values, the output value in 2016 was RMB3,335.5 billion, representing an increase of 9% and 17% respectively over those in 2015 and 2014, and the demand for China's domestic logistics business still continues to grow.

==> picture [362 x 218] intentionally omitted <==

Source: National Bureau of Statistics of the People's Republic of China

China's economy has been experiencing a slowdown in recent years, and is gradually transforming into a domestic demand-led economy. With the rapid rise of e-commerce which deeply affects the retail business of Chinese consumer goods, the Chinese market demand for logistics services has increased significantly. The rapid development of e-commerce vendors’

self-built logistics and third-party express delivery enterprises has to a certain extent squeezed the market space of the traditional logistics business which mainly relies on trunk-line transportation and warehousing logistics. Some of traditional logistics enterprises have opened up a new market by ways of seizing the upstream and downstream of the e-commerce logistics business, developing bulk express delivery logistics and participating in the support services of e-commerce business parks, and realized the integration and development with the e-commerce business. Furthermore, cross-border e-commerce will become the next mainstream business leading a new type of international trade logistics. The development trend will be high-frequency, diversified and small volume with a focus on the regional on-site distribution business. To grab the end-logistics business of e-commerce, the world's major e-commerce platforms are enhancing their cross-border e-commerce business, including establishing and strengthening platforms for cross-border sales (such as international logistics and overseas warehousing), expanding the cross-border sales market, and constructing a full-range B2B2C logistics services. Taking the Chinese market as an example, the scale of cross-border e-commerce grew 1.6 times in the last 4 years, and it is estimated to reach RMB8 trillion in 2017. Cross-border e-commerce will bring opportunities for international maritime shipping, air freight and overseas warehousing.

==> picture [329 x 201] intentionally omitted <==

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

Scale of China’s Cross Border E-commerce
(RMB Trillion)
----- End of picture text -----

Source ： Common Wealth Magazine

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

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

82
----- End of picture text -----

(3) Macro Economic, Product Trends and Competition

A. International Logistics:

Since 2016Q4, a slow and stable recovery of global economic bring up the global trade volume. The Company expected that throughout the year the annual trade and transportation volume will be relatively active. The new US government's recent measures, including the policy of giving priorities to the US domestic manufacturing industry, raising the employment rate and tax reform planning have significantly improved market expectations. With an increase in corporate profits and a strong US dollar policy, the overall US consumption is expected to rise in 2017. In Europe, the substantial depreciation of the pound sterling and the depreciation of Euro resulted in a substantial increase in the European countries’ exports, especially their technology and luxury products to Asia. Therefore, it is expected that in 2017, imports from Europe will continue to grow, and exports to Europe will be relatively stable. In China, many of the manufacturers, particularly the Beijing-Tianjin-Hebei region, East China and the Pearl River Delta region, have moved out mainly to ASEAN, including Indonesia and Vietnam, and this will promote a significant increase in the transportation operations in the Asian region.

The Company has a professional international logistics team, over 400 oversea agencies and a good ship and air company relation, so the Company has good competitiveness in international logistic development. Besides, since 2015, the Company has continue to develop the China-Europe Rail business project, setting up project team in China’s Zhengzhou, Suzhou, Chendu, Chongqing, Hefei, Harbin, and Shenyang to actively promote the new business channel with European agencies and corporate with China’s rail company. The the China policy of the "Belt and Road Initiative", the Company has more competitiveness.

B. China Domestic Logistics:

In recent year, a decline of China’s economic growth, an increase of consumer market and a booming of e-commerce and Online to offline module influenced the china’s logistics develop. The Company predicted that the need of logistics total solution service which include import, declaration, warehousing and transportation will increase. The Company will integrate every business to develop B2BB2C logistics service.

5.1.3 Research and Development

The Company is in the logistics industry, and the key in enhancing the quality of logistics technology is the logistics system. The company has set up an IT software development department responsible for the integration of sea and air import and export, customs declaration, warehousing and other front-end operation and sales systems, and connected them with the back-end accounting management operating system in order to provide customers with the support systems required for a one-stop logistics service.

5.1.3.1 Research and Development Expense in Recent Year:

Not applicable as the development costs of the logistics system are the salaries of the IT staff and the purchase costs for the software; the costs are included in the management fee and no R&D department is set up.

5.1.3.2 Research and Development Accomplishments in the Recent Year:

Not applicable as the development costs of the Company's logistics system are

those expenses entailed for the integration of front-end and back-end information.

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. 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.

C. 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

et and Sales Overview rket Analysis ales(Service) Regions
Year Area	2016	`年`	2015	`年`
	Amount	(%)	Amount	(%)
China and HongKong	7,440,921	76.36	6,988,293	71.77
Taiwan	1,859,424	19.08	2,217,382	22.77
Eastern Asia	443,768	4.55	531,237	5.46
`合計`	9,744,113	100.00	9,736,912	100.00

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 and 2016, Chinese ports accounted for 69%. 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 2016, in the unit of TEU for export,

the Group's export was 232,603 TEU in 2016, representing about 0.11% of the world's top ten container ports’ throughput.

The world’s top ten container ports in 2015:

2016	2015	Port	Country	10 Thousand TEU
1	1	Port of Shanghai	China	`3654`
2	2	Port of Singapore	Singapore	`3092`
3	3	Port of Shenzhen	China	`2420`
		Port of
4	5		China	`2063`
		Ningbo-Zhoushan

5	4	Port of Hong Kong	China	`2007`
6	6	Port of Busan	Korea	`1945`
7	7	Port of Qingdao	China	`1747`
8	8	Port of Guangzhou	China	`1722`
			United Arab
9	9	Dubai Port		`1560`
			Emirates

10	10	Port of Tianjin	China	`1411`
		Total		`21621`

Resource: www.snet.com.cn

On the global air cargo market, according to the data of International Air Transport Association (IATA), in 2016 the global air cargo transport volume was about 53.25 million tons, and in 2016 the Group's total air cargo volume was 64,988 tons, accounting for about 0.12% of the global air cargo volume.

5.2.1.3 Market Demand, Supply and Growth

A. Ocean Freight Market:

The global economic growth in 2017 will show a moderate recovery, and the global trade will grow over last year. According to the data of the Economic Policy Analysis Bureau of the Netherlands, from November last year to January this year, the global trade of goods shows a growth of 2.4% over the previous three months, being the highest since August 2010, and the growth of emerging markets is particularly good. Furthermore, according to the latest report of the internationally well-known maritime consultant Alphaliner, the estimated supply growth rate of the global container shipping industry is 3.1%, and the demand growth rate is 2.9% in 2017. The supply and demand gap has gradually reduced.

B. Air Freight Market:

According to the statistics of IATA, in 2017, although the global economic recovery is still slow and there is the risk of protectionism, the global freight demand will still show a 3.3% growth rate according to the forecast of IATA. The IATA statistics also display a volume growth rate of 14% in March, showing the fastest increase since October 2010.

On the supply side, the global air freight capacity will continue to grow. In 2017, the global commercial aircraft team’s size is expected to increase by about 1000 to 28,718 aircrafts. In 2016, the global air freight capacity ESK (effective seat kilometers) will increase by 6.2% year on year, of which, according to IATA statistics and in freight-ton-kilometer, the global air cargo capacity will increase by 5.3%. In 2017, more and more air freight companies are using passenger aircrafts instead of dedicated cargo aircrafts to transport more cargos, thereby increasing the utilization rate of cargo capacity. The global air freight capacity ASK is forecasted to increase by 5.7%, and the transportation turnover RPK is forecasted to increase by 5.1 %.

C. Logistics Market

The logistics business of the Company is mainly oriented towards the Chinese market, and China's logistics activities are closely related to China's industrial activities and consumer demand. From the following table, it can be found that the growth rate of the total import value, industrial production value, consumption retail value and transportation, warehousing and postal businesses are all growing in 2017, and it can be predicted that China's logistics market demand will have a positive growth in 2017.

will have apositivegrowth in	2017.
	First four months of 2017	2016	2015
Total import value growth rate	24% (Jan ~ Mar 2017)	-5.5%	-14.2%
Industrial production growth rate	6.7%	6.0%	6.1%
Retail sales growth rate of social consumergoods	10.16%	10.43%	10.68%
Transportation, warehousing andpostalgrowth rate	11.27%	9.41%	6.97%

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.
Unstable international freight.

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

Year	2015	2015	2015	2015	2015	2016	2016	2016	2016	2016
Quantity/ Amount	Quantity				Amount	Quantity				Amount
Major Products	TEU	CBM	TON	Shipment		TEU	CBM	TON	Shipment
Sea Export	224,648	548,251	-	-	224,648	232,603	521,686	-	-	3,962,240
Sea Import	42,808	57,014	-	-	42,808	22,154	241,429	-	-	490,802
Air Export	-	-	37,794	-	-	-	-	41,430	-	1,742,589
Air Import	-	-	22,678	-	-	-	-	23,558	-	386,940
Logistics	-	-		210,017	-	-	-		188,466	1,367,324
Total	267,456	605,265	60,472	210,017	267,455	254,756.50	763,115	64,988	188,466	7,949,895

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	2015					2016
Quantity/ Amount	Quantity				Amount	Quantity				Amount
Major Products	TEU	CBM	TON	Shipment		TEU	CBM	TON	Shipment
Sea Export	224,648	548,251	-	-	5,382,415	232,603	521,686	-	-	4,979,218
Sea Import	42,808	57,014	-	-	549,930	22,154	241,429	-	-	594,197
Air Export	-	-	37,794	-	2,061,876	-	-	41,430	-	2,036,784
Air Import	-	-	22,678	-	476,133	-	-	23,558	-	488,196
Logistics	-	-		210,017	1266,558	-	-		188,466	1,645,718
Total	267,456	605,265	60,472	210,017	9,736,912	254,756.50	763,115	64,988	188,466	9,744,113

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	2015	2016	Data as of ending data in the current year
		~~90~~

Number of Employees	Sales	0	0	0
	Administrative Person	38	32	26
	Total	38	32	26
Average Age		42	40.51	40.00
Average Years of Service		4.4	5.33	4.52
Education	Ph.D.	0.00%	0.00%	0.00%
	Masters	23.68%	15.63%	23.08%
	Bachelor’s Degree	76.32%	84.38%	76.92%
	Senior High School	0.00%	0.00%	0.00%
	Below Senior High School	0.00%	0.00%	0.00%

II. T3EX Group

	Year	2015	2016	Data as of ending data in the current year
Number of Employees	Sales	1,213	1,293	1,237
	Administrative Person	334	275	283
	Total	1,547	1,568	1,520
Average Age		32.38	34.87	35.12
Average Years of Service		4.79	5.26	5.23
Education	Ph.D.	0.06%	0.00%	0.00%
	Masters	1.75%	1.40%	1.65%
	Bachelor’s Degree	78.35%	52.87%	58.81%
	Senior High School	15.19%	17.16%	20.26%
	Below Senior High School	4.65%	28.57%	19.28%

5.4 Environmental Protection Expenditure

In 2016 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 Program `：`

Internal Program`：`
Internal Training	Times	Training Expense
420 classes	1,750hours	NT$ 500,000
a. The Basic Program of ISO 9001 Regulation b. The Training of ISO 9001 Internal Quality Audit c. The application of New Account Receivable Management d. The Training of the Evaluation of AEO Risk. E. The Development of International Green Logistics

F. The Introduction of Internal forms.

G. Supply Chain Management.

H. The Training of ETP Program

I. The Training of “One Belt and One Road”.

J. The Operation of Export and Import. K. New Employees Training I. PowerPoint Training

m. Project Management Training

n. The Plan and Implementation of International Logistics Distribution Center

External Program `：`

External Program`：`	Distribution Center
External Training	Times	Training Expense
43classes	300hours	NT$ 300,000
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. The Training of IFRS
m. AEO Program
n. The Recognition of the Safety of Mail Boxes
o. The legal Risk of internal auditors
p. The standard of financial analysis and the prevention of

operating management risk.

c. The retirement policy:

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

A. Transportation:

Agreement	Counterparty	Period	Major Contents	Restrictions
1	CHINA AIRLINE	2016/6/1 ~ 2017/12/31	Air Transportation	None
2	EVA AIR	2017/5/1~2018/4/30	Air Transportation	None

3	YANG MING MARINE	YANG MING MARINE	2017/5/1~2018/4/30	Sea Transportation	None
4	EVER GREEN LINE		2017/5/1~2018/4/30	Sea Transportation	None
5	OOCL		2017/5/1~2018/4/30	Sea Transportation	None
6	COSCO SHIPPING		2016/6/1 ~ 2017/12/31	Sea Transportation	None
Agency:
Agreement	Counterparty	Period		Major Contents	Restrictions
1	A Company	2012.10.25~2013.10.24 (AutomaticallyRenew One Year)		Agency Agreement	Privacy
2	B Company	2014.12.15~2015.12.14 (AutomaticallyRenew One Year)		Agency Agreement	Privacy
3	C Company	2014.11.18~2015.11.17 (AutomaticallyRenew One Year)		Agency Agreement	Privacy
4	D Company	2014.12.22~2015.12.22 (AutomaticallyRenew One Year)		Agency Agreement	Privacy
5	E Company	2014.11.18~2015.11.17 (AutomaticallyRenew One Year)		Agency Agreement	Privacy
6	F Company	2014.12.10~2015.12.9 (AutomaticallyRenew One Year)		Agency Agreement	Privacy
Sales:

. Sales:
Agreement	Counterparty	Period	Major Contents	Restriction s
1	GCompany	2016.1.1~2019.6.30	Logistics Service	Privacy
2	HCompany	2016.5.21~2017.4.30	Logistics Service	Privacy
3	`I`Company	2017.4.1~2018.3.31	Logistics Service	Privacy
4	Qingdao FU LIN Tires	2017.4.15~2018.4.14 (AutomaticallyRenew One Year)	Forwarder Agreement	None
5	Anhui SIANG WEI Logistics	2017.1.1~2017.12.31 (AutomaticallyRenew One Year)	Forwarder Agreement	None
6	J Company	2017.1.1~2017.12.31 (AutomaticallyRenew One Year)	Forwarder Agreement	Privacy
7	K Company	2016.9.1~2017.10.31	Logistics Service	Privacy
8	L Company	2017.1.1~2017.12.31	Logistics Services Agreement	Privacy

D. Others:

Agreement	Counterparty	Period	Major Contents	Restrictions
Directors and Officers Liability Insurance	Cathay Century Insurance	2016/9/11~2017/9 /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$4,000,000

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

			Unit: NT$	Unit: NT$	Unit: NT$	Unit: NT$	thousands
Year Item		Financial	Summary for The Last Five Years				1Q2017
		2012	2013	2014	2015	2016
Current assets		2,090,051	2,360,757	3,011,312	3,385,769	3,481,349	3,297,256
Property, Plant and Equipment		286,190	265,059	276,664	337,171	314,067	303,869
Intangible assets		339,375	333,371	326,560	720,469	658,732	651,785
Other assets		238,933	271,542	325,738	315,250	359,297	446,864
Total assets		2,954,549	3,230,729	3,940,274	4,758,659	4,813,445	4,699,774
Current liabilities	Before distribution	1,687,596	1,706,197	1,627,457	1,564,095	2,013,714	2,020,299
	After distribution	1,716,226	1,774,276	1,772,621	1,770,436	-	-
Non-current liabilities		79,607	108,953	283,346	558,519	414,237	411,432
Total liabilities	Before distribution	1,767,203	1,815,150	1,910,803	2,122,614	2,427,951	2,431,731
	After distribution	1,795,833	1,883,229	2,055,967	2,328,955	-	-
Equity attributable to shareholders of the parent		1,164,644	1,388,541	1,992,136	2,506,418	2,259,199	2,139,571
Capital stock		726,648	794,297	983,981	1,160,421	1,195,264	1,185,655
Capital surplus		356,942	410,144	629,395	867,214	865,337	847,051
Retained earnings	Before distribution	150,795	201,493	284,581	390,641	285,955	313,826
	After distribution	97,113	104,237	103,126	161,373	-	-
Other equity interest		(48,508)	3,840	115,412	98,778	(25,556)	(140,611)
Treasury stock		(21,233)	(21,233)	(21,233)	(10,636)	(61,801)	(66,350)
Non-controlling interest		22,702	27,038	37,335	129,627	126,295	128,472
Total equity	Before distribution	1,187,346	1,415,579	2,029,471	2,636,045	2,385,494	2,268,043
	After distribution	1,158,716	1,347,500	1,884,307	2,429,704	-	-

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
		2012	2013	2014	2015	2016
Current assets		2,104,413	- NA
Funds & Long-term investments		46,482
Fixed assets		288,640
Intangible assets		365,918
Other assets		176,156
Total assets		2,981,609
Current liabilities	Before distribution	1,684,660
	After distribution	1,713,290
Long-term liabilities		21,089
Other liabilities		49,877
Total liabilities	Before distribution	1,755,626
	After distribution	1,784,256
Capital stock		726,648
Capital surplus		356,942
Retained earnings	Before distribution	147,943
	After distribution	94,261
Unrealized gain or loss on financial instruments		-
Cumulative translation adjustments		3,102
Net loss unrecognized	aspension cost	(10,121)
Total equity	Before distribution	1,225,983
	After distribution	1,197,353

6.1.2 Condensed Individual Balance Sheet

A. Condensed Individual Balance Sheet- Based on IFRS

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
		2012	2013	2014	2015	2016
Current assets		57,718	307,659	120,195	308,347	375,269
Property, Plant and Equipment		184,176	183,414	198,954	198,754	192,995
Intangible assets		6,460	7,001	6,560	11,227	8,151
Other assets		1,666,968	1,890,329	2,233,894	2,792,687	2,779,735
Total assets		1,915,322	2,388,403	2,559,603	3,311,015	3,556,150
Current liabilities	Before distribution	727,298	940,106	345,360	306,249	743,136
	After distribution	755,928	1,008,185	635,688	512,590	-
Non-current liabilities		23,380	59,756	222,107	498,348	353,815
Total liabilities	Before distribution	750,678	999,862	567,467	804,597	1,096,951
	After distribution	779,308	1,067,941	712,631	1,010,938	-
Capital stock		726,648	794,297	983,981	1,160,421	1,195,264
Capital surplus		356,942	410,144	629,395	867,214	865,337
Retained earnings	Before distribution	150,795	201,493	284,581	390,641	285,955
	After distribution	97,113	104,237	103,126	161,373	-
Other equity interest		(48,508)	3,840	115,412	98,778	(25,556)
Treasury stock		(21,233)	(21,233)	(21,233)	(10,636)	(61,801)
Total equity	Before distribution	1,164,644	1,388,541	1,992,136	2,506,418	2,259,199
	After distribution	1,136,014	1,320,462	1,846,972	2,300,077	-

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
		2012	2013	2014	2015	2016
Current assets		58,097	NA
Funds & Long-term investments		1,689,934
Fixed assets		184,176
Intangible assets		6,790
Other assets		14,130
Total assets		1,953,127
Current liabilities	Before distribution	726,152
	After distribution	754,782
Long-term liabilities		-
Other liabilities		23,694
Total liabilities	Before distribution	749,846
	After distribution	778,476
Capital stock		726,648
Capital surplus		356,942
Retained earnings	Before distribution	147,943
	After distribution	94,261
Unrealized gain or loss on financial instruments		-
Cumulative translation adjustments		(10,121)
Net loss unrecognized	aspension cost	(21,233)
Total equity	Before distribution	1,203,281
	After distribution	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

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	1Q2017
	2012	2013	2014	2015	2016
Operatingrevenue	8,643,377	8,323,514	9,729,513	9,736,912	9,744,113	2,437,587
Grossprofit	1,264,574	1,395,725	1,659,065	1,877,272	1,794,218	428,951
Income from operations	101,830	166,796	225,141	312,196	193,165	61,141
Non-operating income and expenses	(2,276)	(2,896)	48,765	85,061	33,439	(9,707)
Income before tax	99,554	163,900	273,906	397,257	226,604	51,434
Net income (Loss)	64,612	108,691	206,665	303,900	121,176	29,595
Other comprehensive income (income after tax)	(48,508)	52,373	111,077	(24,070)	(137,465)	(120,539)
Total comprehensive income	16,104	161,064	317,742	279,830	(16,289)	(90,944)
Net income attributable to shareholders of the parent	63,505	104,380	199,512	293,820	130,487	30,992
Net income attributable to non-controlling interest	1,107	4,311	7,153	10,080	(9,311)	(1,397)
Comprehensive income attributable to Shareholders of the parent	14,997	156,728	307,445	270,881	248	(84,063)
Comprehensive income attributable to non-controlling interest	1,107	4,336	10,297	8,949	(16,537)	(6,881)
Earningsper share	0.89	1.40	2.14	2.65	1.11	0.27

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
	2012	2013	2014	2015	2016
Operatingrevenue	8,643,377	NA
Grossprofit	1,264,574
Income from operations	106,094
Non-operatingincome	27,612
Non-operatingexpenses	29,888
Income before tax	103,818
Income from operations of continued segments - after tax	68,876
Income from discontinued operations	-
Extraordinary gain or loss	-
Cumulative effect of accounting principle changes	-
Net income	68,876
Net income attributable to shareholders of theparent	67,769
Earningsper share	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
	2012	2013	2014	2015	2016
Operatingrevenue	972,860	149,770	272,824	415,213	230,812
Grossprofit	201,352	101,936	190,484	292,966	140,614
Income from operations	74,435	101,936	190,484	292,966	140,614
Non-operating income and expenses	(10,972)	2,450	10,107	1,902	(7,096)
Income before tax	63,463	104,386	200,591	294,868	133,518
Net income(Loss)	972,860	149,770	272,824	415,213	230,812
Other comprehensive income (income after tax)	(48,508)	52,348	107,933	(22,939)	(130,239)
Total comprehensive income	14,997	156,728	307,445	270,881	248
Net income attributable to shareholders of theparent	63,505	104,380	199,512	293,820	130,487
Net income attributable to non-controllinginterest	-	-	-	-	-
Comprehensive income attributable to Shareholders of theparent	14,997	156,728	307,445	270,881	248
Comprehensive income attributable to non-controllinginterest	-	-	-	-	-
Earningsper share	0.89	1.40	2.14	2.70	1.11

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
	2012	2013	2014	2015	2016
Operatingrevenue	895,565	NA
Grossprofit	131,070
Income from operations	(4,389)
Non-operatingincome	86,871
Non-operatingexpenses	14,755
Income before tax	67,727
Income from operations of continued segments - after tax	67,769
Income from discontinued operations	-
Extraordinary gain or loss	-
Cumulative effect of accounting principle changes	-
Net income	67,769
Earningsper share	0.95

6.1.4 Auditors’ Opinions from 2011 to 2015

Year	CPA’s Name	CPA Firm	Auditing Opinion
2012	GUAN-WEN LU& TZU-HUEI LI	KPMG	Modified Unqualified
2013	Peggy Chen & HENG- SHENG LIN	KPMG	Unqualified
2014	Peggy Chen & HENG- SHENG LIN	KPMG	Unqualified
2015	Peggy Chen & HENG- SHENG LIN	KPMG	Modified Unqualified
2016	Peggy Chen & HENG- SHENG LIN	KPMG	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	1Q2017
		2011	2012	2013	2014	2015
Financial structure (%)	Debt Ratio	59.81	56.18	48.49	44.61	50.44	51.74
	Ratio of long-term capital to property, plant and equipment	442.70	575.17	835.97	947.46	891.44	881.79
Solvency (%)	Current ratio	123.85	138.36	185.03	216.47	172.88	163.21
	Quick ratio	121.14	134.93	182.72	213.68	170.82	160.40
	Interest earned ratio(times)	5.72	12.75	25.67	41.73	9.67	8.05
Operating performance	Accounts receivable turnover (times)	6.48	5.91	6.21	6.20	6.22	6.12
	Average collectionperiod	56.31	61.78	58.78	58.87	58.68	59.64
	Inventoryturnover(times)	-	-	-	-	-	-
	Accounts payable turnover (times)	12.76	10.58	10.28	9.88	10.14	10.11
	Average days in sales	-	-	-	-	-	-
	Property, plant and equipment turnover(times)	30.09	30.20	35.92	31.72	29.92	31.56
	Total assets turnover(times)	2.94	2.69	2.71	2.24	2.04	2.05
Profitability	Return on total assets(%)	2.80	3.89	6.02	6.94	3.18	0.78
	Return on stockholders' equity (%)	5.38	8.35	12.00	13.06	5.48	1.41
	Pre-tax income to paid-in capital(%)	13.70	20.63	27.84	34.23	18.96	4.34
	Profit ratio(%)	0.75	1.31	2.12	3.12	1.24	1.21
	Earningsper share(NT$)	0.89	1.40	2.20	2.65	1.11	0.27
Cash flow	Cash flow ratio (%)	8.80	5.64	13.90	32.73	0.43	5.83
	Cash flow adequacy ratio (%)	107.24	97.83	69.22	90.20	104.00	106.91
	Cash reinvestment ratio (%)	10.72	5.09	7.35	13.75	`註`2	5.34
Leverage	Operating leverage	5.19	3.63	3.19	2.96	3.70	2.78
	Financial leverage	1.26	1.09	1.05	1.03	1.16	1.14
Analysis of financial ratio differences for the last two years.
1. Current ratio & Quick ratio: The increase of bank loan caused the decrease of ratio.
2. Interest earned ratio (times):The decrease of tax expense and interest expense caused the
decrease of ratio.
3. Ratios of profitability: The decline of profit in 2016 caused the decrease of profitability. 4. Ratios of cash flow: The decline of cash flow activity caused the decrease of ratio.

Note 1: Equations:

Capital Structure

103

(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
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
			2012	2013	2014	2015	2016
Financial structure (%)	Debt Ratio		58.88	NA
	Ratio of long-term capital to fixed assets		432.05
Solvency (%)	Current ratio		124.92
	Quick ratio		118.42
	Interest earned ratio(times)		5.93
Operating performance	Accounts receivable turnover (times)		6.48
	Average collectionperiod		56
	Inventoryturnover(times)		-
	Accounts payable turnover (times)		28.60
	Average days in sales		-
	Fixed assets turnover(times)		29.13
	Total assets turnover(times)		2.93
Profitability	Return on total assets(%)		2.92
	Return on stockholders' equity (%)		5.54
	Ratio to issued capital (%)	Operating income	14.60
		Pre-tax income	14.29
	Profit ratio	(%)	0.80
	Earningsper share(NT$)		0.95
Cash flow	Cash flow ratio (%)		9.14
	Cash flow adequacy ratio (%)		98.57
	Cash reinvestment ratio (%)		8.07
Leverage	Operating leverage		1.51
	Financial leverage		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	Financial Analysis for	Financial Analysis for	the Last Five Years	the Last Five Years
		2012	2013	2014	2015	2016
Financial structure (%)	Debt Ratio	39.19	41.86	22.17	24.30	32.68
	Ratio of long-term capital to property, plant and equipment	645.05	789.63	1,112.94	1,511.80	1,353.93
Solvency (%)	Current ratio	7.94	32.73	34.80	100.69	50.50
	Quick ratio	6.91	29.98	31.69	97.20	49.02
	Interest earned ratio(times)	6.06	10.78	22.12	38.26	6.37
Operating performance	Accounts receivable turnover(times)	14.15	15.93	8.70	8.89	4.81
	Average collectionperiod	26	23	42	41	76
	Inventoryturnover(times)	-	-	-	-	-
	Accounts payable turnover (times)	92.84	9.65	12.64	43.01	50.59
	Average days in sales	-	-	-	-	-
	Property, plant and equipment turnover(times)	5.16	0.81	1.43	2.09	1.18
	Total assets turnover(times)	0.49	0.07	0.11	0.14	0.07
Profitability	Return on total assets(%)	3.75	5.26	8.38	10.23	4.53
	Return on stockholders' equity (%)	5.39	8.18	11.80	13.06	5.48
	Pre-tax income to paid-in capital(%)	8.73	13.14	20.39	25.41	11.17
	Profit ratio(%)	6.53	69.69	73.13	70.76	56.53
	Earningsper share(NT$)	0.89	1.40	2.21	2.70	1.11
Cash flow	Cash flow ratio (%)	0.03	Note1	Note1	Note1	Note1
	Cash flow adequacy ratio (%)	74.42	48.73	14.84	7.58	0.03
	Cash reinvestment ratio (%)	Note1	Note1	Note1	Note1	Note1
Leverage	Operating leverage	1.53	1.00	1.00	1.00	1.00
	Financial leverage	1.20	1.12	1.05	1.03	1.21

107

Analysis of financial ratio differences for the last two years.

Debt Ratio: The increase of bank loan caused the increase of ratio.
Current ratio & quick ratio: The increase of bank loan caused the decrease of ratio.
Interest earned ratio (times): The decrease of tax expense and interest expense caused the decrease of ratio.
Accounts payable turnover & Average collection period: The decline of investment profit caused the decrease of turnover rate and the increase of collection period.
Property, plant and equipment turnover & Total assets turnover: The ratio increased in 2016 due to the decrease in sales.
Ratios of profitability: The decline of profit in 2016 caused the decrease of profitability.
Cash flow adequacy ratio: The cash flow activity in 2016 was negative.

Note1: it was negative.

Note2:

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
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

108

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)

6.3 Supervisors’ Report in the Most Recent Year

T3EX Global Holdings Corp. Audit Report by Supervisors

Date: March 20, 2017

The Board of Directors has prepared the T3EX Global Holdings Corporation’s (“the Company)” 2016 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:

==> picture [127 x 52] intentionally omitted <==

2017 Regular Shareholders’ Meeting of the Company

Supervisor: YI-WEI INVESTMENT Representative Chin-Chou Hsu

==> picture [110 x 50] intentionally omitted <==

Supervisor: BAO-JYUE INVESTMENT Representative: Mao-Jen Chen

Supervisor: Shen-Li Liao

6.4 Consolidated Financial Statements of the Parent Company and Subsidiary in the Most Recent Year: Please refer page 126~197

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

109

Please refer page 198~263

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.

VII. Review of Financial Position, Management Performance and Risk

Management.

7.1 Analysis of Financial Status

Unit: NT$ thousands

Year Item	2015	2016	Difference	Difference
			Amount	%
Current Assets	3,385,769	3,481,349	95,580	2.82
Fixed Assets	337,171	314,067	(23,104)	(6.85)
Intangible Assets	720,469	658,732	(61,737)	(8.57)
Other Assets	315,250	359,297	44,047	13.97
Total Assets	4,758,659	4,813,445	54,786	1.15
Current Liabilities	1,564,095	2,013,714	449,619	28.75
Long-term Liabilities	558,519	414,237	(144,282)	(25.83)
Total Liabilities	2,122,614	2,427,951	305,337	14.38
Capital stock	1,160,421	1,195,264	34,843	3.00
Capital surplus	867,214	865,337	(1,877)	(0.22)
Retained Earnings	390,641	285,955	(104,686)	(26.80)
Other Equity	98,778	(25,556)	(124,334)	(125.87)
Treasury Stock	(10,636)	(61,801)	(51,165)	481.05
Non-controlling interests	129,627	126,295	(3,332)	(2.57)
Total Stockholders' Equity	2,636,045	2,385,494	(250,551)	(9.50)
Analysis of changes in financial ratios: Current Liabilities: The increase was due to increase the bank loan for operating need. Long-term Liabilities: The 2rd domestic unsecured convertible bond was reclassified to current liabilities which caused the decrease of long-term liabilities. Retained Earnings: The decrease in 2016 was due to decrease in net profit. Other Equity: The decrease due to the the loss of foreign exchange from USD devaluation. Treasury Stock: The Company increased treasury stock.

110

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

The foreign loss was an unrealized loss, so it doesn’t have big effect on the Company.

7.2 Analysis of Financial Performance

Unit: NT$ thousands

Year Item	2015	2016	Difference	Difference
			Amount	%
Sales	9,736,912	9,744,113	7,201	0.07
Cost of Sales	7,859,640	7,949,895	90,255	1.15
Gross Profit	1,877,272	1,794,218	(83,054)	(4.42)
OperatingExpenses	1,565,076	1,601,053	35,977	2.30
OperatingIncome	312,196	193,165	(119,031)	(38.13)
Non-operatingIncome and Expenses	85,061	33,439	(51,622)	(60.69)
Income Before Tax	397,257	226,604	(170,653)	(42.96)
Tax Expense	93,357	105,428	12,071	12.93
Net Income	303,900	121,176	(182,724)	(60.13)
Analysis of changes in financial ratios: Operating Income: The decrease was due to the decrease of gross profit. Non-operating Income and Expenses: The Company recognized the goodwill loss. Income Before Tax: The decrease was due to the decrease of gross profit. Net Income: The decrease was due to the decrease 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.

111

7.3 Analysis of Cash Flow

7.3.1 Cash Flow Analysis for the Current Year

Unit: NT$ thousands

Year Item	2015	2015	Variance	Variance
			Amount	(%)
Cash flows from operatingactives	511,974	8,719	(503,255)	(98.30)
Cash flows from investingactives	(111,382)	(288,998)	(177,616)	159.47
Cash flows from financingactives	202,476	178,712	(23,764)	(11.74)
Net cash flows	603,068	(101,567)	(704,635)	(116.84)
Analysis of financial ratio change: Cash flows from operating actives: The decrease were due to the decrease of profit before tax
and the increase 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 Company issue the 3rdunsecured convertible bond and capital increasing plan in 2015.

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)
1,448,581	200,000	(100,000)	150,000	1,698,581
Analysis of 2017 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 is planning to purchase IT equipment for integrating logistics and financial information system. 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 is planning to purchase IT equipment for integrating logistics and financial information system.

Cash flows from financing actives: The Company will continue to do some financial plans for developing business.

7.4 Major Capital Expenditure Items: None.

112

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:

The Company and its subsidiaries’ investment profit in 2016 were mainly due to the profits of THI Logistics, THI Group (Shanghai) Ltd, and THI Group (HK) Ltd. The investment loss were mainly due to the loss of Taiwan Express and Sanghai EXer Logistics. The loss of Taiwan Express was mainly due to the businesses decline from doing customer structural adjustment. The loss of Sanghai EXer Logistics was mainly due to the distribution volume has not yet reached a scale of economy which caused loss.

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 0.27% 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 0.50% 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

113

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

In 2016 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:

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 2016.

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 2016 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

114

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

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

115

T3EX Global Holdings Corp.

==> picture [799 x 423] intentionally omitted <==

----- 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
THI Group Limited Co., Ltd T.H.I.GROUP 51%
holdings limited
(H.K) SINGAPORE
THI &
100% 100% 97.51% PTE LTD
Hiview Logistics Maruzen
Shanghai Yaohwa T-Cube Global Co., Ltd Co., Ltd
Logistics Co., Ltd
International
Forwarder Co., Ltd. 100% Taiwan Express LOGI
(USA),INC International
100%
Co., Ltd.
T.H.I. Group 100%
TEC LOGISTICS
(Shanghai) Ltd. 90%
(USA),INC
THI LOGISTICS
84.195% 30%
Orient Air General (MALAYSIA)
EXer Logistics
Sales Agent Co., SDN.SHD
Co.,Ltd.
100%
Taiwan Express
(HK) Co., Ltd.
100% 100%
TEC Logistics Wai Hung Cargo
(Shenzhen) Co., Ltd. Transport Co., Ltd.
----- End of picture text -----

116

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	Rm601-7,Prosperity Millennia Plaza, 663 King's Rd.,Quarry Bay,HK.	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

117

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	RMB11,000	Warehousing and distribution
EXer Logistics Co.,Ltd.	2015.08.12	No.536, ShenglongRoad, SongjiangDistrict, Shanghai	RMB4,709	Express
THI LOGISTICS (MALAYSIA) SDN.BHD	2016.01.26	13-2, Jalan Mahogani 5/KS7,Bandar Botanic, 41200 Selangor Darul Ehsan Malaysia	USD200	Air & sea freight forwarding andpackaging

118

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	Jack Lai	-	-
	Director & GM	Billy Yuen	-	-
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	Jack Lai
	Director & GM	Jack Lai	-	-
	Director	Tony Lin	-	-
	Supervisor	Irene Lee	-	-
Shanghai Yaohwa International Forwarder Co., Ltd	Investor	THI GROUP LIMITED(H.K)	-	100%
	Chairman	David Yen	-	-
	Representative	Michael Chang
	Director & GM	Michael Chang	-	-
	Director	Jack Lai	-	-
	Supervisor	Helen Zheng	-	-
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.	-	84.195%
	Investor	`CHUN-TSANG Investment`		3.7910%
	Chairman	`Tony Lin`	-	-
	Representative	`LE-HUA LIU`	-	5.4330%

119

	Director	LE-HUA LIU	-
	Director	CHIEN- HUA LIU	-	6.5810%
	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%

120

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	Andy Wan	-	-
	Director	Allen Hou	-	-
	Director	David Yen	-	-
	Director	Tony Lin	-	-
	Supervisor	Shen-Li Liao	-	-
	GM	Benison Hsu	-	-
T.H.I. Logistics Ltd	Investor	T3EX Global Holdings Corp.	13,000,000	100%
	Chairman	Daivd Yen	-	-
	Director	Helen Liu	-	-
	Director	`Tony Lin`	-	-

121

	Director	Benison Hsu
	Director	Allen Hou
	Supervisor	Ji-Zhi Hsieh	-	-
	GM	Daivd Yen	-	-
Taiwan Express (USA) INC.	Investor	Taiwan Express Logistic Co., Ltd.	100,000	100%
	Director	Benison Hsu	-	-
	Director	TSAI- CHUAN Liu	-	-
TEC Logistics (USA) INC.	Investor	Taiwan Express Logistic Co., Ltd.	200	100%
	Director	Benison Hsu	-	-
	Director	TSAI- CHUAN Liu	-	-
TEC Logistics Co., Ltd	Investor	Taiwan Express Logistic Co., Ltd.	1,000,000	100%
	Chairman	Benison Hsu	-	-
	Director	AndyWan	-	-
	Director	Julie Chen	-	-
	Supervisor	Melonie Lin	-	-
Hiview Logistics Co., Ltd	Investor	Taiwan Express Logistic Co., Ltd.	5,000,000	97.51%
	Chairman	Julie Chen	-	-
	Director	Benison Hsu	-	-
	Supervisor	Melonie Lin	-	-
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	Allen Chiu	-	-
	Director	MING-SHIN JOU	-	-
Wai Hung(China-H K) Cargo Transport Co., Ltd	Investor	Taiwan Express (HK) Co., Ltd.	-	100%
	Director	Benison Hsu	-	-
	Director	Andy Wan	-	-

122

8.1.4 The Operating Condition of Affiliated Companies ：

Unit: NT$ thousands

Affiliated Companies	Share Capital	Total Assets	Total liabilities	Total equity	Revenue	Operating Income	Net Income	EPS
		Amount	Amount
T.H.I. Group Ltd	35,000	94,790	18,222	76,568	8,422	(8,569)	4,962	0
GREATLINE INTERNATIONAL LIMITED	134,428	1,367,232	419	1,366,813	0	(3,884)	115,203	0
T.H.I. Logistics Ltd	130,000	238,880	104,473	134,407	934,414	29,729	30,540	0
THI GROUP LIMITED(H.K)	48,448	1,499,586	138,374	1,361,212	955,459	81,873	119,179	0
T.H.I. Group (Shanghai) Ltd.	92,883	1,506,079	617,196	888,883	4,799,105	156,645	33,957	0
Shanghai Yaohwa International Forwarder Co., Ltd	55,031	157,221	47,567	109,654	557,269	25,486	19,179	0
T.H.I. Group Vietnam Co.,LTD	9,534	69,025	3,887	65,138	158,248	5,247	5,238	0
T.H.I. GROUP (BANGKOK) CO., LTD.	4,841	29,606	4,961	24,645	77,242	7,536	4,732	0
T.H.I. GROUP (CAMBODIA) Co., Ltd.	4,462	9,828	1,050	8,778	26,495	1,081	911	0
T.H.I. Group Singapore PTE. LTD.	9,536	4,813	3,345	1,468	36,803	(4,902)	(3,801)	0
T.H.I. Logistics (Malaysia) SDN. BHD	11,535	8,539	1,293	7,246	5,191	(3,575)	(2,939)	0
T.H.I. & Maruzen Co. Ltd.	15,660	53,863	30,239	23,624	151,549	5,305	2,372	0
Fresh Beauty Enterprises Ltd.	57,411	95,757	0	95,757	0	0	51,975	0
Eastern union holdings limited	57,411	95,995	0	95,995	0	0	51,975	0
T-Cube Global Logistics Co., Ltd	54,610	183,105	71,415	111,690	427,536	66,877	51,723	0
EXer Logistics Co.,Ltd.	23,335	96,675	95,672	1,003	272,768	(109,059)	(110,010)	0
Taiwan Express Logistic Co., Ltd.	359,584	891,307	434,632	456,675	920,733	16,450	(1,322)	0
Taiwan Express (USA) INC.	31,629	36,230	(84)	36,314	15,146	(3,411)	(3,411)	0
TEC Logistics Co., Ltd	10,000	32	195	(163)	0	0	0	0
Hiview Logistics Co., Ltd	68,000	110,979	36,466	74,513	158,246	4,689	4,544	0
Taiwan Express (HK) Co., Ltd.	266,807	404,343	61,103	343,240	457,903	(31,432)	(10,996)	0
TEC Logistics (Shenzhen) Co., Ltd.	183,901	224,345	65,870	158,475	373,586	7,342	10,150	0
TEC LOGISTICS(USA), INC	8,549	14,907	898	14,009	1,703	(1,364)	(1,068)	0
Wai Hung Cargo Transport Co., Ltd.	375	8,649	1,953	6,696	13,449	(7,688)	(6,382)	0

123

8.2 Private Placement Securities in the Most Recent Years:

The private placement securities was listed on December 19,2016.

Item	First Grant of 2011 Private Placement Issue Date: 05 16,2011	First Grant of 2011 Private Placement Issue Date: 05 16,2011	First Grant of 2011 Private Placement Issue Date: 05 16,2011	First Grant of 2011 Private Placement Issue Date: 05 16,2011	First Grant of 2011 Private Placement Issue Date: 05 16,2011
Securities under privateplacement	Common stock
Date of resolution and approved quantity	8,400,000 shares / 03 24, 2011
Basis and rationale forprice setting	For strategic specified parties, the price setting based on the related regulation.
Selection method of specifiedparties	The original shareholders of Taiwan Express, who can help T3EX future business development.
Reasons for private placement	To maintain a long-term relationship with the strategic specified parties.
Date of payment and completion	03 29, 2011
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	The board representative of the Company’s subsidiary	None
	FU- HSIEN WENG		182,000	None	None
	RONG-JHAN HSIEH		154,000	The supervisor representative of the Company’s subsidiary	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	This plan can enhance the Company’s competitiveness and increase the value of shareholders’ equity.

124

(ex. causing an increase in accumulated losses) Use of funds from private placement This plan was finished on 03 29, 2011. and progress of proposed plans Compared with 03 31, 2011, the consolidate total liabilities/ total assets was Effectiveness of 57.8% (YOY -0.8%) private placement 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.

125

Independent Auditors’ Audit Report

The Board of Directors T3EX Global Holdings Corp.

Opinion

We have audited the consolidated financial statements of T3EX Global Holdings Corp.(“the Company”) and its subsidiaries (“the Group”), which comprise the consolidated statement of balance sheet as of December 31, 2016 and 2015, the consolidated statement of comprehensive income, consolidated statement of changes in equity and cash flows for the year ended December 31,2016 and 2015, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2016 and 2015,and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

1. Revenue recognition

Please refer to Note 4(m) "Revenue recognition" of consolidated financial statements and Note 6(v) "Revenue" for the details of operating revenues of consolidated financial statements.

How the matter was addressed in our audit:

The Group mainly engages in sea and air freight forwarding, and total logistics solution. Therefore, the revenue is a matter to the users of the consolidated financial statements. Consequently, this is one of the key assessment areas our audit focus on.

126

4-1

Our audit procedures included:

Understanding the internal control on revenue recognition applied by the management and assessing whether appropriate accounting policy is applied; performing the analysis on revenue from the top ten customers to verify whether or not any unusual transaction has incurred; performing the sampling procedures to verify records and supporting document of the transactions; selecting a period before and after the reporting date to assess whether revenue recognized in the correct period.

2. Goodwill and other intangible assets impairment assessment

Please refer to Notes 4(j) and (k) "The non-financial assets impairment" of consolidated financial statements, Note 5 for assumptions on the accounting estimates and assumptions on the impairment of goodwill and other intangible assets of the consolidated financial statements, and Note 6(i) for the details of the intangible assets in consolidated financial statements.

How the matter was addressed in our audit:

The accounting policy applying to the goodwill and other intangible assets arising from acquisition transactions is with the uncertainty estimation. Consequently, this is one of the key assessment areas our audit focus on.

Our the principal audit procedures included:

Understanding the internal control on the impairment assessment of the goodwill and other intangible assets; selecting significant goodwill and other intangible assets; obtaining impairment assessment reports issued by an external expert engaged by the management; assessing model, parameters and assumptions applying to the financial information forecast; and evaluating whether the assessment for goodwill and other intangible assets was based on the accounting policies.

3. Account receivable evaluation

Please refer to Note 4(f) "impairment of financial assets" of consolidated financial statements, Note 5 "Estimation uncertainty of the impairment of the receivable" of consolidated financial statements and Note 6(e) "impairment of the receivables" of consolidated financial statements.

How the matter was addressed in our audit:

The group deal with its main customers on credit, so Group's receivables are exposed to the credit risk. When the customer defaults, the receivables may be impaired. Since the collectability assessment of receivables depends on management's judgment. Consequently, this is one of the key assessment areas our audit focus on.

Our principal audit procedures included:

Understanding impairment policy applied to the receivables by the management; assessing whether it is based on appropriate accounting policies. Inquiring the management whether there was any receivable with difficulty to collect; performing a sampling procedure to check the correctness of the aging of receivables and to review the collection of receivables in the subsequent period to understand if there was any significant overdue receivables to evaluate the provisions for impairment of receivables are adequate.

Other Matter

T3EX Global Holdings Corp. has prepared its parent-company-only financial statements
as of and for the years then ended December 31, 2016 and 2015, on which we have expressed
an unqualified opinion.

127

4-2

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Assess for purpose of identifying the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Evaluated for purposes of determining the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we determine that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

128

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Pei-Chi Chen and Heng-Shen Lin.

KPMG

Taipei, Taiwan (Republic of China) March 20, 2017

129

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

CONSOLIDATED BALANCE SHEETS

December 31, 2015, December 31, 2016 (Expressed in thousands of New Taiwan dollars)

December 31, 2016 Amount % $ 1,448,581 30 7,107 - 29,432 1 31,651 1 1,629,766 34 511 - 334,301 6	December 31, 2016	December 31, 2016	December 31, 2016
	Amount	%	Amount
3,481,349 72
- - 38,800 1 60,753 1 314,067 6 563,329 12 95,403 2 43,044 1 140,462 3 76,238 2
	2,013,714 42 1,564,095 33
	2 - - - 290,691 5 393,988 8 82,709 2 84,911 2 40,835 1 79,620 2
	414,237 8 558,519 12
1,332,096 28	2,427,951 50 2,122,614 45
	1,195,264 25 1,160,421 24 865,337 17 867,214 18 285,955 7 390,641 8 (25,556) (1) 98,778 2 (61,801) (1) (10,636) -
	2,259,199 47 2,506,418 52
	126,295 3 129,627 3
$ 4,813,445 100	2,385,494 50 2,636,045 55
	$ 4,813,445 100 4,758,659 100

130

(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, 2016 AND 2015 (Expressed in thousands of New Taiwan dollars, except for earnings per common share)

2016	% 100 82	2015	% 100 81
Amount $ 9,744,113 7,949,895		Amount 9,736,912 7,859,640
1,794,218	18	1,877,272	19
1,135,050 466,003	12 4	1,122,993 442,083	12 4
1,601,053	16	1,565,076	16
193,165	2	312,196	3
9,454 50,310 (201) (26,124) -	- 1 - - -	20,392 74,081 2,330 (9,754) (1,988)	- 1 - - -
226,604 105,428	3 1	397,257 93,357	4 1
121,176	2	303,900	3
(5,905) -	- -	(6,305) -	- -
(5,905)	-	(6,305)	-
(125,138) (6,422) -	(2) - -	(4,345) (13,420) -	- - -
(131,560)	(2)	(17,765)	-
(137,465)	(2)	(24,070)	-
$ (16,289)	-	279,830	3
$ 130,487 (9,311)	2 -	293,820 10,080	3 -
$ 121,176	2	303,900	3
$ 248 (16,537)	- -	270,881 8,949	3 -
$ (16,289)	-	279,830	3
$	1.11		2.65
$	1.04		2.36

131

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

`T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES`

Consolidated Statements of Changes in Equity
For the years ended December 31, 2016 and 2015

(Expressed in Thousands of New Taiwan Dollars)

==> picture [1015 x 460] intentionally omitted <==

132

(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, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars)

2016 Cash flows from operating activities: Profit before tax $ 226,604 Adjustments: Adjustments to reconcile profit and loss: Depreciation 43,767 Amortization 20,446 Impairment loss on receivables 1,634 Change in fair value of financial assets and liabilities 129 Interest expense 26,124 Interest income (4,729) Cost of share-based payment transactions (288) Share of profit of equity-accounted investees 201 Loss (gain) on disposal of property, plant and equipment (17,960) Gain on disposal of investments (16,283) Loss on disposal of equity-accounted investee - Other - Loss on impairment of goodwill 36,092 Total adjustments to reconcile profit (loss) 89,133 Changes in operating assets and liabilities: Changes in operating assets: Decrease in financial assets held for trading - Decrease (increase) in notes receivable 2,031 Decrease (increase) in accounts receivable (194,319) Decrease (increase) in accounts receivable－ related parties 910 (Increase) in other current assets (63,625) Decrease (increase) in other operating assets (1,823) Total changes in operating assets (256,826) Changes in operating liabilities: Increase (decrease) in notes payable 3,141 Increase (decrease) in accounts payable 131,383 Increase (decrease) in accounts payable to related parties 1,004 Increase (decrease) in other payable (92,140) Increase in other current liabilities 3,097 Decrease in net defined benefit liability (8,106) Total changes in operating liabilities 38,379 Net changes in operating assets and liabilities (218,447) Net adjustments (129,314) Cash inflow generated from operations 97,290	2016 $ 226,604 43,767 20,446 1,634 129 26,124 (4,729) (288) 201 (17,960) (16,283) - - 36,092	2015 397,257 36,615 13,129 5,223 (65) 9,754 (5,139) 20,025 (2,330) (7,518) (23,169) 1,988 (260) -
	89,133	48,253
	- 2,031 (194,319) 910 (63,625) (1,823)	1,560 10,403 353,356 13,381 (5,204) 3,661
	(256,826)	377,157
		1,206 (246,241) (23) 12,615 9,034 (1,171)
	38,379	(224,580)
	(218,447)	152,577
	(129,314)	200,830
	97,290	598,087

133

Interest received			4,729		5,139
Interest paid			(5,447)		(3,878)
Income taxes refund (paid)			(87,853)		(87,374)
Net cash flows from (used in)			8,719		511,974
operating activities
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through			296	-
profit or loss
Acquisition of available-for-sale financial assets			(90,533)	-
Proceeds from disposal of available-for-sale			95,991		50,925
financial assets
Acquisition of equity-accounted investee			(10,381)		(9,666)
Net cash flow from acquisition of subsidiaries		-			(78,236)
Acquisition of property, plant and equipment			(32,236)		(51,872)
Proceeds from disposal of property, plant and			23,210		9,180
equipment
Increase in refundable deposits			(7,552)		(17,396)
Acquisition of intangible assets			(4,953)		(9,164)
Decrease in investment payable		(175,427)		-
Decrease (increase) in other current and non-current			(91,391)		(6,595)
assets
Dividends received			3,978		1,442
Net cash flows from (used in)		(288,998)		(111,382)
investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term borrowings			451,000	(129,000)
Decrease (increase) in short-term notes and bills			(20,000)		15,000
payable
Proceeds from issuance of convertible bonds		-			296,000
Proceeds from long-term debt		-			45,000
Repayments of long-term debt			(1,141)	(144,678)
Payment of cash dividends		(206,341)		(145,164)
Proceeds from issuance of shares		-			249,000
Exercise of employee share options			5,222		5,158
Payments to acquire treasury shares			(51,165)		(11,624)
Proceeds from employee purchase of treasury		-			22,784
shares
Change in non-controlling interests			1,137	-
Net cash flows used in financing			178,712		202,476
activities
Effect of exchange rate changes on cash and cash		(117,331)			(7,073)
equivalents
Net increase (decrease) in cash and cash		(218,898)			595,995
equivalents
Cash and cash equivalents at beginning of period		1,667,479		1,071,484
Cash and cash equivalents at end of period	$	1,448,581		1,667,479

134

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

T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2016 and 2015

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

(1) Company 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 Group’s registered office is 12F, No. 563, Sec. 4, Zhongxiao E. Rd., Xinyi Dist., Taipei City, R.O.C.. The Group mainly engages in sea and air freight forwarding, distribution, packing, warehousing, logistics, and customs clearance.

Pursuant to a restructuring plan of the Group, 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 Group’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.

In October 2012, the Company was renamed as T3EX GLOBAL HOLDINGS CORP.. In order to highlight the Company’s investment in focusing on the logistics industry, renamed its subsidiary, Taiwan Hua International Express Co., Ltd., to THI Logistics. Co., Ltd.

The Group’s shares was listed at TWSE since December 22, 2016.

(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 20, 2017.

(3) New standards, amendments and interpretations adopted:

(a) Impact of the International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission, R.O.C. ("FSC") but not yet in effect.

According to Ruling No. 1050026834 issued on July 18, 2016, by the FSC, public entities are required to conform to the IFRSs which were issued by the International Accounting Standards Board (IASB) before January 1, 2016, and were endorsed by the FSC on January 1, 2017 in preparing their financial statements. The related new standards, interpretations and amendments are as follows:

New, Revised or Amended Standards and Interpretations	Effective date per IASB
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 Accounts” Amendment to IAS 1 “Disclosure Initiative”	January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016

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Notes to Consolidated Financial Statements

New, Revised or Amended Standards and Interpretations

Effective date per
IASB

Amendments to IAS 16 and IAS 38 “Clarification of Acceptable
Methods of Depreciation and Amortization”
Amendments to IAS 16 and IAS 41 “Agriculture: 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 cycles 2010-2012 and 2011-2013
Annual improvements cycle 2012- 2014
IFRIC 21 “Levies”

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

Except for the following items, the Group believes that the adoption of the above IFRSs would not have a significant impact on the consolidated financial statements:

(i) IFRIC 21 "Levies"

This Interpretation addresses the accounting for a liability to pay a levy if that liability is within the scope of IAS 37 "Provisions, Contingent Liabilities and Contingent Assets". According to the new Interpretation, the obligating event that gives rise to a liability to pay a levy is the activity that triggers the payment of the levy, as identified by the legislation.

Based on the aforementioned Interpretation, the Group considers that the timing to recognize certain liabilities might be changed, but needs further analysis to evaluate the impact.

(ii) Amendments to IAS 36 "Recoverable Amount Disclosures for Non Financial Assets"

Under the amendments, the recoverable amount is required to be disclosed only when an impairment loss has been recognized or reversed. In such cases, the amendments also require that the following be disclosed if the recoverable amount is based on fair value less costs of disposal:

1) the level of the fair value hierarchy within which the fair value measurement is categorized; and
2) the valuation technique(s) used for fair value measurements categorized within Levels 2 and 3 of the fair value hierarchy, and the key valuation assumptions made.

The Group expects the aforementioned amendments will result in a broader disclosure of the recoverable amount for non-financial assets.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Newly released or amended standards and interpretations not yet endorsed by the FSC

The following is a summary of the new standards and amendments issued by the IASB but not yet endorsed by the FSC. The FSC announced that the Group should apply IFRS 9 and IFRS 15 starting January 1, 2018. As of the date the Group’s financial statements were issued, the FSC has yet to announce the effective dates of the other IFRSs.

New, Revised or Amended Standards and Interpretations

Effective date
per 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”
IFRS 15 “Revenue from Contracts with Customers”
IFRS 16 “Leases”
Amendment to IFRS 2 “Clarifications of Classification and Measurement of
Share based Payment Transactions”
Amendment to IFRS 15 “Clarifications of IFRS 15”
Amendment to IAS 7 “Disclosure Initiative”
Amendment to IAS 12 “Recognition of Deferred Tax Assets for
Unrealized Losses”
Amendments to IFRS 4 “Insurance Contracts” (“Applying IFRS 9
Financial Instruments with IFRS 4 Insurance Contracts”)
Annual Improvements to IFRS Standards 2014–2016 Cycle:
IFRS 12 “Disclosure of Interests in Other Entities”
IFRS 1 “First-time Adoption of International Financial Reporting
Standards” and IAS 28 “Investments in Associates and Joint Ventures”
IFRIC 22 “Foreign Currency Transactions and Advance Consideration”
Amendments to IAS 40 Investment Property

January 1, 2018
Effective date to be
determined by IASB
January 1, 2018
January 1, 2019
January 1, 2018
January 1, 2018
January 1, 2017
January 1, 2017
January 1, 2018
January 1, 2017
January 1, 2018
January 1, 2018
January 1, 2018

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Notes to Consolidated Financial Statements

The Group is still currently determining the potential impact of the standards listed below:

Issuance / Standards or
Release Dates Interpretations
May 28, 2014 IFRS 15 "Revenue from
April 12, 2016 Contracts with Customers"

Content of amendment

IFRS 15 establishes a five-step model
for recognizing revenue that applies to
all contracts with customers, and will
supersede IAS 18 "Revenue," IAS 11
"Construction Contracts," and a number
of revenue-related interpretations.

Final amendments issued on April 12,
2016, clarify how to (i) identify
performance obligations in a contract;
(ii) determine whether a company is a
principal or an agent; (iii) account for
a license for intellectual property
(IP); and (iv) apply transition
requirements.

November 19, 2013 IFRS 9 "Financial
July 24, 2014 Instruments"

The standard will replace IAS 39 "Financial Instruments: Recognition and Measurement", and the main amendments are as follows:

‧Classification and measurement: Financial assets are measured at amortized cost, fair value through profit or loss, or fair value through other comprehensive income, based on both the entity's business model for managing the financial assets and the financial assets' contractual cash flow characteristics. Financial liabilities are measured at amortized cost or fair value through profit or loss. Furthermore, there is a requirement that "own credit risk" adjustments be measured at fair value through other comprehensive income.
‧Impairment: The expected credit loss model is used to evaluate impairment.
‧ Hedge accounting: Hedge accounting is more closely aligned with risk management activities, and hedge effectiveness is measured based on the hedge ratio.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

`Issuance /` `Release Dates` `January 13, 2016`	`Standards or` `Interpretations` `IFRS 16 "Leases"`	`Content of amendment` `The new standard of accounting for lease` `is amended as follows:` `‧For a contract that is, or contains,` `a lease, the lessee shall recognize a` `right-of-use asset and a lease` `liability in the balance sheet. In the` `statement of profit or loss and other` `comprehensive income, a lessee shall` `present interest expense on the lease` `liability` `separately` `from` `the` `depreciation charge for the right-of` `use asset during the lease term.` `‧A lessor classifies a lease as either` `a finance lease or an operating lease,` `and therefore, the accounting remains` `similar to IAS 17.`

The Group is evaluating the impact on its financial position and financial performance of the initial adoption of the abovementioned new or amended standards and interpretations. The results thereof will be disclosed when the Group completes its evaluation.

(4) Summary of significant accounting policies:

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

(a) 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.

(b) Basis of preparation
(i) 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:

1) Financial instruments measured at fair value through profit or loss are measured at fair value (including derivative financial instruments);
2) Available-for-sale financial assets are measured at fair value;

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

3) Net defined benefit liability (asset) is recognized as plan assets, on fair value measurement, less the present value of the defined benefit obligation.
(ii) 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.

(c) Basis of consolidation
(i) 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.

(ii) 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	Name of subsidiary T.H.I Group Ltd. (in B.V.I.) GREATLINE INTERNATIONAL LIMITED (GREATLINE) T.H.I GROUP VIETNAM CO., LTD. T.H.I. GROUP (BANGKOK) COMPANY LIMITED 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. T.H.I. Logistic (Mdaysia) SDN. BHD	Principal activity Offshore settlement center Offshore settlement center 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 Air & sea freight forwarding	Percentage of shares held December 31, 2016 December 31, 2015 100% 100% 100% 100% 51% 51% 49% 49% 100% 100% 100% 100% 100% 100% 80% 80% 51% 51% 90% -	Remark
			December 31, 2016 100% 100% 51% 49% 100% 100% 100% 80% 51% 90%
				Please refer to Note 6(7)

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Name of investor The Company Fresh Beauty Eastern Union GREATLINE T.H.I. HK T.H.I. HK T.H.I. Shanghai TEC TEC TEC TEC TEC TEC HK TEC HK	Name of subsidiary Fresh Beauty Enterprise Ltd. (Fresh Beauty) East Union Holdings Limited (East Union) T-Cube Global Logistics Co., Ltd. T.H.I. GROUP LIMITED (in HK) T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) Shanghai Yaohwa International Forwarder Co., Ltd. (Shanghai Yaohwa) EXer Logistics Co., Ltd. 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 (China-HK) Cargo Transport Co., Ltd. (Wai Hung )	Principal activity Offshore holding company Offshore holding company Warehousing and distribution Air & sea freight forwarding Air & sea freight forwarding and customs clearance Air & sea freight forwarding and customs clearance Express logistics company Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution Freight forwarding, customs clearance, and distribution 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 December 31, 2016 December 31, 2015 60% 60 100% 100 100% 100 100% 100% 100% 100% 100% 100% 73.87% 68% 100% 100% 100% 100% 100% 100% 100% 100% 97.51% 97.51% 100% 100% 100% 100%	Remark
			December 31, 2016 60% 100% 100% 100% 100% 100% 73.87% 100% 100% 100% 100% 97.51% 100% 100%
				Please refer to Note 6(7) Please refer to Note 6(7)

(iii) Subsidiaries which are not included in the consolidated financial statements None.
(d) Classification of current and non-current assets and liabilities

An asset is classified as current when:

(i) It is expected to be realized as an asset or is intended to be sold or consumed in the entity’s normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

All other assets are classified as non-current.

A liability is classified as current when:

(i) It is expected to be settled in the entity’s normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) 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.
(e) 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.

(f) Financial instruments

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

(i) 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.

1) 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:

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

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

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.

2)

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.

3)

Loans and receivables

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.

4)

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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

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.

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.

5) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

(ii) Financial liabilities and equity instruments
1) 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.

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.

2) 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:

a) 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;

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

b) Performance of the financial liabilities is evaluated on a fair value basis;
c) 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.

3) 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.

4) 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.

5) 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.

(iii) 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.

(g) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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 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.

(h) Property, plant and equipment

(i) 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.

(ii) 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.

(iii) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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:

1)	Building	5~50 years
2)	Transportation	5~7 years
3)	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.

(i) Leased assets
(i) 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.

(ii) 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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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(j) Intangible assets

(i) Goodwill

1) Recognition

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

2) 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.

(ii) Other intangible assets

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

(iii) 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.

(i) 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 3~7 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.

(k) 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).

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

(l)

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.

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Notes to Consolidated Financial Statements

(m) 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.

(n) Employee benefits
(i) 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.

(ii) 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.

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.

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Notes to Consolidated Financial Statements

(iii) 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.

(o) 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.

(p) 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.

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:

(i) 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.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
(iii) Initial recognition of goodwill.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

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:

(i) The entity has the legal right to settle tax assets and liabilities on a net basis; and
(ii) The taxing of deferred tax assets and liabilities fulfills one of the scenarios below:
1) levied by the same taxing authority; or
2) 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.

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.

(q) 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 assets 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.

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Notes to Consolidated Financial Statements

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).

(r)

Earnings per share

The Group discloses the basic and diluted earnings per share attributable to ordinary shareholders of theGroup. The calculation of basic earnings per share is the profit attributable to the ordinary shareholders of the Group 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 Group 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

(s) 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 financial statements in conformity with the Regulations and 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 may have risk of significant impact on the amounts recognized in the consolidated financial statements is disclosed in note 6(i), Intangible assets.

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Notes to Consolidated Financial Statements

(6) Significant accounts disclosures:

(a) Cash and cash equivalents

Cash on hand Demand and checking deposits Time deposits	December 31, 2016 $ 23,799 1,365,508 59,274	December 31, 2015 12,697 1,554,174 100,608
	$ 1,448,581	1,667,479

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

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

Financial assets at fair value through profit or loss Financial assets held for trading Total Current Non-current Total Financial liabilities designated at fair value through profit or loss Non-current	December 31, 2016	December 31, 2015 148 7,086
	$ - 7,107
	$ 7,107	7,234
	$ 7,107 -	7,086 148
	$ 7,107	7,234
	$ 2 $ 2	- -

Investment in listed securities: Stocks listed on domestic markets	December 31, 2016 $ 29,432	December 31, 2015 25,326

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Notes to Consolidated Financial Statements

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	2016		2015 Other comprehensive income (after tax) Profit (loss) (after tax) 253 - (253) -	2015
	Other comprehensive income (after tax) $ 294	Profit (loss) (after tax)		Profit (loss) (after tax) - -
Increase 1% Decrease 1%		-
	$ (294)	-	(253)

As of December 31, 2016 and 2015, there was no available-for-sale financial asset factored or provided as collateral.

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

Domestic unlisted common shares	December 31, 2016 $ 38,800	December 31, 2015 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, 2016 and 2015, there was no financial asset measured at cost factored or provided as collateral.

(e) 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	December 31, 2016 $ 31,651 1,652,402 64,017 (35,609)	December 31, 2015 33,682 1,459,655 46,520 (36,252)
	$ 1,712,461	1,503,605

Other receivable (including doubtful receivable) are listed under other current assets.

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Notes to Consolidated Financial Statements

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

Over due less than 60 days Over due 61~90 days Over more than 90 days	December 31, 2016 $ 493,123 22,694 -	December 31, 2015 370,561 30,843 5,844
	$ 515,817	407,248

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 2016 and 2015 was as follows:

Beginning balance as of January 1, 2016 Impairment loss recognized Exchange rate effects and others Balance as of December 31, 2016 Beginning balance as of January 1, 2015 Impairment loss recognized Receivables written off Exchange rate effects and others Balance as of December 31, 2015	Individually assessed impairment $ 13,612 - (129)	Collectively assessed impairment 22,640 1,634 (2,148)	Total 36,252 1,634 (2,277) 35,609 Total 24,102 5,223 (125) 7,052 36,252
	$ 13,483	22,126
	Individually assessed impairment $ 11,441 1,743 - 428	Collectively assessed impairment 12,661 3,480 (125) 6,624
	$ 13,612	22,640

As of December 31, 2016 and 2015, there was no receivable factored or provided as collateral.

(f) Equity-accounted investees
(i) A summary of the Group’s financial information for equity-accounted investees at the reporting date is as follows:

Associates	December 31, 2016 $ 60,753	December 31, 2015 61,131

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

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 thousand in order to improve its business performance and competitiveness.

The Group’s share of profit of associates in 2016 and 2015 is summarized as follows:

The Group’s share of profit of associates	2016 $ (201)	2015 2,330

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

The equity of the non-significant associates	December 31, 2016 $ 115,945	December 31, 2015 106,970

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.

(ii) Guarantees

As of December 31, 2016 and 2015, there was no equity-accounted investment factored or provided as collateral.

(g) Acquisition of subsidiaries
(i) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

1) Consideration

Consideration type was as follows

Consideration type was as follows
		Amount
Cash	$	2,916
The fair value of the acquired assets and liabilities at the acquisition date		were as follows:
Cash and cash equivalents	$	18,756
Accounts receivable		16,032
Prepaid expenses		1,172
Other assets		906
Accounts payable		(16,734)
Other liability		(1,051)
Long-term borrowings		(2,069)
Net assets	$	17,012

2) The fair value of the acquired assets and liabilities at the acquisition date were as follows:
(ii) 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, 2016. 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:

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

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

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

The unpaid balance of the above cash consideration as of December 31, 2015 amounted to $135,467 thousand, which was booked as other current liabilities and was paid in 2016. According to the share purchase agreement, the upper limit of contingent consideration amounted to CNY27,504 thousand, which shall be deposited into the designated trust account. The contingent consideration will be paid in three-years on an intallment basis according to the performance. As of December 31, 2016, the balance of the above contingent cosideration deposited in the trust account amounted to $91,391 thousand, which was booked as other current assets and other non-current assets amounting to $43,867 thousand and $47,524 thousand, respectively. The fair value of the aforementioned liability of the contingent consideration on December 31, 2016 and 2015 amounted to $83,391 thousand and $118,347 thousand, respectively, and the details were as follows:

Other current liabilities Other non-current liabilities	December 31, 2016	December 31, 2015 38,727 79,620 118,347
	$ 42,556 40,835
	$ 83,391

2) Assets acquired and liabilities assumed at the date of acquisition

Cash Accounts receivable Property, plant, and equipment Intangible assets Other assets Account Payable Current tax liabilities Other Payable Fair value of identifiable net assets acquired 3) 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

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) 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 express, general cargo logistics, agency and warehouse management.

EXer Logistics Co., Ltd., in September 2016, increased its capital amounted to $9,594 thousands. All increased capital was subscribed by T.H.I GROUP Ltd. (Shanghai). The ownership of EXer Logistics Co., Ltd. held by T.H.I GROUP Ltd. (Shanghai) increased from 68% to 73.87% after the capital increased. The capital surplus of the Group decreased by $12,068 thousand because T.H.I GROUP Ltd. (Shanghai) did not subscribe the increased on the original ownership ratio.

The primary types of consideration, assets acquired, liabilities assumed, and goodwill recognized were 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 Goodwill Consideration Add: Non-controlling interest Less: Fair value of identifiable net assets acquired Goodwill	$ 31,328 88,774 1,368 12,711 29,961 (36,173) (31,369)
	$ 96,600
	$ 177,246 30,911 (96,600)
	$ 111,557

3) Goodwill

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(h) 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, 2016 and 2015, were as follows:

Land $ 132,594 - - - $ 132,594	Buildings 69,299 - - - 69,299	Transportation Equipment 191,073 2,665 (37,569) (3,960) 152,209	Office and Other Equipment 177,389 29,571 (20,006) (8,774) 178,180	Total 570,355 32,236 (57,575) (12,734) 532,282
$ 132,594 - - - - $ 132,594	69,299 - - - - 69,299	159,866 35,268 10,168 (13,258) (971) 191,073	119,302 16,604 48,943 (6,880) (580) 177,389	481,061 51,872 59,111 (20,138) (1,551) 570,355
$ - - - - $ -	23,213 2,127 - - 25,340	122,611 15,764 (35,817) (4,011) 98,547	86,296 25,876 (16,508) (1,336) 94,328	232,120 43,767 (52,325) (5,347) 218,215

$ - - - - - $ -	23,213 1,064 - - - 24,277	108,437 19,859 7,373 (11,863) (1,195) 122,611	72,747 15,692 4,910 (6,603) (450) 86,296	204,397 36,615 12,283 (18,466) (1,645) 233,184

$ 132,594	43,959	53,662	83,852	314,067
$ 132,594	45,022	68,462	91,093	337,171
$ 132,594	46,086	51,429	46,555	276,664

A summary of pledged assets as of December 31, 2016 and 2015 is found in note 8.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(i) Intangible assets

The costs, amortization, and impairment loss of the intangible assets of the Group for the years ended December 31, 2016 and 2015, were as follows:

Cost:: Balance on January 1, 2016 Additions Effect of movement in exchange rates Balance on January 1, 2016 Balance on January 1, 2015 Additions Addition through acquisition Effect of movement in exchange rates Balance on January 1, 2015 Amortization and impairment loss: Balance on January 1, 2016 Amortization Impairment Effect of movement in exchange rates Balance on January 1, 2016 Balance on January 1, 2015 Amortization Effect of movement in exchange rates Balance on January 1, 2015 Book value: At January 1, 2016 At January 1, 2015 At January 1, 2015	Goodwill $ 607,244 - (9,492)	Other intangible assets 174,628 4,953 (2,650)	Total 781,872 4,953 (12,142) 774,683 374,429 9,164 396,603 1,677 781,873 61,404 20,446 36,092 (1,991) 115,951 47,869 13,129 406 61,404 658,732 720,469 326,560
	$ 597,752	176,931
	$ 277,895 - 328,188 1,161	96,534 9,164 68,415 516
	$ 607,244	174,629
	$ - - 36,092 (1,669)	61,404 20,446 - (322)
	$ 34,423	81,528
	$ - - -	47,869 13,129 406
	$ -	61,404
	$ 563,329	95,403
	$ 607,244	113,225
	$ 277,895	48,665

Amortization of intangible assets of the Group for the years ended December 31, 2016 and 2015, was recognized as operating expenses in the consolidated profit and loss.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

As of December 31, 2016 and 2015, the group assessed the provision of the impairment. Except the impairment loss described below, there was no other siginificant impairment loss of other intangible assets and goodwill.

Due to the intense competition in the express market in 2016, the sales volume and unit price did not meet the management's expectation. So the synergy from the acquisition of EXer Logistics Co., Ltd. did not meet the original budget and the value of Goodwill was impacted. The Group recognized the impairment loss of Goodwill amounted to $36,092 thousand based on the valuation report issued by the external expert.

(j) Other current assets and other assets

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

Other receivables Other financial assets－current Other financial assets－non current Others Total	December 31, 2016 $ 50,534 193,850 47,524 118,631	December 31, 2015 32,908 102,798 31,167 88,561 255,434
	$ 410,539

Other financial assets consisted of contingent considerations which are deposited into its designated trust account and time deposits with a maturity period over three months, restricted bank deposits, and restricted time deposits.

(k) 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	December 31, 2016 $ 447,000 120,000 -	December 31, 2016 $ 447,000 120,000 -	December 31, 2015 116,000 - 20,000 136,000 1,439,594 1.64%~1.79%
	$ 567,000
	$ 1,105,275
		1.09%~1.19%

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

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(l) Long-term borrowings

Long-term borrowings were as follows:

Unsecured bank loans Less: Current portion Total Unused credit facilities Interest rate	December 31, 2016 $ - - $ -	December 31, 2016 $ - - $ -	December 31, 2015 1,142 (1,142) - - 0.3%~1.75%
	$ -
		-

(i) 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, 2016, long term loans have been returned in full. For the years ended December 31, 2016 and 2015, the repayments of bank loans were $1,141 thousand and $144,678 thousand, respectively.

(ii) Security

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

(m) 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)	December 31, 2016	December 31, 2016
	385,231 393,988 (94,540) -
	$ 290,691 393,988
	$ (2) $ 19,681	148 20,597

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Embedded derivative－put and call options (accounted for as evaluation gain (loss) on financial instruments) Interest expense	2016		2015 29 6,286

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:

(i) Coupon rate

Both are zero.

(ii) Issuance period

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

(iii) 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 Group’s common shares on the TWSE 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 Group’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.

(iv) Put option of bondholders

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

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

(v) Terms of conversion
1) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

2) 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, 2016, the conversion prices of the 1st, 2nd, and 3rd convertible bonds, $21.3 (TWD), and $26.9 (TWD), respectively.

(n) Operating leases

Non-cancellable operating lease rentals are payable as follows:

Less than one year Between one and five years Over five years	December 31, 2016 $ 218,809 188,078 - $ 406,887	December 31, 2015 254,060 282,040 41
		536,141

For the years ended December 31, 2016 and 2015, operating lease expenses were $345,927 and $173,374, respectively.

(o) Employee benefits

(i) 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	December 31, 2016 $ (120,690) 37,981	December 31, 2015 (122,414) 37,503
	$ (82,709)	(84,911)

The Group employee benefits liabilities:

Paid vacation liabilities-current

December 31, 2016 $ 2,936	December 31, 2015 2,936

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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

1) 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.

As of December 31, 2016, the pension fund account balance at Bank of Taiwan and the manager pension fund balance amounted to $21,539 and $16,442, 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.

2) 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, 2016 and 2015 were as follows:

At January 1 Service costs and interest Actuarial losses Obligations paid Others At December 31	2016 $ 122,414 15,155 5,780 (22,380) (279)	2015 113,785 2,274 6,355 - -
	$ 120,690	122,414

3) Movements in the fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2016 and 2015 were as follows:

2016 and 2015 were as follows:
2016 At January 1 $ 37,503 Net remeasurements of defined benefit liabilities －Return on plan assets (excluding the amounts included in net interest expense) 491 Contributions 5,858 Curtailment gain (5,600) Actuarial losses (gain) (271) At December 31 $ 37,981	2015 34,008 455 2,927 - 113
	37,503

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

4) Expenses recognized in profit or loss

The Group’s pension expenses recognized in profit or loss for the years ended December 31, 2016 and 2015, were as follows:

Current service cost Gain on performance Net interest on the net defined benefit liabilities Prior service cost	2016 $ 102 (16,780) 1,473 12,954	2015 51 - 2,304 -
	$ (2,251)	2,355

5) Re-measurement of net defined benefit liability recognized in other comprehensive income

The Group’s net defined benefit liability recognized in other comprehensive income for the years ended December 31, 2016 and 2015 were as follows:

Cumulative amount, January 1 Recognized during the year Cumulative amount, December 31	2016 $ (6,305) (5,905)	2015 - (6,305)
	$ (12,210)	(6,305)

6) Actuarial assumptions

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

Discount rate Future salary increasing rate	December 31, 2016 1.13%~1.375% 2.50%~3.50%	December 31, 2015
		1.50%~1.875% 2.50%~3.50%

The Group expects to make contributions of $7,016 to the defined benefit plans in the next year starting from December 31, 2016. The weighted average period of the defined benefit plans is 9.4~18.22 years.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

7) Sensitivity analysis

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

December 31, 2016 Discount rate Future salary increasing rate	Effects to the defined benefit obligation Increase by 0.25% Decrease by0.25% $ (3,098) 3,251 3,128 (2,996)
	Increase by 0.25% $ (3,098) 3,128

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.

(ii) 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 $99,266 and $71,917 for the years ended December 31, 2016 and 2015, respectively. Payments were made to the Bureau of Labor Insurance.

(p) Income tax
(i) The income tax expense for the years ended December 31, 2016 and 2015, was as follows:

Current income tax expense Deferred income tax expense (benefit) Income tax expense	2016 $ 104,392 1,036	2015 91,540 1,817 93,357
	$ 105,428

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Notes to Consolidated Financial Statements

The reconciliation of income tax expense and profit before tax for the years ended December 31, 2016 and 2015 were as follows:

2016 Profit before income tax $ 226,604 Income tax on pre-tax financial income calculated at the Company’s income tax rate 38,523 Effect of foreign jurisdiction tax rate differences 17,184 Changes in unrecognized temporary differences 31,924 Others 17,797 $ 105,428	2016 $ 226,604	2015 397,257
		67,534 22,116 1,737 1,970
	$ 105,428	93,357

(ii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets and liabilities

As of December 31, 2016 and 2015, 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. The related amounts were as follows:

Unrecognized deferred tax assets

Aggregate temporary differences associated with investments in subsidiaries Tax losses Unrecognized deferred liabilities The tax losses are tax credits from the Company. Unrecognized deferred tax liabilities	December 31, 2016	December 31, 2015 696 8,130
	$ 1,966 40,054 $ 42,020
		8,826

Unrecognized deferred tax liabilities
Aggregate temporary differences associated with investments in subsidiaries	December 31, 2016	December 31, 2015 214,087
	$ 240,112

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2016 and 2015 were as follows:

Defined benefit plans	Accrued expense	Others	Total 40,191 1,817
$ 6,859 56	29,244 1,800	4,088 (39)
$ 6,915	31,044	4,049	42,008
$ 6,915 -	31,044 399	4,049 637	42,008 1,036
$ 6,915	31,443	4,686	43,044

3) Examination and approval

The Company’s income tax returns through 2014 have been examined and approved by the Tax Authority.

4) 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		December 31, 2016 $ 140,264	December 31, 2016 $ 140,264	December 31, 2015 272,167 79 2015(actual)
		$ 1,336
		2016(estimated) 0.950%
				8.490 %

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.

(q) Share capital and other equity

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

As of December 31, 2016 and 2015, the authorized capital of the Company consisted of 1,200,000 thousand shares, of which 80,000 thousand shares were reserved for employee share options, with a par value of $10 (dollars) per share, and the issued capital was 119,526 thousand shares and 116,042 thousand shares, respectively.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

The movements in outstanding shares for the years ended December 31, 2016 and 2015 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	2016	2015
	116,042 - 2,292 784 408 $ 119,526	98,398 10,000 3,629 3,654 361
		116,042

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.

Above Common stock under private placement and the related stock dividends was public on December 8, 2016.

(i) 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	December 31, 2016 $ 564,672 228,566 21,060 5,937 2,912 42,190	December 31, 2015 561,694 218,314 21,060 18,004 2,912 45,230
	$ 865,337	867,214

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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(i) Retained earnings

According to the Company’s articles of incorporation, 10% of annual net earnings (net of income taxes), after deducting accumulated deficits, must be set aside 10% as legal reserve. Unless and until the accumulated legal reserve equals the Company’s total capital, the Company may set aside a special reserve in accordance to Article 41 of the Securities and Exchange Act. After the board of directors considers the Company’s budget for funding needs, financial structures, current period earnings, and steady profit distribution when proposing the distribution of earnings, the proposal should be resolved during the stockholders’ meeting.

1) Legal reserve

In accordance with the Company Act, 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.

2) 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, 2016 and 2015.

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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

3) Earnings distribution

Earnings distribution for 2015 and 2014 was decided via the general meeting of the shareholders held on May 31, 2016 and June 3, 2015, respectively. The relevant dividend distributions to shareholders were as follows:

January 1, 2015 Amount per share (dollars) Total amount $ 1.8 206,341 0.2 22,927 $ 229,268	January 1, 2015 Amount per share (dollars) Total amount $ 1.8 206,341 0.2 22,927 $ 229,268	January 1, 2014 Amount per share (dollars) Total amount 1.456 145,164 0.3639 36,291 181,455	January 1, 2014 Amount per share (dollars) Total amount 1.456 145,164 0.3639 36,291 181,455
		Amount per share (dollars) 1.456 0.3639
	206,341 22,927
$ 229,268			181,455

The total amount of surplus distribution for the prd dousing ear. There is no difference with the resolution of the Board of Directors of the Company, Information can be found at the public information station.

(ii) Treasury stock

The Company has acquired treasury stock and transferred it to its employees as an incentive. For the years ended December 31, 2016 and 2015 the movements of the treasury stock were as below.

Item	January 1,	January 1,	2015	Increase 2,085 51,165 Increase 427 11,624	December 31,
Treasury stock acquired for transfer to employees－shares (in thousands) Treasury stock acquired for transfer to employees－amount Item	$ January 1,	$	427		December 31,
			10,636
			2015
Treasury stock acquired for transfer to employees－shares (in thousands) Treasury stock acquired for transfer to employees－amount		$	1,089
			21,233	11,624

As of December 31, 2016 and 2015, a total of 2,512 and 427 thousand shares, respectively, were not yet cancelled.

For the years ended December 31, 2016, 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, 2016, 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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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(r) Share-based payment

Information on share-based payment transactions as of December 31, 2016, was as follows:

Option grant date Options grant units Contract period Grant recipients Vesting conditions	Employee stock options
	2012/7/11 2,000 Five years Employees of the Company and its subsidiaries Provide service for the next five years

(i) 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	2013 Employee stock options 4.50 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.

(ii) Information on share-based payment plan

As of December 31, 2016 and 2015, outstanding units were 27 and 475, respectively.

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

For the years ended December 31, 2016, there were 408 units exercised at 12.8 (dollars).

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Employee expense and liabilities

The Group’s expenses for share-based payment for the years ended December 31, 2016 and 2015 were $(288) and $802, respectively.

(iv) Issuance of new shares

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

(s) Earnings per share (EPS)
(i) Basic earnings per share

The basic earnings per share for the years ended December 31, 2016 and 2015, were calculated on the basis of profit attributable to common shareholders and the weighted-average number of outstanding common shares. Calculations were as follows:

1) Profit attributable to common shareholders

Profit attributable to common shareholders	2016	2015 Continuing operations 293,820
	Continuing operations
	$ 130,487

2) Weighted-average number of outstanding common 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	shares 2016	2015 98,398 (542) 3,629 4,247 109 2,821
	$ 116,042 (1,391) 2,292 - 68 173
	$ 117,184	108,662 110,955

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(i) Diluted earnings per share

The diluted earnings per share for the years ended December 31, 2016 and 2015 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:

1) 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 Weighted-average number of outstanding common 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	2016 Continuing operations $ 130,487 8,416 150 $ 139,053	2015 Continuing operations 293,820 6,286 (29) 300,077 2015 108,662 15,679 78 350
	shares (diluted) 2016
	$ 117,184 16,191 42 221 $ 133,638
		124,769 127,062

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

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.

(t) Employees and directors, supervisors reward

Pursuant to the Company’s articles of incorporation, 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

The Company accrued and recognized the employee compensation amounting to $692 and $1,522 for the year 2016 and 2015, respectively. And the directors’ and supervisors’ compensation is accrued and recognized amounting to $4,151 and $7,879 for the year 2016 and 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. 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 next year.

(u) Revenue

The Group’s net revenue for the years ended December 31, 2016 and 2015 were as follows:

Sea forwarding Air forwarding Logistics and others	2016 $ 5,573,415 2,524,980 1,645,718	2015 5,932,345 2,538,009 1,266,558 9,736,912
	$ 9,744,113

(v) Other income

The Group’s other income for the years ended December 31, 2016 and 2015, was as follows:

Interest income Dividend income Other	2016 $ 4,729 3,978 747	2015 5,139 2,780 12,473
	$ 9,454	20,392

(w) Other gains and losses

The Group’s other gains and losses for the years ended December 31, 2016 and 2015, was as follows:

follows:
Foreign exchange gains (losses) Gains on valuation of fair value of financial assets and liabilities through profit or loss Gain on disposal of property, plant and equipment Gain on disposal of available-for-sale financial assets Gain on disposal of fair value financial assets through profit or loss Gain on bargain purchase Loss of goodwill impairment Other	2016 $ 48,555 (129) 17,960 16,283 - - (36,092) 3,733	2015 47,281 65 7,518 22,525 (684) 260 - (2,884)
	$ 50,310	74,081

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Notes to Consolidated Financial Statements

(x) Financial costs

The Group’s financial costs for the years ended December 31, 2016 and 2015, was as follows:

Interest expense Bank borrowings Amortization of the convertible bonds discount Amortization of other financialliabilities	2016 $ 5,411 8,416 12,297	2015 3,468 6,286 -
	$ 26,124	9,754

(y) Financial instruments

(i) Credit risk

1) Exposure to credit risk

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

2) 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, 2016 and 2015, there was no significant concentration of credit risk from the sales of the Group.

(ii) Liquidity risk

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

December 31, 2016 Non-derivative financial liabilities Bank borrowings Convertible bond payable Trade and other payable Investment payable (other current and non－current liabilities)	Carrying amount	Contractual cash flow Within 6 months 6~12 months	1~2years	2~5years	Over 5 years
	$ 567,000 385,231 1,210,020 83,391	(567,000) (567,000) - 406,000 106,500 - (1,210,020) (1,210,020) - (91,391) (43,868) - (1,462,411) (1,714,388) -	- 299,500 - (47,523)	- - - - -	- - - - -
	$ 2,245,642		251,977

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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)	Carrying amount	Contractual cash flow Within 6 months 6~12 months	1~2years	2~5years	Over 5 years
	$ 117,141 393,988 1,166,669 20,000 253,814	(117,351) (116,891) (460) (411,500) - - (1,166,669) (1,166,669) - (20,000) (20,000) - (273,732) (174,377) - (1,989,252) (1,477,937) (460)	- (111,500) - - (47,691)	- (300,000) - - (51,664)	- - - - - -
	$ 1,951,612		(159,191)	(351,664)

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

(iii) Currency risk
1) Exposure to foreign currency risk

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

Unit: thousand

December 31, 2016	December 31, 2016	December 31, 2015	December 31, 2015	Exchangerate
Foreign currency	Exchangerate	TWD	Foreign currency
$ 44,603 6,586 7,302 77,359 21,004,115 15,383 2,087 10,476 127,101	32.27 4.1611 4.6519 1 0.00243 32.27 4.1611 4.6519 1	1,439,323 27,404 33,969 77,359 51,040 496,419 8,686 48,736 127,101	47,014 40,223 6,325 194,009 21,773,424 10,840 2,658 74,185 120,715	32.84 4.2370 5.0573 1 0.00222 32.8400 4.2370 5.0573 1

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

2) 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, 2016 and 2015 would have decreased the net income before tax by $8,971 and $9,306, 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, 2016 and 2015, the Group’s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $48,555 and $47,281, respectively.

(iv) 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 $5,670 and $1,371 for the years ended December 31, 2016 and 2015, respectively, assuming all other variable factors had remained constant. This is mainly due to the Group’s variable-rate borrowing.

(v) Fair value of financial instruments
1) Fair value hierarchy
- a) 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.

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Notes to Consolidated Financial Statements

	December 31, 2016	December 31, 2016	December 31, 2016
Book value $ 7,107		Fair	value	Total 7,107 7,107 29,432 29,432 - - - - - 2 - 385,231 - - 83,391 468,622 505,163
	Level 1 7,107	Level 2	Level 3
		-	-
7,107	7,107	-	-
$ 29,432	29,432	-	-
29,432	29,432	-	-
$ 1,448,581 1,661,928 241,374	- - -	- - -	- - -
3,351,883	-	-	-
$ 140,462	-	-	-
$ 2 567,000 $ 385,231 852,021 357,999 110,823	- - - - - - -	2 - 385,231 - - - 385,231	- - - - - 83,391

2,273,074			83,391
$ 5,661,498	36,539	385,233	83,391
	December 31, 2015
Book value $ 7,086 148 7,234		Fair	value	Total 7,086 148 7,234 25,326 - 25,326
	Level 1 7,086 - 7,086	Level 2	Level 3
			- - -

$ 25,326	25,326	-	-
38,800	-	-	-
64,126	25,326	-	-

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Notes to Consolidated Financial Statements

	December 31, 2015	December 31, 2015	December 31, 2015
Book value $ 1,667,479 1,503,605 133,965		Fair	value	Total - - - - - - - 393,988 - - - - 393,988 426,548
	Level 1	Level 2 - - -	Level 3
	- - -		- - -
3,305,049	-	-	-
$ 132,910	-	-	-
$ 116,000 20,000 $ 393,988	- - -	- - 393,988	- - -
1,141 716,494 450,175 253,814	- - - - -	- - - - 393,988	- - - - -
1,951,612
$ 5,328,021	32,412	394,136	-

b) Valuation techniques and assumptions used in fair value determination

Non-derivative financial instruments

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

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

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments. The discounted cash flow method, or other valuation technique including a model using observable market data at the consolidated balance sheet date.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Derivative financial instruments

Measurements of fair value of derivative financial instruments is based on the valuation techniques generally accepted by market participants such as the discounted cash flow or option pricing models. Fair value of forward currency is usually determined by the forward currency exchange rate.

There were no transfers of financial assets from each level for the years ended December 31, 2016 and 2015.

(z) Financial risk management
(i) 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.

(ii) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(iii) 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.

1) 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.

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.

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.

2) 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.

3) Guarantees

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

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

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

4) 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.

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, 2016, was $1,105,275.

5) 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).

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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 Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates.

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.

(aa) 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.

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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	December 31, 2016 $ 2,427,951 1,448,581	December 31, 2016 $ 2,427,951 1,448,581	December 31, 2015 2,122,614 1,667,479 455,135 2,636,045 - 2,636,045 17.27%
	$ 979,370
	$ 2,385,494 - $ 2,385,494
	41.05%

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.

(ab) Investing and financing activities without cash flows

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

(7) Related-party transactions:

(a) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Company.

(b) Transactions with key management personnel

(i) Guarantees

As of December 31, 2016 and 2015, certain directors had provided bank loan facility guarantees for the Group.

(ii) Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits Share-based payments	2016 $ 47,531 14,334 177 $ 62,042	2015 65,203 3,918 368
		69,489

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(c) Other related-party transactions
(i) Revenue

Revenue
Associates	Revenue 2016 2015 $ 17,831 51,304	Accounts receivable December 31, 2016 December 31, 2015 511 1,421
	2016 $ 17,831	December 31, 2016 511

Trading terms of the above transactions require payments within 30 to 60 days or depending on the funding needs.

(ii) Cost of revenue

Associates	Cost of revenue 2016 2015 $ 13,694 14,458	Accounts payable December 31, 2016 December 31, 2015 1,173 170
	2016 $ 13,694	December 31, 2016 1,173

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:

ledged assets:
Pledged assets	Object	December 31, 2016 $ 178,600 24,259 140,462 17,805	December 31, 2015 180,690 16,612 132,910 31,167
Property, plant, and equipment Other financial assets－current Refundable deposits Other financial assets－non-current Property, plant, and equipment	Short-term/long-term credit facility and bank guarantees Forward exchange guarantees/credit facility/logistics-related guarantees Logistics-related guarantees Logistics-related guarantees Short-term/long-term credit facility
		$ 361,126	361,379

(9) Commitments and contingencies:

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

(In thousands)

HKD TWD	December 31, 2016 $ 2,900 37,250	December 31, 2015 1,500 34,750

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T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(b) 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.
(c) Promissory notes issued to the bank as collateral for short-term bank borrowings, logistics business, etc., were as follows.

Promissory notes	December 31, 2016 $ 116,560	December 31, 2015 292,810

(d) The Group received the notification from the court that a shipping line claimed the loss due to the delay of picking up stocks. The shipping line required the Group to compensate its loss amounted to CNY4,027 thousands. As of the reporting date, this case was still in process, so based on the assessment, the Group did not accrue the provision for this case.
(e) The Group received the notification from the court that a client claimed a loss on stock damage to the Group amounted to CNY4,212 thousands. As of the reporting date, this case was still in process, so based on the assessment, the Group did not accrue the provision for this case.
(f) The Group received the notification from the court that software vendor requested the Group to pay a system development service fee, amounted to $7,677 thousand. As of the reporting date,the Group has engaged the lawyer and this case was still in process, based on the assessment, no provision has need accrued.

(10) Losses Due to major Disasters: None.

(11) Subsequent Events: None.

(12) Other:

The personnel cost and depreciation and amortization expenses, categorized by function, were as follows.

	2016	2016	2016	2015	2015	2015
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Personnel cost Salaries Labor and health insurance Pension Others Depreciation expenses Amortization expenses	319,17 2 20,801 15,764 8,780 9,790 -	845,59 3 60,363 81,251 92,521 33,977 20,446	1,164,7 65 81,164 97,015 101,30 1 43,767 20,446	139,27 0 10,603 6,630 2,549 13,651 -	774,51 6 53,456 67,642 58,414 22,964 13,129	913,78 6 64,059 74,272 60,963 36,615 13,129

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(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
0 0 0 4	The Company The Company The Company T.H.I. Group (Shanghai) Ltd.	T.H.I. Group Singapore Pte. Ltd. Taiwan Express Logistic Co., Ltd. PT Dexte Eurekatama EXe Logistics Co., Ltd.	Other receivables- r elated patties Other receivables- r elated patties r Other receivables- r elated patties r Other receivables	Yes Yes Yes Yes	9,471 300,000 65,220 32,563	4,841 270,000 64,540 32,563	4,841 200,000 - 12,864	Quarterly changes in interest rates Monthly changes in interest rates 5% 5.05%	2 2 2 2	- - - -	Trading turnover Trading turnover Trading turnover Trading turnover	- - - -		- - - -	451,840 451,840 451,840 177,777	903,680 903,680 903,680 355,554

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.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during theperiod	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationshi p with the Company
0 0 0 0 1	The Company The Company The Company The Company Shanghai Yaohwa International Forwarder Co.,Ltd.	Shanghai Yaohwa Internation al Forwarder Co., Ltd. T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) Exer Logistics Co., Ltd T Cube Global Logistics Co., Ltd. T.H.I. Group (Shanghai) Ltd.	3 3 3 3 3	451,840 451,840 451,840 451,840 10,965	61,121 47,922 43,193 28,795 3,565	27,911 46,519 41,867 27,911 3,256	9,304 - 19,073 17,753 514	- - - - -	1.23% 2.06% 1.85% 1.23% 2.97%	903,680 903,680 903,680 903,680 43,860	Y Y Y Y N	N N N N N	Y Y Y Y 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:

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(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.
(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.
(iii) Securities held as of December 31, 2016 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Endingbalance	Endingbalance	Endingbalance	Endingbalance	Highest Percentage of ownership (%)	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company The Company The Company The Company Taiwan Express Logistic Co., Ltd.	Fund Yuanta Wan Tai Fund Stock Soonest Express Co., Ltd. Stock Chailease Holding Company Limited. Stock Globe Union Industrial 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 Available-for-sale financial assets－ current Financial assets measured at cost－ non-current	473,454 282,000 250,000 101,000 3,880,000	7,107 14,015 13,775 1,642 38,800	- % 1.05% 0.02% 0.03% 12.90%	7,107 14,015 13,775 1,642 -	- 397,000 250,000 101,000 -	(note 1)

Note 1: due to lack of market information, will not include in this report

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock: None.

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(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Overdue	Overdue
					Amount	Action taken
T.H.I. Group (Shanghai) Ltd. T.H.I. Logistics Co. Ltd. T.H.I. Group Ltd. (B.V.I.)	T.H.I. Group Limited (in HK) T.H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (in HK)	Parent company Associates Associates	Other receivables 312,932 Other receivables 124,694 Other receivables 138,615	- - -	- - -		- - -	- - -

Note 1: The amount is to be collected on March 7, 2016.

(ix) Trading in derivative instruments:Please refer to notes 6(b)&(j).

(i) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

No.	Name of company	Name of counter-party	Nature of relationship	Intercompanytransactions	Intercompanytransactions	Intercompanytransactions	Intercompanytransactions	Intercompanytransactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
1 2 3	T.H.I. Group (Shanghai) Ltd. T.H.I. Logistics Co. Ltd. T.H.I. Group Ltd (in BVI)	T.H.I. Group Limited (in HK) T.H.I. Group Ltd (in BVI) T.H.I. Group Ltd (in HK)	3 3 3	Other receivable Other receivable Other receivable	312,932 124,694 138,615	" " "	3.21% 1.28% 1.42%

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:

1. The Parent company to its subsidiaries.

2. Subsidiaries to the Parent company.

3. Subsidiaries to subsidiaries.

Note 3: This chart will disclose sales, accounts and notes receivable, other receivables, purchases, accounts and notes payable, and other payables.

Note 4: The above transactions have been reversed in this financial report.

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2016 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Shares (thousands)	Balance as of December 31,2016	Balance as of December 31,2016	Balance as of December 31,2016	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31,2016	December 31,2015		Highest percentage of ownership	Carrying value	Percentage of ownership
The Company The Company The Company The Company The Company The Company The Company The Company	T.H.I. Group Ltd.(in B.V.I) Greatline International 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.	British Virgin Islands British Virgin Islands Vietnam Thailand Japan Taiwan Taiwan Cambodia	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	35,000 (1,000USD) 134,428 (4,050USD) 4,862 (159USD) 2,372 (72USD) 10,365 (31,130JPY) 704,200 130,000 4,462 (150USD)	35,000 (1,000USD) 134,428 (4,050USD) 4,862 (159USD) 2,372 (72USD) 10,365 (31,130JPY) 704,200 130,000 4,462 (150USD)	1,000,000 4,050,000 - - 3,060 35,958,400 13,000,000 -	100.00% 100.00% 51.00% 49.00% 51.00% 100.00% 100.00% 100.00%	76,568 1,366,813 33,220 12,076 12,048 708,657 134,407 8,778	100.00% 100.00% 51.00% 49.00% 51.00% 100.00% 100.00% 100.00%	4,962 115,203 5,238 4,732 2,372 (1,322) 30,540 911	4,962 115,203 2,671 2,319 1,210 (7,322) 30,540 911	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries

194

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==> picture [580 x 385] intentionally omitted <==

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

Original investment amount Balance as of December 31, 2016
Main Highest Net income Share of
Name of investor Name of investee Location businesses and Shares percentage of Carrying Percentage (losses) profits/losses of
products December 31, 2016 December 31, 2015 (thousands) ownership value of ownership of investee investee Note
The Company PT. Dexter Indonesia Air & sea freight 47,381 47,381 12,000 30.00% 51,040 30.00% 11,173 227 Investment
Eurekatama forwarding (1,598USD) (1,598USD) under equity
method
The Company T.H.I. Group Singapore Air & sea freight 7,629 7,629 320,000 80.00% 1,174 80.00% (3,801) (3,040) Subsidiaries
Singapore Pte. forwarding (320USD) (320USD)
Ltd. (Singapore)
The Company LOGI Korea Air & sea freight 9,666 9,666 16,285 30.00% 6,810 30.00% (5,946) (1,784) Investment
International forwarding (300USD) (300USD) under equity
Co., Ltd. method
The Company Fresh Beauty Samoa Offshore holding 282,775 282,775 60 60.00% 305,374 60.00% 51,975 28,878 Subsidiaries
Enterprises Ltd. company (55,579CNY) (55,579CNY)
(Fresh Beauty)
The Company T.H.I. Logistics Malaysia Air & sea freight 10,381 0 180,000 90.00% 6,521 90.00% (2,939) (2,645) Subsidiaries
(Malaysia) SDN. forwarding (315USD)
BHD.
GREATLINE T.H.I. Group Hong Kong Air & sea freight 139,948 139,948 12,480,000 100.00% 1,365,000 100.00% 119,179 119,179 Subsidiaries
INTERNATION Limited (HK) forwarding (4,134USD) (4,134USD)
AL LIMITED (T.H.I. HK)
Fresh Beauty Eastern Union Hong Kong Offshore holding 57,411 57,411 - 100.00% 113,296 100.00% 51,975 51,975 Subsidiaries
Enterprises Ltd. Holdings company (1,751USD) (1,751USD)
Limited (Eastern
Union)
TEC Taiwan Express Hong Kong Freight forwarding, 266,807 266,807 - 100.00% 343,240 100.00% (10,996) (10,996) Subsidiaries
(HK) Co., Ltd. customs clearance, (70,550HKD) (70,550HKD)
(TEC HK) and distribution
TEC TEC Logistic Taiwan Freight forwarding, 6,000 6,000 1,000,000 100.00% - - % - - Subsidiaries
Co., Ltd. customs clearance,
and delivery
services
TEC Orient Air Taiwan Freight forwarding, 600 600 6,000 30.00% 2,904 30.00% 4,520 1,356 Investment
General Sales customs clearance, under equity
Agent Co., Ltd. and delivery method
services
TEC Hiview Logistics Taiwan Freight forwarding, 76,590 76,590 5,000,000 97.51% 84,848 97.51% 4,544 4,431 Subsidiaries
Co., Ltd. customs clearance,
and distribution
TEC Taiwan Express United States Freight forwarding, 31,629 31,629 100,000 100.00% 36,314 100.00% (3,411) (3,411) Subsidiaries
(USA), Inc. customs clearance, (1,000USD) (1,000USD)
and distribution
TEC TEC United States Freight forwarding, 8,549 8,549 200 100.00% 14,009 100.00% (1,068) (1,068) Subsidiaries
LOGISTICS customs clearance, (290USD) (290USD)
(USA), INC. and distribution
TEC HK Wai Hung Cargo Hong Kong Warehousing and 16,299 16,299 - 100.00% 6,695 100.00% (6,382) (9,033) Subsidiaries
Transport Co., distribution (4,238HKD) (4,238HKD)
Ltd.
----- End of picture text -----

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January1,2015	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31,2016	Net income (losses) of the investee	Percentage of ownership	Highest Percentage of ownership	Book value	Investment income (losses)	Accumulated remittance of earnings in currentperiod
					Outflow	Inflow
Shanghai Yaohwa International Forwarder Co., Ltd. T.H.I. Group (Shanghai) Ltd. T-Cube Global Logistics Co., Ltd. EXer Logistics Co., Ltd. TEC Logistics (Shenzhen) Co., Ltd.	Air & sea freight forwarding and customs clearance Air & sea freight forwarding and customs clearance Warehousing and company Express logistics company Freight forwarding, customs clearance, and distribution	55,031 (1,700USD) 92,883 (3,060USD) 54,610 (1,100USD) 23,335 (4,709CNY) 183,901 (48,550HKD)	(1) (1) (1) (6) (7)	55,031 (1,700USD) 84,861 (3,060USD) 28,961 (932USD) - 183,901 (48,550HKD)	- - 175,427 (5,253USD) - -	- - - - -	55,031 (1,700USD) 84,861 (3,060USD) 204,388 (6,185USD) - 183,901 (48,550HKD)	19,179 33,957 51,723 (110,010) 10,150	100.00% 100.00% 60.00% 73.87% 100.00%	100% 100% 60% 73.87% 100%	19,179 33,957 51,723 (115,226) 10,150	109,897 918,566 111,690 85,795 158,468	- - - - -

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

Notes to Consolidated Financial Statements

(ii) Limitation on investment in Mainland China:

itation on investment in Mainland China:
Accumulated Investment in Mainland China as of December 31,2016	Investment Amounts Authorized by Investment Commission,MOEA	Upper Limit on Investment
350,810 ( 10,685USD thousand)	473,078 ( 14,660USD thousand)	1,355,519

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 1:32.27.

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 (HKD48,550 thousand).

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

(14) Segment information:

(a) General information

The Group’s reportable operating segments are the sea export and air export segments.

(b) Information on reportable segments’ income or loss, assets, liabilities, and measurement base and 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:

	2016		Total
Sea export $ 5,589,842 1,119,072 (note 1)	Airexport 2,524,980 395,451 (note 1) 2015	Others 1,645,718 278,393 (note 1)
			9,744,113 1,794,218 (note 1) Total
Sea export $ 5,940,224 997,807 (note 1)	Airexport 2,538,009 355,908 (note 1)	Others 1,266,558 522,794 (note 1)
			9,736,912 1,877,272 (note 1)

Note 1: Segment assets are not reviewed by the Group’s chief operating decision makers, and thus, they are disclosed as zero.

196

Please refer to note 13(2).

(d) 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.

Non-current assets:

Taiwan China and Hong Kong Others	2016 $ 688,150 281,700 2,949	2015 783,694 271,043 2,903
	$ 972,799	1,057,640

(e) Major customers

The Group has no single customer that exceeds 10% of its sales.

197

Independent Auditors’ Audit Report

The Board of Directors T3EX Global Holdings Corp.

Opinion

We have audited the parent-company-only financial statements of T3EX Global Holdings Corp.(“the Company”), which comprise the balance sheets as of December 31, 2016 and 2015, the statement of comprehensive income, changes in equity and statement of cash flows for the years ended December 31, 2016 and 2015, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2016 and 2015, and its financial performance and its cash flows for the years ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the 31 December 2016. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide an opinion on these matters, separately.

1. Revenue recognition

Please refer to Note 4(m) "Revenue recognition" of financial statement and Note 6(v) "Revenue" for the details of operating revenue of financial statements.

How the matter was addressed in our audit:

T3EX Global Holdings Corp. is an industrial holding company. Its main operating revenue is from the share of profit or associates under equity method and the services revenue from subsidiaries by providing management services. We expect that its revenue recognition is the matter of the users of the financial statements. Consequently, this is one of the key assessment areas our audit focus on parent-company-only financial statement of T3EX Global Holding Corp.

198

Our audit procedures included:

Understanding the internal control on revenue recognition applied by the management; assessing whether its revenue recognition had been carried out in accordance with the established accounting policy; checking whether T3EX Global Holdings Corp. had calculated and recognized the share of profits and losses of its subsidiaries and associates by using the equity method; comparing the differences between the investment cost and the net equity of its subsidiaries and associates, to ensure that they had been properly handled. Issuing confirmation letter to T3EX Global Holdings Corp.’s subsidiary company to inquire the amount of the management services fee.

2. Equity method investee’s impairment assessment

Please refer to Note 4(j) and (k) "Equity method investees impairment" for accounting policies, Note 5 "assumptions on the accounting estimates and assumptions of the impairment of Equity method investees" and Note 6 (i) for the details of Equity method investees in the financial statements.

How the matter was addressed in our audit:

The goodwill and other intangible assets arising from acquisition transactions booked as the investment under the equity method of parent-company-only financial statements. The accounting policy applying to the goodwill and other intangible assets arising from acquisition transactions is with the uncertainty estimation. Consequently, this is one of the key assessment areas our audit focus on parent-company-only financial statements of T3EX Global Holding Corp.

Our audit procedures included:

Understanding the internal control on the impairment assessment of the goodwill and other intangible assets; selecting significant goodwill and other intangible assets and obtaining impairment assessment reports issued by the external experts engaged by the management; assessing model, parameters and assumptions applying to the financial information forecast; and evaluating whether the assessment for goodwill and other intangible assets was based on the accounting policies.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

199

Auditor’s Responsibilities for the Audit of the Parent-company-only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent-company-only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Assess for purpose of identifying the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Evaluated for purposes of determining the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we determine that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent-company-only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on this parent-company-only financial statements. We are responsible for the direction, supervision and performance of the audit.

200

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Pei-Chi Chen and Heng-Shen Lin.

KPMG

Taipei, Taiwan (Republic of China) March 20, 2017

201

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

`T3EX GLOBAL HOLDINGS CORP.`

`Balance Sheets`

`December 31, 2016 and 2015`

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2016 Amount % $ 32,410 1 7,107 - 29,432 1 46,520 1 204,855 7 54,945 2	December 31, 2016	December 31, 2016	December 31, 2016
	Amount	%	Amount
375,269 12
- - 2,723,486 81 192,995 6 8,151 - 6,549 - 2,176 - 47,524 1
	743,136 21 306,249 9
	2 - - - 290,691 8 393,988 12 22,287 1 24,740 1 40,835 1 79,620 2
	353,815 10 498,348 15
2,980,881 88	1,096,951 31 804,597 24
	1,195,264 36 1,160,421 35 865,337 27 867,214 26 285,955 9 390,641 12 (25,556) (1) 98,778 3 (61,801) (2) (10,636) -
	2,259,199 69 2,506,418 76
$ 3,356,150 100	$ 3,356,150 100 3,311,015 100

202

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

`T3EX GLOBAL HOLDINGS CORP.`

`Statements of Comprehensive Income`

`For the years ended December 31, 2016 and 2015`

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

2016	2016	% 100 39	2015	2015
Amount $ 230,812 90,198			Amount 415,213 122,247
$
	140,614	61		292,966
	140,614	61		292,966
	6,530 11,244 (24,870)	3 5 (11)		5,520 4,295 (7,913)
	133,518 3,031	58 1		294,868 1,048
	130,487	57		293,820
	1,349 (7,254)	1 (3)		1,522 (7,827)
	(5,905)	(2)		(6,305)
	(117,912) (2,107) (4,315) -	(51) (1) (2) -		(3,214) (2,470) (10,950) -
	(124,334)	(54) (56)		(16,634)
	(130,239)			(22,939)
$	248	1		270,881
$	1.11			2.65
$	1.04			2.36

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.

203

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

`T3EX GLOBAL HOLDINGS CORP.`

`Statements of Changes in Equity`

`For the years ended December 31, 2016 and 2015`

(Expressed in Thousands of New Taiwan Dollars)

Share capital	Capitalsurplus		Retained	earnings		Total other equityinterest	Total other equityinterest		Treasury shares	Totalequity
Ordinary shares		Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on available-for-sale financialassets	Total other equityinterest
$ 983,981	629,395	91,506	7,116	185,959	284,581	91,535		115,412	(21,233)	1,992,136
							23,877
- -	- -	- -	- -	293,820 (6,305)	293,820 (6,305)	- (3,214)	- (13,420)	- (16,634)	- -	293,820 (22,939)
-	-	-	-	287,515	287,515	(3,214)	(13,420)	(16,634)	-	270,881
- - 36,291 - 100,000 36,544 - - 3,605 -	- - - 5,503 149,000 51,996 14,682 - 1,553 15,085	19,852 - - - - - - - - -	- - - - - - - - - -	(19,852) (145,164) (36,291) - - - - - - -	- (145,164) (36,291) - - - - - - -	- - - - - - - - - -	- - - - - - - - - -	- - - - - - - - - -	- - - - - - - (11,624) - 22,221	- (145,164) - 5,503 249,000 88,540 14,682 (11,624) 5,158 37,306
1,160,421 - -	867,214 - -	111,358 - -	7,116 - -	272,167 130,487 (5,905)	390,641 130,487 (5,905)	88,321 - (117,912)	10,457 - (6,422)	98,778 - (124,334)	(10,636) - -	2,506,418 130,487 (130,239)
-	-	-	-	124,582	124,582	(117,912)	(6,422)	(124,334)	-	248
- - 22,927 - 7,836 - - 4,080	- - - (288) 9,337 - (12,068) 1,142	27,217 - - - - - - -	- - - - - - - -	(27,217) (206,341) (22,927) - - - - -	- (206,341) (22,927) - - - - -	- - - - - - - -	- - - - - - - -	- - - - - - - -	- - - - - (51,165) - -	- (206,341) - (288) 17,173 (51,165) (12,068) 5,222
$ 1,195,264	865,337	138,575	7,116	140,264	285,955	(29,591)	4,035	(25,556)	(61,801)	2,259,199

’ Note 1：2016 directors emoluments of $4,151 and employee bonus of $692 have been deducted from comprehensive income statement 。 ’ Note 2：2015 directors emoluments of $7,879 and employee bonus of $1,522 have been deducted from comprehensive income statement 。

204

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

`T3EX GLOBAL HOLDINGS CORP.`

`Statements of Cash Flows`

`For the years ended December 31, 2016 and 2015` (Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Share-based payments Share of loss (profit) of subsidiaries,associates and joint ventures accounted for using equity method Loss (gain) on disposal of investments Loss (gain) on disposal of investments accounted for using equity method Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease in financial assets held for trading Decrease in accounts receivable due from related parties Increase in other current assets Total changes in operating assets Changes in operating liabilities: Decrease in notes payable Decrease in construction contracts receivable Increase (decrease) in other payable Decrease in provisions Decrease in other current liabilities Decrease in net defined benefit liability Total changes in operating liabilities Net changes in operating assets and liabilities Net adjustments Cash inflow (outflow) generated from operations Interest received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Acquisition of intangible assets Increase in other receivables-related parties Net cash receipts from acquisitions of subsidiaries and other business units Increase in other current and non-current assets Decrease in account payable to investment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase (decrease) in short-term loans Proceeds from issuing bonds Decrease in other non-current liabilities Cash dividends paid Exercise of employee share options Payments to acquire treasury shares Treasury shares sold to employees Issuance of common stock for cash Net cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2016	2015
	$ 133,518 6,120 4,049 129 24,870 (2,682) 17 (172,130) (11,568) - (151,195)	294,868 5,494 3,590 (65) 7,913 (1,913) 19,278 (352,325) (5,713) 1,988
		(321,753)
	296 2,910 68	1,560 (5,487) 155
	3,274	(3,772)
	(78) - (6,545) (917) - (1,104)	(2,041) (23,073) 2,480 - (79) (1,026)
	(8,644)	(23,739)
	(5,370)	(27,511)
	(156,565)	(349,264)
	(23,047) 2,682 (4,157) (1,462)	(54,396) 1,913 (1,628) (1,642)
	(25,984)	(55,753)
	(90,533) 85,141 (10,381) (361) (972) (109,929) 100,984 (91,391) (175,427)	- 12,217 (12,582) (5,294) (8,258) (84,925) 37,171 - - (61,671)
	(292,869)
	480,000 - (7,336) (206,341) 5,222 (51,165) - - 220,380	(190,000) 296,000 - (145,164) 5,158 (11,624) 22,784 249,000
		226,154
	(98,473) 130,883	108,730 22,153
	$ 32,410	130,883

205

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

Notes to the Financial Statements

For the years ended December 31, 2016 and 2015

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

(1) Company 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.

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.

In October 2012, the Company was renamed as T3EX GLOBAL HOLDINGS CORP. In order to highlight the Company’s investment in focusing on the logistics industry, renamed its subsidiary, Taiwan Hua International Express Co., Ltd., to T.H.I. Logistics. Co., Ltd.

The Company’s shares was listed at TWSE since December 22, 2016.

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

The parent-company only financial statements were authorized for issue by the board of directors on March 20, 2017.

(3) New standards, amendments and interpretations adopted:

(a) Impact of the International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission, R.O.C. ("FSC") but not yet in effect.

New, Revised or Amended Standards and Interpretations	Effective date per IASB
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 Accounts” Amendment to IAS 1 “Disclosure Initiative”	January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016

206

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

New, Revised or Amended Standards and Interpretations

Effective date per
IASB

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

Except for the following items, the Company believes that the adoption of the above IFRSs would not have a significant impact on the parent-company only financial statements:

(i) IFRIC 21 "Levies"

Based on the aforementioned Interpretation, the Company considers that the timing to recognize certain liabilities might be changed, but needs further analysis to evaluate the impact.

(ii) Amendments to IAS 36 "Recoverable Amount Disclosures for Non Financial Assets"

1) The level of the fair value hierarchy within which the fair value measurement is categorized; and
2) The valuation technique(s) used for fair value measurements categorized within Levels 2 and 3 of the fair value hierarchy, and the key valuation assumptions made.

207

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

The Company expects the aforementioned amendments will result in a broader disclosure of the recoverable amount for non-financial assets.

(b) Newly released or amended standards and interpretations not yet endorsed by the FSC

The following is a summary of the new standards and amendments issued by the IASB but not yet endorsed by the FSC. The FSC announced that the Company should apply IFRS 9 and IFRS 15 starting January 1, 2018. As of the date the Company’s financial statements were issued, the FSC has yet to announce the effective dates of the other IFRSs.

New, Revised or Amended Standards and Interpretations

Effective date
per IASB

208

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

The Company is still currently determining the potential impact of the standards listed below:

Issuance / Release Dates May 28, 2014 April 12, 2016 November 19, 2013 July 24, 2014	Standards or Interpretations IFRS 15 "Revenue from Contracts with Customers" IFRS 9 "Financial Instruments"	Content of amendment
		IFRS 15 establishes a five-step model for recognizing revenue that applies to all contracts with customers, and will supersede IAS 18 "Revenue," IAS 11 "Construction Contracts," and a number of revenue-related interpretations. Final amendments issued on April 12, 2016, clarify how to (i) identify performance obligations in a contract; (ii) determine whether a company is a principal or an agent; (iii) account for a license for intellectual property (IP); and (iv) apply transition requirements. The standard will replace IAS 39 "Financial Instruments: Recognition and Measurement", and the main amendments are as follows: ‧Classification and measurement: Financial assets are measured at amortized cost, fair value through profit or loss, or fair value through other comprehensive income, based on both the entity's business model for managing the financial assets and the financial assets' contractual cash flow characteristics. Financial liabilities are measured at amortized cost or fair value through profit or loss. Furthermore, there is a requirement that "own credit risk" adjustments be measured at fair value through other comprehensive income. ‧Impairment: The expected credit loss model is used to evaluate impairment.

‧ Hedge accounting: Hedge accounting is more closely aligned with risk management activities, and hedge effectiveness is measured based on the hedge ratio.

209

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

`Issuance /` `Release Dates` January 13, 2016	`Standards or` `Interpretations` IFRS 16 "Leases"	`Content of amendment`
		The new standard of accounting for lease is amended as follows:

‧For a contract that is, or contains, a lease, the lessee shall recognize a right-of-use asset and a lease liability in the balance sheet. In the statement of profit or loss and other comprehensive income, a lessee shall present interest expense on the lease liability separately from the depreciation charge for the right-of use asset during the lease term.
‧A lessor classifies a lease as either a finance lease or an operating lease, and therefore, the accounting remains similar to IAS 17.

The Company is evaluating the impact on its financial position and financial performance of the initial adoption of the abovementioned new or amended standards and interpretations. The results thereof will be disclosed when the Company completes its evaluation.

(4) Summary of significant accounting policies:

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

(a) Statement of compliance

These parent-company-only 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.

(b) Basis of preparation
(i) Basis of measurement

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

1) Financial instruments measured at fair value through profit or loss are measured at fair value (including derivative financial instruments);
2) Available-for-sale financial assets are measured at fair value;
3) Net defined benefit liability (asset) is recognized as plan assets, on fair value measurement, less the present value of the defined benefit obligation.

210

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(ii) 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 parent-company-only 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.

(c) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Company 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.

(ii) Foreign operations

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.

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.

211

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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.

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

An asset is classified as current when:

(i) It is expected to be realized as an asset or is intended to be sold or consumed in the entity’s normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) 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:

(i) It is expected to be settled in the entity’s normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) 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.
(e) Cash and cash equivalents

212

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(f) Financial instruments

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

(i) Financial assets

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.

1) 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 Company 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:

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

2) Available-for-sale financial assets

213

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

3) Loans and receivables

4) Impairment of financial assets

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.

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.

214

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

5) Derecoginition of financial assets

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

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 amount of the consideration received or receivable for the part derecognized shall be recognized in profit or loss.

(ii) Financial liabilities and equity instruments
1) 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.

215

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

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.

2) 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) 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;
b) Performance of the financial liabilities is evaluated on a fair value basis;
c) A hybrid instrument contains one or more embedded derivatives.

216

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

3) Other financial liabilities

4) Derecognition of financial liabilities

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.

5) Offsetting of financial assets and liabilities

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.

(iii) Derivative financial instruments

The Company 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.

(g) Investment in associates

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.

The parent-company-only 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.

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.

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T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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.

(h) 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 parent-company-only 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.

(i) Property, plant and equipment
(i) Recognition and measurement

(ii) Subsequent cost

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.

(iii) Depreciation

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T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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:

1)	Building	5~50 years
2)	Office and other equipment	3~5 years

(j) Leased assets
(i) Lessor

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

(ii) Lessee

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

219

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(k) Intangible assets

(i) Other intangible assets

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

(ii) Subsequent expenditure

(i) Amortization

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

－
(l) Impairment non-derivative financial assets

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.

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 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.

220

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

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.

(m) Treasury stock

(n) Revenue

Revenue of the Company 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.

221

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(o) Employee benefits

(i) 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.

(ii) Defined benefit plans

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.

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 Group. 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.

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.

(iii) Short-term employee benefits

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

222

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

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.

(p) Share-based payment

(q) Income tax

(i) 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.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
(iii) 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.

223

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

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

(i) The entity has the legal right to settle tax assets and liabilities on a net basis; and
(ii) The taxing of deferred tax assets and liabilities fulfills one of the scenarios below:
1) Levied by the same taxing authority; or
2) 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.

(r) 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 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.

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.

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.

224

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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.

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).

(s) Earnings per share

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

(t) Operating segments

The Company discloses the operating segment information in its consolidated financial statements. Therefore, it need not be disclosed in its parent-company-only financial statements.

(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.

225

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(6) Significant account disclosures:

(a) Cash and cash equivalents

Cash on hand Demand and checking deposits Time deposits	December 31, 2016 $ 460 847 31,103	December 31, 2015 278 861 129,744
	$ 32,410	130,883

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

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

Financial assets at fair value through profit or loss Financial assets held for trading Total Current Non-current Total Financial liabilities at fair value through profit or loss Non-current	December 31, 2016 $ - 7,107	December 31, 2015 148 7,086
	$ 7,107	7,234
	$ 7,107 -	7,086 148
	$ 7,107	7,234
	$ 2	-
	$ 2	-

Investment in listed securities： Stocks listed on domestic markets	December 31, 2016 $ 29,432	December 31, 2015 14,874

226

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

Equity price at reporting date	2016		2015 other comprehensive income (after-tax) profit (loss) (after-tax) 149 - (149) -	2015
	other comprehensive income(after-tax) $ 294	profit (loss) (after-tax) -		profit (loss) (after-tax) - -
Increase 1% Decrease 1%
	$ (294)	-	(149)

As of December 31, 2016 and 2015, there was no available-for-sale financial asset factored or provided as collateral.

(d) 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	December 31, 2016 46,520 204,855 -	December 31, 2015 49,430 94,926 - 144,356
	$ 251,375

As of December 31, 2016, 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 2016 and 2015.

As of December 31, 2016 and 2015, no receivables were pledged as collateral.

(e) Equity-accounted investees

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

Subsidiary Associates	December 31, 2016 $ 2,665,637 57,849 $ 2,723,486	December 31, 2015 2,726,473 57,341
		2,783,814

227

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(i) Subsidiary

Please refer to the consolidated financial statements for the years ended December 31, 2016 and 2015 .

(ii) Associates

No publicly quoted prices were available for the above associates.

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

The Company’s share of profit of associates in 2016 and 2015 is summarized as follows:

The Company’s share of profit of associates	2016 $ (1,557)	2015 104

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

The equity of the non-significant associates	December 31, 2016 $ 106,267	December 31, 2015 94,334

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.

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

(iii) Guarantees

As of December 31, 2016 and 2015, there was no equity-accounted investment factored or provided as collateral.

(iv) Loss of impairment;

Due to the intense competition in the express market in 2016, the sales volume and unit price did not meet the management's expectation. So the synergy from the acquisition of EXer Logistics Co., Ltd. did not meet the original budget and the value of Goodwill was impacted. T.H.I Group(Shangai) Ltd. recognized the impairment loss of Goodwill amounted to $36,092 thousand based on the valuation report issued by the external expert.

228

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(f) Acquisition of subsidiaries

(i) 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.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 parent-company-only statements of comprehensive income.
1) Consideration

Consideration type was as follows

		Amount
Cash	$	2,916
The fair value of the acquired assets and liabilities at the acquisition date		were as follows:
Cash and cash equivalents	$	18,756
Accounts receivable		16,032
Prepaid expenses		1,172
Other assets		906
Accounts payable		(16,734)
Other liability		(1,051)
Long-term borrowings		(2,069)
Net assets	$	17,012

2) The fair value of the acquired assets and liabilities at the acquisition date were as follows:
(ii) 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, 2016. 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.

229

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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

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

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

December 31, 2016 $ 42,556 40,835	December 31, 2016 $ 42,556 40,835	December 31, 2015 38,727 79,620
$ 83,391		118,347
	$ 51,843 79,370 34,118 38,454 9,157 (37,719) (4,053) (60,930)
	$ 110,240

2) Assets acquired and liabilities assumed at the date of acquisition

230

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

3) Goodwill arising from acquisition

Consideration transferred Add: Non-controlling interest Less: Fair value of identifiable net assets acquired Goodwill	$ 282,775 44,096 (110,240)
	$ 216,631

(g) 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, 2016 and 2015, were as follows:

Land $ 132,594 -	Buildings	Total 233,112 361
$ 132,594	69,299 31,580	233,473
$ 132,594 -	69,299 25,925 - 5,294	227,818 5,294
$ 132,594	69,299 31,219	233,112
$ - -	24,277 10,081 1,063 5,057	34,358 6,120
$ -	25,340 15,138	40,478
$ - -	23,213 5,651 1,064 4,430	28,864 5,494
$ -	24,277 10,081	34,358
$ 132,594	43,959 16,442	192,995
$ 132,594	45,022 21,138	198,754
$ 132,594	46,086 20,274	198,954

A summary of pledged assets as of December 31, 2016 and 2015 is found in note 8.

231

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(h) Intangible assets

The costs, amortization, and impairment loss of the intangible assets of the Company for the years ended December 31, 2016 and 2015, were as follows:

Cost:: Balance on January 1, 2016 Additions Balance on January 1, 2016 Balance on January 1, 2015 Addition through acquisition Balance on January 1, 2015 Amortization and impairment loss: Balance on January 1, 2016 Amortization Effect of movement in exchange rates Balance on January 1, 2016 Balance on January 1, 2015 Amortization Balance on January 1, 2015 Book value: At January 1, 2016 At January 1, 2015 At January 1, 2015	Other Intangible Assets $ 29,837 972
	$ 30,809
	$ 21,579 8,258
	$ 29,837
	$ 18,609 4,049 -
	$ 22,658
	$ 15,019 3,590
	$ 18,609
	$ 8,151
	$ 11,228
	$ 6,560

Amortization of intangible assets of the Company for the years ended December 31, 2016 and 2015, was recognized as operating expenses in the individual profit and loss.

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

December 31, 2016 $ 360,000 120,000	December 31, 2016 $ 360,000 120,000	December 31, 2015 - -
$ 480,000		-
$ 540,000		1,020,000
	1.09%~1.19%	-

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

232

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(j) 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	December 31, 2016 $ 600,000 (8,969) - (205,800)	December 31, 2016 $ 600,000 (8,969) - (205,800)	December 31, 2015 1,100,000 (17,512) (332,600) (355,900)
	385,231 (94,540)		393,988 -
	$ 290,691		393,988
	$ (2) $ 19,681 2016		148 20,597 2015 29 6,286

The terms and conditions of the bonds are as follows:

(i) Coupon rate

Both are zero.

(ii) Issuance period

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

(iii) 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.

233

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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 TWSE 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.

(iv) 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.

(v) Terms of conversion
1) 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.
2) 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, 2016, the conversion prices of the 2nd, and 3rd convertible bonds, $21.3 (dollars), and 26.9 (dollars), respectively.

(k) Employee benefits

(i) 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 The Company employee benefit liabilities as follows: Paid vacation liability-current	December 31, 2016 $ (36,014) 13,727 $ (22,287) December 31, 2016 $ 229	December 31, 2015 (36,864) 12,124 (24,740) December 31, 2015 1,146

234

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

1) 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 $1,613 thousand and $12,114 thousand, 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.

2) 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, 2016 and 2015 were as follows:

At January 1 Service costs and interest Actuarial losses At December 31	2016 $ 36,864 573 (1,423)	2015 37,711 754 (1,601)
	$ 36,014	36,864

3) Movements in the fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2016 and 2015 were as follows:

2016 and 2015 were as follows:
At January 1 Expected return on plan assets Contributions Actuarial losses At December 31	2016 $ 12,124 184 1,493 (74)	2015 10,423 224 1,556 (79)
	$ 13,727	12,124

235

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

4) Expenses recognized in profit or loss

The Company’s pension expenses recognized in profit or loss for the years ended December 31, 2016 and 2015, were as follows:

Net interest on the net defined benefit liabilities	2016 $ 389	2015 530

The above net pension gains and losses are recognized under operating expenses.

5) Recognition of the other-comprehensive gains (losses) remeasurements of defined benefit plans.

The company recognition of the other comprehensive gains (losses) on remeasurements of defined benefit plans for the years ended December 31, 2016 and 2015 were as follow:

Cumulative amount, January 1 Recognized during the year Cumulative amount, December 31	2016 $ (1,522) (1,349)	2015 - (1,522)
	$ (2,871)	(1,522)

6) Actuarial assumptions

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

Discount rate Future salary increasing rate	December 31, 2016 1.125% 3.000%	December 31, 2015
		1.625% 3.500%

The Company expects to make contributions of $1,750 thousand to the defined benefit plans in the next year starting from December 31, 2016. The weighted average period of the defined benefit plans is 12.77 years.

7) 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.

236

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

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

December 31, 2016 Discount rate Future salary increasing rate December 31, 2015 Discount rate Future salary increasing rate	Effects to the defined benefit obligation Increase by 0.00% Decrease by0.00% $ (324) 330 309 (304) (416) 424 398 (392)
	Increase by 0.00% $ (324) 309 (416) 398

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

(ii) 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 $1,733 thousand and $1,998 thousand for the years ended December 31, 2016 and 2015, respectively. Payments were made to the Bureau of Labor Insurance.

(l) Income tax

(i) The income tax expense for the years ended December 31, 2016 and 2015, was as follows:

Current income tax expense Income tax expense	2016 $ 3,031	2015 1,048
	$ 3,031	1,048

237

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

The reconciliation of income tax expense and profit before tax for the years ended December 31, 2016 and 2015 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 Surtax on undistributed earnings Others	2016 $ 133,518	2015 294,868 50,127 (40,950) (15,253) - 7,124 1,048
	22,698 (25,315) (3,753) 1,568 7,833
	$ 3,031

(ii) Deferred tax assets and liabilities
1) Unrecognized deferred tax assets and liabilities

amounts were as follows:
Tax losses Unrecognized deferred tax liabilities Unrecognized deferred tax assets	December 31, 2016 $ 226,841 $ 1,966	December 31, 2015 202,329
		4,388

2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2016 and 2015 were as follows:

Defined benefit plans	Others	Total 6,549
$ 4,094	2,455
$ 4,094	2,455	6,549
$ 4,094 -	2,455 -	6,549 -
$ 4,094	2,455	6,549

238

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

3) Examination and approval

The Company’s income tax returns through 2014 have been examined and approved by the Tax Authority.

4) 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	December 31, 2016 $ 140,264		December 31, 2015 272,167 79 2015(actual) 8.49 %

	$ 1,336
	2016(estimated) 0.95%

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.

(m) Share capital and other equity

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

As of December 31, 2016 and 2015, 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 119,526 thousand shares and 116,042 thousand shares, respectively.

The movements in outstanding shares for the years ended December 31, 2016 and 2015 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	2016	2015 98,398 10,000 3,629 3,654 361
	$ 116,042 - 2,292 784 408
	$ 119,526	116,042

239

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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 thousand. The capital increase was registered on March 30, 2011. The relevant statutory registration procedures have since been completed.

Above Common stock under private placement and the related stock dividends was public on December 8, 2016.

(i) 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	December 31, 2016 $ 564,672 228,567 21,060 5,936 2,912 42,190	December 31, 2015 561,694 218,314 21,060 18,004 2,912 45,230
	$ 865,337	867,214

(i) Retained earnings

240

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

1) Legal reserve

2) Special reserve

241

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

3) Earnings distribution

January 1, 2016	January 1, 2016	January 1, 2016	-1	Total amount 145,164 36,291
Amount per share (dollars) Total amount $ 1.8 206,341 0.2 22,927 $ 229,268		Total amount	Amount per share (dollars) 1.456 0.3639
		206,341 22,927
	$ 229,268			181,455

There is no difference between the total amount of surplus distribution and the resolution of the Board of Directors of the Company, and the relevant information can be inquire from MOPS.

(ii) Treasury stock

The Company has acquired treasury stock and transferred it to its employees as an incentive. For the years ended December 31, 2016 and 2015 the movements of the treasury stock were as below.

Item	January 1,	January 1,	January 1,	2016	Decrease - - Decrease 1,089 22,221	December 31, 2016 2,512 61,801 December 31, 2015 427 10,636	December 31, 2016 2,512 61,801 December 31, 2015 427 10,636
Treasury stock acquired for transfer to employees－shares (in thousands) Treasury stock acquired for transfer to employees－amount Item	427 $ 10,636 January 1, 2015	$		427		December 31,
				10,636			61,801
							2015 427
Treasury stock acquired for transfer to employees－shares (in thousands) Treasury stock acquired for transfer to employees－amount		$	1,089
			21,233		22,221		10,636

As of December 31, 2016 and 2015, a total of 2,512 and 427 thousand shares, respectively, were not yet cancelled.

For the years ended December 31, 2016, the compensation cost arising from employee purchase of treasury stocks amounted to $14,523 thousand, which was recognized as operating expense and capital surplus.

242

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(n) Share-based payment

Information on share-based payment transactions as of December 31, 2016, was as follows:

Option grant date Options grant units Contract period Grant recipients Vesting conditions	Employee stock options
	2012/7/11 2,000 Five years Employees of the Company and its subsidiaries Provide service for the next five years

(i) 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	2013 Employee stock options 4.50 20.50 20.50 25.998% 4.00 0.951%

243

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(ii) Information on share-based payment plan

As of December 31, 2016 and 2015, outstanding units were 27 and 475, respectively.

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

For the years ended December 31, 2016, there were 408 units exercised at $12.8 (dollars).

(iii) Employee expense and liabilities

The Company’s expenses for share-based payment for the years ended December 31, 2016 and 2015 were $17 thousand and $55 thousand, respectively.

The expenses to the subsidiaries of the Company for share-based payment for the years ended December 31, 2016 and 2015 were $(305) thousand and $747 thousand, respectively.

(iv) Issuance of new shares

For the years ended December 31, 2015 the compensation cost arising from issuance of new shares and reserved 1,000 shares subscribed by employees for cash injection amounted to $4,700 respectively recognized as operating expenses & capital surplus.

(o) Earnings per share (EPS)
(i) Basic earnings per share

1) Profit attributable to common shareholders

Profit attributable to common shareholders	2016 Continuing operations $ 130,487	2015 Continuing operations 293,820

244

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

2) Weighted-average number of outstanding common shares

2016 2015 Common shares as of January 1 $ 116,042 98,398 Effect of treasury stock (1,391) (542) Effect of stock dividends 2,292 3,629 Effect of issuance of common stock - 4,247 Effect of employee stock options 68 109 Effect of conversion of convertible bonds 173 2,821 Weighted-average number of outstanding common shares on December 31 $ 117,184 108,662 Weighted-average number of outstanding common shares on December 31`－`retrospectively adjusted 110,955 ed earnings per share diluted earnings per share for the years ended December 31, 2016 and 2015 were lated on the basis of profit attributable to common shareholders and the weighted-average er of outstanding common shares, with all potential common shares retroactively adjusted. lations were as follows: Profit attributable to common shareholders (diluted) 2016 2015 Continuing operations Continuing operations Profit attributable to common shareholders (basic) $ 130,487 293,820 Interest on convertible bonds 8,416 6,286 Gains on revaluation of put and call options of convertible bonds measured at fair value 150 (29) $ 139,053 300,077	2016	2015 98,398 (542) 3,629 4,247 109 2,821
	$ 116,042 (1,391) 2,292 - 68 173

(i) Diluted earnings per share

1) Profit attributable to common shareholders (diluted)

245

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

2) 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	2016 $ 117,184 16,191 42 221	2016 $ 117,184 16,191 42 221	2015 108,662 15,679 78 350
	$ 133,638		124,769 127,062

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.

(p) Employees and directors, supervisors reward

For the years ended December 31, 2016 and 2015, remuneration of employees and directors of $692 , $1,522 thousand, $4,151 and $7,879 thousand, 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 years ended . 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.

(q) Net Revenue

The Company’s net revenue for the years ended December 31, 2016 and 2015 were as follows:

Management income Shares of profit of equity-accounted investees	2016 $ 58,682 172,130	2015 62,888 352,325
	$ 230,812	415,213

246

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(r) Non-operation income and expenses

(i) Other gains and losses

The Company’s other gains and losses are as follow:

Foreign exchange gains (losses) Gains on valuation of fair value of financial assets and liabilities through 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 (ii) Other income The Company’s other revenue are as follow: Interest income Rental income Other income (iii) Finance costs The Company’s financial costs are as follow: Interest costs Bank loan Amortization of the convertible bonds discount Other financialliabilitiesamortization	2016 $ (2,243) - - (129) - 11,569 2,038 9	2015 885 260 (1,988) 65 (684) 5,373 408 (24) 4,295 2015 1,913 3,530 77 5,520 2015 1,627 6,286 - 7,913
	$ 11,244
	2016 $ 2,682 3,564 284
	$ 6,530
	2016 $ 4,157 8,416 12,297
	$ 24,870

247

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(s) Financial instruments

(i) Credit risk

1) Exposure to credit risk

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

2) Concentration of credit risk

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

(ii) Liquidity risk

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

Carrying amount	Contractual cash flow Within 6 months 6~12 months	1~2years - (299,500) - (47,523)	2~5years	Over 5 years
$ 480,000 385,231 124,077 83,391	(480,400) (480,400) - (406,000) (106,500) - (124,077) (124,077) - (91,391) (43,868) - (1,101,868) (754,845) -		- - - - -	- - - - -
$ 1,072,699		(347,023)
$ 393,988 130,698 253,814	(411,500) - - (130,698) (130,698) - (273,732) (174,377) - (815,930) (305,075) -	(111,500) - (47,691)	(300,000) - (51,664)	- - - -
$ 778,500		(159,191)	(351,664)

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

248

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(iii) Currency risk

1) Exposure to foreign currency risk

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

Unit: thousand

December 31, 2016	December 31, 2016	December 31, 2015 TWD Foreign currency 97,449 176 51,040 21,773,424 83,391 - - 50,188	December 31, 2015 TWD Foreign currency 97,449 176 51,040 21,773,424 83,391 - - 50,188	`Exchange`ra te
Foreign currency	`Exchange`ra te 32.27 0.00243 32.27 4.5690		Foreign currency
$ 3,020 21,004,115 2,584 -		97,449 51,040 83,391 -	176 21,773,424 - 50,188	32.84 0.00222 - 5.0573

2) Sensitivity analysis

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, HKD and CNY against the TWD as of December 31, 2016 and 2015 would have decreased the net income before tax by $140 thousand and $(2,480) thousand, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for both periods.

Exchange gains and losses on monetary items:

The currency of the Company has a wide range of foreign currency items, so that the exchange of information on monetary items are disclosed. For the year 2016 and 2015, foreign exchange gains and losses 9including realized and unrealized) are (2,243) thousand and 885 thousand.

(iv) 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.

249

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

If the interest rate had increased/decreased by 1%, the Company’s net income before tax would have decreased/increased by $4,800 and $0 for the years ended December 31, 2016 and 2015, respectively, assuming all other variable factors had remained constant. This is mainly due to the Company’s variable-rate borrowing.

(v) Fair value of financial instruments
1) Fair value hierarchy
- a) Categories and fair value of financial instruments

December 31, 2016

Book value $ 7,107		Fair	value
	Level 1 7,107	Level 2	Level 3	`Total` 7,107 7,107 29,432 29,432 - - 91,391 - - 2 2 - 385,231 - - 83,391 468,622 505,163
		-	-
7,107	7,107	-	-
$ 29,432	29,432	-	-
29,432	29,432	-	-
$ 32,410 251,375 91,391	- - -	- - -	- - -
375,176	-	-	-
$ 2,176	-	-	-
$ 2 2	- -	2 2	- -

480,000 385,231	- -	- 385,231	- -
1,744 122,333 83,391 1,072,699	- - - -	- - - 385,231	- - 83,391
			83,391
$ 1,484,416	36,539	385,233	83,391

250

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

	December 31, 2015	December 31, 2015	December 31, 2015
		Fair	value	`Total` 7,086 148 7,234 14,874 14,874 - - - - 393,988 - - - 393,988 416,096
	Level 1 7,086 - 7,086	Level 2	Level 3
			- - -

$ 14,874	14,874	-	-
14,874	14,874	-	-
$ 130,883 144,356	- - -	- - -	- - -
275,239
$ 2,176	-	-	-
$ 393,988	-	393,988	-
1,822 128,876 253,814	- - - -	- - - 393,988	- - - -
778,500
$ 1,075,847	21,960	394,136	-

b) Valuation techniques and assumptions used in fair value determination

Non-derivative financial instruments

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.

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.

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.

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.

251

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

Derivative financial instruments

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.

There were no transfers of financial assets from each level for the years ended December 31, 2016 and 2015.

(t) Financial risk management
(i) Overview

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.

1) Credit risk
2) Liquidity risk
3) Market risk

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

(ii) Risk management framework

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

The Company’s risk management policies are established to identify and analyze the 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.

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.

252

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

(iii) Credit risk

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.

1) Accounts receivable and other receivables

For the years ended December 31, 2016 and 2015, there was no significant concentration of credit risk from the sales of the Group.

The source of revenue of the Company is from the Group and its subsidiaries, as such, there is no credit risk.

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.

2) Investments

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.

3)
Guarantees

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

a) Companies with a transaction relationship with the Company.
b) Companies in which the Company has more than 50% of the voting shares.
c) Companies which directly or indirectly hold more than 50% of the voting shares of T3EX Global Holdings Corp.

253

T3EX GLOBAL HOLDINGS CORP. Notes to Financial Statements

4) Liquidity risk

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 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.

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, 2016, was $540,000.

5) 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 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.

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 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.

a) Currency risk

254

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

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.

(u) 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.

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	December 31, 2016 $ 1,096,951 32,410	December 31, 2016 $ 1,096,951 32,410	December 31, 2015 804,597 130,883 673,714 2,506,418 - 2,506,418 26.88%
	$ 1,064,541
	$ 2,259,199 - $ 2,259,199
	47.12%

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.

(v) Investing and financing activities without cash flows

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

255

Notes to Financial Statements

T3EX GLOBAL HOLDINGS CORP.

(7) Related-party transactions:

(a) List of subsidiaries

(a) List of subsidiaries
Name of subsidiary Location	Percentage to shares held) December 31, 2016 December 31, 2015
T.H.I Group Ltd. (in B.V.I.) British Virgin Islands GREATLINE INTERNATIONAL LIMITED (GREATLINE) British Virgin Islands T.H.I Group Vietnam Co., Ltd. Vietnam T.H.I. Group (Bangkok) Company Limited Thailand Taiwan Express Logistics Co., Ltd. (TEC) Taiwan T.H.I Logistics Co., Ltd. Taiwan T.H.I. Group (Cambodia) Co., Ltd. Cambodia T.H.I. Group Singapore Pte. Ltd. (Singapore) Singapore T.H.I. & Maruzen Co. Ltd. Japan Fresh Beauty Enterprises Ltd. SAMOS Eastern Union Holdings Limited Hong Kong T-Cube Global Logistics Co., Ltd. China T.H.I. Group Limited (HK) (T.H.I. HK) Hong Kong T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) China Shanghai Yaohwa International Forwarder Co., Ltd. (Shanghai Yaohwa) China Exer Logistics Co., Ltd. China Taiwan Express (HK) Co., Ltd. (TEC HK) Hong Kong Taiwan Express (USA) INC. United States TEC Logistics Co., Ltd. Taiwan TEC Logistics (USA), Inc United States Hiview Logistics Co., Ltd. Taiwan TEC Logistics (Shenzhen) Co., Ltd. China Wai Hung Cargo Transport Co., Ltd. Hong Kong T.H.I. Logistics (Malaysia) SDN. BHD Malaysia
	100% 100% 100% 100% 51% 51% 49% 49% 100% 100% 100% 100% 100% 100% 80% 80% 51% 51.00% 60% 60% (Note 1) (Note 1) (Note 2) (Note 2) 100% 100% 100% 100% 73.87% (Note 3) 68.00% (Note 3) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 97.51% 97.51% 100% 100% 100% 100% 90% -

(Note 1) Acquisition of the equity through Fresh Beauty Enterprises Ltd.

(Note 2) Acquisition of the equity through Eastern Union Holdings Limited

(Note 3) Acquisition of 73.87% shares through the T.H.I. Group (Shanghai) Ltd.

On September 31, 2016 from the holding of its 68% stake increased to 73.87%.

256

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(b) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Company.

Key management personnel compensation comprised:

Key management personnel compensation comprised:
Short-term employee benefits Post-employment benefits Share-based payments	2016 $ 20,254 768 65	2015 25,890 1,956 368
	$ 21,087	28,214

(d) Other related-party transactions
(i) Revenue

The Significant operating income of the Company and its outstanding balance are as follows:

Subsidiary	Revenue 2016 2015 $ 58,682 62,888	Accounts receivable December 31, 2016 December 31, 2015 46,520 49,430
	2016 $ 58,682	December 31, 2016 46,520

Trading terms of the above transactions require payments within 30 to 60 days or depending on the funding needs.

(ii) Other payables

Subsidiary	December 31, 2016 $ 99,404	December 31, 2015 99,404

Amounts received on benefit of subsidiary.

(iii) Loans to subsidiary

The Company’s loans to subsidiary and interest income are as follow:

Loans to subsidiary	December 31, 2016 $ 204,855	December 31, 2015 94,926

257

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

Interest income (recorded in other income)	2016 $ 2,682	2015 1,746

The Company’s loan and relationship are accrued as the average interest rate of the short-term borrowings of the financial institutions in the current year, and are unsecured loans, and no bad debts are required after the assessment.

(iv) Rent Income (recorded in other income)

Subsidiary	2016 $ 3,564	2015 3,530

Income from office rental to subsidiary, the rent is based on the market price and being collected monthly.

(8) Pledged assets:

ledged assets:
Pledged assets	Object	December 31, 2016 $ 176,553	December 31, 2015 177,616
Property, plant, and equipment	Short-term/long-term credit facility

(9) Commitments and contingencies:

(a) The sub-subsidiary company T.H.I Group(Shangai) Ltd. received the notification from the court that a shipping line claimed the loss due to the delay of picking up stocks. The shipping line required the Company to compensate its loss amounted to CNY4,027 thousands. As of the reporting date, this case is still in process, so based on assessment, the Company did not accrue the provision for this case.
(b) The sub-subsidiary company T.H.I Group(Shangai) Ltd. received the notification from the court that a client claimed a loss on stock damage to the Company amounted to CNY4,212 thousands. As of the reporting date, this case is still in process, so based on assessment, the Company did not accrue the provision for this case.
(c) The Company received the notification from the court that software vendor requested the Group to pay a system development service fee, amounted to $7,677 thousand. As of the reporting date,the Company has engaged the lawyer and this case was still in process, based on the assessment, no provision has need accrued.

258

T3EX GLOBAL HOLDINGS CORP.

Notes to Financial Statements

(d) Promissory notes issued to the bank as collateral for short-term bank borrowings, logistics business, etc., were as follows.

Promissory notes	December 31, 2016 $ 100,000	December 31, 2015 -

(10) Losses Due to major Disasters: None.

(11) Subsequent Events: None.

(12) Other:

The personnel cost and depreciation and amortization expenses, categorized by function, were as follows.

Personnel cost	2016	2016	2016	2015	2015	2015
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Salaries Labor and health insurance Pension Others Depreciation expenses Amortization expenses	41,547 3,017 2,122 1,522 6,120 4,049	- - - - - -	41,547 3,017 2,122 1,522 6,120 4,049	75,324 3,340 2,528 1,388 5,494 3,590	- - - - - -	75,324 3,340 2,528 1,388 5,494 3,590

In 2016 and 2015, the average number of employees were 33 and 35, respectively.

259

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

No (Note 1)	Name of lender	Name of borrower	Account name	affiliates	Highest balance during the period	Balance as of December 31, 2016 (Note 4)	Appropriated credit as of December 31, 2016	Range of interest rates during the period	Type of financing (Note 2)	Transaction amounts	Purpose of fund financing of the borrower	Allowance for bad debt	Guarantee	Guarantee	Guarantee	Guarantee
													Item	Value
0 0 0 4	The Company The Company The Company T.H.I. Group (Shanghai) Ltd.	T.H.I. Group Singapore Pte. Ltd. Taiwan Express Logistic Co., Ltd. PT Dexter Eurekatama EXer Logistics Co., Ltd.	Other receivables- related patties Other receivables- related patties Other receivables- related patties Other receivables- related patties	Yes Yes Yes No	9,471 360,000 65,220 32,563	4,841 270,000 64,540 31,983	4,841 200,000 - 12,864	Quarterly changes in interest rates Quarterly changes in interest rates 5% 5.05%	2 2 2 2	- - - -	Trading turnover Trading turnover Trading turnover Trading turnover	- - - -		- - - -	451,840 451,840 451,840 177,777	903,680 903,680 903,680 355,554

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 4: Ending facility balance approved by BOD.

(ii) Guarantees and endorsements for other parties:

No.	Endorsemen t/guarantee Provider	Counter-party/ guarantee receiver	Counter-party/ guarantee receiver	Limit of guarantee/ endorsement amount for receiving pary	Maximum balance	Ending balance	Actual amount used	Property 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 0 1	The Company The Company The Company The Company The Company	Shanghai Yaohwa International Forwarder Co., Ltd. T.H.I. Group (Shanghai) Ltd. (T.H.I. Shanghai) Exer Logistics Co., Ltd T Cube Global Logistics Co., Ltd. T.H.I. Group (Shanghai) Ltd.	2 2 3 3 3	451,840 451,840 451,840 451,840 10,965	61,121 47,922 43,193 28,795 3,565	27,911 46,519 41,867 27,911 3,256	9,304 - 19,073 17,753 514	- - - - -	1.23% 2.06% 1.85% 1.23% 2.97%	903,680 903,680 903,680 903,680 43,860	Y Y Y Y Y	N N N N N	Y Y Y Y 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.
(4)The parent company holds more than 50% of its outstanding common shares (directly or indirectly) through a subsidiary.

260

(English Translation of Financial Report Originally Issued in Chinese) T3EX GLOBAL HOLDINGS CORP. Notes to Consolidated Financial Statements

(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.

(iii) Securities held as of December 31, 2016 (excluding investment in subsidiaries, associates and joint ventures):

Company’s m	Category and Types and issuer of marketable securities	Nature of the relationship	Account name	Endingbalance	Endingbalance	Endingbalance	Endingbalance	Notes
				Number of shares	Book value	Ownership%	Fair value
The Company The Company The Company Taiwan Express Logistic Co., Ltd. The Company	Fund Yuanta Wan Tai Fund StockSoonest. Express Co., Ltd. StockChailease Holding Company Limited StockCentral Taiwan Science Park Logistics Co., Ltd. StockGlobe UNION Industrial Corp.	- - - -	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 Available-for-sale financial assets－ current	473,454 282,000 250,000 3,880,000 101,000	7,107 14,015 13,775 38,800 1,642	- % 1.08% 0.02% 12.90% 0.03%	7,107 14,015 13,775 - 1,642	(note1)

Note 1: due to lack of market information, will not include in this report

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:None

261

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

Notes to Consolidated Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company which has accounts receivable	Counterparty	Relationship	Ending balance of accounts receivable (in thousands)	Turnover	Past-due receivables from relatedparty	Past-due receivables from relatedparty	Received subsequently (in thousands)	Allowance for bad debt
					Amount	method
T.H.I. Group (Shanghai) Ltd. T.H.I. Logistics Co. Ltd. T.H.I. Group Ltd. (B.V.I.)	T.H.I. Group Limited (HK) H.I. Group Ltd. (B.V.I.) T.H.I. Group Limited (HK)	Parent company Associates Associates	Other receivables 312,932 Other receivables 124,694 Other receivables 138,615	- - -	- - -		- (Note) 1) - -	- - -

(ix) Trading in derivative instruments:Please refer to notes 6(b) & (j).

(b) Information on investees:

Relevant information about reinvestment for 2016 is as follows:

(In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of December 31,2016	Balance as of December 31,2016	Balance as of December 31,2016	Net income (loss) of the Investee	Share of profit loss of invest	Note
				December 31,2016	December 31,2015	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 The Company GREATLINE INTERNATI ONAL LIMITED Fresh Beauty Enterprises Ltd. TEC TEC TEC TEC TEC TEC TEC HK	T.H.I. Group Ltd.(in B.V.I) Greatline International 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. Logistics (Malaysia) SDN. BHD 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 Malaysia 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 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 (31,130JPY) 704,200 130,000 4,462 (150USD) 47,381 (1,598USD) 7,629 (320USD) 9,666 (300USD) 282,775 (55,579CNY) 10,381 (4,314USD) 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) 10,365 (31,130JPY) 704,200 130,000 4,462 (150USD) 47,381 (1,598USD) 7,629 (320USD) 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)	1,000,000 4,050,000 - - 3,060 35,958,400 13,000,000 - 12,000 320,000 16,285 60 180,000 12,480,000 - - 1,000,000 6,000 5,000,000 100,000 200 -	100.00% 100.00% 51.00% 49.00% 51.00% 100.00% 100.00% 100.00% 30.00% 80.00% 30.00% 60.00% 90.00% 100.00% 100.00% 100.00% 100.00% 30.00% 97.51% 100.00% 100.00% 100.00%	76,568 1,366,813 33,220 12,076 12,048 708,657 134,407 8,778 51,040 1,174 6,810 305,374 6,521 1,365,000 113,296 343,240 - 2,904 84,848 36,314 14,009 6,695	4,962 115,203 5,238 4,732 2,372 (1,322) 30,540 911 11,173 (3,801) (5,946) 51,975 (2,939) 119,179 51,975 (10,996) - 4,520 4,544 (3,411) (1,068) (6,382)	4,962 115,203 2,671 2,319 1,210 (7,322) 30,540 911 227 (3,040) (1,784) 28,878 (2,645) 119,179 51,975 (10,996) - 1,356 4,431 (3,411) (1,068) (9,033)	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investment under equity method Subsidiaries Investment under equity method Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investment under equity method Subsidiaries Subsidiaries Subsidiaries Subsidiaries

262

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

Notes to Consolidated Financial Statements

(c) Information on investment in mainland China (PRC)
(i) Name, major operations and related information of investee in Mainland China:

(In Thousands of New Taiwan Dollars)

Names of PRC investee companies	Major operations	Amounts of paid-in capital (in thousands)	Method of investment	Investment transferred from Taiwan, beginning of period (in thousands)	Year ended December 31,2014	Year ended December 31,2014	Investment transferred from Taiwan, end of period (in thousands)	Investee net income	Direct and indirect shareholding percentage by the Company	Current gains or losses on investment recognized (in thousands)	Carrying value of investment, end of period (in thousands)	Repatriated gains on investment, end ofperiod
					Remittance	Repatriation
Shanghai Yaohwa International Forwarder Co., Ltd. T.H.I. Group (Shanghai) Ltd. T-Cube Global Logistics Co., Ltd. EXer Logistics Co., Ltd. TEC Logistics (Shenzhen) Co., Ltd.	Air & sea freight forwarding and customs clearance Air & sea freight forwarding and customs clearance Warehousin g and company Express logistics company Freight forwarding, customs clearance, and distribution	55,031 (1,700USD) 92,883 (3,060USD) 54,610 (11,000CNY) 23,335 (4,709CNY) 183,901 (48,550HKD)	Note 1 Note 1 Note 1 Note 5 Note 6	55,031 (1,700USD) 84,861 (2,600USD) 28,961 (932USD) - 183,901 (48,550HKD)	- - 175,427 (5,253USD) - -	- - - - -	55,031 (1,700USD) 84,861 (2,600USD) 204,388 (6,185USD) - 183,901 (48,550HKD)	19,179 33,957 51,723 (110,010) 10,150	100.00% 100.00% 60.00% 73.87% 100.00%	19,179 33,957 51,723 (115,226) 10,150	109,897 918,566 111,690 85,795 158,468	- - - - -

(ii) Limitation on investment in Mainland China:

Cumulative remittance from Taiwan, end of the period (Note3)	Amount of investment approved by the Investment Commission, Ministry of Economic Affairs(Note4)	Limit on the amount of investment in Mainland China
350,810 ( 10,685USD thousand)	473,078 ( 14,660USD thousand)	1,355,519

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 1:32.27.

Note 5: T.H.I. Group (Shanghai) Ltd. directly invested in EXer Logistics Co., Ltd.

Note 6: 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 (HKD48,550 thousand).

(iii) Significant transactions:

(14) Segment information:

Please refer to the consolidated financial statements for the years ended December 31, 2016.

263

`Representation Letter`

The entities that are required to be included in the combined financial statements of T3EX GLOBAL HOLDINGS CORP. as of and for the year ended December 31, 2016 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, T3EX GLOBAL HOLDINGS CORP. and its Subsidiaries do not prepare a separate set of combined financial statements.

Company name: T3EX GLOBAL HOLDINGS CORP. Chairman: David Yen Date: March 20, 20

264

AI assistant

T3EX — Annual Report 2016

52176_rns_2017-07-25_fb7ee120-f67e-493c-ab10-08b95e5aee18.pdf

T3EX Global Holdings Corp.

2016 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

2016 Review

2017 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: None

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

Unit: NT$ thousands

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

Other mentionable items:

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

2016/5/31. The attendance of directors were as follows:

2017/5/19. The attendance of directors were as follows:

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

 Board meeting:

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

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.

3.6 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

A. Issued Shares

4.1.2 Status of Shareholders

4.1.3 Shareholding Distribution Status

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 and Directors' and Supervisors' Remuneration ：

4.1.9 Buyback of Treasury Stock

4.2 Bonds

4.2.1 Corporate Bonds

4.2.2 Convertible Bonds

4.2.4 Shelf Registration for Issuing Bonds: None

T3EX Annual Report 2016

E. Supply chain management `：`

F. Customized services `：`

Internal Program `：`

External Program `：`