Stock Code:3130

104 CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors' Report For the Years Ended December 31, 2018 and 2017

Address: 10F., No. 119-1, Baozhong Rd., Xindian Dist., New Taipei City 231, Taiwan, R.O.C. Telephone: 886-2-2912-6104

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

	Contents	Page
1	Cover page	1
2	Table of contents	2
3	Representation letter	3
4	Independent Auditors' Report	4
5	Consolidated Balance Sheets	5
6	Consolidated Statements of Comprehensive Income	6
7	Consolidated Statements of Changes in Equity	7
8	Consolidated Statements of Cash Flows	8
9	Notes to Consolidated Financial Statements
	(1) Company history	9
	(2) Approval date and procedures of the consolidated financial statements	9
	(3) New standards, amendments and interpretations adopted	9~15
	(4) Summary of significant accounting policies	15~28
	(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	28~29
	(6) Explanation of significant accounts	29~49
	(7) Related-party transactions	49~50
	(8) Pledged assets	50
	(9) Significant commitments and contingencies	50
	(10) Losses due to major disasters	50
	(11) Significant subsequent events	50
	(12) Other	51
	(13) Other disclosures items
	1) Information on significant transactions	51~52
	2) Information on investees	52
	3) Information on investment in Mainland China	53~54
	(14) Segment information	54

Representation Letter

The entities that are required to be included in the combined financial statements of 104 Corporation and Subsidiaries as of and for the year ended 2018 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 by the Financial Supervisory Commission, "Consolidated and Separate Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, 104 Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: 104 Corporation and Subsidiaries Chairman: Rocky Yang Date: March 13, 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

	December 31, 2018		December 31, 2017
Assets	Amount	%	Amount	%
Current assets:
Cash and cash equivalents (note 6(1))	\$ 2,072,669	85	2,043,470	87
Notes receivable, net (note 6(3))	565	-	1,196	-
Accounts receivable, net (notes 6(3) and (13))	46,999	2	37,040	2
Other receivables (note 6(4))	21,905	1	9,104	-
Other financial assets-current (note 8)	150	-	-	-
Other current assets	15,140	1	14,633	1
Total current assets	2,157,428	89	2,105,443	90
Non-current assets:
Financial assets at fair value through profit or loss-non-current (note 6(2))	4,914	-	-	-
Property, plant and equipment (note 6(5))	243,851	10	206,619	9
Intangible assets (note 6(6))	3,514	-	6,705	-
Deferred tax assets (note 6(9))	5,697	-	5,692	-
Prepayments for equipment	1,594	-	-	-
Refundable deposits	8,250	-	7,840	-
Other financial assets-non-current (note 8)	10,000	1	10,000	1
Total non-current assets	277,820	11	236,856	10

	December 31, 2018	December 31, 2017
Liabilities and Equity	Amount	%	Amount	%
Current liabilities:
Contract liability-currrent (note 6(13))	\$ 446,687	18	-	-
Notes payable	395	-	2	-
Accounts payable	6,019	-	6,920	-
Other payables (note 6(15))	361,753	15	312,516	14
Current tax liabilities	64,694	3	46,472	2
Deferred revenue (note 6(14))	-	-	391,760	17
Other current liabilities	49,650	2	43,721	2
Total current liabilities	929,198	38	801,391	35
Non-current liabilities:
Net defined benefit liability (note 6(8))	5,666	-	7,213	-
Total non-current liabilities	5,666	-	7,213	-
Total liabilities	934,864	38	808,604	35
Equity attributable to owners of parent (notes 6(8), (9), (10) and (11))
Common stock	331,917	14	332,072	14
Capital surplus	397,859	16	399,549	17
Retained earnings:
Legal reserve	378,199	16	378,199	16
Special reserve	2,941	-	-	-
Unappropriated earnings	386,934	16	422,717	18
Total retained earnings	768,074	32	800,916	34
Other equity:
Foreign currency translation differences for foreign operations	(4,051)	-	(2,941)	-
Others	(604)	-	(3,380)	-
Total other equity	(4,655)	-	(6,321)	-
Total equity attributable to owners of parent	1,493,195	62	1,526,216	65
Non-controlling interests	7,189	-	7,479	-
Total equity	1,500,384	62	1,533,695	65
Total liabilities and equity	\$ 2,435,248	100	2,342,299	100

Total assets \$ 2,435,248 100 2,342,299 100

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

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

	2018		2017
	Amount	%	Amount	%
Operating revenue (notes 6(13) and (14))	\$ 1,577,612	100	1,539,995	100
Operating costs (notes 6(5), (6), (7), (8), (10), (11), (15) and 7)	159,204	10	150,154	10
Gross profit	1,418,408	90	1,389,841	90
Operating expenses (notes 6(3), (5), (6), (7), (8), (10), (11), (15) and 7):
Selling expenses	601,196	38	552,749	36
Administrative expenses	171,257	11	180,871	12
Research and development expenses	322,846	21	298,062	19
Total operating expenses	1,095,299	70	1,031,682	67
Operating income	323,109	20	358,159	23
Non-operating income and expenses (notes 6(16), (17) and 7): Other income	27,343	2	25,632	2
Other gains and losses	1,603	-	(2,006)	-
Total non-operating income and expenses	28,946	2	23,626	2
Income before income tax	352,055	22	381,785	25
Less: income tax expenses (note 6(9))	69,972	4	63,122	4
Net income	282,083	18	318,663	21
Other comprehensive income (loss):
Items that will not be reclassified subsequently to profit or loss (notes 6(8) and (9))
Remeasurements from defined benefit plans	245	-	(4,094)	-
Income tax related to items that will not be reclassified subsequently to profit or loss	34	-	696	-
Total items that will not be reclassified subsequently to profit or loss	279	-	(3,398)	-
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences for foreign operations	(1,276)	-	(689)	-
Income tax related to items that are or may be reclassified subsequently to profit or loss	-	-	-	-
Total items that may be reclassified subsequently to profit or loss	(1,276)	-	(689)	-
Other comprehensive loss	(997)	-	(4,087)	-
Total comprehensive income	\$ 281,086	18	314,576	21
Net income attributable to:
Shareholders of the Company	\$ 282,207	18	318,123	21
Non-controlling interests	(124)	-	540	-
	\$ 282,083	18	318,663	21
Total comprehensive income (loss) attributable to:
Shareholders of the Company	\$ 281,376	18	314,104	21
Non-controlling interests	\$ (290) 281,086	- 18	472 314,576	- 21

Basic earnings per share (note 6(12))
Basic earnings per share	\$	8.51		9.60
Diluted earnings per share	\$	8.44		9.51

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

104 CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

Other equity interest Foreign currency translation Total equity Retained earnings differences for attributable Non Common Capital Legal Special Unappropriated foreign to owners of controlling Total stock surplus reserve reserve earnings Total operations Others Total parent interests equity Balance at January 1, 2017 \$ 332,417 401,962 338,362 - 506,436 844,798 (2,320) (11,690) (14,010) 1,565,167 7,007 1,572,174 Appropriations and distributions Legal reserve - - 39,837 - (39,837) - - - - - - - Cash dividends - - - - (358,838) (358,838) - - - (358,838) - (358,838) Net income for the year - - - - 318,123 318,123 - - - 318,123 540 318,663 Other comprehensive income (loss) for the year - - - - (3,398) (3,398) (621) - (621) (4,019) (68) (4,087) Total comprehensive income (loss) for the year - - - - 314,725 314,725 (621) - (621) 314,104 472 314,576 Adjustments for restricted employee shares - (2,758) - - 231 231 - 1,575 1,575 (952) - (952) Cancellation of restricted employee shares (345) 345 - - - - - - - - - - Compensation cost of restricted employee shares - - - - - - - 6,735 6,735 6,735 - 6,735 Balance at December 31, 2017 332,072 399,549 378,199 - 422,717 800,916 (2,941) (3,380) (6,321) 1,526,216 7,479 1,533,695 Effects of retrospective application - - - - 3,116 3,116 - - - 3,116 - 3,116 Balance on January 1, 2018 after adjustments 332,072 399,549 378,199 - 425,833 804,032 (2,941) (3,380) (6,321) 1,529,332 7,479 1,536,811 Appropriations and distributions Special reserve - - - 2,941 (2,941) - - - - - - - Cash dividends - - - - (318,650) (318,650) - - - (318,650) - (318,650) Net income for the year - - - - 282,207 282,207 - - - 282,207 (124) 282,083 Other comprehensive income (loss) for the year - - - - 279 279 (1,110) - (1,110) (831) (166) (997) Total comprehensive income (loss) for the year - - - - 282,486 282,486 (1,110) - (1,110) 281,376 (290) 281,086 Adjustments for restricted employee shares - (1,845) - - 206 206 - 634 634 (1,005) - (1,005) Cancellation of restricted employee shares (155) 155 - - - - - - - - - - Compensation cost of restricted employee shares - - - - - - - 2,142 2,142 2,142 - 2,142 Balance at December 31, 2018 \$ 331,917 397,859 378,199 2,941 386,934 768,074 (4,051) (604) (4,655) 1,493,195 7,189 1,500,384				Equity attributable to owners of parent

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

	2018	2017
Cash flows from (used in) operating activities:
Income before tax	\$ 352,055	381,785
Adjustments:
Adjustments to reconcile profit:
Depreciation expense	39,567	46,665
Amortization expense	4,434	8,266
Expected credit loss / Provision for bad debt expense	199	1,155
Interest income	(12,977)	(12,643)
Compensation cost of restricted employee shares	2,142	6,735
Loss (gain) on disposal of property, plant and equipment	92	(57)
Unrealized foreign exchange loss	8	-
Adjustments for restricted employee shares	(1,005)	(952)
Total adjustments to reconcile profit	32,460	49,169
Changes in operating assets and liabilities:
Net changes in operating assets:
Notes receivable	631	1,048
Accounts receivable	(9,923)	3,345
Other receivable	(805)	1,658
Other financial assets	(150)	-
Other current assets	(1,354)	(5,906)
Total net changes in operating assets	(11,601)	145
Net changes in operating liabilities:
Contract liabilities	58,441	-
Notes payable	393	-
Accounts payable	(901)	(726)
Other payables	18,075	41,511
Deferred revenue	-	22,752
Other current liabilities	5,963	(6,781)
Net defined benefit liabilities	(1,302)	(1,355)
Total net changes in operating liabilities	80,669	55,401
Total net changes in operating assets and liabilities	69,068	55,546
Total adjustments	101,528	104,715
Cash inflow generated from operations	453,583	486,500
Interest received	12,936	12,660
Income taxes paid	(52,310)	(54,645)
Net cash flows from operating activities	414,209	444,515
Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through profit or loss	(4,922)	-

Acquisition of property, plant and equipment	(42,910)	(30,521)
Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits	- (410)	564 627
Acquisition of intangible assets	(4,039)	(1,026)
Increase in prepayments for equipment	(1,594)	-
Net cash flows used in investing activities	(53,875)	(30,356)

Cash flows used in financing activities:

Cash dividends paid	(318,650)	(358,838)
Net cash flows from financing activities	(318,650)	(358,838)
Effect of exchange rate changes on cash and cash equivalents	(1,289)	(681)
Net increase in cash and cash equivalents	40,395	54,640
Cash and cash equivalents at beginning of year	2,043,470	1,988,830
Cash and cash equivalents at end of year	\$ 2,083,865	2,043,470
Components of cash and cash equivalents
Cash and cash equivalents in consolidated statements of financial position	\$ 2,072,669	2,043,470
Other item qualifying for cash and cash equivalents under the definition of IAS 7	11,196	-
Cash and cash equivalents at end of year	\$ 2,083,865	2,043,470

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars, unless otherwise stated)

(1) Company history

104 Corporation (the "Company") was incorporated as a company limited by shares under the Company Act of the Republic of China in October 1993. The Company, formerly named Fu-Hwa International Market Development Consultant Ltd., was renamed 104 Corporation in August 2000. The Company and subsidiaries (the "Consolidated Company") are engaged in information technology, general advertising services, employment services and human resource consultancy.

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

These consolidated financial statements were authorized for issuance by the board of directors on March 13, 2019.

(3) New standards, amendments and interpretations adopted:

1) The impact of the International Financial Reporting Standards ("IFRSs") endorsed by the Financial Supervisory Commission, R.O.C. ("FSC") which have already been adopted.

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2018.

	Effective date
New, Revised or Amended Standards and Interpretations	per IASB
Amendment to IFRS 2 "Clarifications of Classification and Measurement of Share-based Payment Transactions"	January 1, 2018
Amendments to IFRS 4 "Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts"	January 1, 2018
IFRS 9 "Financial Instruments"	January 1, 2018
IFRS 15 "Revenue from Contracts with Customers"	January 1, 2018
Amendment to IAS 7 "Statement of Cash Flows -Disclosure Initiative"	January 1, 2017
Amendment to IAS 12 "Income Taxes- Recognition of Deferred Tax Assets for Unrealized Losses"	January 1, 2017
Amendments to IAS 40 "Transfers of Investment Property"	January 1, 2018
Annual Improvements to IFRS Standards 2014–2016 Cycle:
Amendments to IFRS 12	January 1, 2017
Amendments to IFRS 1 and Amendments to IAS 28	January 1, 2018
IFRIC 22 "Foreign Currency Transactions and Advance Consideration"	January 1, 2018

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

IFRS 15 "Revenue from Contracts with Customers"

IFRS 15 establishes a comprehensive framework by a single model through five procedures for determining whether, how much and when revenue is recognized. It replaces the existing revenue recognition guidance, including IAS 18 "Revenue" and IAS 11 "Construction Contracts". The Consolidated Company applies this standard retrospectively with the cumulative effect, it need not restate those contracts, but instead, continues to apply IAS 11, IAS 18 and the related Interpretations for comparative reporting period. The Consolidated Company recognizes the cumulative effect upon the initially application of this Standard as an adjustment to the opening balance of retained earnings on January 1, 2018.

The Consolidated Company uses the practical expedients for completed contracts, which means it need not restate those contracts that have been completed on January 1, 2018.

The following are the nature and impacts on changing of accounting policies:

(A) Rending of services

The Consolidated Company provides software licensing, customized services and other relevant services. In the past, the Consolidated Company identifies software licensing, customized services and other relevant services as a single performance obligation, and revenue was recognized on the percentage of services performed to date as total services to be performed during the period of contract. Under IFRS 15, the Consolidated Company has analyzed that software licensing and customized services are separately identifiable. Software licensing is a single performance obligation and revenue is recognized after the controlling right of software has been transferred. Therefore, the transaction price which is allocated to software licensing will be recognized as revenue after the controlling right of software has been transferred. Customized service revenue is still recognized on the percentage of services performed to date as total services to be performed during the period of contract.

(B) Impacts on financial statements

The following tables summarize the impacts of adopting IFRS15 on the Consolidated Company's consolidated financial statements:

		December 31, 2018			January 1, 2018
Impacted line items on the consolidated balance sheet	Balances prior to the adoption of IFRS 15	Impact of changes in accounting policies	Balance upon adoption of IFRS 15	Balances prior to the adoption of IFRS 15	Impact of changes in accounting policies	Balance upon adoption of IFRS 15
Accounts receivable	\$ 46,999	-	46,999	37,040	240	37,280
Impact on assets		-			240
Deferred revenue	\$ 454,113	(454,113)	-	391,760	(391,760)	-
Contract liability-current	-	446,687	446,687	-	388,246	388,246
Current tax liabilities	63,959	735	64,694	46,472	-	46,472
Deferred tax liabilities	-	-	-	-	638	638
Impact on liabilities		(6,691)			(2,876)

(Continued)

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

		December 31, 2018		January 1, 2018
Impacted line items on the consolidated balance sheet	Balances prior to the adoption of IFRS 15	Impact of changes in accounting policies	Balance upon adoption of IFRS 15	Balances prior to the adoption of IFRS 15	Impact of Balance changes in upon accounting adoption of policies IFRS 15
Retained earnings	\$ 380,243	6,691	386,934	422,717	3,116 425,833
Impact on equity		6,691			3,116
				2018
			Balance	Impact of
			without	changes in	Balance with
Impacted line items on the consolidated income statement			adoption of IFRS 15	accounting polices	adoption of IFRS 15
Operating revenues		\$	1,573,940	3,672	1,577,612
Impact on income before income tax				3,672
Income tax expenses			69,875	97	69,972
Impact on net income				3,575
Basic earnings per share (New Taiwan dollars)		\$	8.40	0.11	8.51
Diluted earnings per share (New Taiwan dollars)		\$	8.33	0.11	8.44
				2018
Impacted line items on the consolidated statement of cash flows			Balance without adoption of IFRS 15	Impact of changes in accounting polices	Balance with adoption of IFRS 15
Cash flows from (used in) operating activities:
Income before tax		\$	348,383	3,672	352,055
Adjustments:
Accounts receivable			(10,163)	240	(9,923)
Contract liability-current			-	58,441	58,441
Deferred revenue			62,353	(62,353)	-
Impact on net cash flows from operating activities				-

2. IFRS 9 "Financial Instruments"

IFRS 9 replaces IAS 39 "Financial Instruments: Recognition and Measurement" which contains classification and measurement of financial instruments, impairment and hedge accounting.

The Consolidated Company adopted the consequential amendments to IFRS 7 "Financial Instruments: Disclosures" that are applied to disclosures about 2018 but generally have not been applied to comparative information.

The detail of new significant accounting policies and the nature and effect of the changes to previous accounting policies are set out below:

(A) Classification of financial assets and financial liabilities

IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. The standard eliminates the previous IAS 39 categories of held to maturity, loans and receivables and available for sale. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification. For an explanation of how the Consolidated Company classifies and measures financial assets and accounts for related gains and losses under IFRS 9, please refer to note 4(7).

The adoption of IFRS 9 did not have any a significant impact on its accounting policies on financial liabilities.

(B) Impairment of financial assets

IFRS 9 replaces the "incurred loss" model in IAS 39 with the "expected credit loss" (ECL) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than they are under IAS 39 – please refer to note 4(7).

The adoption of IFRS 9 have been applied retrospectively, except as described below,

‧ Differences in the carrying amounts of financial assets resulting from the adoption of IFRS 9 are recognized in retained earnings and other equity interest as on January 1, 2018. Accordingly, the information presented for 2017 does not generally reflect the requirements of IFRS 9 and therefore is not comparable to the information presented for 2018 under IFRS 9.
‧ The following assessments have been made on the basis of the facts and circumstances that existed at the date of initial application.
The determination of the business model within which a financial asset is held.
The designation and revocation of previous designations of certain financial assets and financial liabilities as measured at FVTPL.
The designation of certain investments in equity instruments not held for trading as at FVOCI.

(D) Classification of financial assets on the date of initial application of IFRS 9

The following table shows the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Consolidated Company's financial assets as of January 1, 2018. (There is no change in both categories and carrying value of financial liabilities.)

	IAS39		IFRS9
Financial Assets	Measurement categories	Carrying Amount	Measurement categories	Carrying Amount
Cash and equivalents	Loans and receivables		2,043,470 Amortized cost	2,043,470
Receivables, net (notes receivable, accounts receivable and other receivable)	Loans and receivables		47,580 Amortized cost	47,580
Other financial assets (refundable deposit and others)	Loans and receivables		17,840 Amortized cost	17,840

The above change in accounting policy would not have any material adjustment on the consolidated financial statements.

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

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2019 in accordance with Ruling No. 1070324857 issued by the FSC on July 17, 2018:

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

Except for the following impact of the adoption of IFRS 16 "Leases", the Consolidated Company believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements. The extent and impact of signification changes are as follows:

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

IFRS 16 introduces a single and an on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. In addition, the nature of expenses related to those leases will now be changed since IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities. There are recognition exemptions for short-term leases and leases of low-value items. The lessor accounting remains similar to the current standard – i.e. the lessors will continue to classify leases as finance or operating leases.

Determining whether an arrangement contains a lease

On transition to IFRS 16, the Consolidated Company can choose to apply either of the following:

‧ IFRS 16 definition of a lease to all its contracts; or
‧ a practical expedient that does not need any reassessment whether a contract is, or contains, a lease.

The Consolidated Company plans to apply the practical expedient to grandfather the definition of a lease upon transition. This means that it will apply IFRS 16 to all contracts entered into before January 1, 2019 and identified as leases in accordance with IAS 17 and IFRIC 4.

Transition

As a lessee, the Consolidated Company can apply the standard using either of the following:

‧ retrospective approach; or
‧ modified retrospective approach with optional practical expedients.

The lessee applies the election consistently to all of its leases.

On January 1, 2019, the Consolidated Company plans to initially apply IFRS 16 using the modified retrospective approach, right-of-use assets is measured from lease liabilities, the cumulative effect of adopting IFRS 16 will be recognized as an adjustment to the opening balance of retained earnings at January 1, 2019, with no restatement of comparative information. When applying the modified retrospective approach to leases previously classified as operating leases under IAS 17, the lessee can elect, on a lease-by-lease basis, whether to apply a number of practical expedients on transition. The Consolidated Company chooses to elect the following practical expedients:

‧ apply a single discount rate to a portfolio of leases with similar characteristics.
‧ exclude the initial direct costs from measuring the right-of-use assets at the date of initial application.
So far, the most significant impact identified is that the Consolidated Company will have to recognize the new assets and liabilities for the operating leases of its offices. The Consolidated Company estimated that the right-of-use assets and the lease liabilities to increase by \$112,670 thousand and \$112,469 thousand on January 1, 2019.

The actual impacts of adopting the standards may change depending on the economic conditions and events which may occur in the future.

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

As of the date, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

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

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

(4) Summary of significant accounting policies

The significant accounting policies were applied consistently throughout the periods presented in these consolidated financial statements.

Except for note 3, 4(7), and 4(12) that changes in accounting policies, the significant accounting policies presented in the consolidated financial statements are summarized as follows:

1) Statement of compliance

These consolidated financial statements have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" (hereinafter referred to as "the Regulations") and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by the FSC (hereinafter referred to as "the IFRSs endorsed by the FSC").

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

2) Basis of preparation
1. Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

(A) Financial instruments measured at fair value through profit or loss are measured at fair value;
(B) The defined benefit liability is recognized as plan assets measured at fair value, less, the present value of the defined benefit obligation, and measured restrictedly according to note 4(13).
1. Functional and presentation currency

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

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

The consolidated financial statements comprise the Company and its subsidiaries. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the noncontrolling 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-Consolidated Company balances and transactions, and any unrealized income and expenses arising from intra-Consolidated Company transactions are eliminated in preparing the consolidated financial statements.

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

List of subsidiaries in the consolidated financial statements

The Company's subsidiaries were as follows:

			Percentage of ownership (%)
Name of investor	Name of subsidiary	Business activities	December 31, 2018	December 31, 2017	Notes
The Company	104 Learn Corporation (104 Learn)	General advertising services, data processing services, electronic information services, management consultancy, and employment services	- %	100.00 %	Note 1
The Company	104 Consulting Corporation (104 Consulting)	General advertising services, IT software services, electronic information services, talent dispatching, management consultancy and data processing services	100.00 %	100.00 %

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

			Percentage of ownership (%)
Name of investor	Name of subsidiary	Business activities	December 31, 2018	December 31, 2017	Notes
The Company	104 Human Resources Consultancy (Shanghai) Co., Ltd. (104 Human Resources Consultancy)	Collecting, coordinating, publishing, and consulting on human resource information; recruitment; designing and developing computer software, multimedia, and network systems; designing and producing advertising	70.00 %	70.00 %
The Company	104 Redpoint Information Technology (Shanghai) Co., Ltd. (Redpoint Information)	Developing network technologies and computer software, selling products, providing technical advice and services, and management consultancy	100.00 %	100.00 %

Note 1: 104 Learn has already been liquidation on October 31, 2018.

All subsidiaries of the Consolidated Company are included in the consolidated financial statements.

4) Foreign currency
1. Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Company entities at the 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 amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

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 when 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 the translation.

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 the exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated at the average exchange rate. Translation differences are recognized in other comprehensive income and presented in the foreign currency translation reserve in equity.

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 interests. When the Company disposes of only part of investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

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

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

The Consolidated Company shall classify an asset as current when:

1. It is expected to realized, or intended to be sold or consumed, during normal operating cycle;
1. It is held primarily for the purpose of trading;
1. It is expected to be realized within twelve months after the reporting period; or
1. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Consolidated Company shall classify all other assets as non-current.

The Consolidated Company shall classify a liability as current when:

1. It is expected to be settled during normal operating cycle;
1. It is held primarily for the purpose of trading;
1. The liability is due to be settled within twelve months after the reporting period even if the liability has been refinanced as long-term loans or the payments have been rescheduled after the reporting period but before the approval from the board of directors; or
1. It does not have an unconditional right to defer settlement of the liability 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 the issue of equity instruments do not affect its classification.

The Consolidated Company shall classify all other liabilities as non-current.

6) Cash and cash equivalents

Cash and cash equivalents comprise checking deposits, demand deposits, time deposits and cash equivalents-bonds purchased under resell agreements (hereinafter referred to as "RS bond"). Cash equivalents are short-term, highly liquid investments that are readily convertible to cash and which are subject to an insignificant risk of changes in value. Time deposits are classified as cash and cash equivalents only when they satisfy the aforementioned definition and are held for the purpose of short-term commitments rather than for investment or other purposes.

7) Financial instruments

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

Financial assets (policy applicable from January 1, 2018)

Financial assets are classified into the following categories: measured at amortized cost and fair value through profit or loss (FVTPL).

The Consolidated Company shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

(A) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

(B) Fair value through profit or loss

All financial assets not classified as amortized cost as above are measured at FVTPL. On initial recognition, the Consolidated Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, 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.

The Consolidated Company recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, refundable deposits and other financial assets).

Loss allowance for accounts receivable and notes receivable are always measured at an amount equal to lifetime expected credit loss (ECL). Loss allowances for other financial assets are considered reasonable and supportable information that is relevant and available (without undue cost or effort). This includes both quantitative and qualitative information and analysis, based on the Consolidated Company's historical experience, informed credit assessment and including forward-looking information, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. The Consolidated Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Consolidated Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the writeoff. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Consolidated Company's procedures for recovery of amounts due.

(D) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Consolidated Company transfers substantially all the risks and rewards of ownership of the financial assets.

1. Financial assets (policy applicable before January 1, 2018)
(A) Receivables

Receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Receivables comprise trade receivables and other receivables. Such assets are recognized initially at fair value, plus any directly attributable transaction costs. Subsequent to initial recognition, receivables other than insignificant interest on short-term receivables are measured at amortized cost using the effective interest method, less any impairment losses.

(B) Impairment of financial assets

Except for financial assets at fair value through profit or loss, financial assets are assessed for impairment at each reporting date. A financial asset is impaired if, and only if, there is any objective evidence of impairment as a result of one or more events (a loss event) that occurred after the initial recognition of the asset and that loss event (or events) has an impact on the estimated future cash flows of the financial assets that can be estimated reliably.

Objective evidence that financial assets are impaired includes default or delinquency by a debtor (such as delay in payment of interest or principal or default on payments), restructuring of an amount due to the Consolidated Company on terms that the Consolidated 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.

The Consolidated Company considers the specific assets at individual and aggregate level as the evidence for impairment for receivables. All individually significant receivables are assessed for specific impairment. For individually significant receivables without specific impairment, the Consolidated Company should further evaluate all impairment that had occurred but not yet assessed at an aggregate level. Receivables that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Consolidated 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.

An impairment loss in respect of a financial asset is reduced 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 from the allowance account. Any subsequent recovery of a receivable written off is recorded in the allowance account. Changes in the amount of the allowance account are recognized in profit or loss.

Impairment losses and recoveries of accounts receivable are recognized in selling expenses.

The Consolidated Company derecognizes financial assets when the contractual rights to the cash inflow from the asset expire or when the Consolidated Company 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 that had been recognized in other comprehensive income and presented in other equity – unrealized gains or losses from available-for-sale financial assets is recognized in profit or loss, and included in other gains and losses under non-operating income and expenses.

The Consolidated 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 sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income shall be recognized in profit or loss, and is included in other gains and losses under non-operating income and expenses.

A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is derecognized based on the relative fair values of those parts.

1. Financial liabilities and equity instruments
(A) Equity instruments

Equity instruments refer to surplus equities of the assets after the deduction of all the debts for any contracts. Equity instruments issued are recognized as the amount of consideration received less the direct cost of issuing.

(B) Other financial liabilities

Financial liabilities not classified as held for trading or designated as at fair value through profit or loss, which comprise trade and other payables, are measured at fair value, plus any directly attributable transaction cost at the time of initial recognition.

The Consolidated 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 removed and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss, and is included in other gains and losses under non-operating income or expenses.

(D) Offsetting of financial assets and liabilities

The Consolidated Company presents financial assets and liabilities on a net basis when the Consolidated 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.

8) Property, plant and equipment
1. 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.

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 the depreciation method 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 non-operating income and expense.

Subsequent cost

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

Depreciation

The depreciable amount of an asset is determined after deducting its residual amount, and it shall be allocated on a straight-line basis over its useful life. Items of property, plant and equipment with the same useful life may be grouped 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.

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:

3 to 50 years
2 to 5 years
3 to 4 years
2 to 5 years
3 years
2 to 5 years

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

9) Lease

Operating leases are not recognized in the Consolidated Company's balance sheets. Payments, other than insurance and maintenance expenditures made under an operating lease, are recognized as expense 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 payments are recognized as expense when the adjustments are determined.

10) Intangible assets

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

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 expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

Amortization

The amortizable amount is the cost of an asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the intangible assets from the date that they are available for use. The estimated useful life of computer software is 1~3 years.

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

11) Impairment – non-derivative financial assets

The Consolidated Company evaluates any indication of impairment on the reporting date and estimates the recoverable amount for those assets which show indications of impairment. This applies to all non-derivative financial assets excluding the following assets:

1. Deferred tax assets
1. Assets arising from employee benefits

If it is not possible to determine the recoverable amount (fair value less cost to sell and value in use) for an individual asset, then the Consolidated Company will have to determine the recoverable amount for the asset's cash-generating unit (CGU).

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

The Consolidated Company should assess 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 entity shall estimate the recoverable amount of that asset.

An impairment loss recognized in prior periods for an asset other than goodwill shall be 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. If this is the case, the carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal of an impairment loss.

12) Recognition of Revenue
1. Revenue from contracts with customers (policy applicable from January 1, 2018)

Revenue is measured based on the consideration to which the Consolidated Company expects to be entitled in exchange for transferring goods or services to a customer. The Consolidated Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Consolidated Company's main types of revenue are explained below.

(A) Online advertising and consulting service

The Consolidated Company provides online advertising and consulting services to enterprises and recognizes its revenue in the accounting period in which service is performed. Part of fixed-price online advertising service contracts which service is provided with specified quantity over a fixed period of time or for services with undefined quantity. Revenue is recognized on the percentage of services to be performed on the reporting date as total services.

Part of fixed-price consulting service contracts include software licensing, customized services and other relevant services. Software licensing and customized services are two single performance obligations, wherein their transaction prices are allocated to each performance obligation on a relative stand-alone selling price basis. At the beginning of the contract, management estimates the stand-alone selling price based on the type of software to be provided and the observable price for providing similar services to similar customers under similar circumstances. If any, the discount is allocated to each performance obligation on a relative stand-alone selling price basis. Software licensing revenue is recognized after the controlling right of software has been transferred. Customized service revenue is recognized on the percentage of services performed to date as total services to be performed during the period of contract.

Under fixed-price contracts, customer pay the fixed amount according to the agreed payment terms. The payment excesses the services be performed as a contract liability.

(B) Financing components

The Consolidated Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

Revenue (policy applicable before January 1, 2018)

The Consolidated Company's operating revenues mainly derive from providing online advertising and consulting services. For services rendered with specified quantity over a fixed period of time or for services with undefined quantity, revenue is recognized in accordance with the timing of services being rendered or the quantity of the service, respectively, as well as the amounts which are designated in the online advertising contract. The revenue for consulting service mainly derived from selling software and providing consultation service. Revenue is only recognized after certain task, which are designated in the contracts, are completed. After the Consolidated Company identified the main items of each completed tasks, revenue is recognized on the percentage of services performed to date to total services to be performed. Additionally, the Consolidated Company often received its payments in advance after the contracts are signed; therefore, the amount is deferred according to the Consolidated Company's policy and recognized as revenue once the service is performed.

13) Employee benefits
1. 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.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Consolidated Company's net obligation in respect of 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 are deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Consolidated 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 Consolidated Company, the recognized asset is limited to the total of any unrecognized past service costs and 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 Consolidated Company. An economic benefit is available to the Consolidated 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 portion of the increased benefit relating to past service by employees is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in profit or loss.

Remeasurements of the defined benefit liability (asset) include (1) actuarial gains and losses; (2) the return on plan assets, excluding the amounts included in net interest on the net defined benefit liability (asset); and (3) any change in effect of the asset ceiling, excluding the amounts included in net interest on the net defined benefit liability (asset). The Consolidated Company recognizes the remeasurements of the defined benefit liability (asset) in other comprehensive income under retained earnings.

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

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 Consolidated 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.

14) 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 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 sharebased payment is measured to reflect such conditions, and there is no true-up for differences between expected and actual outcomes.

15) Income taxes

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

Current taxes include tax payables and tax deduction receivables on taxable income (deficits) 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 shall not be recognized for the exceptions below:

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

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the statutory tax rate on the reporting date or the actual legislative tax rate.

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

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

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 they shall be 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.

16) Earnings per share

The Consolidated Company discloses the Company's basic and diluted earnings per share attributable to ordinary shareholders of the Company. The calculation of basic earnings per share is the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is the profit attributable to ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.

17) Segment information

An operating segment is a component of the Consolidated Company 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 Consolidated Company). Operating results of the operating segment are regularly reviewed by the Consolidated Company'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 IFRSs 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.

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Management continues to monitor the accounting estimates and assumptions. Management recognizes any changes in the accounting estimates during the period and the impact of the changes in the accounting estimates in the next period.

There are no critical judgments in applying accounting policies that have significant effect on the amounts recognized in the consolidated financial statements.

For the assumptions and estimation uncertainties, there were no significant risk resulting in a material adjustment within the next financial year.

(6) Explanation of significant accounts

1) Cash and cash equivalents

	December 31, 2018		December 31, 2017
Checking deposits	\$	3,177	3,210
Demand deposits		101,245	105,082
Time deposits		1,896,247	1,881,178
Cash equivalents-RS bond		72,000	54,000
Cash and cash equivalents in the consolidated statement of cash flows	\$	2,072,669	2,043,470

Please refer to note 6(18) for the disclosure of the interest rate risk, currency risk, and sensitivity analysis of the financial assets and liabilities of the Consolidated Company.

2) Financial assets at fair value through profit or loss

		December 31, 2018	December 31, 2017
	Mandatorily measured at fair value through profit or loss- non-current
	Private fund	\$ 4,914	-
3)	Notes and accounts receivable and overdue receivables
		December 31, 2018	December 31, 2017
	Notes receivable	\$ 565	1,196
	Accounts receivable	47,126	37,696
	Overdue receivable (recorded under other non-current assets)	252	5,959
	Less: Allowance for doubtful accounts-accounts receivable	(127)	(656)
	Allowance for doubtful accounts-overdue receivable (recorded under other non-current assets)	(252)	(5,959)
		\$ 47,564	38,236

The Consolidated Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on December 31, 2018. To measure the expected credit losses, notes, accounts and overdue receivable have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information.

The loss allowance provision as of December 31, 2018 was determined as follows:

	Gross carrying amount	Weighted average loss rate (%)	Expected credit loss
Aging 1~365 days	\$ 47,691	0.27	127
Aging over 365 days	252	100.00	252
	\$ 47,943		379

As of December 31, 2017, the Consolidated Company applies the incurred loss model to consider the loss allowance provision of notes accounts and overdue receivable.

As of December 31, 2017, impairment loss had been fully recognized for those overdue receivables.

The movement in the allowance for notes, accounts and overdue receivable were as follows:

		2017
	2018	Individually assessed impairment	Collectively assessed impairment
Balance on January 1, 2018 and 2017 per IAS 39	\$ 6,615	5,918	369
Adjustment on initial application of IFRS 9	-
Balance on January 1, 2018 per IFRS 9	6,615
Impairment losses recognized	199	913	242
Amounts written off	(863)	(872)	-
Accounts recovered	18	47	-
Disposal of subsidiary	(5,595)	-	-
Foreign exchange losses (gains)	5	-	(2)
Balance on December 31, 2018	\$ 379	6,006	609

Impairment loss recognized for individually assessed impairment is the difference between the carrying amount and the amount expected to be collected as of December 31, 2017. The Consolidated Company does not hold any collateral for collectible amounts.

4) Loss control of subsidiaries

The Consolidated Company liquidated 104 Learn on October 31, 2018, with the liquidation balance of \$12,100 thousand, which was recorded under other receivables.

The carrying amount of assets and liabilities of 104 Lean on the date of disposal were as follow:

Cash and cash equivalents	\$ 11,196
Other receivables	178
Other current assets	847
Other payables	(25)
Current tax liabilities	(62)
Other current liabilities	(34)
Carrying amount of net assets	\$ 12,100

5) Property, plant and equipment

Movement of the cost, depreciation, and impairment loss of the property, plant and equipment of the Consolidated Company for the years ended December 31, 2018 and 2017, were as follows:

Cost or deemed cost:	Land	Buildings	Computer equipment	Office equipment	Leasehold improvement	Transportation equipment	Other equipment	Unfinished construction	Total
January 1, 2018	\$ 103,562	75,072	304,180	3,686	39,846	1,619	28,035	-	556,000
Additions	-	710	67,365	-	5,197	-	2,151	1,470	76,893
Disposals	-	-	(20,793)	-	-	-	(388)	-	(21,181)
Reclassifications	-	-	-	-	1,470	-	-	(1,470)	-
Effect of movements in exchange rates	-	-	(64)	(12)	(18)	(22)	-	-	(116)
December 31, 2018	\$ 103,562	75,782	350,688	3,674	46,495	1,597	29,798	-	611,596
January 1, 2017	\$ 103,562	69,410	295,881	4,516	40,822	2,631	25,994	-	542,816
Additions	-	1,847	24,458	11	316	-	617	7,559	34,808
Disposals	-	-	(16,120)	(833)	(1,281)	(1,000)	(2,320)	-	(21,554)
Reclassifications	-	3,815	-	-	-	-	3,744	(7,559)	-
Effect of movements in exchange rates	-	-	(39)	(8)	(11)	(12)	-	-	(70)
December 31, 2017	\$ 103,562	75,072	304,180	3,686	39,846	1,619	28,035	-	556,000
Depreciation and impairment loss:
January 1, 2018	\$ -	30,117	259,903	3,665	33,050	1,459	21,187	-	349,381
Depreciation	-	3,317	29,303	13	4,155	160	2,619	-	39,567
Disposals	-	-	(20,701)	-	-	-	(388)	-	(21,089)
Effect of movements in exchange rates	-	-	(61)	(13)	(18)	(22)	-	-	(114)
December 31, 2018	\$ -	33,434	268,444	3,665	37,187	1,597	23,418	-	367,745
January 1, 2017	\$ -	26,726	241,045	4,326	28,508	2,222	20,996	-	323,823
Depreciation	-	3,391	34,994	178	5,416	175	2,511	-	46,665
Disposals	-	-	(16,100)	(832)	(870)	(924)	(2,320)	-	(21,046)
Effect of movements in exchange rates	-	-	(36)	(7)	(4)	(14)	-	-	(61)
December 31, 2017	\$ -	30,117	259,903	3,665	33,050	1,459	21,187	-	349,381
Carrying amount:
December 31, 2018	\$ 103,562	42,348	82,244	9	9,308	-	6,380	-	243,851
December 31, 2017	\$ 103,562	44,955	44,277	21	6,796	160	6,848	-	206,619
January 1, 2017	\$ 103,562	42,684	54,836	190	12,314	409	4,998	-	218,993

6) Intangible assets

The cost, amortization and impairment of the intangible assets of the intangible assets of the Consolidated Company for the years ended December 31, 2018 and 2017, were as follows:

	Software
Costs:
Balance on January 1, 2018	\$ 95,323
Additions	1,243
Disposals	(48)
Balance on December 31, 2018	\$ 96,518
Balance on January 1, 2017	\$ 92,527
Additions	2,796
Balance on December 31, 2017	\$ 95,323
Amortization and impairment loss:
Balance on January 1, 2018	\$ 88,618
Amortization for the year	4,434
Disposals	(48)
Balance on December 31, 2018	\$ 93,004
Balance on January 1, 2017	\$ 80,352
Amortization for the year	8,266
Balance on December 31, 2017	\$ 88,618
Carrying amount:
Balance on December 31, 2018	\$ 3,514
Balance on December 31, 2017	\$ 6,705
Balance on January 1, 2017	\$ 12,175

The amortization of intangible assets in 2018 and 2017 was recorded as expenses under the following categories in the consolidated statements of comprehensive income:

	2018	2017
Operating costs	\$ 2,026	4,469
Operating expenses	\$ 2,408	3,797

7) Operating leases

Non-cancellable operation lease rentals payable were as follows:

	December 31, 2018		December 31, 2017
Less than one year	\$	31,368	25,293
Between one and five years		25,973	23,826
	\$	57,341	49,119

The Consolidated Company leases offices and official car under operating leases. The leases typically run for a period of 1 to 5 years with an option to renew the lease.

Operating lease expenses were as follows:

	2018	2017
Operating costs	\$ 9,516	9,087
Operating expenses	27,954	26,627
	\$ 37,470	35,714

The Consolidated Company did not take responsibility for the residual value of the aforementioned rental of offices. As a result, all the risks and rewards still remained substantially with the lessor. The Consolidated Company classified those office leases as operating leases accordingly.

8) Employee benefits

Defined benefit plans

Reconciliation of defined benefit obligations at present value and plan assets at fair value were as follows:

	December 31, 2018	December 31, 2017
Present value of the defined benefit obligations	\$ 52,459	50,671
Fair value of plan assets	(46,793)	(43,458)
Net defined benefit liability	\$ 5,666	7,213

The Consolidated Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Act) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

(A) Composition of plan assets

The Consolidated 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 Bureau of Labor Funds, Ministry of Labor. 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.

The Consolidated Company's Bank of Taiwan labor pension reserve account balance amounted to \$46,793 thousand as of December 31, 2018. 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 Bureau of Labor Funds, Ministry of Labor.

(B) Movements in present value of the defined benefit obligations

The movements in present value of the defined benefit obligations for the Consolidated Company were as follows:

	2018	2017
Defined benefit obligation at January 1	\$ 50,671	45,881
Current service costs and interest	870	975
Remeasurement of the net defined benefit liability
-Actuarial gains and losses arising from changes in financial assumptions	918	3,815
Defined benefit obligation at December 31	\$ 52,459	50,671

(C) Movements in fair value of plan assets

The movements in fair value of plan assets for the Consolidated Company were as follows:

	2018	2017
Fair value of plan assets at January 1	\$ 43,458	41,407
Interest income	565	704
Remeasurements of net defined benefit asset – the return on plan assets (excluding amounts included in the interest during this period)	1,163	(279)
Contributions made	1,607	1,626
Fair value of plan assets at December 31	\$ 46,793	43,458

(D) Expenses recognized in profit or loss

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

	2018	2017
Current service costs	\$ 212	195
Net interest on the defined benefit liability	94	76
	\$ 306	271
Operating costs	\$ 22	24
Selling expenses	145	112
Administrative expenses	73	44
Research and development expenses	66	91
	\$ 306	271

(E) Remeasurements of the net defined benefit liability recognized under other comprehensive income

The Consolidated Company's remeasurements of the net defined benefit liability recognized in other comprehensive income in 2018 and 2017 were as follows:

	2018	2017
Cumulative amount at 1 January	\$ (2,772)	1,322
Recognition during the year	245	(4,094)
Cumulative amount at 31 December	\$ (2,527)	(2,772)

(F) Actuarial assumptions

The significant actuarial assumptions at the reporting date were as follows:

	December 31, 2018	December 31, 2017
Discount rate	1.10 %	1.30 %
Future salary increases rate	3.50 %	3.50 %

The expected contribution to be made by the Consolidated Company to the defined benefit plans for the next annual reporting period is \$1,575 thousand.

The weighted-average duration of the Company's defined benefit plans is 15 years.

(G) Sensitivity analysis

When calculating the present value of the defined benefit obligations, the Consolidated Company uses judgments and estimations to determine the actuarial assumptions, including discount rates and future salary changes, as of the balance sheet date. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligations.

As of December 31, 2018 and 2017, the effect of changes in principal actuarial assumptions on the present value of the defined benefit obligations were as follows:

	Effect on defined benefit obligation
	Increase of 0.25%	Decrease of 0.25%
At December 31, 2018
Discount rate	(1,895)	1,982
Future salary increase rate	1,799	(1,734)
At December 31, 2017
Discount rate	(1,919)	2,010
Future salary increase rate	1,835	(1,766)

The above sensitivity analysis is based on the effect of changes in a single assumption under the condition that other assumptions remain constant. In practice, many changes in assumptions may be linked together. The method used for the sensitivity analysis and calculation of the net defined benefit liability are the same.

Defined contribution plans

The Company and domestic subsidiaries allocate 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. Under this defined contribution plan, the Consolidated Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation. Foreign subsidiaries contribution pension are in accordance with local laws and regulations.

The Consolidated Company's pension costs under the defined contribution method were \$34,926 thousand and \$32,066 thousand for 2018 and 2017, respectively.

9) Income taxes

According to the amendments to the "Income Tax Act" enacted by the office of the President of the Republic of China on February 7, 2018, an increase in the corporate income tax rate from 17% to 20% is applicable upon filing the FY2018 corporate income tax return.

The components of income tax expense (benefit) for 2018 and 2017 were as follows:

	2018	2017
Current tax expense (benefit)
Current period	\$ 71,160	65,325
Adjustment for prior periods	(579)	(2,398)
10% surtax on unappropriated retained earnings	-	76
	70,581	63,003
Deferred tax expense (benefit)
Origination and reversal of temporary differences	34	119
Adjustment in tax rate	(643)	-
	(609)	119
Income tax expense	\$ 69,972	63,122

The amount of income tax benefit recognized in other comprehensive income (loss) for 2018 and 2017 were as follows:

	2018	2017
Items that will not be reclassified subsequently to profit or loss
Remeasurements of defined benefit plans	\$ 34	696

Reconciliation of income tax and profit before tax for 2018 and 2017 were as follows:

	2018	2017
Income before income tax	\$ 352,055	381,785
Income tax using the Company's domestic tax rate	\$ 70,404	64,903
Effect of tax rates in foreign jurisdictions	(153)	540
Adjustment in tax rate	(643)	-
Non-deductible expenses	-	1
Adjustment for prior periods	(579)	(2,398)
10% surtax on unappropriated retained earnings	-	76
Others	943	-
Total	\$ 69,972	63,122

2. Deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2018 and 2017 were as follows: Deferred tax assets:

	Defined benefit plans	Cumulative compensated absences	Allowance for bad debts	Total
Balance at January 1, 2018	\$ 1,226	3,504	962	5,692
Recognized in profit or loss	(127)	1,060	(962)	(29)
Recognized in other comprehensive income	34	-	-	34
Balance at December 31, 2018	\$ 1,133	4,564		5,697
Balance at January 1, 2017	\$ 760	3,412	943	5,115
Recognized in profit or loss	(230)	92	19	(119)
Recognized in other comprehensive income	696	-	-	696
Balance at December 31, 2017	\$ 1,226	3,504	962	5,692
Deferred tax liabilities:
Balance at January 1, 2018			\$	Other -
Recognized directly in equity				638
Recognized in profit or loss				(638)
Balance at December 31, 2018			\$	-

Assessment of tax

The R.O.C. income tax authorities have examined and approved the Company's income tax returns through 2016.

4. Business income tax administrative remedies

The Company's income tax return for the year 2014 had been examined by the National Taxation Bureau of the Northern Area, Ministry of Finance, in 2016, and the additional tax amounted to \$2,151 thousand. The examination difference is due to the difference in offsetting the taxable amounts of the investment tax credit. The Company disagreed with the examination results and requested a reexamination. The additional assessed tax payables were recognized as tax expense for the year 2016. The Company had received correction of notification of tax assessment for the year 2014 from the tax authorities in March 2017 and the Company had recognized the refund amount of \$2,171 thousand as tax income for the year ended December 31, 2017.

10) Share capital and other equity

As of December 31, 2018 and 2017, the total value of nominal ordinary shares amounted to \$500,000 thousand. Par value of each share is \$10 (dollars), and in total, there are 50,000 thousand authorized ordinary shares, of which 33,191 thousand shares and 33,207 thousand shares, respectively, were issued.

Reconciliation of shares outstanding and issued for 2018 and 2017 were as follows:

			Unit: Thousand shares
		2018	2017
	Balance of shares outstanding at January 1	33,147	33,111
	Granted of restricted employee shares	25	36
	Balance of shares outstanding at December 31	33,172	33,147
	Balance of restricted employee shares at January 1	60	131
	Granted of restricted employee shares	(25)	(36)
	Cancellation of restricted employee shares	(16)	(35)
	Balance of restricted employee shares at December 31	19	60
	Balance of shares issued at December 31	33,191	33,207
2.	Capital surplus
	The details of capital surplus were as follows:
		December 31, 2018	December 31, 2017
	Paid-in capital in excess of par value	\$ 395,098	391,986

In accordance with the Company Act, realized capital reserves can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

Restricted employee shares 2,761 7,563

\$ 397,859 399,549

3. Retained earnings

The Company's article of incorporation stipulates that Company's after-tax earnings should first be used to offset the prior years' deficits, if any. Of the remaining balance, 10% is to be appropriated as legal reserve until the balance of the legal reserve equals the total authorized capital and then remaining undistributed earnings shall be distributed according to a resolution of the shareholders' meeting.

When a company incurs no loss, it may, pursuant to a resolution to be adopted by a shareholders' meeting, distribute its legal reserve by issuing new shares or by distributing cash, only the portion of legal reserve which exceeds 25% of the capital may be distributed.

The aforesaid earning distribution shall be formulated by the board of directors and forward to the shareholder's meeting for approval by a resolution.

In accordance with the dividend policy of the Company's article of incorporation, the Company shall take into consideration its operating environment, industry developments, and the future capital needs and long-term financial plan, the Company adopts a stable dividends policy. As the Company is in its growth phase, business expansion and capital needs over next few years, therefore, the Company should distribute the undistributed earnings in the form of shares or in cash. The cash dividends shall not be less than 10% of total dividends. However, distribution of earnings shall be made in view of the year's earnings and financial condition, and adjusted in the shareholders' meeting.

(A) Special reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of the current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders' equity. Similarly, a portion of undistributed prior-period earnings (which does not qualify for earnings distribution) shall be reclassified as special earnings reserve to account for the cumulative changes to other shareholders' equity pertaining to prior periods. The amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions. The carrying amount of special reserve amounted to \$2,941 thousand, and \$0 thousand as of December 31, 2018, and 2017.

(B) Earning distribution

Earning distribution for 2017 was decided via the general meeting of shareholders held on May 30, 2018. The Company decided to distribute a cash dividend of \$9.6 (dollars) per share, totaling \$318,650 thousand.

Earning distribution for 2016 was decided via the general meeting of shareholders held on June 8, 2017. The Company decided to distribute a cash dividend of \$10.8 (dollars) per share, totaling \$358,838 thousand.

The employee restricted shares are not required to be repaid according to the Company's agreement with employees. For the years 2018 and 2017, the amount adjusted to selling expense after considering the employee turnover rate are \$206 thousand and \$231 thousand, respectively.

The related information about the aforementioned earnings distribution of 2017 and 2016 is available on the Market Observation Post System website.

11) Other share-based payment arrangement-restricted employee shares

A resolution was passed during the shareholders' meeting held on June 19, 2014, for the issuance of 230 thousand new restricted employee shares. The restricted shares were registered with and approved by the Securities and Futures Bureau of the Financial Supervisory Commission, R.O.C., on August 8, 2014.

The Company decided to issue 130 thousand and 12 thousand first restricted shares in 2014 during the board meeting held on August 13, 2014 and July 2, 2015, with the board resolution date as the record date, at a fair value of \$125 (dollars) and \$145 (dollars) per share, respectively. All shares have been issued, and the Company has completed the registration process.

The resolution was passed during the board of director's meeting held on November 10, 2016, for the cancellation of 7 thousand unvested shares due to employee resignation, and the registration was completed.

The resolution was passed during the board of directors' meeting held on March 16, 2017, for the cancellation of 1.5 thousand unvested shares, and the registration was completed on April 10, 2017.

Those employees with the restricted employee shares are entitled to them for free, with the condition that these employees continue to provide service to the Company for 2 years, that the yearly personal performance score is above grade 100, and that there is no violation of the rules in the employee code of conduct of the Company.

The proportion of shares granted by each vesting condition will be as follows from the time an employee is granted the restricted stock:

50% of the restricted employee shares are vested in year 1 after the grant date.

50% of the restricted employee shares are vested in year 2 after the grant date.

The restricted employee shares are kept by a depository and clearing corporation, which is appointed by the Company's share transfer agency before they are vested. These shares shall not be sold, pledged, transferred, gifted, or disposed of any other means to third parties during the custody period. The voting rights of these shareholders are executed by the custodian, and the custodian will act based on law and regulations. If the shares remain unvested after the vesting period, the Company will retrieve all the unvested shares at the issue price, and cancel the shares thereafter.

The Company decided to issue the first restricted employee shares of 2016 with consideration of attracting and retaining talented people based on the resolution approved at the shareholders' meeting held on June 7, 2016. Conditions for restricted employee shares are as follows:

1. The proposed 2016 restricted employee shares will issue 273 thousand shares, with a par value of 10 dollars per share, totaling \$2,730 thousand.
1. Issuance price: to issue new shares to employees gratuitously without any charges.
1. Shares can be issued in whole or in parts within 1 year after the effective registration with the authority.
1. Vesting condition: If the qualified employee is still in service at the following time points, the employee's yearly personal performance is above grade A and did not violate any law, labor contract, working rules, and employee code of conduct of the Company, the proportion of shares granted by each vesting condition will be as follows from the time an employee is granted the restricted stock:
(A) 1/3 of the restricted employee shares are vested in year 1 after the grant date
(B) 1/3 of the restricted employee shares are vested in year 2 after the grant date
(C) 1/3 of the restricted employee shares are vested in year 3 after the grant date
1. If the granted restricted employee shares cannot be vested by dividing into three years, then they should be calculated based on higher portion for the former and lower portion for the latter basis.

The restricted employee shares mentioned above were registered with and approved by the Securities and Futures Bureau of the Financial Supervisory Commission, R.O.C., on August 1, 2016.

The Company decided to issue 125 thousand first restricted shares in 2016 during the board meeting held on August 11, 2016, with the board resolution date as the record date, at a fair value of \$137 (dollars) per share. All shares have been issued, and the Company has completed the registration process.

The resolution was approved during the board of directors' meeting held on March 16, 2017, August 10, 2017, March 14, 2018, and June 14, 2018, for the cancellation of \$14.5 thousand, \$18.5 thousand, \$14.5 thousand, and \$1 thousand unvested shares, respectively; wherein the registration had been completed.

For the years 2018 and 2017, the amounts adjusted to capital surplus after considering the estimated employee turnover rate are \$1,845 thousand and \$2,758 thousand, respectively, and the amounts adjusted to other equity-other are \$634 thousand and \$1,575 thousand, respectively.

Compensation costs of the aforementioned restricted employee shares amounted to \$2,142 thousand and \$6,735 thousand were recognized as operating costs and expenses in 2018 and 2017, respectively.

12) Earnings per share

The calculation of basic and diluted earnings per share in 2018 and 2017 were as follows:

	2018	2017
Basic EPS:
Net income	\$ 282,207	318,123
Weighted-average number of common shares outstanding (thousand shares)	33,156	33,125
Basic EPS (New Taiwan dollars)	\$ 8.51	9.60

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

	2018	2017
Diluted EPS:
Net income	\$ 282,207	318,123
Weighted-average number of common shares outstanding (thousand shares)	33,156	33,125
Effect of potentially dilutive common stock
Employees' compensation	247		264
Restricted employee shares	35		67
Weighted-average number of common shares outstanding -diluted (thousand shares)	33,438	33,456
Diluted EPS (New Taiwan dollars)	\$ 8.44	9.51
13) Revenue from contracts with customers
1. The details of revenue were as follows:
		2018
Primary geographical markets:
Taiwan	\$	1,547,644
Other countries		29,968
	\$	1,577,612
Primary services:
Online and consultation services	\$	1,577,612

Please refer to note 6(14) for details on revenue for the year ended December 31, 2017.

Contract balances

	December 31,	January 1, 2018
Accounts receivable	\$	47,126	37,936
Less: Allowance for impairment		(127)	(656)
Total	\$	46,999	37,280
Contract liabilities-rendering of services	\$	446,687	388,246

Please refer to note 6(3) for details on accounts receivable and allowance for impairment.

The amount of revenue recognized for the year ended December 31, 2018 that was included in the contract liability balance at the beginning of the period was \$284,114 thousand.

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

14) Revenue and deferred revenue

The details of revenue were as follows:

	2017
Revenue of online services	\$ 1,264,428
Revenue of platform and consultation services	275,567
Net operating revenue	\$ 1,539,995
The details of deferred revenue were as follows:
	December 31, 2017
Revenue of online services	\$ 348,873
Revenue of platform and consultation services	42,793
Others	94
Total	\$ 391,760

Please refer to note 6(13) for details on revenue for the year ended December 31, 2018.

15) Employees' compensation and remunerations of directors and supervisors

In accordance with the Articles of incorporation, if the Company operates at a profit (the profit socalled is pre-tax profit before deducting employees' compensation and remunerations of directors and supervisors) it shall contribute 8%-15% of profit as employees' compensation and remunerations of directors and supervisors no more than 3%. However, any losses accumulated by the corporation to date shall be paid off first.

The employees' compensation in the preceding paragraph shall be distributed in the form of shares or in cash and object of payment includes the employees of subsidiaries of the corporation meeting certain specific requirements.

For the years ended December 31, 2018 and 2017, the Company estimated its employees' compensation to be \$31,738 and \$34,465 thousand, respectively, and the remuneration of directors and supervisors to be \$7,694 and \$8,355 thousand, respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees, directors and supervisors of each period, multiplied by the percentage of remuneration to employees, directors and supervisors as specified in the Company's Articles. These remunerations were expensed under operating costs or operating expenses during 2018 and 2017. If there are any subsequent adjustments to the actual remuneration amounts, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. If the employees' compensation is paid by the Company's stock, the numbers of shares to be distributed were calculated based on the closing price of the Company's ordinary shares, one day before the date of the meeting of board of directors. The related information is available on the Market Observation Post System website. There is no difference between the actual amount distributed as employees' compensation and remunerations of directors and supervisors and the estimated amount recognized in the financial statements for the years ended December 31, 2018 and 2017.

16) Other income

The details of other income in 2018 and 2017 were as follows:

	2018	2017
Interest revenue	\$ 12,977	12,643
Others	14,366	12,989
	\$ 27,343	25,632

17) Other gains and losses

The details of other gains and losses in 2018 and 2017 were as follows:

	2018	2017
Gains (Loss) on disposal of property, plant and equipment	\$ (92)	57
Net foreign exchange (losses) gains	1,695	(1,898)
Others	-	(165)
	\$ 1,603	(2,006)

18) Financial instruments

1. Categories of financial instruments

(A) Financial liabilities

	December 31, 2018	December 31, 2017
Financial assets at amortized cost (note):	\$
Cash and cash equivalents	2,072,669	2,043,470
Notes and accounts receivable	47,564	38,236
Other receivables	21,905	9,104
Other financial assets-current	150	-
Refundable deposits	8,250	7,840
Other financial assets-non-current	10,000	10,000
Total	\$ 2,160,538	2,108,650

Note: As of December 31, 2017, they are classified to loans and receivables.

(B) Financial liabilities

	December 31,	December 31, 2017
Financial liabilities at amortized cost:	\$
Notes and accounts payable		6,414	6,922
Other payables		104,781	112,443
Total	\$	111,195	119,365

2. Liquidity risk

The following table shows the contractual maturity of the financial liabilities excluding estimated interest:

	Carrying amount	Contractual cash flows	Within 6 months	6-12 months	1-2 years	2-5 years	Over 5 years
December 31, 2018
Non-derivative financial liabilities
Notes and accounts payable	\$ 6,414	6,414	6,414	-	-	-	-
Other payables	104,781	104,781	104,781	-	-	-	-
	\$ 111,195	111,195	111,195	-	-	-	-
December 31, 2017
Non-derivative financial liabilities
Notes and accounts payable	\$ 6,922	6,922	6,922	-	-	-	-
Other payables	112,443	112,443	112,443	-	-	-	-
	\$ 119,365	119,365	119,365	-	-	-	-

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

Interest rate analysis

Please refer to the financial risk management for the disclosure on the interest rate risk.

1. Currency risk
(A) Exposure to foreign currency risk

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

	December 31, 2018					December 31, 2017
	Foreign currency		Exchange rate	TWD	Foreign currency	Exchange rate	TWD
Financial assets
Monetary items
USD	\$	1,237	30.72	38,006	1,069	29.76	31,807

(B) Sensitivity analysis

The Consolidated Company's exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents that are denominated in a foreign currency. A weakening of 1% of the TWD against the USD as at December 31, 2018 and 2017, would have increased the net profit after tax by \$304 thousand and \$264 thousand for the years ended December 31, 2018 and 2017, respectively.

The foreign exchange gains and losses (including realized and unrealized) on monetary items was as follows:

	2018		2017
	Exchange gains and losses	Average exchange rate	Exchange gains and losses	Average exchange rate
TWD	\$ 156	-	127	-
CNY	333	4.63	(448)	4.52

1. Fair value of financial instruments
(A) Fair value hierarchy

The fair value of financial instruments is measured on a recurring basis, the fair value of the Consolidated Company's financial assets and liabilities, including the information on fair value hierarchy were as follows:

	December 31, 2018 Fair value
	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss-non current
Private fund	\$ -	-	4,914	4,914

(B) Reconciliation of Level 3 fair values

					2018
					Increase			Decrease
						From Level 3
						of financial
						liability			From Level 3
						transfer to			of financial
			In other			Level 3 of			assets of
		In profit or	comprehensiv	Purchased or	Transfers in	financial	Sale or	Transfers out	financial	Ending
Name	Opening balance	loss	e income	issued	of Level 3	assets	disposal	of Level 3	liability	balance
Financial assets at fair value through profit or loss-private fund	\$ -	-	-	4,914	-	-	-	-	-	4,914

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The Consolidated Company's financial instruments that use Level 3 inputs to measure fair value is financial assets at fair value through profit or loss –Private fund.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through profit or loss – Private fund	Net Asset Value Method	‧Net Asset Value	Not applicable

(D) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

For fair value measurements in Level 3, changing one or more of the assumptions by 5% to reflect reasonably possible alternative assumptions would have the following effects:

	Profit or loss		Other comprehensive income
	Favour-able	Unfavour able	Favour-able	Unfavour able
December 31, 2018
Private fund	\$ 246	(246)	-	-

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

19) Financial risk management
1. Overview

The Consolidated Company has exposure to the following risks arising from financial instruments:

(A) Credit risk.
(B) Liquidity risk.
(C) Market risk.

This note presents information about the Consolidated Company's exposure to each of the above risks and the objectives, policies, and processes for measuring and managing risk. Please see other related notes for quantitative information.

2. Risk management framework

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

The Consolidated Company's risk management policies are established to identify and analyze the risks faced by the Consolidated 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 Consolidated Company's activities. The Consolidated 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 Consolidated Company's Supervisor is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the board of directors and the Supervisor.

Credit risk

Credit risk is the risk of financial loss to the Consolidated Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Consolidated Company's notes and accounts receivable, other receivables, refundable deposits, etc.

(A) Cash and cash equivalents

The Consolidated Company's bank deposits are in different financial institutions with good credit. The Consolidated Company controls its credit risk for each financial institution and believes that the Consolidated Company's bank deposits will not have any significant credit risk.

(B) Receivables and other receivables

The Consolidated Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Consolidated Company's customer base, including the information of past trading experience with customer and adjust the transaction credit limits.

The board of directors and management have established a credit policy under which each new customer is analyzed individually for creditworthiness before the Consolidated Company's standard payment and delivery terms and conditions are offered. The Consolidated Company's review includes external ratings (when available), and in some cases, bank references. Credit limits are established for each customer. Customers that fail to meet the Consolidated Company's benchmark creditworthiness may transact with the Consolidated Company only on a prepayment basis or basic credit limits.

4. Liquidity risk

Liquidity risk is the risk that the Consolidated Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Consolidated Company's approach to managing liquidity is to ensure, as far 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 Consolidated Company's reputation.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates prices, will cause the Consolidated Company suffer possible loss for related transaction.

The Consolidated Company maintains its foreign currency within a level sufficient to meet the operational needs so as to manage exchange rate risk. The Consolidated Company's financial assets exposed to changes in fair value caused by interest rate fluctuation are bank deposits. Nevertheless, the interest rate is not volatile enough to affect the Consolidated Company's operations.

20) 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 includes common stock, capital surplus, retained earnings, and non-controlling interest. The board of directors' controls not only the return on capital ratio, but also the dividend level of the common stock.

The Consolidated Company's capital management approach did not change for the year ended December 31, 2018.

(7) Related-party transactions

1) Names and relationship with related parties

The followings are entities that have had transactions with the Consolidated Company during the periods covered in the consolidated financial statements.

Name of related party	Relationship with the Consolidated Company
104 Hope Foundation	Other related party

2) Transactions with related parties-Rental income

The amount of rental income by related parties was as follows:

	2018	2017
104 Hope Foundation	\$ 12	12

The price charged for rental was agreed by both parties, and was collected by telegraphic transfer.

3) Key management personnel compensation

Key management personnel compensation comprised:

	2018	2017
Short-term employee benefits	\$ 66,263	72,881
Termination benefits	1,651	1,401
Share-based payments	1,918	6,096
	\$ 69,832	80,378

(8) Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2018	December 31, 2017
Time deposits (recorded under other financial assets-current)	Guarantee for employment services	\$ 150	-
Time deposits (recorded under other financial assets-non current)	Guarantee for employment services	10,000	10,000
		\$ 10,150	10,000

(9) Significant commitments and contingencies

1) Unrecognized contractual commitments

The Consolidated Company applied to the Council of Labor Affairs for permission to provide employment services in accordance with the Employment Services Act. As of December 31, December 31, 2018 and 2017 and , the guaranteed amount provided by banks on behalf of the Consolidated Company was \$1,000 thousand.

2) Contingent liabilities: None.

(10) Losses due to major disasters: None.

(11) Significant subsequent events: None.

(12) Other

A summary of employee benefits, depreciation, and amortization, be classified by function as follows:

Function		2018		2017
Account	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits
Salary	82,075	742,897	824,972	58,687	697,159	755,846
Health and labor insurance	6,066	53,052	59,118	4,745	49,717	54,462
Pension	3,500	31,732	35,232	2,662	29,675	32,337
Remuneration to directors	-	5,771	5,771	-	6,266	6,266
Other personnel expense	3,283	24,259	27,542	3,260	22,386	25,646
Depreciation	15,158	24,409	39,567	21,191	25,474	46,665
Amortization	2,026	2,408	4,434	4,469	3,797	8,266

(13) Other disclosures items

1) 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 Consolidated Company in 2018:

1. Loans to other parties: None.
1. Guarantees and endorsements for other parties: None.
1. Securities held as of December 31, 2018 (excluding investment in subsidiaries, associates, and joint ventures):

			Ending balance
						Percentage of
	Category and	Relationship with		Shares/ units	Carrying	ownership		Highest balance
Name of holder	name of security	company	Account title	(thousands)	value	(%)	Fair value	during the year	Remarks
The Company	Private fund	-	Financial assets at	-	4,914	-	4,914	4,914
	sparkLabs Taipei		fair value through
	Fund I		profit or loss-non
			current

1. Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
1. Acquisition of individual real estate with amount exceeding TWD300 million or 20% of the capital stock: None.
1. Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
1. Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock: None.
1. Receivables from related parties with amount exceeding the lower of TWD100 million or 20% of the capital stock: None.
Trading in derivative instruments: None.

10. Business relationships and significant intercompany transactions:

					Intercompany transactions
			Nature of				Percentage of the consolidated total
Number	Name of	Name of	relationship		Amount		operating revenue or
(note 1)	company	counterparty	(note 2)	Account name	(note 3)	Trading terms	total assets
0	The Company 104	Consulting	1	Sales		5,467 No significant differences with third-party transactions	0.35 %
0	The Company 104		1	Miscellaneous		4,767 Income for service support	0.30 %
		Consulting		income		and asset authorization;
						there are no other customers
						for comparison
0	The Company 104		1	Accounts		1,941 No significant differences	0.08 %
		Consulting		receivable		with third-party transactions
0	The Company 104 Human		1	Miscellaneous		1,472 There are no other	0.09 %
		Resource		income		customers for comparison
2	104	The Company	2	Sales		48,282 There are no other	3.06 %
	Consulting					customers for comparison
2	104	The Company	2	Accounts		11,651 There are no other	0.48 %
	Consulting			receivable		customers for comparison

Note 1: 1. 0 represents the Company

1 represents 104 Learn
2 represents 104 Consulting
3 represents 104 Human Resource Consultancy
4 represents Redpoint Information

Note 2: 1. Parent company to subsidiary company.

Subsidiary company to parent company.
Subsidiary company to subsidiary company

Note 3: Mutual business dealings between the parent company and subsidiaries amounting to \$1,000 thousand are disclosed.

Note 4: Related-party transactions have been eliminated in the preparation of the consolidated financial statements.

2) Information on investees:

The following is the information on investees for the year ended December 31, 2018 (excluding information on investees in Mainland China):

					Original investment amount		Balance of December 31, 2018		Highest	Net income	Share of profit/
Name of investor	Name of investee		Location Main business and products	December 31, 2018	December 31, 2017		Shares Percentage of ownership	Book value (note 1)	balance during the year	(loss) of investee	losses of investee (note 1)	Remarks
The Company 104 Learn		Taiwan	General advertising	-	11,470	-	- %	-	11,470	(659)		(659)Note 2
			services, data
			processing services,
			electronic
			information services,
			management
			consultancy, and
			employment services
	The Company 104 Consulting Taiwan		General advertising	12,678	12,678	1,219	100.00 %	51,102	12,678	23,001		23,001 Subsidiary
			services, IT software
			services, electronic
			information services,
			talent dispatching,
			management
			consultancy and data
			processing services

Note 1: The long-term investments and investment gain or loss accounts have been eliminated in the preparation of the consolidated financial statements.

Note 2: The Consolidated Company liquidation 104 Learn in 2018.

3) Information on investment in Mainland China:
1. The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of Method of paid-in capital (note 4)	investment (note 1)	Aggregate investment amount remitted from Taiwan at beginning of year (note 4)	Amount remitted or returned in current year Invested amount	Returned amount	Aggregate investment amount remitted from Taiwan at end of year (note 4)	Net income (loss) of investee	Percentage of direct or indirect ownership by the Company (%)	The highest holding during the year	Investment gain (loss) (notes 2 and 3)	Book value as of December 31, 2018 (notes 2 and 3)	Unit: thousand dollars Amount of investment income remitted back to Taiwan at end of year
104 Human	Collecting,	34,091	(1)	23,909	-	-	23,909	(413)	70.00 %	23,909	(289)	16,775	-
Resources	coordinating,			(USD770)			(USD770)
Consultancy	publishing, and
	consulting on
	human resource
	information;
	recruitment;
	designing and
	developing computer
	software,
	multimedia, and
	network systems;
	designing and
	producing
	advertising
Redpoint	Developing	60,365	(1)	60,365	-	-	60,365	1,021	100.00 %	60,365	1,021	33,968	-
Information	network			(USD2,000)			(USD2,000)
	technologies and
	computer
	software, selling
	products,
	providing
	technical advice
	and services, and
	management
	consultancy

Note 1: Ways of investments are as follows:

(1) direct investment in Mainland China.

(2) others.

Note 2: The long-term investments and investment gain or loss accounts have been eliminated in the preparation of the consolidated financial statements.

Note 3: The investment gain (loss) and carrying value disclosed above included direct and indirect investments. The investment gain (loss) recognized by the Company is based on the financial statements audited by the auditors of parent company under the equity method.

Note 4: Based on historical exchange rates.

2. Limitation on investment in Mainland China:

		Unit: thousand dollars
Aggregate investment amount		Limitation on investment in
remitted from Taiwan to	Investment amount approved by	Mainland China by Investment
Mainland China at the end of the	Investment Commission of	Commission of Ministry of
period	Ministry of Economic Affairs	Economic Affairs (Note 1)
84,274	85,094	895,917
(USD 2,770 )	(USD 2,770 )

Note 1: Limitation on investment in Mainland China: 60% of the Company's stockholders' equity of \$1,493,195 thousand.

Note 2: Issued capital and investment capital remitted from Taiwan to Mainland China were translated at historical rates, and the rest of the investment information was translated at the year-end rate of December 31, 2018 (USD:NTD=1:30.72).

Significant transactions:

There is no significant inter-company transaction with the investment in Mainland China for the year ended December 31, 2018.

(14) Segment information

The consolidate company identifies reportable segment in accordance with the reported information which used by operating decision maker when making decision. To develop diversified career services and improve operating synergy, from January 1, 2018, the consolidate company only has a single reportable segment and considerate the overall operating profit and loss. Please refer to consolidate statements of comprehensive income for the related segment information for the years ended December 31, 2018 and 2017.

1) Service information

The service information on reportable segments of the Consolidated Company is based on different types of services and the revenue information from external customers has been disclosed above. As a result, additional information on service segments is not required.

2) Geographic information

The Consolidated Company's revenue (grouped by the customers' location) and other assets (grouped by the assets' location) were as follows:

Revenue from external customers

Region	2018	2017
Taiwan	\$ 1,547,644	1,504,131
Others	29,968	35,864
Total	\$ 1,577,612	1,539,995

Other assets:

Region	December 31, 2018	December 31, 2017
Taiwan	\$ 247,277	213,156
Others	88	168
Total	\$ 247,365	213,324

Other assets include property, plant and equipment, and intangible assets.

3) Information on major customers

There was no major customer whose revenue was more than 10% of operating revenue of the Consolidated Company in 2018 and 2017.

AI assistant

104 — Annual Report 2018

52296_rns_2018-11-14_399ae2c8-d10c-4a59-ab7e-24ff9b3d5546.pdf

104 CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Table of contents

Representation Letter

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

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

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) 104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the years ended December 31, 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars, unless otherwise stated)

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

2. IFRS 9 "Financial Instruments"

(4) Summary of significant accounting policies

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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

7) Financial instruments

9) Lease

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

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(6) Explanation of significant accounts

5) Property, plant and equipment

6) Intangible assets

7) Operating leases

8) Employee benefits

(B) Movements in present value of the defined benefit obligations

(C) Movements in fair value of plan assets

(F) Actuarial assumptions

2. Deferred tax assets and liabilities

4. Business income tax administrative remedies

10) Share capital and other equity

3. Retained earnings

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

14) Revenue and deferred revenue

18) Financial instruments

1. Categories of financial instruments

2. Liquidity risk

104 CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

2. Risk management framework

4. Liquidity risk

(7) Related-party transactions

(8) Pledged assets

(9) Significant commitments and contingencies

(12) Other

(13) Other disclosures items

10. Business relationships and significant intercompany transactions:

2) Information on investees:

2. Limitation on investment in Mainland China:

(14) Segment information

Revenue from external customers

3) Information on major customers

More from 104

104 Annual Report 2018