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104 Annual Report 2017

Jun 14, 2018

52296_rns_2018-06-14_978b57a2-9a91-48b5-8ad6-1cd8102f6ee8.pdf

Annual Report

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I. Spokesperson

Name: Chi-Kuan Yang

Title: Chairman

Tel: (02) 2912-6104

Email: [email protected]

Deputy Spokesperson

Name: Fen-Ju Lin

Title: Vice President & Chief Financial Officer

Tel: (02) 2912-6104 E-mail: [email protected]

II. Address and telephone number

Address: 10F, No.119-1, Baozhong Rd., Xindian Dist., New Taipei City, Taiwan, R.O.C. Tel: (02) 2912-6104

III.Share transfer agency

Name: Fubon Securities Co., Ltd., Shareholder Administration Department

Address: 2F, No.17, Xuchang Street, Zhongzheng District, Taipei City

Website: http://www.fubon.com

Tel: (02) 2361-1300

IV. Auditors

Name: Chun-Hsiu Kuang, CPA and Lily Lu, CPA

CPA Firm: KPMG

Address: 68F, No.7, Sec. 5, Xinyi Road, Xinyi District, Taipei City Website: http://www.kpmg.com.tw

Tel: (02) 8101-6666

V. The name of any exchanges where the company's securities are traded

offshore, and the method by which to access information on said offshore securities: N/A.

VI. Website: http://corp.104.com.tw

104 Corporation Table of Contents

I. Letter to Shareholders ............................................................................................................... 1 II. Company Profile ....................................................................................................................... 5 III.Corporate Governance Report ............................................................................................... 7 1. Organization ............................................................................................................................. 7 2. Directors, Supervisors, and Management Team ....................................................................... 9 3. Remuneration paid during the most recent fiscal year to Directors, Supervisors, General Managers, and Vice Presidents ............................................................................................... 20 4. Implementation of Corporate Governance ............................................................................. 27 5. Information on CPA professional fees .................................................................................... 64 6. Information on replacement of certified public accountant ................................................... 64 7. Information of the Company's chairman, general manager, or any managerial officer in charge of finance or accounting matters who has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise ............... 65 8. Any transfer of equity interests and pledge of and change in equity interests by a director, supervisor, managerial officer, and shareholder with a stake of more than 10 percent during the most recent fiscal year and up to the date of the annual report printed ............................ 66 9. Relationship information, among the Company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another ............................. 68 10.The total number of shares held in any single enterprise by the Company, its directors and supervisors, managers, and any companies controlled either directly or indirectly by the Company................................................................................................................................. 69 IV. Funding Status ....................................................................................................................... 70 1. Capital and Shares .................................................................................................................. 70 2. Issuance of Corporate Bonds .................................................................................................. 74 3. Issuance of Preferred Shares .................................................................................................. 74 4. Issuance of Global Depository Receipts ................................................................................. 74 5. Status of Employee Stock Option........................................................................................... 74 6. Status of Restricted Employee Shares .................................................................................... 75 7. Status of New Share Issuance in Connection with Mergers and Acquisitions ....................... 77 8. Financing Plans and Implementation ..................................................................................... 77 V. Operational Highlights ........................................................................................................... 78 1. Business Activities.................................................................................................................. 78 2. Market and Sales Overview.................................................................................................... 86 3. Human Resources ................................................................................................................... 89

  1. Environmental Protection Expenditure .................................................................................. 89 5. Labor Relations ...................................................................................................................... 90 6. Important Contracts ................................................................................................................ 90 VI. Financial Information ........................................................................................................... 91 1. Five-Years Financial Summary .............................................................................................. 91 2. Fire-Year Financial Analysis .................................................................................................. 95 3. Supervisors' report for the most recent fiscal year ................................................................. 98 4. Consolidated Financial Statement for the Most Recent Fiscal Year ...................................... 99 5. Financial Statement for the Most Recent Fiscal Year Audited by CPA ............................... 149 6. Financial conditions of the Company and its affiliates of the most recent fiscal year ......... 149 VII. Review of Financial Conditions, Financial Performance and Risk Management ....... 150 1. Financial position ................................................................................................................. 150 2. Financial performance .......................................................................................................... 150 3. Cash flow .............................................................................................................................. 151 4. Major capital expenditures during the most recent fiscal year ............................................. 151 5. Reinvestment policies, reasons for profit/loss, plans for improvement in the recent year and future investment plan in the coming year ........................................................................... 151 6. Analysis of risk management ............................................................................................... 152 7. Other Items ........................................................................................................................... 154 VIII. Special Items ..................................................................................................................... 155 1. Affiliated companies ............................................................................................................ 155 2. Private placement of securities in the most recent fiscal year and up to the date of the annual report printed............................................................................................................. 158 3. Holding or disposal of shares in the Company by the Company's subsidiaries in the most recent fiscal year and up to the date of the annual report printed ......................................... 158 4. Other matters that require additional description ................................................................. 158 IX. Material Matters that Impacted Shareholders' Equity or Securities Price in the Most Recent Fiscal Year and Up to the Date of the Annual Report Printed .......................... 158

I. Letter to Shareholders

i. Introduction

Dear shareholders:

Thank you for taking the time to attend the Company's 2018 annual shareholder’s meeting. On behalf of 104 Corporation, I would like to welcome your attendance and advice.

ii. 2017 Business Report

1.Achievements of the implementation of the operational plan

In order to implement the three major missions of management, i.e. "commitment to career matchmaking, commitment to the elderly, and commitment to children", 104 continued to develop its service models in 2017, including:

(1) Career Mission

  • 1.Mobile Job-Seeking Service: In response to the job applicants using mobile phones as the key way for job seeking, 104 continued to improve user experience of mobile phone service. In 2017, mobile version of job encyclopedia service was newly added, whilst APP, PC webpage and mobile webpage for job search had subsequently completed revisions of search services, and more accurate job referrals based on user behavior preferences were introduced.

  • 2.Enterprise Talent-Seeking Service: With the rising trend of mobile application, 104 continued to optimize the mobile talent-seeking service. In 2017, 104 Talent Search APP completed the revision of resume and the addition of contact information push notification services etc. The introduction page of recruiting company also launched a mobile version, allowing a smoother experience across various devices. We aim to help companies manage their brands, enhance their attractiveness for job seekers, assist corporate clients in managing employer brands, create exclusive overall recruitment solutions, and find talented individuals for the company.

  • 3.Career Social Platform: 104 hopes to help job seekers “not just find a job, but also find a direction for you”. Members in the career community can share their profession and experience, build their personal brand names, and through the objective affirmation of others, it can help the members explore their own direction and attract the attention of benefactors and talent-seeking companies.

  • 4.Human Resource Management Platform: 104eHRMS integrates the needs of benchmark enterprises in various industries, and meets the complex personnel leave and payroll calculation requirements of the enterprises with flexible parameter settings and continues to optimize the platform. In addition, 104 also provides human resources of small and medium business the “HR Portal”, a cloud management platform, helping companies easily manage people and affairs and assisting HR managers to improve professionalism, staff collaboration and communication, management decisions, and effectively improving work efficiency.

  • 5.Be A Giver Platform: Managers publish professional articles on the Be A Giver Community Platform and provide on-line consultation service in the Career Clinics, and participate in on-site lecture activities, allowing them to fully demonstrate their personal professionalism.

(2) Elderly Mission

1. Senior Care Bank Matchmaking Platform: A note-taking process that combines the eight major health care professionals (physicians, nurses, dietitians, pharmacists, physiotherapists, functional therapists, social workers, and fitness experts), with nurses at home care centers acting as consultants to promote health issues. This platform develops and launches health promotion proposals based on the concept of health promotion and prevention, formulates health promotion

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recommendations and housekeeper service plans according to individual needs of the elderly, tests the needs of children and elderly in the senior citizens market, and completes the supply and demand test in the two largest areas (Taipei City and New Taipei City).

  • 2.Senior Platform: A platform that takes the value of healthy elders as its mission. Retired people can provide paid services for demanders to sign up and participate on the platform. This platform went online in November 2017. The first stage focuses on retirees providing guided tour services, and will subsequently launch cooking and consultations.

(3) Children Mission

World of Work and Kids Platform : Implement 104's "commitment to children" mission, assist the teachers through the Kids Platform, and explore talents with children. Use the World of Work Platform to help students find suitable subjects and explore future work. Since the Kids Platform was launched, there have been 12,044 works and talent exploration records. World of Work Platform also has 945 career volunteers to answer 3,865 career issues.

2.Financial Performance

The consolidated revenue for 2017 was NT$1,539,995 thousand, up 6% from the consolidated revenue of NT$1,454,753 thousand for 2016. The consolidated net income for 2017 was NT$358,159 thousand up 6% from the consolidated operating income of NT$338,955 thousand for 2016. The consolidated net income for 2017 was NT$318,663 thousand, down 20% from the consolidated net income of NT$398,304 thousand for 2016. The decrease was mainly caused by the recognition of a tax income of NT$43,135 thousand and an investment income of NT$38,765 thousand (disposal of 104 Human Resources Corporation) for 2016.

recognition of a tax income of NT$43,135 thousand and an investment income of NT$38,765
thousand (disposal of 104 Human Resources Corporation) for 2016.		 recognition of a tax income of NT$43,135 thousand and an investment income of NT$38,765
thousand (disposal of 104 Human Resources Corporation) for 2016.		 recognition of a tax income of NT$43,135 thousand and an investment income of NT$38,765
thousand (disposal of 104 Human Resources Corporation) for 2016.
Unit: NT$1,000
Consolidated Income Statement 2017 2016
Operatingrevenue 1,539,995
1,454,753
Operatingincome 358,159
338,955
Net income before tax 381,785
376,635
Income tax expense 63,122
17,096
Income from continuingoperations 318,663
359,539
Income from discontinued operations(Note) -
38,765
Net income 318,663
398,304
Return on assets(%) 14
17
Return on shareholders’ equity (%) 21
26
Pre-tax income topaid-in capital(%) 115
113
Net margin(%) 21
27
Basic EPS(after Tax) (NT$) 9.60
12.04

Note: The Company's Board of Directors resolved to dispose of the full ownership of its subsidiary, 104 Human Resources Corporation, on December 29, 2015 and completed the transaction on January 5, 2016. According to IFRS 5, the relevant gains on disposal had classified as income (loss) from discontinued operations in the consolidated statements of comprehensive income for 2016.

3.Research and Development Results

In order to provide customers with more and better services, and to enhance and optimize the experience of user interface, 104 subsequently completed various research and development projects in 2017, including:

1. Optimization of Human Resources Cloud Management Platform

The optimization of the human resources cloud management platform is divided into two major parts. In addition to the original dynamic wall, it also provides functions including tasks,

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meetings, voting, activities, files, and instant messaging to meet the needs of internal employees. In terms of technology, new languages and new service architectures are used on AWS. In addition to significantly improving product performance, it can dynamically adjust resource allocation to meet customer needs in line with customer usage in the future.

2.Integration of Group-Wide User Account

Provide a consistent login and logout interface, offer a consistent user experience for all services within the group, and connect each service in tandem to exert synergy to provide a more complete product value.

3.The Establishment of a Common Platform

It provides the common components needed for 104 internal products, including notification system, user profile system, and instant messaging system.

4.Semantic Analysis and User Behavior Analysis

Independently developed system can segment words and phrases, and analyze the semantics of word data. It can record the footprints of each user in the job bank service. By mastering the user's preferences and behaviors, 104 continuously optimizes its products and refer the most suitable services and content to users.

5.Cloud Big Data Integrated Storage and Processing

With the most and complete resumes, job openings, companies, and user behavior data on the market, 104 unifies and integrates content and behavior data scattered everywhere into the cloud environment. It makes use of the powerful and flexible cloud computing environment and takes full advantage of 104 database.

iii. The Company's Development Strategies and Future Prospects

1. The Company's Development Strategies

In terms of the product development of the job bank, it will continue to enhance the effectiveness of matchmaking and improve user experience. We integrate projects such as storage and processing, semantic analysis and user behavior analysis through cloud big data, realize data-driven product development strategies, and convert 104's existing scale advantages of enterprise users and individual users into data scale and data-driven application service advantages, and also lay the foundation for the development of artificial intelligence (AI) applications. Through the group-wide user account integration project, the various services are put together to exert synergies, and monitor users' behaviors in each product to provide more accurate content and service referrals.

In order to assist companies in managing internal talents, with respect to consultancy service, we continued to refine talent management consultancy services and integrate them seamlessly with assessment systems. In the development of human resources systems, we continued to invest in the development of cloud and out-of-print systems to meet the needs of domestic large companies and small and medium business for their talent management.

In addition, in order to implement the three major missions of 104, we launched “Be A Giver”, a social campaign that helps people via mutual aids among various generations:

  • (1)We established a resume consultation room and a career consultation room. Through the experience sharing of senior workers in the workplace, the work skills and professional experience are passed on to young workers, and even social freshmen and campus students. This will eliminate the difference of communication among various generations and bridge the gap between learning and practice.

  • (2)Help your children start at their young age and explore the faculty and industry that suit their talents. There will be more integration with school teaching activities, and Be A Giver will call for more career workers to be partners of 104 so that school teachers can more easily use career services provided by 104 and enable Taiwan's next generation to gain better competitiveness.

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  • (3)In order to effectively assist career development of middle and high-level executives and expand middle-and high-rank services, in addition to striving for existing talent search services, the establishment of the Be A Giver community platform allows the middle- and high-level executives to provide their expertise, at the same time connecting the service of talent search, or extending the second career for high-rank talents!

2. Future Prospects

In 104, we continued to work hard to become the leading brand of human resources in the Chinese region, and took the four key values of “social responsibility”, “innovative thinking”, “customer orientation” and “honesty and integrity” as the highest standards of conduct with the aim of sustainable development. We will do our best to fulfill our social responsibility and corporate governance, create a long-term working environment for our employees, provide more valuable services to our customers, and look forward to continuing to create maximum value for our shareholders, customers, employees and all stakeholders.

Finally, I wish all shareholders

Good health and all the best

Chairman: Chi-Kuan Yang

General Manager: Chi-Kuan Yang

Chief Accountant: Fen-Ju Lin

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II. Company Profile

1. Date of Incorporation : October 30, 1993.

2. Company History

October 1993 Founded Askforce Corporation with capital of NT$1.5 million.
September 1998 Changed Limited Company to Corporation and increased paid-up capital to NT$5
million with cash capital increase of NT$3.5 million.
August 2000 Changed the company’s name to “104 Corporation”.
December 2000 Awarded “OutstandingI.T. Applications and Product Award”.
July 2001 Approved by Securities and Futures Commission to complete supplementary
procedures for classification as a public company with cash capital increase of NT$95
million, authorized capital of NT$300 million, and paid-up capital of NT$100 million.
August 2002 Increased paid-up capital to NT$115 million through capitalization of retained earnings
of NT$15 million.
April 2003 Established “104 Human Resource Corporation”.
August 2003 Increased paid-up capital to NT$130 million through capitalization of retained earnings
NT$15million.
August 2004 Increased paid-up capital to NT$240 million with cash capital increase of NT$10
million and through capitalization of retained earnings NT$100 million.
October 2004 Listed on Gre Tai Securities Market as a “Communication and Internet industry” stock.
January2005 Established “104 Learn Corporation” after resolution from the Board of Directors.
July 2005 Increased paid-up capital to NT$300 million through capitalization of retained earnings
NT$60 million.
February 2006 Conducted cash capital increase of NT$37.5 million with paid-up capital of NT$337.5
millionand became thefirstInternet companylisted on TaiwanSecuritiesExchange.
December 2006 Invested in China subsidiary “Redpoint Information” through Samoa reinvested
company to enterChina's onlinerecruitmentmarket and expand the scale.
April 2007 Invested directly in the China subsidiary “104 Human Resource Consultancy
(Shanghai)”.
December 2007 Invested in “104 Consulting Corporation” to focus on research and development of new
products.
December 2008 Ranked 2nd in Taiwan A+ Best 73 Earners byGlobal Views Magazine.
November 2009 104 Excellent Talent Resource Website was awarded the 9th “e-21 Gold Website
Award”by the Ministry of Economic Affairs.
December 2009 Awarded “Taiwan Innovative Service Supplier in 2009” by the Ministry of Economic
Affairs andIndustrial Technology andResearch Institute.
March 2011 Became the first Job Bank to develop and launch mobile platform for job seeking to
enable job seekers to easilyfind jobs.
June 2011 Ranked 4th in Internet information provider industry of “2011 the Largest Corporations
in Taiwan”.
October 2011 Ranked top 1 of “2011 Best Job Bank Website” in service sector survey by Global
Views Magazine.
December 2011 Awarded the 4th Good Brand of Commerce and Service Industry by Ministry of
Economic Affairs.

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June 2012 Obtained the 9th National Brand Yushan Award in “Outstanding Enterprise” and “The
Most Popular Brand”.
June 2012 Obtained Gold Award of 2012 i-Service.
June 2012 Ranked 6th in Internet information provider industry category of “2012 the Largest
Corporationsin Taiwan”.
October 2012 Obtained First Prize in “Outstanding Enterprise” category of the 9th National Brand
Yushan Award.
January 2013 Awarded the international standard ISO 27001 information security management system
certification.
January 2013 “104 Job Search” APP was awarded "Best Interactive UI Interface" of ”2012 Chinese
Mobile APP Prize”.
May2013 Awarded 2013 CSR Award-Work in Health byGlobal Views Magazine.
June 2013 Obtained "Gold Award" of 2013 i-Service byCommercial Times.
June 2013 “You may not be the best, but you are certainly very unique.” won 2013 Best
Advertising Slogan.
July 2013 Ranked 5th in Internet information provider industry category of “2013 the Largest
Corporations in Taiwan”by China Credit Information Service Ltd.
December 2013 Obtained TopTen OutstandingEnterprise Award of the 11th Golden Torch Awards.
January2014 “Dream Cradle” went online.
April 2014 Awarded 2014 CSR Award-SME Award byGlobal Views Magazine.
June 2014 Awarded “Gold Award” of 2014 i-Service byCommercial Times.
October 2014 “104 Career Community” went online.
June 2015 Awarded “Gold Award” of 2013 i-Service byCommercial Times.
July 2015 Awarded “2015 Outstanding Business Entities Using E-invoices” by Ministry of
Finance.
September 2015 “HR Portal” went online.
January 2016 Obtained Creativity Award of “2015 ROI Festival” and Silver Award in the category of
Innovation Award of“2015 Agency & Advertiser”.
July2016 Awarded “Gold Award” of The Best Service in Taiwan 2016,Commercial Times.
September 2016 Awarded “LOHAS Work” and “LOHAS Family” awards for Work-Life Balance Awards
2016 by the Ministry of Labor.
October 2016 Awarded “Silver Medal” in 2016 for Talent Quality-management System (TTQS)
Evaluationby theMinistry of Labor.
December 2016 Awarded Highest Honors in 2016 for Nursing Room Evaluation by New Taipei City
Government.
January 2017 “Be A Giver_Not very good 25 years old, who has not had?”
Google hosted The most successful ad video of Youtube in Taiwan in the fourth quarter
2016.
July2017 2017 Asia-Pacific ISLA™ held annuallyby (ISC)².
October 2017 2017 CSR Impact Award.
December 2017 2017 National Talent Development Awards.
December 2017 Awarded 2017 "Health Promotion Badge", a health career attestation, by the Health
Promotion Administration, Ministry of Health and Welfare.

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III.Corporate Governance Report

1. Organization

(1)Organizational Chart

==> picture [516 x 438] intentionally omitted <==

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

Shareholders’ meeting
Supervisors
Remuneration
Board of Directors
Committee
Auditing Office
Chairman
General Manager
Research and Social Enterprise
Development Center Department
Platform and Administration
Online Service
Consultation Management
Business Group
Business Group Business Group
Finance and
Corporation
Administrative
Governance
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----- End of picture text -----

(2)Major Corporate Functions
Department Major Functions
Online Service Business
Group		 Responsible for strategic planning, research and development, marketing and promotion of online recruiting and job seeking products and services.
Platform and Consultation
Business Group		 Responsible for strategic planning, research and development, marketing and promotion of HR cloud-computing management platform, HR system and consulting
services,executive search andproject recruitment services,matchingwith butlers and healthprevention for senior care and senior learningservices.
Administration Management
Business Group		 1.Financial Management: annual budgeting, business management, accounting, tax planning, treasury and capital allocation, financing, mid- to long-term capital and
reinvestment planning, subsidiary management, and management of shareholding tasks.
2.Corporate Governance: planning of Board meeting and shareholders’ meeting, establishment and promotion of related corporate governance code (including Code of
Practice on Corporate Governance, Principles of Integrity Operation, and Principles of Ethical Behavior), and corporate website planning and management for both
Chinese and English versions.
3.Human Resources Management and General Procurement: organizational design and development, recruitment, training and development, salary and benefit, employee
relationship, assets management, friendly and healthy workplace, general administrative tasks, and procurement management.
4.Information Services and Management: responsible for planning, design, development/construction, management, and maintenance of group-wide internal and external
information services and website/system/database/security architecture/one-stop sign-in center; ensuring quality of all external program services; construction and
maintenance of data center/public cloud; introduction and implementation of information security and personal information protection management systems.
5.Enhance brand value and increase brand awareness and favorability through relevant marketing activities, public issues, PR and public promotions.
Research and Development
Center		 1.Develop assessment tools to examine the competitiveness of workforces, help enterprises manage human resources and also assist job seekers to understand
themselves.
2.Develop various services and systems to help workforce enhance their competitiveness in the workplace.
3.Develop Senior Care Bank to formulate health promotion proposals, housekeeper care guidance and service plans according to the individual needs of the elderly. A
multi-screen and cloud-integrated mobile device is used in conjunction with cloud-based big data and Internet of Things to create an ecosystem of senior care industry.
4.Develop cloud management platform to provide customers with low cost and highly efficient enterprise cloud human resources platform.
5.Develop and implement Open Platform, provide online API registration and platform for developers so that third-party developers may utilize 104 Open API to develop
diverse applications.
6.Establish and introduce data analytics and data science research methods to assist the Company with various project-based products in order to continuously provide
innovative services and products which match client needs.
Social Enterprise Department Develop innovative business models and services to solve social problems according to the company's mission and vision.
Auditing Office 1.Responsible for establishment, promotion and supervision of the company's and its subsidiaries' internal control systems.
2.Supervise and help departments and subsidiaries establish, maintain, and implement internal control and implement self-evaluate operations.
3.Draw up auditing plans and implement internal audit based on risk levels, and make suggestions for improvement and continue to track the process according to
auditingresults.

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2. Directors, Supervisors, and Management Team

(1) Directors and Supervisors

A. Directors and Supervisors: March 31, 2018

Shares currently held by Shares currently held by Executives, directors or s Executives, directors or s upervisors who
Shares held upon Shares hel d in the name


are spo
uses or a relati
ve within the
Nationality
election		 Shares currently held spouse and minor of othe r persons Current positions in the
Job
Education and work
se
cond degree of
kinship

or place of		 Name Gender Date Term First children
company and/or in any
Title elected elected date experiences
registration other company
Shares Percentage Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Chi-Kuan Male 3
10.49%
3,773,157
11.36%
3,773,157
11.36%
－		 － Education: Bachelor of Foreign The company: General Manager － － －
Other companies: Chairman and
General Manager of 104 Learn
Corporation; Chairman and
General Manager of 104
Consulting Corporation;
Executive Director and Legal
Redpoint Information
Technology (Shanghai) Co.,
Ltd.; Chairman of 104 Human
Resources Consultancy
June Aug. Languages & Literature at Cheng
Kung University.
Chairman R.O.C. Yang 24,
2015		 Year 14,
2000		 3,473,493
Work Experience: Manager of
Tailami Laminex Co., Ltd.;
Manager of SUNREX
(Shanghai) Co., Ltd.; Chairman
of 104 Hope Foundation;
Chairman of Askforce
Corporation; Director of Tian
MeiCharityFoundation.
Male 3
Year		 Aug.
14,
2000		 246,167
0.74%
246,167
0.74%
9,000
0.03%
－		 － The company: Chief Legal
Officer.
Other companies: Director of
104 Consulting Corporation;
Director of 104 Learn
Corporation; Supervisor of 104
Human Resource Consultancy		 － － －
Education: LL.M, The University
of Houston,
Law Center, Texas, U.S.A
Work Experience: Managing
Director, Su & Yeh Law Firm;
General Manager of 104
June
Director R.O.C. Hung-Wen Su 24,
2015
Consulting Corporation; Adjunct
Instructor of Vanung University
and Hwa Hsia University of
Technology
(Shanghai) Co., Ltd.; Director of
104 Hope Foundation
Male June 3
Year		 May
16,
2005		 256,240
0.77%
143,240
0.43%
87,000
0.26%
－		 － Education: M.A European Study
Katholieke Universiteit Leuven,
Belgium
Work experiences: Business		 The company: None.
Other companies: Supervisors of
104 Consulting Corporation;		 － － －
Director R.O.C. Chien-An Juan 24,
2015
Director (China) of Digital
Imaging System, Philips China;
General Manager of 104
Corporation		 Director of 104 Hope
Foundation; Marketing
Consultant Convener of B
Current Impact Investment Inc.

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Shares currently held by Shares currently held by Executives, directors or Executives, directors or supervisors who
Shares held upon Shares hel d in the name



are spo
uses or a relati
ve within the
Nationality
el
ection		 Shares currently held spouse and minor of oth er persons Current positions in the
Job

Education and work
se
cond degree of
kinship

or place of		 Name Gender Date Term First ch ildren
company and/or in any
Title elected elected date experiences
registration other company
Shares Percentage Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Mun-Kee Male 3
Year		 June
9,
2011		 － － － － － － － － Education: Bachelor of
Mechanical Engineering,
University of Texas at Austin;
Master of Mechanical
Engineering, Massachusetts
Institute of Technology
Work Experience: Kendall		 The company: None.
Other companies: Executive
Director/Chief Executive
Officer–JcbNext Berhad;
Director–Greenfield Japan		 － － －
June
Director Malaysia
Chang		 24,
2015
Kabushiki Kaisha; Independent
Director, Vitrox Corp Bhd,
Malaysia; Director, Innity Bhd,
International Regional Director of
Sales and Marketing for Malaysia Malaysia; Independent Director,
MOLGlobal
Male June 3
Year		 June
28,
2013		 － － － － － － － － Education: University of
Massachusetts-Amherst;
M.A.(Labor Relations)
University of Massachusetts-
Amherst, Ph. D.(Labor
Economics)
Work Experience:
Professor, Department of
Economics; Minnesota State		 The company: Member of
Remuneration Committee
Other companies: Adjunct
Professor of the Institute of
－		 － －
Human Resource Management at
National Central University;
K. T. Li chair Professor at
National Central University;
Executive Board Member,
International Industrial Relations
Association; Global Business
Review, Advisory Board
University; Vice president, Chung-
Hua Institution for Economic
Member; Asian Pacific Business
Review, Editorial Board Member
Independent
Director		 R.O.C. Cheng Li 24,
2015		 Research; Dean of School of
Management, National Central
University; Vice president,
National Central University;		 (UK); The Journal of Industrial
Relations, Editorial Advisory
Board Member (Australia);
Harvard Business Review
(Chinese), Editorial Advisory
Interim president, National Central
University; Member of Pay
committee, TECO Electric &
Machinery Co., Ltd.; Director,
Feng Zan Waring Cool
Environmental Defense Fund;
Independent Director & Member
Board Member; Editorial Board
Member, Nanjing University
Journal of Human Resource
Management; Advisor, National
Development Council; Advisor,
Chung-Hua Institution for
Economic Research; Advisor,
Commonwealth Publishing
Company; Executive Yuan
ManpowerCommittee;
of Remuneration committee, Sinyi
Realty Inc.

-10-

Shares currently held by Shares currently held by Executives, directors or Executives, directors or supervisors who
Shares held upon Shares hel d in the name



are spo
uses or a relati
ve within the
Nationality
election		 Shares currently held spouse and minor of othe r persons Current positions in the
Job

Education and work
se
cond degree of
kinship

or place of		 Name Gender Date Term First ch ildren
company and/or in any
Title elected elected date experiences
registration other company
Shares Percentage Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Male 3
Year		 June
10,
2009		 － － － － － － － － Education:
M.S. Management Science &
Engineering. M.S. Electrical
Engineering at Stanford
University; B.S. Computer
Engineering at University of
British Columbia
Working Experience:
CEO of Voofox, Inc; Investment		 The company:
Member of Remuneration
Committee
Other companies: Chairman of
Global Social, Inc.; Director of
Innogrator, Inc; Director of		 － － －
June
Independent ROC Wei-Lin Liou
24
Director ... ,
2015
Advantage Ark, Inc; Director of
Manager at III; Deputy Investment Peer Ideas Incorporated
Manager at Asiatech Venture
Capital
Si ROC Askforce 3
Year		 June
11,
2008		 2,427,344
7.33%
2,427,344
7.31%
－		 － － － － － － － －

Corporation
June
24		 － － － － － － － － Education: Department of
Accounting, Ming Chuan
University		 The company: None.
Other companies: Independent
Director and Member of
Remuneration Committee of		 － － －
upervsor ... Representative:
Mei-Fang Hsu		 Female ,
2015
Work Experience: CPA of Daryar
MPI Corporation; CPA of Daryar
Accounting Firm
AccountingFirm
Male 3
Year		 June
28,
2013		 － － － － － － － － Education: Master of Law, Chinese
The company: None.		 － － －
Culture University; Bachelor of
Public Finance, National Chengchi
June University Other companies: Consultant of
Supervisor R.O.C. Zan-Syong Cai
24		 Work Experience: Member of Fair Keelung City Government;
Executive Controller of
,
2015		 Trade Commission; Executive
Yuan, Lawmaker & Senior
Lawmaker Association; Manager
Consultant; Associate Professor of of TSS Office
Economics, Chinese Culture
University

B. Major Shareholders of Institutional Shareholders:

B. Major Shareholders of Institutional Shareholders:
March 31, 2018
Names of institutional shareholders Major shareholders of institutional shareholders
Askforce Corporation Chi-Kuan Yang11.36%, Yun-HsiangKu 11.36%, Chien-Li Yang77.28%
  • C. Major shareholders in the table above who are the major shareholders of the institutional shareholders: None.

-11-

D. Directors and Supervisors:
Criteria Has more than 5 years of work experience and the
Independence criteria

following professional qualifications
An instructor or a A judge, prosecutor, Work 1 2 3 4 5 6 7 8 9
higher post in a
lawyer, accountant, or		 experience Concurrently

private or public
other professional
necessary for
serving as the
college or practice or technician commerce,
independent
university in the that must undergo law, finance,
director of other

field of
national examinations		 accounting, or 10 public
commerce, law, and specialized license.
business of the		 companies
finance, Company
Name accounting, or

business of the
Company
Chi-Kuan Yang ✓ ✓ ✓ ✓ ✓ 0
Hung-Wen Su ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Chien-An Juan ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Mun-Kee Chang ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Cheng Li ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Wei-Lin Liou ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Mei-Fang Hsu ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1
Zan-Syong Cai ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0

During the two years before being elected or during the term of office, directors and supervisors of a public company must comply with the following conditions:

  • (1) Not employed by the Company or its affiliates. (2) Not a director or supervisor of the Company or its affiliates (except for an independent director of the Company, its parent company, or subsidiary, 50% or more of whose shares eligible for voting are directly or indirectly held by the Company).

  • (3) Not a natural person shareholder who holds more than 1% of issued shares or is ranked top 10 in terms of the total quantity of shares held, including the shares held in the name of the person’s spouse, minor children or in the name of others.

  • (4) Not a spouse, relative within the second degree of kinship, or lineal relative within third degrees of kinship in the preceding three paragraphs. (5) Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the total number of issued shares of the Company or is ranked top 5 in terms of quantity of shares held.

(6) Not a director, supervisor, managerial officer, or shareholder holding more than 5% of shares of a specified company or institution that has a financial or business relationship with the Company. (7) Not a business owner, partner, director, supervisor, managerial officer, or spouse of a professional, sole proprietorship, partnership, corporation or organization that provides commerce, legal, financial, or accounting service or consultation from the Company or affiliates. These restrictions do not apply to any member of the remuneration committee who exercises powers pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the TPEx”. (8) Not a spouse or a relative within the second degree of kinship with any director. (9) Where none of the circumstances in the subparagraphs of Article 30 of the Company Act applies. (10) Where the person is not elected in the capacity of the government, a juristic person, or a representative thereof as provided in Article 27 of the Company Act.

-12-

(2) Management Team:

April 1, 2018

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender Elected or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Chairman and General Manager of

104 Learn Corporation; Chairman

and General Manager of 104

Consulting Corporation; Executive
Education: Bachelor of Foreign Languages
Director and Legal Redpoint
Chairman and
Chi-Kuan Jan. 1,
& Literature at Cheng Kung University.
Information Technology (Shanghai)
General R.O.C. Male 3,773,157
11.36%
3,773,157
11.36%
－		 －
－		 － －
Yang 2016
Work Experience: Manager of Tailami
Co., Ltd.; Chairman of 104 Human
Manager
Laminex Co., Ltd.; Manager of SUNREX Resources Consultancy (Shanghai)
Co., Ltd.; Chairman of 104 Hope

Foundation; Chairman of Askforce
Corporation; Director of Tian Mei

Charity Foundation.
Education: EMBA, National Taiwan
University
General Kuang-Li
Manager of R.O.C.
Hung		 Male Mar. 1, 36,000
0.11%
－		 － － － Work experiences: General Manager of None － － －
2016
Alication Service HP Taiwan
Business Group (Note 2) pp , ;
President, EDS Taiwan; Senior Director,
Unisys Taiwan
Education: Master of Business
Management, University of South
 Director of 104 Human Resource
General

Manager of
 R.O.C. Yu-Chun Female Mar. 1, 22,953
0.07%
－		 － － － Australia, Australia Consultancy (Shanghai) Co., Ltd.; － － －
Huang 2016 Work experiences: Chief Auditor/Chief
Director and CEO of 104 Hope
Business Group
Human Resource Officer, 104 Corporation;

Foundation
Deputy Manager, Chungling Corporation
Education: LL.M, The University of
Director of 104 Consulting

Houston, Law Center, Texas, U.S.A.

Corporation; Director of 104 Learn
Work experience: Managing Director Su
Chief Legal R.O.C. Hung-Wen Su
Male		 Jan. 1, 246,167
0.74%
9,000
0.03%
－		 － ,
& Yeh Law Firm; General Manager of 104		 Corporation; Supervisor of 104 － － －

Officer		 2004
Human Resource Consultanc
Consulting Corporation; Adjunct Instructor
y
(Shanghai) Co., Ltd.; Director of

of Vanung University and Hwa Hsia

104 Hope Foundation

University of Technology
Education: MBA, University of

Minnesota-Twin Cities		 CFO of 104 Learn Corporation;
Work experiences: Director of Far
CFO of 104 Consulting
Vice President Apr. 1,
Eastone; Director of New Century
Corporation; Director of 104 Hope
R.O.C. Fen-Ju Lin Female 6,000
0.02%
－		 － － － － － －
and CFO
2015
InfoComm Tech; CFO of Qware
Foundation; Career Advisor of
Communications; Product Manager of Business School, National

Citibank; Accounting Manager of EQUUS		 Chengchi University
Computer Systems, Inc. (USA)
Education: MBA, Yuan Ze University

Work experiences: HR Director and
Sep. 25, Part time lecturer, Department of
Vice President R.O.C. Li-Ming Chin Male 14,000
0.04%
－		 － － －
Assistant to President, Lituan Corporation;		 － － －

2006
Accounting, Soochow University
Manager of Management Department,

Yichin Corporation

-13-

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender Elected or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Education: EMBA, National Taiwan
University of Science and Technology Member of the Career Service

Work experiences: Director, International		 Committee, Providence University;
May 2,
Vice President R.O.C. Li-Hsue Wu Female 14,413
0.04%
－		 － － －
Marketing Department, New Mo City;
Curriculum Development Advisor,		 － － －

2013
Manager, Taichung Branch, 360dHR; Yu Da High School of Commerce

Regional Manager, Pizza Hut of Jardine
and Home Economics
Matheson Group
Education: M.A., Department of

Psychology, New York University

Work experiences: the 11th Member and
Vice President R.O.C. Tze-Hsing Male Apr. 1, 6,000
0.02%
－		 － － － Chairperson of the e-HR Committee, Lecturer, Department of － － －

Hua
2015
Chinese Human Resource Management
Psychology Soochow University

Association; NIKE Group Training and		 .

Organizational Change Project Manager,

Pao Chen Group
Education: Master, Department of Library

and Information Science, Fu-Jen Catholic
University
Sung-Jung Apr. 1,
Vice President R.O.C. Male 4,000
0.01%
8,000
0.02%
－		 － Work experiences: Director, Product None － － －

Chen
2015
Pt Dtt Tth Vi
rojec eparmen, ransec; ce
President, Airiti; Supervisor, Marketing

Department, Taiwan Mobile; Product

Manager, Sina.com
Education: Ph.D., Department of

Information Management, National Taiwan
Vice President R.O.C. Bo-Hao Zang Male Nov. 16, 21,000
0.06%
－		 － － － University None － － －

(Note 3)		 2015
Work experiences: Sr Director DCS (Data
. ,
Center Services), Trend Micro; Chief

Information Officer, PayEasy
Education: Master, Department of Labor General Manager of Business

Relations, Chinese Culture University
Group/13th Chairman at Chinese

Work experiences: Chief HR Officer,
Human Resource Management
Vice President R.O.C. Wen-Hsiung Male Mar. 1, 6,000
0.02%
－		 － － － Carewell; Director, Human Resources Association; Director at Asia － － －

Chung		 2016 Department Want Want China; Executive Pacific Federation of Human;
,
Director, HR Department, Sinyi Realty;
Director of Asia Pacific Federation

Director, HR and Administrative		 Human Resource Management
Department, Taiwan Fixed Network
(APFHRM)
Education: Ph.D., Human Resource
Management, National Central University

Work experiences: Adjunct Assistant
Adjunct Assistant Professor,
Chun-Hung Apr. 1,
Professor, National Taiwan Normal
Graduate Institute of Human
Vice President R.O.C. Male － － － － － － － － －

Lin
2016		 University and Chihlee Institute of Resource Management, National
Technology; TTQS Counselling Central University
Consultant of Workforce Development

Agency, Ministry of Labor

-14-

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender Elected or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Education: MBA, National Chengchi

University
Hui-Chen Apr. 1,
Vice President R.O.C. Female 26,000
0.08%
－		 － － － Work experiences: CFO, 104 Corporation; None － － －
Shih
2016
Dt M ATEN Cti
epuy anager, orporaon;
CFO, OmniAd Media; Project Manager,

Sunsino Venture Group
Education: Master of Information Science,
University of Pittsburgh, U.S.A.

Work experiences: Chief Information

Officer of TransAsia Airways, Chief
Feb. 6,
Vice President R.O.C. Hao-Lin Teng Male － － － － － －
Information Officer of V Air, Product		 None － － －
2017
Management of Yahoo Kimo, Senior

Product Manager of Expedia Inc., Founder

of Lollipop, Product Manager of Microsoft

US, Consultant of Capgemini US
Education: B.A., Business Management

Department, Yu Da University of Science
Apr. 1,
Vice President R.O.C. Yi-Pei Lin Female 600
0.00%
10
0.00%
－		 －
and Technology		 None － － －

2018
Work experiences: Management

Department, Federal Hospital
Director of 104 Consulting
Education: Ph.D., Department of

Corporation; Supervisor of 104

Psychology, National Chengchi University
Director R.O.C. Jung-Chuen Male Apr. 1, 26,000
0.08%
－		 － － －
Work experiences: Assistant Professor,		 Learn Corporation; Director of 104 － － －

2006
Hoe Foundation Suervisor of
Wang National Defense University; Project p ; p
Redpoint Information Technology
Advisor, ACER

(Shanghai) Co., Ltd.
Education: M.A., Mass Communication,
California State University, U.S.A.

Work experiences: Manager, 104 Office
Mar. 1,
Director R.O.C. Han-Shen Male 4
0.00%
10
0.00%
－		 －
City, 104 Corporation; Business		 None － － －
2016
Huang Development Manager of Taiwan Business
Service, Deputy Manager of Website

Development Division of ETWebs
Education: B.A., Information Management

Department, Shih Shin University
Jan. 9,
Director R.O.C. Yu-Jen Tseng Male － － － － － －
Work experiences: Director, Edom		 None － － －
2012
Corporation; System Development

Manager, Acroprise Technology
Education: Master, Institute of Nuclear
Engineering and Science, National Tsing
Sheng-Long
Director R.O.C.
Wong		 Male Nov. 26, － － － － － － Hua University None － － －
2013
Work exeriences: Sales Director
(Note 4) p ,
International SOS; Senior Sales Manager,

Western Union

-15-

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender Elected or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Education: M.S., Graduate School of
Computer Science, College of Electrical
Hsuan-Wei
and Computer Engineering, National
July 29,
Director R.O.C. Huang Male － － － － － －
Chiao Tung University		 None － － －

2013
(Note 5) Work experiences: Director, Information
Technology Department, FunTown

Branch, Hypermedia
Education: Bachelor, Department of Civil
Director R.O.C. Ming-Lun Male Apr. 1, 7,295
0.02%
6,619
0.02%
－		 － Engineering, Chung Hua University Consultant of Taiwan Professional － － －

Lee
2015
Work experiences: Manager 104 Tutor		 Baseball Players Association
, ,
104 Corporation
Education: MBA, International University

of Monaco
Director R.O.C. Chi-Long Male Apr. 1, 102
0.00%
594
0.00%
－		 － Work experiences: Chief, Administrative Director of 104 Hope Foundation － － －

Huan
2015
Unit TVBS; Vice Section Manaer
g , g,
Administrative Department, Zu Wu

Corporation
Education: Bachelor, Department of

Mathematics, Soochow University
Director R.O.C. Kui-Lin Lee Male Apr. 1, 19,010
0.06%
465
0.00%
－		 － Work experiences: Assistant Manager, None － － －
(Note 6)
2015
Bd Dtt Ti Siti
on eparmen, awan ecures;
Senior Engineer, Information Department,

Yuanta Securities
Education: Associate Bachelor of
Electronic Data Processing Division,

National Taipei Business School
Director R.O.C. Yu-Lin Wang Female Apr. 1, 6,000
0.02%
－		 － － － Work experiences: Manager, HR and None － － －

2015
Administrative Deartment Atech
p,
Totalsolution; Deputy Manager, Learning

Business Group, SoftChina; Supervisor,

HR Department, Arch Technology
Education: MBA, National Taiwan
University of Science and Technology
Director R.O.C. Yu-Mei Tu Female Apr. 1, 1,000
0.00%
－		 － － － Work experiences: Manager, HR None － － －

2016
Deartment 104 Cororation Senior
p, p;
Specialist, HR Department, Aetna Life

Insurance
Education: Master, Journalism, National
Chengchi University

Work experiences: Yahoo E-Commerce
Wei-Wei Oct. 1,
Director R.O.C. Female － － － － － －
Marketing S. Manager, Apple Daily		 None － － －
Wong 2016
Finance Center Tech Section Journalist,
Min-Sen Daily News Family and

Consumer Center Tech Section Journalist

-16-

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender Elected or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Education: Master of Integrated Marketing

Communication, Northwestern University,

U.S.A.
Director R.O.C. Chia-Chin Wu
Male		 Nov. 1, － － － － － － Work experiences: HTC Digital Marketing None － － －
2016
Sr Associate Manaer General Manaer
. g, g
of Logos Consultant, Business Director of

Commtiva, Marketing Director of ASUS

Europe
Education: Finance, Takming University of

Science and Technology
Hui-Hsin
Director R.O.C.
Hsiao		 Female Jan. 1, － － － － － － Work experiences: Cigna Health Insurance None － － －
2017
Diital Marketin Director Standard
(Note 7) g g ,
Chartered Consumer Financing Deputy

Manager
Education: Master, Construction
Management, Ohio State University,

U.S.A.
Chen-Peng
Director R.O.C.
Wang		 Male Nov. 1, 2,463
0.01%
10
0.00%
－		 － Work experiences: Director of Advantech, None － － －
2016
Information Deut Manaer of TASK
(Note 8) py g
Co., Ohio Dept. of Development

Programming Analyst, Ohio Dept. of

Correction, Programming Analyst
Education: BS, Applied Mathematics,
Chia-Hsuan
National Chiao Tung University
Nov. 7,
Director R.O.C. Lin Male － － － － － －
Work experiences: KKBOX Platform Tech		 None － － －
2016
(Note 9) Center Head Engineer, PIXNET IT Dept.
Sr. Engineer
Education: Ph.D., Information
Engineering, National Jinan University
Jan. 1,
Director R.O.C. Cheng-Yu Lu Male － － － － － －
Work experiences: PIXNET IT Director,		 None － － －
2017
Data Scientist, Academia Sinica Institute
of Information Science Researcher
Education: Master, Institute of Human
Resource Management, National Sun Yat-

sen University

Work experiences: Ruentex Group HR
Apr. 1,
Director R.O.C. Li-Mei Su Female － － － － － －
Div. Manager, Ruentex Construction		 None － － －

2017
Associate HR Manager, Ruentex

Engineering HR Specialist, Ruentex

Maintenance HR Specialist, Finance and

IT HR Div. Sr. Manager
Education: Master, Human Resource
Commissioner of the Committee
Management National Central University
Director R.O.C. Chin-Hua Female Apr. 1, － － － － － － ,
Work experiences: Senior Manager of		 for Integration of Technology and － － －
Chiang
2017
Media of Chinese Human Resource
Talent Development of 104 Corporation,
Management Association

China Motor HR Div. Associate Manager,

-17-

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender Elected or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Namchow Chemical and Industrial
Administrative Div. Manager, Far East

Broadband HR Administrative Div.
Specialist
Education: Master of Data Science,
University of Pennsylvania, U.S.A

Work experiences: Engineer of Planning

Department of Chunghwa

Telecommunications、Lead Auditor of
Chi-Chang Jun. 1,
Director R.O.C. Male － － － － － － BSI Verification Department, Director of None － － －

Chen		 2017
Information Security Service Department

of Asia-Pacific Web Access, Engineer of

R&D Department of Wistron NeWeb

Corp., Information Security Engineer of

Yu Song International R&D Department
Education: Master of Applied Arts,

National Chiao Tung University

Work experiences: Supervisor of Asus

Design Center Concept Planning and

Design Department, Deputy Design
Director R.O.C. Xun-Xhi Male Sep. 1, － － － － － － Manager of Perception Interface Supervisor of Taiwan User － － －
Cao
2017
Development Department of Wistron Value

Experience Design Association

Creation Center, Deputy Manager of


Process Integration Department of TSMC

Third Plant, Part Time Lecturer of National
Hsinchu University of Education/Shih

Chien University
Education: Master of Information
Engineering, Queensland University of

Technology, Australia

Work experiences: Senior Manager of

Global Information Services of Trend
Ying-Yi Sep. 26,
Director R.O.C. Male － － － － － － Micro, Senior Technical Support Manager None － － －

Wu
2017
of Cefinity Corporation, Technical

Consultant of Taiwan Business of Allied
Telesys Int, Senior Technical Support

Manager of Neteyes, Integration Specialist

of Compaq Computer
Education: Master of Business
Administration, University of Strathclyde,

UK
Director R.O.C. Min-Yin Female Feb. 1, － － － － － － Work experiences: Chief Operating None － － －
Xu 2018
Officer of Being Digital CO LTD
., ,
Director of Community Business of

cacaFly, Digital Marketing Manager of

Brand Center of BenQ Corporation,

-18-

Managers who are a Managers who are a Managers who are a
Shares held in the

spouse or a relative within
Nationality or Date Shares held Shares held by spouse name

Current positions in the Company
the second degree of
Job Title
Place of		 Name Gender
Elected		 or minor children of other persons Education and Work Experiences
and/or in any other company kinship
Registration (Note 1)
Shares Percentage Shares Percentage Shares Percentage Title Name Relation
Deputy Project Manager of Internet TV

Division of AVerMedia Corporation,

Product Marketing Planning of BenQ Asia

Pacific
Note 1: Date is the commencement date (assumed or promoted) of the current position.
Note 2: General Manager of Business Group Kuang-Li Hung resigned from the post on March 31, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 3: Vice President Bo-Hao Zang left the post on October 16, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 4: Director Sheng-Long Wong resigned from the post on July 31, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 5: Director Hsuan-Wei Huang resigned from the post on January 31, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 6: Director Kui-Lin Lee left the post on February 28, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 7: Director Hui-Hsin Hsiao resigned from the post on August 24, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 8: Director Chen-Peng Wang left the post on December 31, 2017, so shareholding and other related information are disclosed as of the resignation date.
Note 9: Director Chia-Hsuan Lin resigned from the post on September 25, 2017, so shareholding and other related information are disclosed as of the resignation date.

-19-

3. Remuneration paid during the most recent fiscal year to Directors, Supervisors, General Managers, and Vice Presidents

  • (1) Directors and Supervisors

    • A. Remuneration of Directors (including Independent Directors)

December 31, 2017; unit: NT$000

Remuneration of Directors Remuneration of Directors Remuneration of Directors Remuneration of Directors Remuneration of Directors Remuneration of Directors Remuneration of Directors Remuneration of Directors Ratio of Total Remuneration Ratio of Total Remuneration Remuneration Paid to Concurre Remuneration Paid to Concurre Remuneration Paid to Concurre Remuneration Paid to Concurre nt Employees nt Employees nt Employees nt Employees Ratio of Total Compensation
(A+B+C+D+E+F+G) to Net
Income (%)		 Ratio of Total Compensation
(A+B+C+D+E+F+G) to Net
Income (%)		 Compensation
Paid to
Directors
from an
Invested
Company
Other than
the
Company’s
Subsidiary
Job Title Name Base Compensation (A) Retirement pension (B) Directors Compensation (C) Allowances (D) (A+B+C+D) to Net Income
(%)		 Salary, Bonus and Allowances
(E)		 Retirement pension (F) Employee Compensation (G)
(Note 1)
The
Company		 Companies
in the
consolidated
financial
statements		 The
Company		 Companies
in the
consolidated
financial
statements		 The
Company		 Companies in
the
consolidated
financial
statements		 The
Company		 Companies in
the
consolidated
financial
statements		 The
Company		 Companies in
the
consolidated
financial
statements		 The
Company		 Companies in
the
consolidated
financial
statements		 The
Company		 Companies in
the
consolidated
financial
statements		 The Company Companies in the Companies
Cash
amount		 The
Company
in the
consolidated
financial
statements
Stock
amount		 Cash
amount		 Stock
amount
Chairman Chi-
Kuan
Yang		 0 0 0 0 6,266 6,266 30 30 1.98% 1.98% 5,897 5,897 0 0 0 0 1,014 0 3.83% 4.15% None
Director Chien-
An Juan
Director Hung-
Wen Su
Director Mun-
Kee
Chang
Independent
Director		 Cheng
Li
Independent
Director		 Wei-Lin
Liou
Note 1
Note 2		 : The amount approved by the Board of Directors to be distributed for 2017 and calculated by the proportion of actual allocation amount last year.
: The remuneration that Director will receive forprovidingconsultingservices for Companies in the consolidated financial statements is 711.

Table of Remuneration Rang

Table of Remuneration Ranges
Range of Remuneration Name
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
The Company Companies in the consolidated
financialstatements		 The Company Companies in the consolidated
financialstatements
Below NT$2,000,000 Chi-Kuan Yang, Chien-An Juan,
Hung-Wen Su, Mun-Kee Chang,
Cheng Li, Wei-Lin Liou		 Chi-Kuan Yang, Chien-An Juan,
Hung-Wen Su, Mun-Kee Chang,
Cheng Li, Wei-Lin Liou		 Chi-Kuan Yang, Chien-An Juan,
Mun-Kee Chang, Cheng Li, Wei-
Lin Liou		 Chi-Kuan Yang, Chien-An Juan,
Mun-Kee Chang, Cheng Li, Wei-
Lin Liou
NT$2,000,000 (included)~NT$5,000,000 - - - -
NT$5,000,000 (included)~NT$10,000,000 - - Hung-Wen Su Hung-Wen Su
NT$10,000,000 (included)~NT$15,000,000 - - - -
NT$15,000,000 (included)~NT$30,000,000 - - - -
NT$30,000,000 (included)~NT$50,000,000 - - - -
NT$50,000,000 (included)~NT$100,000,000 - - - -
Over NT$100,000,000 - - - -
Total 6 6 6 6

-20-

B. Remuneration of Supervisors

December 31, 2017; unit: NT$000

Remuneration of Supervisors Remuneration of Supervisors Remuneration of Supervisors Remuneration of Supervisors Compensation
Ri f Tl Ri
Job Title Supervisors ato o ota emuneraton
Paid to
Base Compensation (A) Allowances (C) (A+B+C) to Net Income (%)

Compensation(B)
Supervisors from
Companies in Companies in Companies in an Invested
Name Companies in

the
the
the		 Company Other
The The The
the consolidated		 The
consolidated consolidated consolidated than the
Company Company Company financial Company
financial financial financial Company’s
statements
statements statements statements Subsidiary
Supervisor
Askforce
Corporation -
Mei-FangHsu		 0
 0 2,089 2,089 0 0 0.66% 0.66% None
Supervisor
Zan-Syong Cai

Table of Remuneration Ranges

Name Name
Total of (A+B+C)
Range of Remuneration
Companies in the consolidated financial
The Company
statements
Below NT$2,000,000 Askforce Corporation (Representative: Mei-Fang
Askforce Corporation (Representative: Mei-Fang
Hsu),Zan-SyongCai Hsu),Zan-SyongCai
NT$2,000,000(included)~NT$5,000,000 - -
NT$5,000,000 (included) ~NT$10,000,000 - -
NT$10,000,000 (included) ~NT$15,000,000 - -
NT$15,000,000 (included) ~NT$30,000,000 - -
NT$30,000,000 (included) ~NT$50,000,000 - -
NT$50,000,000 (included) ~NT$100,000,000 - -
Over NT$100,000,000 - -
Total 2 2

-21-

(2) Remuneration of General Manager and Vice Presidents

A. Remuneration of General Manager and Vice Presidents

December 31, 2017; unit: NT$000

Job Title Name Salary (A) Salary (A) Retirement Pension (B) Retirement Pension (B) Bonuses and Allowances
(C)		 Bonuses and Allowances
(C)		 Employee Compensation (D) (Note 1) Employee Compensation (D) (Note 1) Employee Compensation (D) (Note 1) Employee Compensation (D) (Note 1) Ratio of Total
Remuneration (A+B+C+D)
to Net Income (%)		 Ratio of Total
Remuneration (A+B+C+D)
to Net Income (%)		 Compensation
Paid to General
Manager and
Vice Presidents
from an
Invested
Company
Other than the
Company’s
Subsidiary
The
Company		 Companies
in the
consolidated
financial
statements		 Companies in the
Companies
 Companies
 The Company
consolidated		 Companies in
The in the
 The in the
 financial statements The the
C consolidated C consolidated consolidated
ompany financial ompany financial Cash Stock Cash Stock company financial
statements statements amount amount amount amount statements
Chairman and
General Manager		 Chi-Kuan Yang 36,234 36,234 0 0 21,642 21,642 6,188 0 8,688 0 20.14% 20.92% None
General Manager
of Business
Group		 Kuang-Li Hung
General Manager
of Business
Group		 Yu-Chun Huang
Chief Legal
Officer		 Hung-Wen Su
Vice President
and CFO		 Fen-Ju Lin
Vice President Wen-Hsiung
Chung
Vice President Li-Ming Chin
Vice President Li-Hsue Wu
Vice President Tze-Hsing Hua
Vice President Sung-Jung Chen
Vice President Bo-Hao Zang
Vice President Chun-Hung Lin
Vice President Hui-Chen Shih
Vice President Hao-Lin Teng

Note 1: The amount approved by the Board of Directors to be distributed for 2017 and calculated by the proportion of actual allocation amount last year. Note 2: Only specify name and remuneration of General Managers and Vice Presidents in 2017.

-22-

Table of Remuneration Ranges

Name Name
Range of Remuneration The Company Companies in the consolidated financial statements
Below NT$2,000,000 Chi-Kuan Yang, Kuang-Li Hung Chi-Kuan Yang, Kuang-Li Hung
Fen-Ju Lin, Wen-Hsiung Chung, Li-Hsue Wu, Fen-Ju Lin, Wen-Hsiung Chung, Li-Hsue Wu,
NT$2,000,000 (included) ~ NT$5,000,000 Sung-Jung Chen, Hui-Chen Shih, Chun-Hung Lin
Sung-Jung Chen, Hui-Chen Shih, Chun-Hung Lin

Bo-Hao Zang, Hao-Lin Teng

Bo-Hao Zang, Hao-Lin Teng
Hung-Wen Su, Yu-Chun Huang, Tze-Hsing Hua,
Hung-Wen Su, Yu-Chun Huang, Tze-Hsing Hua,
NT$5,000,000 (included) ~ NT$10,000,000

Li-Ming Chin

Li-Ming Chin
NT$10,000,000 (included) ~ NT$15,000,000 - -
NT$15,000,000 (included) ~ NT$30,000,000 - -
NT$30,000,000 (included) ~ NT$50,000,000 - -
NT$50,000,000 (included) ~ NT$100,000,000 - -
Over NT$100,000,000 - -
Total 14 14

Note: Only specify the name and remuneration ranges of General Managers and Vice Presidents in 2017.

-23-

B. Names of Managers and the Distribution of B. Names of Managers and the Distribution of Employee Compensation Employee Compensation December 31, 2017; unit: NT$000 December 31, 2017; unit: NT$000
Ratio of Total Amount to
Job Title Name Stock Amount(Note 2) Cash amount Total (Note 1)
Net Income (%)
Chairman and General Manager Chi-Kuan Yang
General Managerof Business Group (Note 4) Kuang-Li Hung
General Managerof Business Group Yu-Chun Huang
Chief LegalOfficer Hung-WenSu
VicePresident and CFO Fen-JuLin
Vice President Li-Ming Chin
Vice President Li-Hsue Wu
Vice President Tze-Hsing Hua
Vice President Sung-Jung Chen
Vice President (Note 5) Bo-Hao Zang
Vice President Wen-Hsiung Chung
Vice President Chun-HungLin
Vice President Hui-ChenShih
Vice President Hao-Lin Teng
Vice President Yi-Pei Lin
Director Jung-ChuenWang
Director Han-Shen Huang
Exe Director Yu-Jen Tseng
cut Director (Note 6) Sheng-Long Wong 0 14,974 14,974 4.71%
ive Director (Note 7) Hsuan-Wei Huang
s Director Ming-Lun Lee
Director Chi-LongHuang
Director(Note 8) Kui-Lin Lee
Director Yu-LinWang
Director Yu-Mei Tu
Director Wei-WeiWong
Director Chia-ChinWu
Director(Note 9) Hui-Hsin Hsiao
Director (Note 10) Chen-Peng Wang
Director(Note 11) Chia-Hsuan Lin
Director Cheng-YuLu
Director Li-MeiSu
Director Chin-Hua Chiang
Director Chi-ChangChen
Director Xun-Xhi Cao
Director Ying-Yi Wu
Director Min-Yin Xu

-24-

Note 1: The amount approved by the Board of Directors to be distributed for 2017 and calculated by the proportion of actual allocation amount last year. Note 2: No stock dividend was distributed in 2017. Note 3: Only specify the name and employee compensation of managers in 2017. Note 4: General Manager of Business Group Kuang-Li Hung resigned from the post on March 31, 2017, and related information is disclosed as of the resignation date. Note 5: Vice President Bo-Hao Zang left the post on October 16, 2017, and related information is disclosed as of the resignation date. Note 6: Director Sheng-Long Wong resigned from the post on July 31, 2017, and related information is disclosed as of the resignation date. Note 7: Director Hsuan-Wei Huang resigned from the post on January 31, 2017, and related information is disclosed as of the resignation date. Note 8: Director Kui-Lin Lee left the post on February 28, 2017, and related information is disclosed as of the resignation date. Note 9: Director Hui-Hsin Hsiao resigned from the post on August 24, 2017, and related information is disclosed as of the resignation date. Note 10: Director Chen-Peng Wang left the post on December 31, 2017, and related information is disclosed as of the resignation date. Note 11: Director Chia-Hsuan Lin resigned from the post on September 25, 2017, and related information is disclosed as of the resignation date.

  • (3) Comparison of Remuneration for Directors, Supervisors, General Manager and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General Manager and Vice Presidents :

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

Job Title Ratio of Total Remuneration Paid to Directors, Supervisors, General Manager, and Vice Presidents
to Net Income in Individual Financial Reports (%)		 Ratio of Total Remuneration Paid to Directors, Supervisors, General Manager, and Vice Presidents
to Net Income in Individual Financial Reports (%)		 Ratio of Total Remuneration Paid to Directors, Supervisors, General Manager, and Vice Presidents
to Net Income in Individual Financial Reports (%)		 Ratio of Total Remuneration Paid to Directors, Supervisors, General Manager, and Vice Presidents
to Net Income in Individual Financial Reports (%)
2017 2016
The Company Companies in the
Consolidated
Financial Statements		 The Company Companies in the Consolidated
Financial Statements
Director(Note 1) 1.98% 1.98% 1.73% 1.73%
Supervisor 0.66% 0.66% 0.58% 0.58%
General Manager and Vice
President(Note 3)		 20.14% 20.92% 15.57% 16.47%
  • Note 1: Total remuneration of Directors excludes related compensation received from concurrent employment.

Note 2: Net income of 2017 and 2016 individual financial statements was NT$318,123 thousand and NT$398,368 thousand, respectively.

  • Note 3: The ratio of the remuneration which paid to the Directors, Supervisors, General Manager and Vice Presidents from the Company and companies in the consolidated financial statements for 2017 on the after-tax income is more than that of 2016. This is primarily because reversal gains on income tax from previous year were declared in 2016, causing a decrease in after-tax income.

-25-

  • B. Policies, standards, and portfolios for payment of remuneration, as well as the procedures for determining remuneration, and its linkage to business performance and future risk exposure:

  • (a) The remuneration of the Company's directors and supervisors are regulated in accordance with Article 26 of the Articles of incorporation of the Company. If the Company has generated a profit in the year, no more than 3% of the profit shall be provided for the remuneration of the directors and supervisors. Since the remuneration is set at a certain percentage of the current year's earnings, the upper limit is highly correlated with the Company's operating performance. Apart from referring to the Company’s past operating performance, the payments of the directors' and supervisors' remuneration will also be adjusted based on future risk factors. That is, when the outlook is bad or the Company’s operating risks increase, the directors' and supervisor’s remuneration will follow. In addition, the evaluation results of the performance of Board of Directors are also important considerations for distribution. Relevant performance evaluation and compensation rationality are reviewed by the Remuneration Committee that regularly reviews and assesses the directors' remuneration, and submits their proposals to the Board of Directors for discussion, in order to balance the Company's sustainable management and risk control.

  • (b) Remuneration paid to the General Manager and Vice President can be divided into three categories, i.e. salaries, bonuses and special expenses, and employee bonuses. Salary, which is called as remuneration in the Company Act, is based on the factors such as job responsibility, the overall environment and the market standard, and is set to reflect work performance; bonuses and special expenses and other items are mainly calculated based on the company's "Employees Compensation and Benefits Management Method" and also include restricted employee shares and employee stock ownership trust for retention of outstanding talents; employee bonuses are regulated by Article 26 of the Articles of incorporation that if the Company make a profit in the year, 8% to 15% of the profit should be remunerated as employee bonuses, since the employee bonuses are based on the proportion of the annual surplus, they are highly correlated with the Company's operating performance. In addition to reference to the relevant industry level and the Company’s past operating performance, the relevant distribution standards, structures and systems will also be reviewed and adjusted at any time depending on the actual operating conditions and changes in relevant laws and regulations, which is expected to prevent managers from engaging in the conducts that may put the Company at risk in order to pursue remuneration. In addition, the Company's Remuneration Committee will also periodically assess the remuneration of the General Manager and Vice President, and submit the proposals to the Board of Directors for discussion in order to balance the Company's sustainable operations and risk control.

-26-

4. Implementation of Corporate Governance

(1) Operation of Board of Directors

Five Board Meetings were held last year (A), the attendance of Directors and Supervisors were as follows:

Times of attendance in Times of attendance in Times of proxy Times of proxy Percentage of attendance Percentage of attendance Percentage of attendance
Job Title Name Remarks
person (B) attendance in person (%) (B/A)
Chairman Chi-Kuan Yang 5 0 100% -
Director Hung-Wen Su 5 0 100% -
Director Chien-An Juan 5 0 100% -
Director Mun-Kee Chang 3 2 60% -
Independent
Cheng Li 4 1 80% -
Director
Independent
Wei-Lin Liou 5 0 100% -
Director
Representative of Askforce
Supervisor 5 0 100% -
Corporation: Mei-Fang Hsu
Supervisor Zan-SyongCai 5 0 100% -
Other matters obligatory to include:
1. The attendance of Independent Directors of each Board Meeting was as follows:
Year 2017 1st 2nd 3rd 4th 5th
Cheng Li Attendance in person Attendance in person Attendance in person Attendance by proxy Attendance in person
Wei-Lin Liou Attendance in person Attendance in person Attendance in person Attendance in person Attendance in person
2. When one of the following situations occurred to the implementation of the board, state the date and term
independent directors and the Company's actions in response to the opinions of the independent directors:

(1)All conditions listed
in Article 14-3 of the Securities and Exchange Act.
Date of Board
meeting
(Meeting number)		 Content of proposals relevant to the Article 14-3 of the Securities and Exchange Act Independent director voiced
objection or reservation
March 16, 2017
(2017-1)		 Proposal to amend the Company’s“Procedure for Acquisition and Disposal of Assets”. None
Proposal to approve the assessment result of independence of auditor and audit fee for year 2017. None
Proposal to designate two seats of directors and one seat of supervisor for the Fourth Board of Directors of
104 Human Resources Consultancy (Shanghai) Co., Ltd., the 70 percent shareholding subsidiary of the
Company.		 None
Opinion from all independent directors for above proposals: None. Actions in response to independent directors'opinions: None.
(2)Other resolutions of the Board, which the independent director(s) voiced objection or reservation that are documented or issued through a written statement in addition to
the above: None.

-27-

  1. When Directors abstain themselves due to being a stakeholder in certain proposals, the name of the Directors, the content of the proposal, reasons for abstentions and the

results of voting counts should be stated. All Directors of the Company follow Article 15, Paragraph 1 of the Company's “Regulations of Procedure for Board of Directors Meetings”, which states that 'If any director or a juristic person represented by a director is an interested party with respect to any agenda item, the director shall state the important aspects of the interested party relationship at the respective meeting. When the relationship is likely to prejudice the interests of the company, the director may not participate in discussion or voting on that agenda item, and further, shall enter recusal during discussion and voting on that item and may not act as another director's proxy to exercise voting rights on that matter.'

The first Board Meeting of 2017: March 16, 2017

(1) Proposal to designate two seats of directors and one seat of supervisor for the Fourth Board of Directors of 104 Human Resources Consultancy (Shanghai) Co., Ltd., the 70 percent shareholding subsidiary of the Company: Chairman Chi-Kuan Yang and director Hung-Wen Su abstained from discussion and director Chien-An Juan acted as proxy for the chairman to inquire all directors present, and the proposal was resolved without objection.

  1. The evaluation of targets (such as establishing an Audit Committee and increase information transparency, etc.) for strengthening of the functions of the board during the current and the most recent fiscal year, and measures taken toward achievement thereof: (1) The Company resolved to purchase Directors and Supervisors Liability Insurance in the Board Meeting on June 8, 2017, and this proposal was carried out accordingly. (2) The Company resolved the “Procedures for Board of Directors Performance Assessments” in the Board Meeting on November 10, 2016. The 2016 performance evaluation have been implemented and it have been report to Board Meeting on March 16, 2017.

(2) Participation of Board Meetings of the Supervisors:

Participation of Board Meetings of the Supervisors: Participation of Board Meetings of the Supervisors: Participation of Board Meetings of the Supervisors: Participation of Board Meetings of the Supervisors: Participation of Board Meetings of the Supervisors:
FiveBoardMeetings wereheldlast year(A), the attendance ofsupervisors were asfollows:
Job Title Name Times of attendance in person
(B)		 Percentage of attendance in
person(%) (B/A)		 Remarks
Supervisor Representative of Askforce
Corporation: Mei-FangHsu		 5 100% -
Supervisor Zan-Syong Cai 5 100% -
Other notes required to be disclosed:
1. Communication among supervisors, the Company's employees, shareholders, internal auditing supervisors and accountants:
(1) The Company's supervisors attend Board Meetings and shareholder's conferences. Managers of internal audit departments reports the execution process
and opinions of the annual auditing plan to the supervisors monthly.
(2) There are feedback mailboxes on the Company's website for employers who use our service, job seekers, employees, shareholders and stakeholders. They
can contact and exchange the opinions with the Company. Additionally, all contact information is disclosed on the website and they may reach contact
windows to convey their opinions.
(3) The Company' Supervisors communicate with CPA at least once every year on significant matter of the current audit, amendments of laws and other
matters that required by other laws.
2. If Supervisors participating in board meetings have expressed opinions, state date and session of the board meeting, proposal content, resolution of the meeting
and the response of the Company regarding the Supervisor’s opinion: None.
  1. If Supervisors participating in board meetings have expressed opinions, state date and session of the board meeting, proposal content, resolution of the meeting and the response of the Company regarding the Supervisor’s opinion: None.

-28-

(3) The difference between the corporate governance implementation and the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” :

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
1. Does the Company established and disclosed the
Corporate Governance Best-Practice Principles
based on “Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies”?		 V The Company has established a Code of Practice for
Corporate Governance and this was resolved by the
Board to be amended on June 8, 2017, and the amended
Code of Practice for Corporate Governance has been
disclosed on the Company’s website.		 Some wording has been
modified and the content
aligned with the Company's
practice; the rest corresponds
to the Practice.
2. Shareholding structure & shareholders' rights
(1)Does the company establish an internal
operating procedure to deal with shareholders’
suggestions, doubts, disputes and litigations, and
implement based on the procedure?
(2)Does the company possess the list of its major
shareholders as well as the ultimate owners of
those shares?
(3)Does the company establish and execute the risk
management and firewall system within its
related enterprises?
(4)Does the company establish internal rules
against insiders trading with undisclosed
information?		 V
V
V
V		 (1)To ensure the shareholders' rights, the Company has
appointed a spokesperson and an acting spokesperson
to respond to shareholders' suggestions, questions and
settle disputes.
(2)The Company regularly check and control the main
shareholders who actually control the Company and
the list of final controllers of the main shareholder
services agent on the book closure date. The
Company also provided by the discloses, on a regular
basis, the pledges and changes to equity of the
shareholders who hold more than 10% of the shares
according to rules.
(3)The Company has established relevant managing
procedures such as “Transaction Processing
Procedures for Stakeholders, Specific Companies and
Corporate Groups”, “Regulations Governing
Subsidiaries Management”, and “Operating
Procedures Governing Loaning of Funds and Making
of Endorsements/Guarantees”. They are intended to
build careful and effective mechanisms on risk
management and firewall.
(4)The Company has established: Operating procedure
of handling internal significant information and the
(1)Corresponds to the
Principle.
(2)Corresponds to the
Principle.
(3)Corresponds to the
Principle.
(4)Corresponds to the
Principle.

-29-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
control management operation on prevention of
insider trading.
3. Composition and Responsibilities of the Board of
Directors
(1)Does the Board develop and implement a
diversified policy for the composition of its
members?
(2)Does the company voluntarily establish other
functional committees in addition to the
Remuneration Committee and the Audit
Committee?
(3)Does the company establish a standard to
measure the performance of the Board, and
implement it annually?
(4)Does the company regularly evaluate the
independence of CPAs?		 V
V
V		 V (1)The Company has established a diversified policy for
the composition of the Board members in the Code of
Practice for Corporate Governance, in which all
members are equipped with necessary knowledge,
skills, and moral fiber to carry out their
responsibilities.
Implementation of the diversified policy for the
composition of the Board members, please refer to
page 37 in the Annual Report.
(2)The Company has established Remuneration
Committee following the requirement of the law, yet
it has not established other various functional
committees.
(3)The Company has established the evaluation method
and evaluation measure for the performance of Board
of Directors. According to the method, the
performance evaluation of the Board of Directors is
carried out internally at least once a year. At least
once every three years, an external team formed by
professional independent organization or external
experts and scholars performs the evaluation once.
The performance evaluation of the Board of Directors
of the Company includes the following five aspects:
1. The degree of participation in the Company's
operations.
2. Improvement of the quality of the Board of
Directors'decisions.
(1)Corresponds to the
Principle.
(2)Corresponds to the
Principle.
(3)Corresponds to the
Principle.
(4)Corresponds to the
Principle.

-30-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
3. The composition and structure of the Board of
Directors.
4. Selection of Directors and continuing education.
5. Internal control.
The measurement of (self) performance evaluation of
the Directors includes the following six major
aspects:
1. Mastery of the Company's goals and tasks.
2. Cognizance of the responsibilities of Directors.
3. The degree of participation in the Company's
operations.
4. Internal relationship management and
communication.
5. Professional and continuing education of the
Directors.
6. Internal control.
The Company has completed the 2017 annual
performance evaluation of the Board of Directors and
the self-assessment questionnaire of the Board
members. This evaluation was conducted through
internal questionnaires. Upon the completion of the
statistics of returned questionnaires, it's found that the
overall Board of Directors is still in effective
operation, and this was reported to the Board of
Directors on March 14, 2018.
(4)The Company evaluates the independence of the
certified accountants at least once a year, and CPA
and their firms are requested to provide relevant
information and declarations, which are evaluated by
the Finance and Administrative Division. The results
of the most recent two years have been reported to the

-31-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
Board of Directors on March 14, 2018 and March 16,
2017, respectively.
For CPA independence evaluation items, please refer
to page 38 of the annual report.
4. Does the company set up a corporate governance
unit or appoint personnel responsible for
corporate governance matters (including but not
limited to providing information for directors and
supervisors to perform their functions, handling
work related to meetings of the board of directors
and the shareholders' meetings, filing company
registration and changes to company registration,
and producing minutes of board meetings and
shareholders’ meetings)?		 V In accordance with the Code of Practice for Corporate
Governance, the Company has set up special (part-time)
personnel for corporate governance, and the Chief
Financial Officer is responsible for overseeing corporate
governance related matters. The CFO has already had
more than three years of management experience in
public offering companies and engaged in finance, stock
affairs or proceedings. The principal duties of corporate
governance officers are to provide the Directors and
Supervisors information necessary for them to perform
business, and the latest regulatory developments related
to operating the Company to assist the Directors and
Supervisors in complying with the ordinance.
Please refer to page 7 to page 8 of the annual report for
the corporate governance chart and related job
descriptions.
The business development of the year 2017 was as
follows and reported to the 2018 second Board of
Directors:
1.Revised the development of the company's business
domains based on the latest laws and regulations
related to corporate governance, and regularly
notified the board members.
2.Conducted the training courses for the members of
the Board of Directors; evaluated and reported to the
Board of Directors regarding the purchase of suitable
“directors’and managers’liability insurance”.		 Corresponds to the Principle.

-32-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
3.From time to time, a meeting of CPA, independent
directors, supervisors, and supervisors of audit,
finance and accounting departments was held to
implement the internal control system.
4.The Board of Directors agenda was drafted seven
days in advance to inform the Directors to convene
the meeting and provide the information of the
meeting. If the issue needs to be avoided, it should be
reminded beforehand, and the proceedings of the
Board of Directors needs to be completed within 20
days after the meeting.
5.In order to implement corporate governance, the
performance evaluation of the Board of Directors was
conducted in accordance with the “Board
Performance Evaluation Method” and the result was
submitted to the first Board of Directors meeting in
2018.
6.Registration of the date of the shareholders' meeting
in accordance with the law, preparation of meeting
notices, manuals, and proceedings, etc. within the
statutory period.
7.For company registration and change registration.
8.Other matters as set out in the company's articles of
incorporation or contract.

-33-

Differences from the Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
5. Does the company establish a communication
channel and build a designated section on its
website for stakeholders (including but not limited
to shareholders, employees, customers, and
suppliers), as well as handle all the issues they
care for in terms of corporate social
responsibilities?
V		 There is a section on the Company's website dedicated
to servicing investors, and there are designated
employees handling relevant issues. The aim is to
provide the shareholders and the stakeholders sufficient
information, as well as a communication channel for the
employees. The Company also discloses information on
MOPS as required by law so that the stakeholders can
make decisions to protect their own rights.		 Corresponds to the Principle.
6. Does the company appoint a professional
shareholder service agency to deal with
shareholder affairs?		 V The Company has commissioned Fubon Securities Co.,
Ltd., a shareholder services agency to hold Shareholders'
Meeting and other relevant affairs.
Corresponds to the Principle.
7. Information disclosure
(1)Does the company have a corporate website to
disclose both financial operation and corporate
governance information?
(2)Does the company have other information
disclosure channels (e.g. building an English
website, appointing designated people to handle
information collection and disclosure, creating a
spokesman system, webcasting investor
conferences)?		 V
V		 (1)The Company's official website contains a section for
investors, and through this section the Company has
revealed relevant information. In addition, one can
visit TWSE's MOPS to inquire information on the
Company's finance, operation and corporate
governance.
(2)As above, the Company has built a section on our
English website for investors, and has designated
employees dedicated to handle information and
disclosure. The Company has built a complete
spokesperson system and has set up a mechanism of
an acting spokesperson.		 (1)Corresponds to the
Principle.
(2)Corresponds to the
Principle.
8. Is there any other important information to V (1)The Company's goal of establishing 104 Job Bank is Corresponds to the Principle
facilitate a better understanding of the company’s to build a “human-based job/talent seeking service
corporate governance practices (e.g., including channel” for Taiwan. Since our foundation, the
but not limited to employee rights, employee Company has begun from this core value and
wellness, investor relations, supplier relations, launched relevant services, and has brought forth a
rights of stakeholders, directors’ and supervisors’ revolutionary change to job seeking channels in
training records, the implementation of risk Taiwan. The Company has already provided over

-34-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
management policies and risk evaluation 330,000 firms with job/talent seeking services. As of


measures, the implementation of customer the end of March 2018, the Company's new product,
relations policies, and purchasing insurance for 104 Career Social Platform, already has nearly
directors and supervisors)? 750,000 users, and the platform is interlinked with
corporate recruitment management system while
offering traditional recruitment and community
recruitment services.
In the future, we will work toward the following three
missions based on this core:
1.“Commitment to career matchmaking”: More than a
job, we help you define a career; more than an
employee, we help you manage talent."
2.“Commitment to the elderly”: Take advantage of the
value of the healthy elderly; respect the dignity of the
disabled elderly.
3.“Commitment to children”: Find the ability of every
child.
(2)Employee's rights and employee wellness: The
Company puts first and foremost of our employee's
rights and well-being. We adhere to governmental
regulations on labor insurance and health insurance;
We establish Staff Welfare Committee and hold
various staff activities, and provide opportunities of
skill training for employees. Please refer to page 38 in
the Annual Report for further information.
(3)Investor relations: The Company has established
Investor Relations personnel to focus on issues
related to investors.
(4)Suppliers Relations: The Company has always
maintained positive relations with our suppliers, and
has established supplier integrity management and

-35-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
evaluation standards for our key suppliers.
(5)The stakeholders of the Company can consult or copy
the registration information of the Company pursuant
to relevant regulations.
(6)Continuing education for directors and supervisors:
The Company schedules appropriate courses
contingently for directors and supervisors. For their
studies in 2017, please refer to page 39 to 40 in the
Annual Report.
(7)Continuing education for the Company's finance,
accounting, and audit supervisors: Please refer to
Pages 40 in the Annual Report for the Company's
finance, accounting and audit supervisor's continuing
education in 2017.
(8)Implementations for risk-management policies and
risk-evaluation standards: The Company has
established Information and Communication Security
Committee to formulate policies of information
security and personal information protection. To all
our clients and stakeholders, we promise to keep all
personal information collected for operational needs
private in accordance with the Personal Information
Protection Act, handling and utilizing such
information as provided by law, and we also promise
to strengthen our information security measures to
ensure the safety and security of information. We
require all colleagues to abide by the various
regulations on information security、personal
information protection and trade secrets, and are
putting the information security guidelines,
“Information Security Is Everyone’s Responsibility”,

-36-

Differences from the Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
into effect.
(9)Protection of consumers or execution of policies
concerning our clients: The Company strictly adheres
to the Employment Services Act, Personal
Information Protection Act, as well as the
government's regulations on consumer protection, and
helps our clients to adhere to relevant regulations. We
sign contracts with the clients, in which the rights and
obligations of both parties are specified, so that the
clients' interests are ensured. The Company has also
established appropriate safety protection measures to
ensure consumer's personal information is kept safe.
(10)Purchase of liability insurance for the directors and
supervisors by the Company: The Company
purchases liability insurance for the directors and
supervisors annually.
Implementation of the diversified policy for the composition of the
Board members: Decision-
making
ability
✓
✓
✓
✓
✓
✓
Item
Name		 Operational
judgment
ability		 Accounting
and financial
analysis
skills		 Operational
management
ability		 Risk
management
ability		 Industry
knowledge		 The
international
market
outlook		 Leadership
ability		 Decision-
making
ability
Chi-Kuan Yang ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Hung-Wen Su ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Chien-An Juan ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Mun-Kee Chang ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
ChengLi ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Wei-Lin Liou ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

-37-

Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
Assessment item of independence of CPA, the abstract as following：
1. There is no direct or significant indirect financial interest relationship with the Company.
2. There is no financing or guarantee between the Company or the Directors and Supervisors.
3. There is no close business relationship with the Company.
4. There is no potential employment relationship with the Company.
5. There is no contingent fee arrangement relating to an audit engagement.
6. The members of the audit team have not acted as directors, supervisors or managers of the Company or have significant influence on the auditing cases
during the current or recent two years.
7. There are no important items that will directly affect the auditing of non-audit services provided by the Company.
8. No publicity or intermediary of shares or other securities issued by the Company.
9. Except for legally authorized business, there is no defense on behalf of the Company and third party legal cases or other disputes.
10.There is no family member relationship with the directors, supervisors and managers of the Company or persons who have significant influence on the
Company's auditing cases.
Employee's rights and employee wellness:
The Company has established a Code of Conduct for Employees. All employees of every level, position, and location at the Company and those of all
branches and subsidiaries must adhere to this ethical standard. Generally, the Company promises to provide a safe and healthy working environment, fair
opportunities and regulations of general behaviors to be followed by the employees and the Company.
1. The Company promises to create a healthy and safe working environment for the employees, and determines to build a working environment and culture
for the employees which is free from discrimination and harassment. Any forms of discrimination, harassment (including sexual harassment) and
language and behaviors which seek to incite enmity are all strictly prohibited. Any transgressions which may cause accidental injuries or discrimination
and harassment should be reported to relevant departments immediately. The Company has established a section on the company's website which accepts
complaints of unlawful behaviors of and for employees.
2. Extra care should be taken when handling the employees' personal information, and the organizational requirements and employees' privacy should also
be taken care of. Unless it is required by governmental regulations, personal information of the employee must not be disclosed under any circumstances.
3. The hiring policies of the Company must adhere to all laws and regulations. The decision of hiring is based on the Company's operational requirements,
job content and the ability of the applicants; fair opportunities are provided to all applicants and staff, and must not be discriminated based on race, color
of skin, social status, language, belief, religion, political parties, place of birth, sex, sexuality, marital status, complexions, facial features, disability,
former labor union membership or other non-employment factors included in governmental regulations. The Company and the employees, as well as
among the employees, must treat one another with respect and integrity. There should not be any selfish motives. This principle is applicable to (but not
limited within) recruitment, hiring, training, promotion, compensation, welfare, transfer of personnel and other associations or recreational activities.

-38-

Differences from the Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
Continuing education for directors and supervisors: Traininghours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
3 hours
Job Title Names Date Organizer Course Name Traininghours
Chairman Chi-Kuan
Yang		 November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Director Chien-An
Juan		 November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Director Hung-Wen
Su		 November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Director Mun-Kee
Chang		 November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Independent
Director		 Cheng Li November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Independent
Director		 Wei-Lin
Liou		 November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Supervisor Zan-Syong
Cai		 November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours

-39-

Differences from the Differences from the Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons

Job Title Names Date Organizer Course Name Traininghours
Supervisor Mei-Fang
Hsu		 February 20,
2017		 Taiwan CPA Association,
ROC		 Labor Law-Working hours system and overtime
compensationpractice		 6 hours
February 24,
2017		 Taiwan CPA Association,
ROC		 Update Income Tax Act for profit-seeking enterprise and
notices for filingreturns assessed		 3 hours
November 9,
2017		 Securities and Futures
Institute		 Extending the social impact: introduction of Social Return on
Investment (SROI)		 3 hours
Continuing education for finance and accounting supervisors:
Job Title Names Date Organizer Course Name Traininghours
CFO Fen-Ju Lin March 24~31,
2017		 Accounting Research and
Development Foundation		 Continuing Training Class for Principal Accounting Officers of
Issuers, Securities Firms, and Securities Exchanges		 12 hours
November 9,
2017		 Securities and Futures
Institute		 An Analysis of the Practical Cases of Directors and
Supervisors’ Breach of Trust and Offenses of Breach of Trust		 3 hours
Extending the social impact: introduction of Social Return on
Investment(SROI)		 3 hours
Job Title Names Date Organizer Course Name Traininghours
Audit
Supervisor		 Yu-Mei Tu June 9, 2017 Taiwan Academy of
Banking and Finance		 2017 Internal Control and Risk Management Forum -
Application of Continuous Audit and Legal Compliance in Big
Data Environment		 7 hours
October 12,
2017		 Computer Audit
Association		 Case Sharing: New Age Audit Changes and Practice 6 hours
November 9,
2017		 Securities and Futures
Institute		 Extending the social impact: introduction of Social Return on
Investment (SROI)		 3 hours
November
2~20,2017		 BSI Taiwan BS 10012:2017 Personal Information Management -System
LeadingAuditor Training Course		 36 hours
December 28,
2017		 The Institute of Internal
Auditors-ChineseTaiwan		 The latest practice development and corporate prevention and
controlofdomesticinsidertrading		 6 hours

-40-

Differences from the Differences from the
Implementation Status “Corporate Governance
Evaluation Item Best-Practice Principles for
TWSE/TPEx Listed
Yes No Abstract Explanation
Companies”and Reasons
9. Please explain the improvements which have been made in accordance with the results of the Corporate Governance Evaluation System released by
the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority enhancement measures.
Below are results from the 3rd corporate governance evaluation from the Corporate Governance Center in 2017:
No
Key targets for improvement in the
3rd corporate governance evaluation
Improvements made in 2016
Priority for improvement
in the future
1
Has the Articles of Incorporation required all elections for directors
and supervisors to take a nomination system?
Board meeting on March 16, 2017, resolved to amend this part of the
Articles of Incorporation, and the amendment have approved in the
2017 Annual Shareholders Meeting.
Completed.
2
Has the annual shareholders meeting adopted an e-voting system?
Implemented from 2017.
Completed.
3
Does the Company upload the English version of annual report 7
days prior to annual shareholders meeting?
Implemented from 2017.
Completed.
4
Does the holding of the Company's annual shareholders meeting
concurrently adopt electronic voting and nomination system for
director and supervisor candidates?
In the 2017 Annual Shareholders Meeting, the amendments to the
Articles of Incorporation were adopted to include the nomination
system for candidates of directors and supervisors.
Completed.
5
Does the company upload the English version of meeting agendas
and supplemental information 21 days prior to the annual
shareholders meeting?
Implemented from 2017.
Completed.
6
Does the Company conduct board performance evaluations on a
regular basis (at least once a year) and disclose the results on the
Company's website or annual report?
Implemented from 2017.
Completed.
7
Does the Company's annual report disclose future research and
development plans and expected investment in research and
development?
Implemented from 2017.
Completed.
8
Does the Company website or Market Observation Post System
website disclose the full financial report (including financial
statements and notes) in English?
Implemented from 2017.
Completed.
9
Does the annual report disclose dividend policies in a clear and
coherent manner?
Implemented from 2017.
Completed.
10
Does the Company refer to the guidelines for the preparation of
internationally accepted reports and prepare corporate social
responsibility reports and other reports that disclose the company's
non-financial information?
Implemented from 2017.
Completed.
11
Does the Company establish policies for energy conservation and
carbon reduction, greenhouse gas reduction, water use reduction, or
other waste management?
Implemented from 2017.
Completed.
…
No Key targets for improvement in the
3rd corporate governance evaluation		 Improvements made in 2016 Priority for improvement
in the future
1 Has the Articles of Incorporation required all elections for directors
and supervisors to take a nomination system?		 Board meeting on March 16, 2017, resolved to amend this part of the
Articles of Incorporation, and the amendment have approved in the
2017 Annual Shareholders Meeting.		 Completed.
2 Has the annual shareholders meeting adopted an e-voting system? Implemented from 2017. Completed.
3 Does the Company upload the English version of annual report 7
days prior to annual shareholders meeting?		 Implemented from 2017. Completed.
4 Does the holding of the Company's annual shareholders meeting
concurrently adopt electronic voting and nomination system for
director and supervisor candidates?		 In the 2017 Annual Shareholders Meeting, the amendments to the
Articles of Incorporation were adopted to include the nomination
system for candidates of directors and supervisors.		 Completed.
5 Does the company upload the English version of meeting agendas
and supplemental information 21 days prior to the annual
shareholders meeting?		 Implemented from 2017. Completed.
6 Does the Company conduct board performance evaluations on a
regular basis (at least once a year) and disclose the results on the
Company's website or annual report?		 Implemented from 2017. Completed.
7 Does the Company's annual report disclose future research and
development plans and expected investment in research and
development?		 Implemented from 2017. Completed.
8 Does the Company website or Market Observation Post System
website disclose the full financial report (including financial
statements and notes) in English?		 Implemented from 2017. Completed.
9 Does the annual report disclose dividend policies in a clear and
coherent manner?		 Implemented from 2017. Completed.
10 Does the Company refer to the guidelines for the preparation of
internationally accepted reports and prepare corporate social
responsibility reports and other reports that disclose the company's
non-financial information?		 Implemented from 2017. Completed.
11 Does the Company establish policies for energy conservation and
carbon reduction, greenhouse gas reduction, water use reduction, or
other waste management?		 Implemented from 2017. Completed.
…

-41-

(4) Operation of Remuneration Committee:

A. Members and information of Remuneration Committee:

Has more than 5 years of work experience and the following Has more than 5 years of work experience and the following Has more than 5 years of work experience and the following Compliant to the requirements of Compliant to the requirements of Compliant to the requirements of Compliant to the requirements of Compliant to the requirements of Compliant to the requirements of Compliant to the requirements of
Criteria

professionalqualifications
independence(Note1)
Number of
Instructor or a higher A judge prosecutor

post in a private or		 , ,
lawyer, CPA, or other		 Work experience remuneration
committee
Identity status public college or professional practice necessary for
memberships
university in the field or technician that commerce, law, 1 2 3 4 5 6 7 8
concurrently held
of commerce, law, must undergo finance, accounting,
in other public
finance, accounting, national examinations or business of the
companies

or business of the		 and specialized Company
Name
Company license
Independent
director		 Wei-Lin
Liou		 V V V V V V V V V 0
Independent
director		 Cheng Li V V V V V V V V V 0
Other Wun-Jheng
Lin(Note 2)		 V V V V V V V V V 5
Other Wen-Chang
Liu(Note 3)		 V V V V V V V V V 0

Note1: During the two years before being elected or during the term of office, members comply with the following conditions:

(1) Not an employee of the Company or its affiliates.

  • (2) Not a director or supervisor of the Company or any of its affiliates. This does not apply in cases where the person is an independent director of the Company, its parent company, or a subsidiary where the Company holds, directly and indirectly, more than 50% of the voting shares.

  • (3) Not a natural person shareholder who holds more than 1% of issued shares or is ranked top 10 in terms of the total quantity of shares held, including the shares held in the name of the person’s spouse, minor children, or others.

(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship in the preceding three paragraphs.

  • (5) Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the total number of issued shares of the Company or is ranked top 5 in terms of quantity of shares held.

  • (6) Not a director, supervisor, managerial officer, or shareholder holding more than 5% of shares of a specified company or institution that has a financial or business relationship with the Company.

  • (7) Not a professional individual or owner, partner, director, supervisor, or managerial officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting, or consultation services to the Company or to any affiliated business, or spouse thereof.

(8) Where none of the circumstances in the subparagraphs of Article 30 of the Company Act applies.

Note2: Resigned on January 1, 2018.

Note3: New appointed on March 14, 2018.

-42-

B. Information on the operation of Remuneration Committee:

(1)There are three members in the Company's Remuneration Committee.

(2)The term of this Remuneration Committee started on July 2, 2015, and ends on June 23, 2018. Three Remuneration Committee meetings were held in the last fiscal year (A), qualifications of the members and attending members were as the following:

Times of attendance in person Percentage of attendance in
Job Title Name Time of proxy attendance Remarks
(B) person(%) (B/A) (Note)
Convener Wei-Lin Liou 3 0 100% -
Member ChengLi 3 0 100% -
Member Wun-JhengLin 2 1 67% Resigned on January1, 2018
Member Wen-ChangLiu NA NA NA New appointed on March 4, 2018
Other notes required to be disclosed:
1.If the Board of Directors rejects or amends the suggestions of the Remuneration Committee, it should state the date of the Board Meeting, the term of the fiscal year, the
content of the proposal, and resolution of the Board Meeting and the follow-up treatments (e.g., if the resolution of the Board Meeting states that the amount of remuneration
is higher than that of the suggestions from the Remuneration Committee, the Board should specify the difference in number and the reason behind the resolution): None.
2.If there is any member who opposes or has reservations to the resolution of the Remuneration Committee, and there is a record or a written statement for it, that record or
statement should contain the date of the Board Meeting, the term of the fiscal year, the content of the proposal, and opinions of all members and the follow-up treatments:
None.

-43-

(5) Implementation of Corporate Social Responsibilities (CSR):

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
1. Corporate Governance Implementation
(1) Does the company declare its corporate social V (1) The Company has formulated CSR policies and practice (1) Corresponds to the
responsibility policy and examine the results of the principles, publishes the CSR Report annually, and Principle.
implementation? reviews the effectiveness of policy implementation. (2) Corresponds to the
(2) Does the company provide educational training on V The following are the CSR policies of the Company: Principle.
corporate social responsibility on a regular basis? The Company strives to raise humanistic level and create (3) Corresponds to the
(3) Does the company establish exclusively (or V social values in Taiwan as long-term idea. To achieve
Principle.
concurrently) dedicated first-line managers such goals, we require all employees to abide by related
(4) Corresponds to the
authorized by the board to be in charge of proposing codes of conduct based on the following core values:
Principle.
the corporate social responsibility policies and social responsibility, innovative thinking, customer-
reporting to the board? orientation and honesty and integrity.
(4) Does the company declare a reasonable salary V Based on the visions and values mentioned in the
remuneration policy, and integrate the employee preceding paragraph, the Company stipulates the
performance appraisal system with its corporate following corporate social responsibilities：
social responsibility policy, as well as establish an 1. “Commitment to career matchmaking”: More than a
effective reward and disciplinary system?
job, we help you define a career; more than an

employee, we help you manage talent.

2. “Commitment to the elderly”: Take advantage of the
value of the healthy elderly; respect the dignity of the
disabled elderly.
3. “Commitment to children”: Find the ability of every
child.
4.We provide a safe work environment and welfare for our
employees to build the best workplace that showcases
professionalism, creativity, and business performance.
5.We make contributions to the local community and
promote volunteers.
6.We devote ourselves to environmental protection by
fulfilling energy saving and carbon reduction and
buildinga sustainable environment.

-44-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
7.We strive to facilitate communication between

stakeholders and keep a balance between profits and
sustainability. In addition, the Company's “Proud of
You” campaign was awarded 2013 CSR Model in the
category of Healthy Workplace, Global Views Monthly;
“104 Angelic Volunteer Bank” was awarded 2014 CSR
Model in the category of SMEs, Global Views Monthly,
In 2017, the “Be A Giver Resume Consultation Room”
won the “Core Value Impact Award” for the first CSR
influence.
(2) Each year, the Company undertakes CSR training for all
employees. New employees are given the Employee
Handbook on their first day to clearly convey the social
responsibilities that should be delivered by all employees.
The Company regularly combines the agenda of the Board
Meeting with continuing education for the directors and
the supervisors.
(3) The Company's CSR outreach is conducted by Public
Affairs Office, and we have formulated relevant
regulations on CSR principles and executions and reported
to the Board of Directors on an annual basis. The
implementation of 2017 business has been reported to the
2018 2nd Board of Directors. In addition, the Company
has established Social Enterprise Department. We hope to
care for others and solve problems in the society through
Word of Work, Dream Cradle, and Cicisasa. We put
forward the energy-saving procedures through General
Procurement Division, and implement governmental
policies on energy conservation and carbon reduction in
our daily practices.
(4) The Company formulated “Regulations of Employee
Compensation andWelfare” to ensure the fairness of

-45-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
internal compensation and the competitiveness of external
compensation. The Welfare Committee has formulated
“Regulations of Relief Effort for Sick or Wounded
Employees”, “Regulations of Establishing and Funding of
Recreational Associations” to assist employees who are ill
or disabled. The Company has also formulated “Code of
Conduct for Employees”, “Regulations of Supplier Gifts
and External Business Invitation”, “Regulations of
Employees' Rewards and Penalties” and “Regulations of
Performance Management and Development”. Through
internal educational training, the Company conveys our
core values to all employees, and combines them with the
performance assessment system, hoping to fairly reward or
give penalties to the employees on their performance and
their ethics.
2. Sustainable Environment Development
(1) Does the company endeavor to utilize all resources
more efficiently and use renewable materials which
have low impact on the environment?
(2) Does the company establish proper environmental
management systems based on the characteristics of
their industries?
(3) Does the company monitor the impact of climate
change on its operations and conduct greenhouse gas
inspections, as well as establish company strategies
for energy conservation and carbon reduction?
V (1) The Company has implemented the reuse of one-sided (1) Corresponds to the
copy paper, the reuse of old envelopes to deliver internal Principle.
documents, regularly recycle used cartridges, waste paper, (2) Corresponds to the
V old office desks and chairs, and old computers. Total Principle.
scrapped items in 2017 were 390 pieces, including office (3) Corresponds to the
computers and server facilities. Principle.
V (2) The Company has employed electronic exchange of
official letters, significantly reducing the consumption of
paper. In addition, due to the industrial characteristics of
the Company, the establishment of an appropriate
environmental management system is not suitable for the
Company. Therefore, it has not been certified by ISO
14001 or a similar environmental management system.
(3) As an information and service provider, the Company's
environmental management tasks are carried out by
General ProcurementOffice under the Human Resources

-46-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
and General Administrative Division. Since the Company
does not undertake product assembly or productions and
hence will not create industrial pollution, including
wastewater discharge or air pollution. Nevertheless, we
will continue to promote various energy conservation and
carbon reduction strategies internally.
The relevant measures are as follows:
1. The professional cleaning company sends cleaners to do
the cleaning at the office daily, and we have placed
recycling bins to encourage recycling and lower the
impact to the environment.
2. The office is sanitized routinely and the air conditioner
fan-coil unit is cleaned to keep the environment tidy.
3. We routinely inspect the indoors CO2 and air quality
and conduct quality inspections on the drinking water.
4. The Company now uses T5 energy-saving florescent
tubes or LED lamps.
5. Timers are installed on all air conditioners, and we
launched and awareness campaign to promote keeping
the inside temperature warmer in the summer to save
energy.
6. Energy-saving measures:
Impacts on the environment from the Company's
operational activities are mostly from electricity
consumption in the office area. The total power usage in
the Company's operations throughout Taiwan in 2017
was 1,673,234 kwh, which is approximately 990 tons of
carbon emission. This shows a 12.1 percent decrease
from 2016, or a reduction of 136 tons of carbon
emissions, showing that our goal toward lowering our
environmental impact have been remarkable results and
wehaveachieved ourgoalof lowering carbonemissions

-47-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
by 2 percent.
If the number of employees remains the same, we will
aim to lower carbon emissions by another 2 percent in
2018.
Carbon emissions for the last five years are shown as the
following:
Annual statistics of carbon emission Unit: kg
2017
989,948
Year 2013 2014 2015 2016 2017
Quantity
of carbon
2,039,017		 1,893,919 1,720,222 1,126,253 989,948
emission
Annual of carbon emission (kg)
2013 017
2014 2015 2016 2
3. Preserving Public Welfare
(1) Does the company formulate appropriate V (1) The Company complies with relevant labor codes and
international human rights treaties, such as gender
equality, working rights, anti-discrimination regulations,
protecting the employees' human dignity, and basic human
rights. We seek to achieve equality and fairness in hiring,
employment conditions,compensation,benefits,training,		 (1) Corresponds to the
management policies and procedures according to Principle.
relevant regulations and the International Bill of (2) Corresponds to the
Human Rights?
Principle.
(2) Has the company set up an employee hotline or V (3) Corresponds to the
grievance mechanism to handle complaintswith Principle.

-48-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
appropriate solutions? assessment, and opportunities for promotion. We have
therefore constructed adequate management method and
procedures such as the “Code of Conduct for Employees”
and “Regulations of Employees' Rewards and Penalties”.
We have conducted research on compensation levels in
markets to provide competitive compensation, bonuses,
and benefits for our employees. We have also launched
educational training for the employees, and implemented
employees' group insurance plans/leave
system/performance management system and corporate
pension plans as required by law.
(2) The Company has established an Employees' Mailbox
([email protected]), managed under the
“Regulations of Employees' Mailbox” by a designated
employee. To protect his/her rights, the initiator of a case
will be notified of the handling process and the concluding
report, in order to keep a harmonious labor relation. Every
division holds town hall meetings or regularly scheduled
meetings to talk with all employees to ensure the
communication between both parties are unimpeded.
There is a corporate governance section on the Company's
website, and the complaint mailbox for the employees'
illegal acts is within that section.
(3) The Company provides a safe and healthy working
environment for the employees:
1.The Company covers regular health checkups for
employees every two years, health checkup follow-ups,
and holds lectures/training on the topics of coping with
stress, first aid, and fire safety, and arrange occupational
safety and health doctor onsite visits every quarter.
There are also first aid kits, AED (Automated External
Defibrillator),and designated first-aidpersonnel on each		 (4) Corresponds to the
(3) Does the company provide a healthy and safe V Principle.
working environment and organize training on health (5) Corresponds to the
and safety for its employees on a regular basis? Principle.
(4) Does the company setup a communication channel V (6) Corresponds to the
with employees on a regular basis, as well as Principle.
reasonably inform employees of any significant (7) Corresponds to the
changes in operations that may have an impact on Principle.
them? (8) Corresponds to the
(5) Does the company provide its employees with career V Principle.
development and training sessions? (9) Corresponds to the
(6) Does the company establish any consumer protection V Principle.
mechanisms and appealing procedures regarding
research development, purchasing, producing,
operating and service?

(7) Does the company advertise and label its goods and V
services according to relevant regulations and
international standards?
(8) Does the company evaluate the records of suppliers’ V
impact on the environment and society before taking
on business partnerships?
(9) Do the contracts between the company and its major V
suppliers include termination clauses which come
into force once the suppliers breach the corporate
social responsibility policy and cause appreciable

impact on the environment and society?

-49-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
floor to protect the health and safety of our employees.
2.The Company holds lectures on health issues and
launches health-promoting activities (e.g. health
exercises, seminars on quitting smoking, weight loss
competitions, and point-collecting competitions for
health) on a regular basis to bring awareness of self-
management of health to the employees, and assist them
to solve potential and existing health issues, and reduce
the incidence of the disease. This is done to help
employees to promote their health and increase their
work efficiency. We were awarded the Healthy
Workplace Accreditation by the Ministry of Health and
Welfare, as well as the “Work-Life Balance Award”
from New Taipei City Government in 2016 and the
Company received the promotion badge from Healthy
Workplace by Ministry of Health and Welfare in 2017.
3. The Company features excellent breastfeeding rooms,
providing mothers everything they need so they can
breastfeed in this private and comfortable space. To
enhance the facilities in the old breastfeeding rooms,
and to fulfill the policy of protecting mothers and
constructing a family friendly workplace, the Company
renovated and built two new breastfeeding rooms in
2015. Not only do they fit the standards required by law,
the rooms are also very comforting (e.g. there are
accessible restrooms inside) and thoughtful supplies are
also available for employees using the rooms. Our
breastfeeding rooms are awarded "Excellent
Breastfeeding Rooms" by the Department of Health,
New Taipei City Government (2016~2019).
4. "Regulations on Prevention and Punishment of Sexual
Harassment atWorkplace"provides the employees a

-50-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
channel for complaints, and creates a safe and orderly
working environment.
5. We purchase casualty insurance and group health
insurance for the employees and their family members.
6. The Company has formulated "Approaches on Disaster
Recovery Management" and hold annual drills for the
secure protection of computer facilities.
7. To keep employee health, we offer subsidy for flu
vaccines for our employees starting in 2016, and this has
effectively enhanced the public safety and health in our
work environment. Subsidies for flu vaccines continued
to be provided in 2017.
8. The Company was awarded two awards by the Ministry
of Labor for promoting work-life balance in 2016.
9. In order to improve employees' psychological and social
health, the Company cooperated with the Taoyuan
Lifeline in 2017 to promote the Employee Assistance
Program (EAP), which provides employees with
multiple advisory service channels.
10. Regularly conduct CO2 and PM2.5 air quality
inspections and regular water quality inspections every
six months to safeguard environmental health for
employees.
(4) Due to the nature of different topics of the communication,
the Company makes use of different methods to let
employees obtain information and expressing their opinion
on the managerial activities and decisions on company
policies through various channels, including town hall
meeting, regularly scheduled conferences, posting
information on the employee portal, making
announcement in large-scale employee activities, posting
announcements,holdingindividual conversation session,

-51-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
or receiving messages through employee mailboxes.
(5) The Company draws up annual training plan according to
the Company's strategic development plan, holding
professional and managerial courses for individual
professions. There will be after-class assessments or tests,
and employees can draw up individual development plan
(IDP) if they are willing to do so in order to develop their
abilities.
(6) The Company features a division of customer service for
job/talent seeking and hiring. This division provides
services and follow-up action to all questions from the
clients, and there are full-time employees dedicated for
customer service. On the home page of our Company
website, 104 Job Bank, there is a "Hotline for job seekers
and hiring firms", which provides services including
workplace safety inquiry and job/talent seeking customer
service and complaints.
(7) Products and services developed by the Company have all
applied for patents or authorization in accordance with IP
laws. The Company also clearly prints the content of each
product or service on its respective website, mobile
website or marketing materials during marketing
promotions, so that users can clearly understand the
contents, ensuring user's interests.
(8) When choosing suppliers, the Company will put their CSR
under consideration, and will give priority to the suppliers
which operate under the principle of integrity.
(9) The Company belongs to the information service sector,
and therefore does not have manufacturing suppliers.
However, the Company still has established a management
procedure of supplier in order to manage and assess the
behaviors of suppliers.If the suppliers of average facilities

-52-

Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
and general supplies are involved in violating their CSR
policies, and causing significant impact on the
environment and the society, the Company will decrease
the amount of or terminate the procurement.
4. Enhancing Information Disclosure
(1) Does the company reliable information regarding its V (1) Besides disclosing relevant activities in our Annual Corresponds to the Principle.
corporate social responsibility on its website and the Report, the Company also discloses relevant matters
Market Observation Post System (MOPS)? pertaining to CSR in the "CSR Section" and "Corporate
Governance Section"on our website.
5. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for
TWSE/TPExListed Companies”, please describe any discrepancy betweenthePrinciples and their implementation: No difference.
6. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices:
(1)"Startup Section": We have established a 'startup section' to encourage the growth and prosperity of new startups in Taiwan and to upgrade and reinvent various
industries. We offer startup companies which established less than three years to post hiring campaigns and advertisements with us for free for one year to lower
the recruitment costs during their grassroot startup stage and to help them increase brand awareness.
(2)"Disability Section": Through our platform mechanism, the section automatically extracts job openings on our website in which are suitable for the disabled.
Categories include: Job openings accepting vision impairment, hearing impairment or balance disorder, autism, chronic diseases, upper-body impairment, lower-
body impairment, torso impairment, voice and speech mechanism impairment, facial disfigurement or other types of disability.
(3)"Maps for Graduates": A dynamic collection of over 2.99 million resumes submitted by recent university and college graduates (including night schools). We
research the employment status, continuing education, wages in different stages, professional accreditation, special skills and techniques of the graduates from
the same department of the same university for the last ten years as a reference for job seekers and students.
(4)"Job Duty Encyclopedia": We explore over 450 job duties to explicate the content of each job duty from ten dimensions including: job missions, personality,
supply and demand, sex and age distribution of those who are currently working at these duties, required competencies, remuneration, education level, job stability,
times unemployed, and possible career developments. We provide students and those new to the workplace basic knowledge and advanced analysis before they
embark on job seeking.
(5)"Student Practicum Section": We have been cooperating with College of Management, National Taiwan University (NTU) to promote TIP practicum plan since
2011. The College of Management, NTU invites its corporate partners to make use of this platform to operate the supply chain of the practicum, including
confirming demands, collection of résumés, communication and screening, teaching from mentors and performance assessment. We also invite former participants
to share their practicum experiences at our "Career Auditorium," as well as corporate representatives to hold seminars on their practicum systems on "Corporate
Day."
(6)"Angelic Volunteer Bank": We assist NPO/NGOs in posting volunteer vacancies for free. Through the power of information spreading on 104 Job Bank, we help

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Difference from the
Implementation Status Corporate Social

Responsibility Best Practice
Evaluation Item
Principles for TWSE/TPEX
Yes No Abstract Explanation
Listed Companies and

reasons
stabilize the source of volunteers and increase the ratio of adult volunteers.
(7)"104 World of Work": Assist children to explore the working world and to explore directions that they're fit for/interested in.
(8)"104 Kids": Help children to explore, cultivate, and utilize their talents through positive audience recognition, exchange and feedback and consultation from
experts.
(9)"Cicisasa": We provide children's artwork and exhibit them online and exclusive 3D art corridor. Each artwork is accompanied by a recording of the child artist
to express their creative concept. Through the appreciation of people, they are getting more certain on their talents.
(10)Establishing "Cradle of Hope Baby Care Center": In order to ease the employees' burden of finding a nanny, and help them work without worry, the Company
set up a corporate affiliated daycare center for employees' children (New Taipei City Government Registration Number 142-1). All employees' children age 0 to
2 are eligible to register. In order to serve our employees in a sustainable fashion, the specialized staff in the daycare center are all full-time employees hired by
the Company, and their compensations are paid from Company budget.
(11)The Company and 104 Hope Foundation have called on various industries and companies to join our "Be A Giver" campaign in 2016 to assist the younger
generation to enhance their professional skills, boost confidence, and to gain more security for the future, in addition to strengthen the value of the experiences
and self-worth of the more experienced, senior generation. We promote the idea that office workers should help one another rather than simply working beside
each other. When Givers meet Takers, and senior staff help out newcomers, these valuable exchanges will not only help the passing on of knowledge, skills, and
views on life, but will also help one another to collectively work toward a brighter future and enhance each other's values. Since 2017, "Be A Giver" has
launched "Resume Consultation Room" to invite companies to diagnose freshmen's resumes, and "Career Consultation Room" also invites executive/professional
searching consultants and senior professional managers from all walks of life to provide online FAQ for those senior employees.
(12)In addition to assisting companies to find talents, the “Executive Searching Consultants” also find a stage for talents. At the same time, they provide free “job
seeking/transferring lectures” every month to help office workers improve their skills with insight into the workplace trends, in writing resumes and interviews.
Inaddition, the tenclasses on human resources were dedicated to the professionalismofcorporatehuman resources.
7.A clear statement shall be made belowif the corporate social responsibilityreportswereverified byexternal certification institutions: None.

  • (8)"104 Kids": Help children to explore, cultivate, and utilize their talents through positive audience recognition, exchange and feedback and consultation from experts.

  • (9)"Cicisasa": We provide children's artwork and exhibit them online and exclusive 3D art corridor. Each artwork is accompanied by a recording of the child artist to express their creative concept. Through the appreciation of people, they are getting more certain on their talents.

  • (10)Establishing "Cradle of Hope Baby Care Center": In order to ease the employees' burden of finding a nanny, and help them work without worry, the Company set up a corporate affiliated daycare center for employees' children (New Taipei City Government Registration Number 142-1). All employees' children age 0 to 2 are eligible to register. In order to serve our employees in a sustainable fashion, the specialized staff in the daycare center are all full-time employees hired by the Company, and their compensations are paid from Company budget.

  • (11)The Company and 104 Hope Foundation have called on various industries and companies to join our "Be A Giver" campaign in 2016 to assist the younger generation to enhance their professional skills, boost confidence, and to gain more security for the future, in addition to strengthen the value of the experiences and self-worth of the more experienced, senior generation. We promote the idea that office workers should help one another rather than simply working beside each other. When Givers meet Takers, and senior staff help out newcomers, these valuable exchanges will not only help the passing on of knowledge, skills, and views on life, but will also help one another to collectively work toward a brighter future and enhance each other's values. Since 2017, "Be A Giver" has launched "Resume Consultation Room" to invite companies to diagnose freshmen's resumes, and "Career Consultation Room" also invites executive/professional searching consultants and senior professional managers from all walks of life to provide online FAQ for those senior employees.

  • (12)In addition to assisting companies to find talents, the “Executive Searching Consultants” also find a stage for talents. At the same time, they provide free “job seeking/transferring lectures” every month to help office workers improve their skills with insight into the workplace trends, in writing resumes and interviews. In addition, the ten classes on human resources were dedicated to the professionalism of corporate human resources.

-54-

(6) Implementation of ethical corporate management and the adoption of related measures:

Implementation Status Implementation Status Implementation Status Difference from the Ethical
Corporate Management Best
EvaluationItems
Practice Principles for
Yes No Abstract Explanation
TWSE/TPEx Listed
Companies, andReasons
1. Establishment of ethical corporate management policies and
programs
(1)Does the company declare its ethical corporate management V (1)Integrity and righteousness are the values and core (1)Corresponds to the
policies and procedures in its guidelines and external competency of 104 Corporation, and the Company Principle.
documents, as well as the commitment from its board to has formulated "Ethical Corporation Management (2)Corresponds to the
implement the policies? Best Practice Principles", "Code of Ethical and Principle.
(2)Does the company establish policies to prevent unethical V Business Conduct", "Code of Conduct for (3)Corresponds to the
conduct with clear statements regarding relevant procedures, Employees", in which all specify relevant personnel Principle.
guidelines of conduct, punishment for violation, rules of must fulfill and correspond to the existing behavioral
appeal, and the commitment to implement the policies? regulation; executives also promise to implement and
(3)Does the company establish appropriate precautions against V supervise the execution of ethical corporation
high-potential unethical conducts or listed activities stated in management policies.
Article 2, Paragraph 7of the Ethical Corporate Management (2)The Company has established behavioral standards
Best-Practice Principles for TWSE/TPExListed Companies? that should be exhibited by all personnel at 104 in the
"Code of Conduct for Employees," "Regulations for
Supplier Gifting and External Business Invitations"
and "Regulations for Employees' Rewards and
Penalties" and established relevant procedures. This
will both prevent problems and help implement best
practices. Internally, a "Report on Inadequate
Behaviors" mechanism has been set up at the
employee portal to achieve our objective of ethical
management.
(3)In order to effectively prevent unethical conduct, not
only the Company makes announcements on internal
and external Company websites on prevention
procedures, but we also provide educational training
and advocacy to its colleagues from time to time, and
held a related course for new employees each month.
In 2017, a total of 12 classes were held, involving 205
participants and 410 training hours. In addition, it is
alsorequiredthat manufacturers whohave dealings

-55-

Implementation Status Implementation Status Implementation Status Difference from the Ethical
Corporate Management Best
EvaluationItems
Practice Principles for
Yes No Abstract Explanation
TWSE/TPEx Listed
Companies, and Reasons
with the Company should follow the same standards
of integrity and behavior; when any violations or
misconduct are discovered, they should report it to
the Company immediately.
2. Fulfill operations integrity policy
(1)Does the company evaluate business partners’ ethical records
and include ethics-related clauses in business contracts?
(2)Does the company establish an exclusively (or concurrently)
dedicated unit supervised by the Board to be in charge of
corporate integrity?
(3)Does the company establish policies to prevent conflicts of
interest and provide appropriate communication channels,
and implement it?
(4)Has the company established effective systems for both
accounting and internal control to facilitate ethical corporate
management, and are they audited by either internal auditors
or CPAs on a regular basis?
(5)Does the company regularly hold internal and external
educational trainings on operational integrity?		 (1)To implement our ethical corporation management
policies, we have already disclosed relevant content
on both internal and external websites, as well as
established integrity clauses in business contracts
with vendors so they would better understand our best
practices in addition to consequences of non-
compliance.
(2)The exclusively unit in charge of ethical corporation
management is the Finance and Administrative
Division, which is responsible for establishing,
amending and supervising the implementation of
ethical corporation management policies, and directly
reports to the Board of Directors on an annual basis;
the implementation status for the year 2017 has been
reported to the 2018 second Board of Directors; other
divisions are in charge of promoting and
implementing their respective operation principles
based on their respective job duties.
(3)The Company has formulated "Regulations of
Procedure for Board of Directors Meetings" (applies
to the Directors) and "Code of Conduct for
Employees" (applied to the employees) so that
potential conflicts of interest are avoided. We also
provide adequate statement channels for relevant
personnel to declare if there is any potential conflict
of interest between the Company and the said
personnel. Internally, there is a "Inadequate Behavior
Report" mechanismat the employee portal;
(1)Corresponds to the
Principle.
(2)Corresponds to the
Principle.
(3)Corresponds to the
Principle.
(4)Corresponds to the
Principle.
(5)Corresponds to the
Principle.
V
V
V
V
V

-56-

Implementation Status Implementation Status Implementation Status Difference from the Ethical
Corporate Management Best
EvaluationItems
Practice Principles for
Yes No Abstract Explanation
TWSE/TPEx Listed
Companies, and Reasons
externally, there is a complaint section on the
Company's website.
(4)The Company established an effective accounting
system and internal control system according to
relevant regulations from governmental agencies. We
amend and review these systems regularly and if
necessary, in order to ensure the design and the
execution of the systems are continuously effective.
The auditing units examine effectiveness of the
design and execution of the internal control system
through internal auditing and self-evaluation of
internal auditors, and complete the auditing report
and present it to the Board of Directors.
(5)Integrity and righteousness is the corporate value and
core competency of 104 Corporation, through internal
communication and promotion through platform, and
explicate their definition and the behavior linked to
them in order to deepen the attitude and behavior
values of all employees.
In addition, to implement the ethical corporation
management policies, the Company has disclosed the
content of the regulation on the Company's internal
and external website, and has included the clauses
that should be adhere to in the contract with the
suppliers in business activities, and holds educational
training and promotion events to relevant personnel.
The goal is to make them understand the Company's
determination on ethical management and the
consequences of its violation.
3. Operation of the integrity channel
(1)Does the company establish both a reward/punishment
system and an integrity hotline? Can the accused be reached
by anappropriate person for follow-up?
V (1)The Company has whistleblowers' section on the (1)Corresponds to the
Company's internal and external website and Principle.
telephonehotline whichserves as channelsfor (2)Corresponds to the

-57-

Implementation Status Implementation Status Implementation Status Difference from the Ethical
Corporate Management Best
EvaluationItems
Practice Principles for
Yes No Abstract Explanation
TWSE/TPEx Listed
Companies, and Reasons
(2)Does the company establish standard operating procedures
for confidential reporting on investigating accusation cases?
(3)Does the company provide proper whistleblower protection?		 V relevant persons to respond to opinions and report Principle.
any inadequate behavior; once a case is open, the (3)Corresponds to the
V Company designates dedicated and independent Principle.
personnel or teams to investigate on the case.
1.There is an e-mail intended for reporting
inappropriate behaviors at our internal website:
[email protected]; the Company also has a
whistleblowing hotline.
2.The whistleblowers' mailbox ([email protected])
and a contact phone number for reporting
behaviors not in good faith or unethical are listed
on our external website.
(2)The Company has formulated "Code of Conduct for
Employees" and "Code of Ethical and Business
Conduct", and has provided whistleblowing channels.
The Company should keep the identity of the
whistleblower and the content of the reporting
confidential, and engage in the investigation and
handling process proactively.
(3)The "Code of Conduct for Employees" specifies that
all employees have the duty and the obligation to
report anyone suspicious of acting unethical or
defying the code of conduct to their supervisors or
relevant units. The Company will also designate
appropriate staff depending on the nature of the
incident, and contact the whistleblower to investigate.
For all whistleblowers or the employees and relevant
personnel participated in the investigation, the
Company will protect them so that they will be safe
from unfair treatment or retaliation.
The Company will keep the identity of the
whistleblower, and the identity of the accused and the
contentof the case stillunder investigationstrictly

-58-

Implementation Status Implementation Status Implementation Status Difference from the Ethical
Corporate Management Best
EvaluationItems
Practice Principles for
Yes No Abstract Explanation
TWSE/TPEx Listed
Companies, and Reasons
confidential so that none of the people above are
treated unfairly.
4. Strengthening information disclosure
(1)Does the company disclose its ethical corporate management
policies and the results of its implementation on the
company’s website and MOPS?		 (1)The Company's website contains a "Corporate Corresponds to the Principle.
V
Governance Section" and has disclosed the content of
ethical corporation management policies and relevant
information. This information is on MOPS, where the
corporate governance information are readily
accessible.
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPExListed
Companies, please describe any discrepancy betweenthe policies and their implementation: No difference.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies).
(1) The Company strictly adheres to the relevant regulations of the country (Company Law, Securities and Exchange Act, regulations concerning TWSE/GTSM

listed companies, and other commercial behaviors) as the basis of the implementation of integrity operation.
(2) The Company schedules corporate governance courses for directors and supervisors on a regular basis to strengthen their ability of supervision and governance,

hopingto increase the effectiveness ofgovernance and implementation of integrityoperation.

  1. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPExListed Companies, please describe any discrepancy between the policies and their implementation: No difference.

  2. (7) If the company has formulated corporate governance principles and relevant regulations, it should disclose the method of inquiry: The Company has formulated corporate governance code of practice, and has been disclosed on our website under "Major Internal Policies" subsection of "Corporate Governance Section".

  3. (8) Other important information which enhances the understanding of the operation on corporate governance should be disclosed together: Other regulations related to corporate governance has also been disclosed on our website under "Major Internal Policies" subsection of "Corporate Governance Section".

-59-

Date: March 14, 2018

(9) Implementation of Internal Control System

  • A. Statement of Internal Control

104 Corporation

Statement of Internal Control System

Based on the findings of a self assessment, the Company states the following with regard to its internal control system of 2017:

  1. The Company acknowledges that the establishment, implementation and conservation of the internal control system are the responsibilities of the Board of Directors and the managers of the Company. The Company has constructed such system. It is intended to provide reasonable assurance to its operation affects and efficiency (including profiting, performance and preserving asset security, etc.), to achieve the goal of reporting reliability, timeliness and transparency and corresponding to relevant regulations and adhering to relevant laws.

  2. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only provide reasonable assurance of accomplishing its stated objectives. In addition, the effectiveness of the internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, the Company's internal control system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies.

  3. The Company evaluates the design and operating effectiveness of its internal control system based on "Regulations Governing Establishment of Internal Control Systems by Public Companies" (herein below, the "Regulations"). The criteria adopted by the Regulations identify five key components of managerial internal control: (1) Control Environment; (2) Risk Assessment; (3) Control Activities; (4) Information and Communication; and (5) Monitoring Activities. Each constituent element includes a number of categories. Please refer to the "Regulations" for the aforementioned categories.

  4. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.

  5. Based on the findings of the evaluation, the Company believes that, on December 31, 2017, it has maintained, in all material respects, an effective internal control system (including the supervision and management toward its subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations.

  6. This Statement will become an integral part of the Annual Report and the Prospectus of the Company, and will be made public. Any falsehold, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

  7. This Statement has been adopted by the Board Meeting held on March 14, 2018, with none of the five attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

104 Corporation

Chairman: Chi-Kuan Yang

General Manager: Chi-Kuan Yang

  • B. Company which commissions CPA to professionally review the internal control system should disclose the review report provided by the CPA: None.

-60-

  • (10) In the last fiscal year and until the publication date of this Annual Report, the punishments and the main deficiencies of the Company and its personnel executed due to transgression of the law and the internal control system, and their correction actions: None.

  • (11) In the last fiscal year and until the publication date of this Annual Report, the important resolutions of the Shareholders' Meeting and the Board Meetings:

  • A. Important resolutions of the Shareholders' Meeting

Date of
the meeting		 Resolutions Execution process
June 8, 2017 Approved the proposal
"2016 Financial
Statements and
Business Report"		 Voted and resolved the proposal as it is.
Approved the proposal
"Distribution of 2016
Earnings"		 Voted and resolved the proposal as it is; set July
29, 2017 as the ex-dividend date for dividend,
and set August 18, 2017 as the day to distribute
cash dividends.
Each common share will be distributed NT$10.8
per share, totaling NT$358,837,560.
Approved the proposal
"Amendment to the
Company’s Articles of
Incorporation"		 Voted and resolved the proposal as it is, and the
Company currently operates according to the
amended regulation.
Amendments were recorded on June 28, 2017,
and the amended "Articles of Incorporation"
have been disclosed on the Company website.
Approved the proposal
"Amendment to the
Company’s Directors
and Supervisors
Election Guidelines"		 Voted and resolved the proposal as it is, and the
Company currently operates according to the
amended regulation.
Approved the proposal
"Amendment to the
Company’s Procedure
for Acquisition and
Disposal of Assets"		 Voted and resolved the proposal as it is, and the
Company currently operates according to the
amended regulation.
The amended " Procedure for Acquisition and
Disposal of Assets" have been disclosed on the
MOPS on June 26, 2017.

B. Important resolutions of the Board Meetings

Date of Content of resolutions the meeting Approve the proposal "Write off of the Employee Restricted Stock that have been received by the Company". Approve the proposal "The Company's 2016 Business Report and Financial Statements". Approve the proposal "Distribution of 2016 Earnings". March 16, 2017 Approve the proposal "Distribution the 2016 Employees, Directors, and Supervisors’ Compensation". Approve the proposal "Amendment of the Company's Articles of Incorporation". Approve the proposal "Amendment of the Company’s Directors and Supervisors Election Guidelines".

-61-

Date of Content of resolutions the meeting Approve the proposal "Amendment of the Company’s Procedure for Acquisition and Disposal of Assets". Approve the proposal "Convening of the Company's 2017 Annual Shareholders' Meeting and Relevant Issues". Approve the proposal "The Company Contribution into the Employee Stock Ownership Trust Account for Manager". Approve the proposal "The Business Plan and Financial Budget of Year 2017". Approve the proposal "The Assessment Result of Auditor’s Independence and Audit Fee for Year 2017". Approve the proposal "The Renewal of the Loan Agreement with Mega International Commercial Bank". Approve the proposal "Designate two seats of Director and one seat of Supervisor for the Fourth Board of Directors of 104 Human Resources Consultancy (Shanghai) Co., Ltd., the 70 percent shareholding subsidiary of the Company". " " Approve the proposal The Declaration of Internal Control System of Year 2016 . Approve the proposal "The First Quarter Consolidated Financial Statements of Year May 11, 2017 " 2017 . Approve the proposal "Amendment of the Company’s Corporate Governance Best Practice Principles". Approve the proposal "The Ex-dividend Record Date and Distribution Date of Cash Dividends" June 8, 2017 Approve the proposal "The Purchase of Year 2017 Directors’ and Officers’ Liability Insurance". Approve the proposal "The Distribution of Year 2016 Directors’ Compensation and ' " Employees Compensation . Approve the proposal "Write off of the Employee Restricted Stock that have been received by the Company". August 10, 2017 Approve d the proposal "The Second Quarter Consolidated Financial statements of Year 2017". Approve the proposal "The Third Quarter Consolidated Financial Statements of Year 2017". Approve the proposal "The Company's Internal Audit Plan of Year 2018". Approve the proposal "The Company Contribution into the Special Employee Stock November 9, Ownership Trust Account for Manager" 2017 Approve the proposal "Distribution of Senior Manager Bonus of Year 2017". Approve the proposal "The Salary Increment of Senior Manager’s Compensation (Including the Promotion Raises) and the Company Contribution into the Employee " Stock Ownership Trust Account for Manager of Year 2018 . Approve the proposal "Write off of the Employee Restricted Stock that have been received by the Company". Approve the proposal "The Company's 2017 Business Report and Financial Statements". Approve the proposal "Distribution of 2017 Earnings ". Approve the proposal "Distribution the 2017 Employees, Directors, and Supervisors’ Compensation". Approve the proposal "Election of Directors and Supervisors and the Nomination of March 14, 2018 Director and Supervisor Candidates ". Approve the proposal "Convening of the Company's 2018 Annual Shareholders' Meeting and Relevant Issues". Approve the proposal "The Business Plan and Financial Budget of Year 2018". Approve the proposal "Change of Certified Public Accountant (CPA) due to the Internal Job Rotation of the CPA Firm ". Approve the proposal "The Assessment Result of Auditor’s Independence and Audit Fee for Year 2018".

-62-

Date of Content of resolutions the meeting Approve the proposal "The Renewal of the Loan Agreement with Mega International Commercial Bank". Approve the proposal "The Declaration of Internal Control System of Year 2017". Approve the proposal "Designation of three seats of Directors and one seat of Supervisors for the fifth Board of Directors of 104 Learn Corporation, the Company's 100 percent Shareholding Subsidiary". Approve the proposal "The Appointment of the Company's Remuneration " Committee Member .

  • (12) During the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the main content of the record or the written statement of Directors and Supervisors who hold different opinions toward important resolutions adopted by the Board of Directors: None.

  • (13) A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company's chairman, general manager, principal accounting officer, principal financial officer, chief internal auditor, and principal research and development officer: None.

-63-

5. Information on CPA professional fees

  • (1) Ranges of professional fees:
Accountingfirm Accountingfirm Name of CPA Name of CPA Auditing period Auditing period Remarks Remarks
KPMG Chun-Hsiu Kuang LilyLu 2017.01.01~2017.12.31 -
Fees Items
Audit Fees Non-Audit Fees Total
Interval of the amount
1 Less than $2,000 thousand V
2 $2,000 thousand(inclusive)~ $4,000 thousand V V
3 $4,000 thousand(inclusive)~ $6,000 thousand
4 $6,000 thousand(inclusive)~ $8,000 thousand
5 $8,000 thousand(inclusive)~ $10,000 thousand
6 Over $10,000 thousand

Unit: NT$000

Non-Audit Fees Non-Audit Fees Reviewing
Accounting Name of Audit System
 Business
 Human period for Remarks
Firm CPA Fees Other Subtotal the
design registration resource accountants
KPMG Chun-
Hsiu
Kuang		 2,259 0 0 0 420 420 2017.01.01
~
2017.12.31		 The main of the
others is the
service fee for
implementation
of IFRS 15
Lily Lu

  • (2) When the non-audit fees paid to the Certified Public Accountants, their firm, and its affiliated companies account for 25% or more to the audit fees, the amount of audit fees and non-audit fees and the content of non-audit service must be disclosed: None.

  • (3) When the company has changed the accounting firm, and in that particular fiscal year, the audit fees paid was less than those of the fiscal year before that, the company must disclose the amount, ratio, and reason of the decrease in audit fee: None.

  • (4) When the audit fees decrease 15% or more than the last fiscal year, the Company must disclose the amount, ratio, and reason of the decrease in audit fee: None.

6. Information on replacement of certified public accountant:

  • (1) Regarding the former accountants
Date of replacement Approved bythe Board of Directors on March 14, 2018. Approved bythe Board of Directors on March 14, 2018. Approved bythe Board of Directors on March 14, 2018.
In compliance with relevant regulatory requirements on rotation, the current
engagement partner Chun-Hsiu Kuang will be replaced by Min-Ju Chao.
Reason of replacement and

explanation
Parties
ContractingCondition
CPA		 The Company
Statement on whether the
Voluntarily terminated the
appointment		 (Not applicable) (Not applicable)
Company or the accountant

terminate or not accept the

appointment
Not accept (continuing) the
appointment		 (Not applicable) (Not applicable)

-64-

==> picture [489 x 270] intentionally omitted <==

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

The opinions and reasons
in audit reports other than
unqualified opinion in the None.
last two years
Accounting principles or practices
Disclosure of financial statements
Yes Scope or procedure of auditing
Different opinions with the
Other
issuer
None V
Statement: None.
Other disclosed items
(Matters which shall be
disclosed pursuant to Sub-
subparagraph 4~7,
Subparagraph 1, Paragraph None.
6, Article 10 of the
Regulation)
----- End of picture text -----

  • (2) Regarding the successor accountant
) Regarding the successor accountant
Name of the accounting firm KPMG
Name of the accountants Min-Ju Chao, CPA
Date of appointment Approved by the Board of Directors on March 14, 2018.
The accounting treatment of particular Not applicable

transactions before appointment or

accounting principle and the

consulting matters and their results for

the possible opinions signed and

issued in the financial report
The succeeding on the accountant's Not applicable

different issues opinions in written

from the former accountant
  • (3) The former accountant's reply toward the Sub-subparagraph of 2-3, Subparagraph 1, Paragraph 5, Article 10 of the Regulation: Not applicable.

7. Information of the Company's chairman, general manager, or any managerial officer in charge of finance or accounting matters who has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise: None.

-65-

8. Any transfer of equity interests and pledge of and change in equity interests by a director, supervisor, managerial officer, and shareholder with a stake of more than 10 percent during the most recent fiscal year and up to the date of the annual report printed:

  • (1) Change of equity of the Directors, Supervisors, Managers and Major Shareholders
2017 2017 As of March 31, 2018 As of March 31, 2018
Number of Number of
Number of Number of
increased increased
Job Title Name increased increased
(decreased) (decreased)
(decreased) (decreased)
pledged pledged
holding shares holding shares
shares shares
Chairman and
Chi-Kuan Yang 0
0
6,664
0
General Manager
Director and Chief
Hung-Wen Su 0
0
0
0
Legal Officer
Director Chien-An Juan (113,000)
0
0
0
Director Mun-Kee Chang 0
0
0
0
Independent Director Wei-Lin Liou 0
0
0
0
Independent Director Cheng Li 0
0
0
0
Supervisor Askforce Corporation 0
0
0
0
Supervisor Zan-Syong Cai 0
0
0
0
General Manager of Kuang-Li Hung
(24,000)
0
0
0
Business Group
(Note 1)
General Manager of
Yu-Chun Huang 0
0
0
0
Business Group
Vice President Li-Ming Chin (2,000)
0
0
0
Vice President Li-Hsue Wu 0
0
(12,000)
0
Vice President Sung-Jung Chen 0
0
0
0
Vice President and
Fen-Ju Lin 0
0
0
0
CFO
Vice President Tze-Hsing Hua 0
0
0
0
Bo-Hao Zang
Vice President 0
0
0
0
(Note2)
Vice President Wen-Hsiung Chung 0
0
0
0
Vice President Chun-Hung Lin 0
0
0
0
Vice President Hui-Chen Shih 0
0
0
0
Vice President Hao-Lin Teng 0
0
0
0
Vice President Yi-Pei Lin 0
0
0
0
Director Jung-Chuen Wang 0
0
0
0
Director Yu-Jen Tseng 0
0
0
0
Sheng-Long Wong
Director 0
0
0
0
(Note 3)
Director Yu-Lin Wang 0
0
0
0
Director Chi-Long Huang 0
0
0
0
Director Ming-Lun Lee 0
0
0
0
Hsuan-Wei Huang
Director 0
0
0
0
(Note 4)
Kui-Lin Lee
Director 0
0
0
0
(Note 5)
Director Han-Shen Huang 0
0
0
0
Director Yu-Mei Tu 0
0
0
0
Director Wei-Wei Wong 0
0
0
0
Director Chia-Chin Wu 0
0
0
0
Chen-Peng Wang
Director 0
0
0
0

(Note 6)
Chia-Hsuan Lin
Director 0
0
0
0
(Note 7)
Hui-Hsin Hsiao
Director 0
0
0
0
(Note 8)

-66-

2017 2017 As of March 31, 2018 As of March 31, 2018
Number of Number of
Number of Number of
increased increased
Job Title Name increased increased
(decreased) (decreased)
(decreased) (decreased)
pledged
pledged
holding shares holding shares
shares
shares
Director Cheng-Yu Lu 0
0
0
0
Li-Mei Su
Director 0
0
0
0
(Note 9)
Chin-Hua Chiang
Director 0
0
0
0
(Note 10)
Chi-Chang Chen
Director 0
0
0
0
(Note11)
Xun-Xhi Cao
Director 0
0
0
0
(Note 12)
Ying-Yi Wu
Director 0
0
0
0
(Note13)
Min-Yin Xu
Director 0
0
0
0
(Note 14)

Note 1: General Manager of Business Group Kuang-Li Hung resigned from the post on March 31, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 2: Vice President Bo-Hao Zang left the post on October 16, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 3: Director Sheng-Long Wong resigned from the post on July 31, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 4: Director Hsuan-Wei Huang resigned from the post on January 31, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 5: Director Kui-Lin Lee left the post on February 28, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 6: Director Chen-Peng Wang left the post on December 31, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 7: Director Chia-Hsuan Lin resigned from the post on September 25, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 8: Director Hui-Hsin Hsiao resigned from the post on August 24, 2017. The disclosure of shareholding and other relevant information ended on the date of resignation. Note 9: Director Li-Mei Su assumed the post on April 1, 2017. The disclosure of shareholding and other relevant information began on the date of the assumption of duty. Note 10: Director Chin-Hua Chiang assumed the post on April 1, 2017. The disclosure of shareholding and other relevant information began on the date of the assumption of duty. Note 11: Director Chi-Chang Chen assumed the post on June 1, 2017. The disclosure of shareholding and other relevant information began on the date of the assumption of duty. Note 12: Director Xun-Xhi Cao assumed the post on September 1, 2017. The disclosure of shareholding and other relevant information began on the date of the assumption of duty. Note 13: Director Ying-Yi Wu assumed the post on September 26, 2017. The disclosure of shareholding and other relevant information began on the date of the assumption of duty. Note 14: Director Min-Yin Xu assumed the post on February 1, 2018. The disclosure of shareholding and other relevant information began on the date of the assumption of duty. Note 15: Only listed the managers' list and their change of equity in the year of 2017 and as of March 31, 2018.

  • (2) Information on the counterpart of equity transfer being a related party of the Company's directors, supervisors, managers and major shareholders:
Transaction counterparty and
their relationship
Reason
Transaction Transaction
with the Company, directors,		 Number Transaction
Name for
date counterparty supervisors, and of shares price
transfer
shareholders holding more
than 10 percent of shares
Chien-An
Juan		 Gift June, 2017 Fang-Ping
Xu		 Spouse 100,000 -
  • (3) Information on the counterpart of equity pledge being a related party of the Company's directors, supervisors, managers and major shareholders: None.

-67-

9. Relationship information, among the Company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another:

April 1, 2018; Unit: share April 1, 2018; Unit: share April 1, 2018; Unit: share
Name Shares held by oneself Shares held by the
spouse or minor
children		 Total shares held in
the name of other
persons		 List of the Company's 10
largest shareholders who are
related parties, spouses, or
relatives within the second
degree of kinship		 Remark(s)
Number
of shares		 Percentage Number
of shares		 Percentage Number
of
shares		 Percentage Name Relationship
Jobstreet
Corporation
Berhad		 7,630,000 22.98% None None
- - - -
Chi-Kuan Yang 3,773,157 11.36% 3,773,157 11.36% - - Yun-Hsiang
Ku		 Spouse
Chien-Li Yang Daughter
Askforce
Corporation		 Chairman
Yun-Hsiang Ku 3,773,157 11.36% 3,773,157 11.36% - - Chi-Kuan
Yang		 Spouse
Chien-Li Yang Daughter
Askforce
Corporation
Representative:
Chi-Kuan Yang		 2,427,344 7.31% - - - - Chi-Kuan
Yang		 Chairman
Wells Fargo
Advantage
Emerging
Markets Equity
Fund		 1,655,000 4.98% None None
- - - -
Hsiu-Chuan Tsai 1,608,480 4.84% Tian Mei
Charity
Foundation		 Chairman
- - - -
Ruane, Cunniff
& Goldfarb LLC		 1,470,000 4.43% None None
- - - -
Chien-Li Yang 1,444,489 4.35% - - - - Chi-Kuan
Yang		 Father
Yun-Hsiang
Ku		 Mother
Tian Mei Charity
Foundation
Representative:
Hsiu-Chuan Tsai		 500,000 1.51% - - - - Hsiu-Chuan
Tsai		 Chairman
Sinopac
Securities
Corporation		 485,000
1.46%		 - - - - None None

-68-

10. The total number of shares and total equity stake held in any single enterprise by the Company, its directors and supervisors, managers, and any companies controlled either directly or indirectly by the Company:

March 31, 2018; Unit: Share March 31, 2018; Unit: Share March 31, 2018; Unit: Share March 31, 2018; Unit: Share
Investments of Directors,
The Company's Supervisors, Managers and
Investments in
Combined investments
investments directly or indirectly
other companies
controlled businesses

(Note)
Number of Shareholding Number of Shareholding Number of Shareholding
Shares Ratio Shares Ratio Shares Ratio
104 Learn
Corporation		 1,000,000 100.00% - - 1,000,000 100.00%
104 Consulting
Corporation		 1,218,990 100.00% - - 1,218,990 100.00%
104 Human
Resource
Consultancy
(Shanghai) Co.,
Ltd.(Note)		 - 70.00% - - - 70.00%
Redpoint
Information
Technology
(Shanghai) Co.,
Ltd.(Note)		 - 100.00% - - - 100.00%

Note: It is a limited company and does not issue shares.

-69-

IV. Funding Status

1. Capital and Shares

  • (1) Source of Capital
Funding Status
Capital and Shares
) Source of Capital
A. Type of Share: March 31, 2018
Authorized Capital
Type of Share Remarks
Outstanding Shares Unissued Shares Total
Registered Common
Stock		 50,000,000
33,207,200
16,792,800
(Note)

Note: Including 15,500 shares of Restricted Employee Stock which the registration have not been completed.

B. Source of Capital:

Unit: share; NT$
Authorized Capital Paid-in Capital Remarks
Year Issued Capital
Approval Date and No.
Month Price Number of Number of
Increased by
Amount Amount Sources of Capital
Shares Shares
Assets Other
than Cash
Cancellation on April 07, 2017 New
Taipei City Jin Si Zi
No. 1068020979
2017.04
10		 50,000,000
500,000,000
33,225,700
332,257,000
restricted employee		 None
stock: 160,000
Cancellation on September 11, 2017 New
Taipei City Jin Si Zi
No. 1068056409
2017.09
10		 50,000,000
500,000,000
33,207,200
332,072,000
restricted employee		 None
stock: 185,000
  • C. Information of Shelf Registration: Not applicable.

-70-

(2) Shareholder Structure

) Shareholder Structure Shareholder Structure
April 1, 2018
Shareholder
Foreign


Government		 Financial Other juristic
Structure Natural persons
institutions and		 Total

agencies		 institutions persons
Amount natural persons
Number ofpeople 0 0 22
1,798		 56 1,876
Shares held 0 0 4,407,005 14,915,314 13,884,881 33,207,200
Shareholdingratio 0.00% 0.00% 13.27% 44.92% 41.81% 100.00%

(3) Distribution Profile of Share Ownership

) Distribution Profile of Share Ownership
April 1, 2018
Shareholder Ownership (Unit: Share) Number of shareholders Ownership Ownership (%)
1 to 999 863 87,208 0.26%
1,000 to 5,000 842 1,399,445 4.21%
5,001 to 10,000 67 475,740 1.43%
10,001 to 15,000 19 239,406 0.72%
15,001 to 20,000 19 343,540 1.04%
20,001 to 30,000 9 231,345 0.70%
30,001 to 50,000 13 514,505 1.55%
50,001 to 100,000 16 1,090,328 3.28%
100,001 to 200,000 9 1,276,463 3.85%
200,001 to 400,000 8 2,375,593 7.15%
400,001 to 600,000 3 1,392,000 4.19%
600,001 to 800,000 0 0 0.00%
800,001 to 1,000,000 0 0 0.00%
Over 1,000,001 8 23,781,627 71.62%
Total 1,876 33,207,200 100.00%

-71-

(4) Major Shareholders

(4) Major Shareholders
April 1, 2018

Total Shares
Shares Ownership (%)

Owned
Name
Jobstreet Corporation Berhad 7,630,000
22.98%
Chi-Kuan Yang 3,773,157
11.36%
Yun-HsiangKu 3,773,157
11.36%
Askforce Corporation 2,427,344
7.31%
Wells Fargo Advantage EmergingMarkets EquityFund 1,655,000
4.98%
Hsiu-Chuan Tsai 1,608,480
4.84%
Ruane,Cunniff & Goldfarb LLC 1,470,000
4.43%
Chien-Li Yang 1,444,489
4.35%
Tian Mei CharityFoundation 500,000
1.51%
Sinopac Securities Corporation 485,000
1.46%

(5) Market Price, Net Worth, Earnings, and Dividends per share in the Past 2 Years

Year Year As of March 31,

2016		 2017
Item 2018 (Note 2)
Market Price
Per Share		 Highest 158.00 171.50 180.50
Lowest 134.00 138.00 162.00
Average 139.15 151.40 173.45
Net Worth
Per Share		 Before Distribution 47.08 45.96 －
After Distribution 36.29 (Note 1) －
Earnings Per
Share		 Weighted Average Shares
(thousand shares)
33,075 33,125 －
Earnings Per Share 12.04 9.60 －
Cash Dividend 10.80 9.60(Note 1) －
Diidd Stk Earnings Distribution
－		 － －
vens
Per Share		 oc
Dividends		 Capital Surplus
Distribution
－ － －
Accumulated Undistributed Dividend － － －
Return on
Investment		 Price/Earning Ratio 11.56 15.77 －
Price/Dividend Ratio 12.88 15.77 －
Cash Dividend Yield Rate 7.76% 6.34% －

Note 1: 2017 dividend per share have not been approved the resolution in the Shareholders' Meeting. Note 2: As of the publishing date of the annual report, 2018 financial data has not been reviewed by the CPA.

-72-

  • (6) Dividend Policy and Implementation

  • A. Dividend Policy of the Company’s article:

The 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, at least 50 percent shall be allocated as dividend for shareholders.

In accordance with the dividend policy of the Company, 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 pursuant to Paragraph 2, Article 26. 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.

Take cash dividend payments in the recent two years as an example: In 2015, dividend per share was NT$8.0, 100% in cash dividend. In 2016, dividend per share was NT$10.80, 100% in cash dividend as well, in line with the dividend policy stated in Articles of Incorporation: cash dividend is no less than 10 percent of total dividend.

  • B. The proposed dividend distribution of Shareholders’ Meeting this year:

Board of Directors proposed dividend per share of NT$9.60, for a total of NT$318,649,920 on March 14, 2018. After the proposal is approved by the 2018 Shareholders' Meeting, the Board of Directors authorized to determine the ex-dividend date.

  • C. Expected material change in dividend policy: None.

  • (7) Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent Shareholders' Meeting: Not applicable, because no stock dividend is proposed this year.

  • (8) Compensation of employees, directors, and supervisors:

  • A.The percentages or ranges with respect to employees, directors, and supervisors’ compensation, as set forth in the Company's Articles of Incorporation: In accordance with the Articles of Incorporation, if the Company operates at a profit (the profit so called 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.

  • B.The basis for estimating the amount of employees, directors, and supervisors’ compensation, for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period:

    • (a)2017 employees, directors, and supervisors’ compensation is estimated as certain percentage during the preceding stated percentages or ranges based on 2017 net profits before tax (excluding the compensation to employees, directors, and supervisors).

    • (b)If there is discrepancy between the actual distributed amount and the above estimated figure, it would be adjusted and realized in the accounting estimates in the next period.

-73-

  • C.Information on approval by the Board of Directors of distribution of compensation:

    • (a)Cash compensation of NT$34,464,860 will be distributed to employees and NT$8,355,118 will be distributed to directors and supervisors.

      • There is no difference between distribution and the 2017 estimates.

    • (b)The amount of employee compensation distributed in stocks, and the amount as a percentage of net income stated in the parent company only financial reports or individual financial reports for the current period and total employee compensation: Not applicable.

  • D.The actual distribution of employees, directors, and supervisors’ compensation for the previous fiscal year:

    • (a)Actual distribution:

      • Employee compensations: NT$36,741,860;

      • Compensations of directors and supervisors: NT$9,185,465.

    • (b)There is no difference between distribution and the 2016 estimates.

  • (9) Share Repurchases:

No share repurchase in the preceding fiscal year or during the current fiscal year up to the date of printing of the annual report.

2. Issuance of Corporate Bonds: None.

3. Issuance of Preferred Shares: None.

4. Issuance of Global Depository Receipts: None.

5. Status of Employee Stock Option:

  • (1) Unexpired employee stock option issued by the company in existence shall be disclosed as of the date of printing of the annual report, and shall explain the effect of such option upon shareholders' equity: None.

  • (2) Names of managers and top ten employees holding employee stock option and the cumulative number of such option exercised as of the annual report printing date: None.

-74-

6. Status of Restricted Employee Shares:

  • (1) Unexpired restricted shares issued by the company in existence shall be disclosed as of the date of printing of the annual report, and shall explain the effect of such option upon shareholders' equity:
March 31, 2018
2016 First Time (Batch 1)
Type
Restricted employee shares
Effective Date August 1, 2016
Issuance Date August 11, 2016
Number of Restricted
125,000 shares issued
Employee Shares Issued
Issued Price Bonus Shares
Ratio of Restricted
Employee Shares Issued 0.38%

to Total Shares Issued
(1) If the qualified employee is still in service and the personal performance
surpasses A at the following time points 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
Vesting Conditions of
date

Restricted Employee
(B) 1/3 of the restricted employee shares are vested in year 2 after the grant

Shares
date
(C) 1/3 of the restricted employee shares are vested in year 3 after the grant
date
(2) 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
formerandlowerportion forthelatterbasis.
(1) Employees granted with restricted employee shares, before fulfilling the

vesting conditions, shall not sell, pledge, transfer, donate to others, setting, or
any other means of disposal.
(2) Employees granted with restricted employee shares, before fulfilling the
Restriction of Rights on vesting conditions, except the preceding stated limitation, its rights and

Restricted Employee		 obligations (including participation in the placement, interest distribution,

Shares
voting in shareholders meeting and capital increase subscription, etc.) are the
same as the Company's already issued common shares.
(3) Before fulfilling the vesting conditions, employees entrust Stock Trust or
TDCC on matters of attending, proposals, speeches, voting rights and other
related matters in the company shareholders meeting.
The restricted employee shares are issued through stock trust, share transfer or
Custody of Restricted
depository & clearing. Prior to meeting vesting conditions, employees shall not,

Employee Shares		 for any reason or with any approach, ask the trustees to return restricted
employee shares.
(1) For employees who do not meet the conditions, the Company will fully
The Procedures for
recover and cancel their shares.
Handling when Vesting
(2) Shares and dividends already received by those who did not fulfill the vesting

Conditions are not Met
conditions do not need to be returned.
Number of Restricted
Employee Shares 48,500(Note)

Recovered or Purchased
Number of Released
31,500
Restricted Shares

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2016 First Time (Batch 1)
Type
Restricted employee shares
Number of Unreleased
45,000
Restricted Shares
Ratio of Unreleased
Restricted Shares to Total 0.14%
Shares Issued(%)
If fully issued and vested, it is estimated to incur annual expense of
approximately NT$6,966,863, NT$15,857,655, NT$11,114,462, NT$4,109,128

and NT$717,892 with the total amount of NT$38.77 million respectively for year
2016 to 2020. It is estimated that the highest possible reduction in the amount of
Impact on Shareholders'

EPS are approximately NT$ 0.21, NT$0.48, NT$0.33, NT$0.12 and NT$0.02.

Equity

The company estimates growth of revenue and profit in the future will be in
steady trends. Hence, by overall assessment, the dilution effect on EPS of the

Company in coming years is limited and shall have no significant impact on
existing shareholders'equity.

Note: Including 15,500 shares of Restricted Employee Stock which the registration have not been completed.

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(2) Names of managers and top ten employees holding restricted employee shares as of the annual report printing date and the conditions of receiving such option:

March 31, 2018

Job Title Name Name Number of
restricted
employee		 Percentage of the
restricted
employee shares
 Shares with
released		 Released restricted rights
Issued
Issued
Percentage of share with
released restricted rihts		 Released restricted rights
Issued
Issued
Percentage of share with
released restricted rihts		 Released restricted rights
Issued
Issued
Percentage of share with
released restricted rihts		 Unreleased
restricted		 Unreleased restricted rights
Issued
Issued
Percentage of share with
unreleased restricted rihts to		 Unreleased restricted rights
Issued
Issued
Percentage of share with
unreleased restricted rihts to		 Unreleased restricted rights
Issued
Issued
Percentage of share with
unreleased restricted rihts to
Executives General Manager of
shares		 to total shares
issued
restricted rights		 price amount g
to total shares issued
shares		 price amount g
total shares issued
Yu-Chun Huang

Business Group
Vice President Fen-Ju Lin
Vice President Wen-Hsiung Chung
Vice President Tze-Hsing Hua
Vice President Li-Hsue Wu 0
 0
 0
 0
60000 018% 23500 007% 36500 011%
Vice President Li-Ming Chin , . , （Note1） （Note1） . , （Note1） （Note1） .
Vice President Bo-Hao Zang

(Note2)
Vice President Sung-Jung Chen
Vice President Hui-Chen Shih
Director Jung-Chuen Wang
Employees Manager Bi-Hua Yang 1 2
Manager Fu-Ming Hsiao
Deputy Manager Pei-Yu Lai
Deputy Manager Yi-Ling Chen
Senior Engineer Chao-Kuan Lu
0 0 0 0
Senior Engineer Shu-Ting Hsieh 5,000 0.05% 6,500 （Note1） （Note1） 0.0% 8,500 （Note1） （Note1） 0.03%
Senior Engineer Yue-Hsiang Su
Senior Engineer Wei-Cheng Shen
Senior Engineer Jian-Wu Lin
Senior Engineer Yong-Cheng Chen
Note1: Issued for free.
Note2: Resigned.

7. Status of New Share Issuance in Connection with Mergers and Acquisitions: None.

8. Financing Plans and Implementation: None.

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V. Operational Highlights

1. Business Activities

(1) Business Scope:

A.The Company's major lines A.The Company's major lines of business and the relative weight (including subsidiaries): of business and the relative weight (including subsidiaries):
Business Groups
Products (services) Ratio
Online service revenue Online recruitment, advertising,
learning, tutoring, and outsourcing		 82%
Platform and consulting
services revenue		 HR Salary Management System, HR
assessment, and executive search		 18%

B. Current products (services):

Online Service Business Group: 104 provides multiple online recruitment services for enterprises, including corporate job listings, talent search and matchmaking, advertisement placement exposure, talent referrals and recruitment process management services, etc. We hope to help companies find suitable talents more quickly through multiple recruitment tools, brand building of employers and smooth experience across various devices. At present, this service has been extended to external talent seeking and talent dispatching company to increase the number of job types. 104 provides appropriate recruiting programs for enterprise users of different scales, industries, and international recruitment needs: for medium and large-sized companies that have continuous recruitment needs, we provide various advertising services for corporate image and value-added exposure, as well as tailor-made integrating recruitment services; we also offer friendly and easy-to-publish programs for small businesses targeting at domestic demands, such as retail stores, restaurants, beauty salons, etc.; for international recruitment needs of multinational corporations, 104 has joined the TheNetwork International Recruitment Services Alliance and cooperated with more than 50 local leading brands of job banks, providing advertising services for more than 130 countries, so that whatever countries you need to recruit talents overseas, 104 can serve as your single window.

In addition to the enterprise recruitment advertisement exposure, 104 also provides commercial advertisement online services and has grown from an HR job bank to develop multiple employment information platform and services, including 104 Tutor for online tutor searching services and 104 Outsourcing for online case-posting services. In addition, 104 provides job-seeking members with multiple career services, including resume publication, on-line job search, job matching, similar or related job referral services etc. For job seekers with different career stages and different needs, 104 provides suitable career searching and career services. For school students, recent graduates and social freshmen, 104 provides job-based tools such as functional personality assessment, payroll intelligence, career development maps, and job function encyclopedias to help job-seekers identify job seeking directions and find suitable jobs; for mobile service workers, 104 continues to strengthen job search APP services. As of the end of 2017, the number of job applicants via mobile phones has continued to climb and exceeded 55%. For middle and high-level groups, 104 has integrated job openings of executive search with those of external talent seeking companies and provides the most complete content of job openings. Moreover, through interactions with various workers from different industries, 104 also provides a new generation career community service to help professional workers in various sectors build individual brands, meet their profession learning and networking needs, and the professional community platform serves as the basis for nextgeneration job/talent seeking applications to create personalized matchmaking services.

Platform and Consultation Business Group: The Human Resources Academy assists companies in talent management through the provision of consultancy services and information systems, and emphasizes the integration of systems and consultants to create differentiation with competitors and increase the added value to customers. Such as the introduction of SME human resources system to provide legal advice on the labor law, the establishment of the functional model to provide the evaluation system with norm construction, etc.; and in response to the flexible needs for Company's

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human resources outsourcing, we integrate professional human resources consultant and information technology to provide talent selection, consulting, training and development, HR system platform, personnel payroll outsourcing and other services. In addition, in response to companies' needs of "tailor-made" searches for executives and key talents, 104 provides enterprises with executive searches for mid- to high-rank professionals and consultation services, and forms an integrated online and offline recruiting service with the job bank.

Social Enterprise Department: Implementing 104's mission of "commitment to children", 104Kids Platform assists students by letting children upload learning materials and explore records to accompany children through talent reporting mechanisms. Using 104 World of Work Platform, we assist students in finding suitable subjects and exploring future suitable works.

Senior Care Business: The process of taking care by the eight major medical experts (i.e. physicians, nurses, dietitians, pharmacists, physiotherapists, functional therapists, social workers, and fitness experts) is accompanied by nurses acting as health promotion consultant. These together develop and launch health promotion proposals based on the concept of health promotion and prevention, and also formulate health promotion proposals and housekeeper service plans based on the individual needs of the elderly.

104 Senior Platform: A platform that takes the value of healthy elders as its mission. Retired people can provide paid services for demanders to sign up and participate on the platform. This platform went online in November 2017. The first stage focuses on retirees providing guided tour services, and will subsequently launch cooking and consultations.

C. Planning and development of new products (services):

To satisfy client needs and further expand the Company's reach, we will continue to optimize and integrate our existing products (services), enhance the scope of our services, and we will also expand our services toward senior citizens and children and develop new products/services or platforms to meet the expectations of the society. These will include the following:

  • (a) To develop a brand new service for resume consultation room: Integrate corporate talents and workplace seniors across the country to help juniors in the workplace find suitable jobs.

  • (b) Create Professional Employer Brand Services: Provide companies with integrated recruitment solutions to increase the efficiency of recruiting talent.

  • (c) Optimize the human resource management platform: Continuously optimize the internal management and communication functions of HR Portal, including tasks, meetings, voting, events, files, instant messages, etc.; and strengthen human resources analysis on the buyout version of the 104eHRMS human resources system. With flexible parameters setting to meet the company's complex staffing duties and payroll calculation needs, and in response to the laws and regulations of one fixed day off and one flexible rest day, the speed of function optimization and adjustment continues to lead the industry.

  • (d) Continuous optimization of the Be A Giver community platform: From "In the Name of Help" to "In the Act of Help," it provides a professional platform for middle- and high-level talents, and actively constructs new middle-and-high-level talent service models.

  • (e) We developed Senior Care Bank with health promotion and coach-housekeeper matchmaking platform, integrated a professional medical team, developed an online self-assessment version of the health promotion, realized the feasibility of quantification and efficiency, further combined with senior and high-quality coach and care managers to give caregivers more professional care instruction. Based on the individual needs of the elders, we also formulate health promotion proposals and housekeeper service plans, dismantling the invisible bombs that drive office workers to withdraw from the workplace due to their duties to take care of the elders in their homes.

  • (f) To develop an open platform for primary and secondary school students, in addition to integrating 104Kids and 104 World of Work career services, with the hope of providing career

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services in the future. We may offer the service on-line so that students or teachers can use the implementation developer center and application service center.

  • (g) Developed and completed 104 Senior Platform.

(2) Industry Overview:

A. Current situation and development

With the popularity of Internet and the cost-efficiency of online recruitment, enterprises are paying more attention to human resource development and e-management, whilst online recruitment has already become the main recruiting channel for domestic enterprises. For job seekers, job banks are also the major channel for job seeking and job transfer. Following the popularity of mobile devices and the rising of online social communities, job-seeking and talent-seeking via mobile devices and community platform are emerging as new trends. Affected by these trends, the number of job openings in corporate online recruitment has continued to increase over the past three years, but the increase in the number of online job seekers has been relatively small due to the declining birthrate. As a result, it has become more and more difficult for enterprises to recruit talents in recent years. In particular, the professional talent is in short supply. 104 has established a dedicated team to provide customized services, including integrated recruitment, executives searching consulting, HR management system, and HR management consulting services.

104 is the leading brand in the online job/talent seeking service market and also a main player in the offline recruitment of executives searching market. The consultant team includes nearly 50 employees with service sites in Taipei, Hsinchu, Taichung and Shanghai. As virtual HR service and cloud-based system are the future trend, 104 continues to develop HR Portal integrating with cloud management tools, and with employees and communities as the core, it provides complete services needed by SME employees, human resources, and business owners.

Due to the decreasing birth rate and people enjoying longer average life span globally, problems associated with an aging population are now inevitable. The percentage of senior in Taiwan reached 7% in 1993, and Taiwan has now been formally recognized as an "Aging Society" by the World Health Organization. As of 2012, the figure reached 11.15% and the number of senior citizens has reached over 2.6 million individuals. According to population estimates by the National Development Council (NDC) from 2012 to 2060, this ratio will exceed 14% by 2018, placing Taiwan as an "Aged Society". By 2025, this figure will reach 20%; in other words, there will be one senior citizen in every five individuals, making Taiwan a "Super-Aged Society". With socioeconomic developments, there have been some changes to family structure and habits of living. In 2010, according to capital and housing statistics by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, the number of single-person and two-person households have grown rapidly in the last 10 years in Taiwan. However, household resident numbers have decrease from 3.3 persons to 3.0 persons, showing family sizes are continuing to shrink. And such changes in family structure will inevitably affect the support functions among family members, as well as impact the possibilities of senior members receiving adequate care from their families. To solve the problem of caring for the aging society and stabilize the job market, the Company has begun to develop a Senior Citizen Health Prevention and Caretaker Matching Platform, based on O2O (Online to offline) which integrates virtual and reality, in response to societal needs. We hope that such measures will bring quality and healthy living for senior citizens.

In addition, there are about 300,000 fresh graduates entering into the workplace each year, but the percentage of their first jobs being less than a year is as high as 70%. The report by the DirectorateGeneral in 2017 also shows that the unemployment rate of fresh graduates (20-24 years old) is as high as 13%, which is about 4 times of the overall unemployment rate (3.8%). The main reason for this is that Taiwanese students lack career exploration during their studies. Therefore, when choosing a school department, most students miss the opportunity to cultivate their own competitiveness in accordance with their own interests and abilities. Coupled with the impact of declining birthrate in Taiwan over recent years, 104 hopes that Taiwan's children can learn about

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their talents, make good use of their talents, and create their own values, so that the future of Taiwan will be more competitive.

B. The relevance of the up, mid and downstream of the industry

Different from the up, mid and downstream relationship in manufacturing industry, our (human resource) services focus on "screening, selection, staffing, development, and retention", which are all correlated and integrated from offline consultation to online information systems. In terms of labor supply, fresh graduates from school each year into the workplace, on-the-job office workers to change their jobs, and second-time employment are all sources of labor supply for the recruiting companies. In terms of labor demand, talent demands from newly established companies and replacement demands due to outflow of talent each year are all sources of job opportunities for job seekers. 104 aims at job seekers, prospective job seekers, recruiting companies and prospective recruiting companies of different groups to provide appropriate products and services and continue to manage customer value. The executive searching service and recruiting teams of corporate human resources have formed an internal and external partnership, and serve as an important role for corporate external talent recruitment.

In addition, the Company is positioned as a user's career service company. From youth to adult to the elderly, we provide a series of services related to career development, so that "commitment to children, commitment to career matchmaking, and commitment to the elderly" can be realized for everyone and every family.

C. Various product trends

Pure publishing or query-style online matching are increasingly unable to meet the demand of recruiting companies and job seekers from the perspective of matchmaking. 104 focuses on helping enterprises quickly find the right talent or assisting job-seekers to quickly get their ideal jobs by developing more precise pairing, similar jobs and referral services. These will enhance the success rate and speed of matchmaking for job/talent seeking, in addition to offering diversified recruitment and multiple career tools for various customer segments and groups. For the job seekers, the Company offers the most number of job postings in the market, and we also offer various diversified employment services including part-time jobs, internships, tutoring, education and career map, job function encyclopedia, salary information, career aptitude assessment, career social platform, and more. For businesses, rather than offering various software like the other companies, we are equipped with key advantages of integrating our management consulting services with systematic platform. Besides sharing professional knowledge and practical know-how with our corporate clients, we also provide the best solutions through integrated resources. Through the experience of using big data system with intelligent services and mobile devices, we can improve matchmaking opportunities for job seekers and recruiting companies. In view of corporate clients' desire to establish brand names and attract more job seekers, 104 will also help corporate clients build their own brand strength, enhance their overall recruitment through integrated recruitment service solutions, and recruit outstanding teams more efficiently. In terms of talents in Taiwan, due to the impact of declining birthrate and brain drain, companies have experienced more and more difficulty in recruiting middle- and top-rank executives. As a result, talent-hunting services are generally valued by foreign companies, listed companies and small and medium-sized enterprises, and have become a supporting force for 104 to develop offline recruitment market.

According to the development of human resources information technology in the United States, the four major trends include: cloud computing of human resources software, communitization of employee platforms, functions of human resource analysis, and the use of Chat bot. 104 continues to move towards the development of human resources technology. The development of HR Portal combined with cloud management tools, with employees and the community as the core, continued to provide the complete services needed by SME employees and business owners, and enhance organizational performance and employee cohesion.

With respect to elderly and children services, senior citizen service will incorporate new

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technologies including cloud, big data, artificial intelligence, robotics, VR, IOT, voice assistant, etc. Based on this, the professional care teams use remote video for coaching butlers to provide precise and customized care service model, catering to the needs of senior citizens for quality and healthy living. As for children services, 104 Workplace Platform offers curriculum and activities to enable children to undertake diversified learning experiences, so that they may receive quality courses and resources more readily to better explore and foster various talents.

D. Competitive Situations

104 mainly offers online job/talent seeking services. Along with the popularity of the Internet and operating performance over past years, it has attracted many businesses to join the market. The competition over the job/talent seeking service platform mainly depends on whether the scale of supply and demand, i.e. the numbers of valid recruiting companies/vacancies and job seekers are large enough, whether the matchmaking of the job/talent seeking are active, and whether searching, paring, referrals and other matchmaking mechanisms are precise and efficient. There are all indispensable and must be available at the same time. In view of this, 104 pioneers the industry and continues to introduce new job/talent seeking features, including alumni navigation, job function encyclopedia, semi-on resume, mobile APP services, student internships, integrated portal webpages of various academic institutions, segmentation of homepage and career communities etc. Although competitors are always scrambling to imitate us, 104 always maintains a first mover advantage and remains the market leader. Furthermore, the Company also aggressively activates its member database, develops precise matchmaking mechanisms, and increases supplementary jobseeking information. In addition to maintaining the website's high traffic and popularity, we meet enterprises' urgent talent-searching demand to broaden the revenue base and form imitation barriers for competitors. The continuous optimization of big data calculation experience, inclusion of active job-seekers and community talents, and the presence of more well-known enterprises have enabled 104 to continually provide faster and better services.

In addition, thanks to the huge talent database and the abundant contacts from senior industry consultants, 104 executive searching consultants enjoy considerable competitive advantage both in terms of talent supply and customer satisfaction. In recent years, they have continued to expand their scale with revenues steadily growing year over year. With respect to human resource consultation service and information system, we continue to outperform competitors in terms of product visibility and number of customers for medium and large-sized clients. In addition, HR Portal for small and medium-sized companies is currently the only cloud service provider offering employee communities, APP and human resources management concurrently.

(3) Technology, Research and Development

  • A. R&D expenses in the most recent fiscal year and as of the date of the Annual Report:
Unit: NT$000
Year Current year to

2017
Item March 31, 2018
Research and development expenses 298,062 (Note)

Note: As of the date of printing of the annual report, 2018 financial data has not been reviewed by CPA.

B. Successfully Developed Technologies and Products:

(a) Mobile Job-Seeking services: The percentage of job applicants through the mobile Job-Seeking service continues to rise. In order to respond to this trend, we continued to improve the mobile phone service experience in 104 and provide apps and mobile web services to meet different demands of various groups. In 2017, mobile version of job function encyclopedia service was newly added. The Job Search APP, PC web version, and mobile web version have completed revisions of search services and introduced more accurate job referrals based on user behavior

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preferences. The overall matchmaking number of job/talent seeking has grown from the previous year.

  • (b) Mobile Talent-Seeking service: The mobile trend continues to increase. At present, about 30% of users on the enterprise side adopts mobile recruitment, and the optimization of APP user experience has become the focus for the future. In view of this trend, 104 continues to optimize the mobile talent-seeking service. In 2017, 104 Talent Search APP completed the revision of resume and the addition of contact information push notification services etc. The introduction page of recruiting company also launched a mobile version, allowing a smoother experience across various devices.

  • (c) Career Social Platform: This stores comprehensive information concerning talent, not only including a brief static resume but also workplace dynamics, community exchange of duties, sharing of professional knowledge and exchange of career experience. 104 will expand its jobseeking services to offer thorough career services by introducing the concept of social community. This platform’s aim is to help members create a comprehensive career record through the strength and intelligence of the crowd and accumulate workplace relationships rapidly, enabling them to discover diverse and suitable potential opportunities and attract the attention of more recruiting employers. In 2017, three common components such as the notification system, the user profile system, and the instant messaging system were completed for the purpose of extending the flexibility for the future platform. The career community product has been completely revised and the new notification system has been used. The user profile system and instant messaging system will also be formally incorporated into the product in 2018.

  • (d) Human resource management platform: Since the employee community is an important development trend both at home and abroad, HR Portal's built-in employee community was relaunched in 2017. In addition to the past employee dynamics and community functions within the companies, it also provides additional functions such as tasks, activities, meetings, voting, and files. These functions can significantly increase communication and production efficiency within the companies. In the aspect of human resources management system, the function of intuitive scheduling has been strengthened, especially in shift schedules and hour schedules, and the two-week, four-week and eight-week deformation schedules are set to allow companies to optimize human resources arrangement, and at the same time meet the complex requirements of domestic labor laws.

  • (e) Student Career Exploration Learning Platform: 104 World of Work focuses the functions of the platform on the exploration of all walks of life. In 2017, we basically completed the framework of World of Work and visualized all walks of life. In addition, some functions have also been developed to make it easier for volunteers to go to school to work. The 104Kids platform has completed the key functions such as the 104Kids platform class page, personal page, uploading works, and talent reports etc. On one hand, the forerunner class was invited to use 104Kids and provided their feedback; and on the other hand, competition events of 3D Talent Gallery was held to encourage parents to upload children's works in space art to the exclusive 3D Talent Gallery for exhibition.

  • (f) Senior Care Bank: We have completed “health promotion services" for the elderly with teachinggrade hospitals. Health assessment visits were conducted by health promotion consultants to senior citizens. Health status of elders was known through comprehensive health observations. The health observation records include five major aspects, i.e. healthy life, healthy body, healthy mind, independence, and feeble fall. The health risks of the elders are marked with red, yellow and green lights. And through the “Personalized Health Promotion Education Database Referral Technology”, matchmaking content from the knowledge database was provided as personalized and exclusive education knowledge. The follow-up process of the professional medical team will formulate health promotion proposals and housekeeper service plans based on the individual needs of the elderly.

  • (g)104 Senior Platform: To build a platform for the retirees to develop their capabilities and experience, the "104 Senior Platform" was launched in November, 2017. The subject of the first

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stage was mainly in the form of guided tours. Cooking and consultancy will be introduced one after another. Different forms of services will enable retirees to come online and generate income, and they can pass on their experience and knowledge to others.

  • (h) In 2017, the 104BeAGiver Community Platform was established, and through articles posted by consultants and daily online video and offline activities, office worker job search/transfer seminars, we can promote and attract mid- to high-level talents to join as Giver members, activate community interaction, and thus expand the middle- and high-rank career space.

C. Future Research and Development Plans:

  • (a) Continue to optimize existing products (services): 104 product (service) teams will continue to adjust and update their respective products or platforms according to user feedback, and continue to develop other cloud-computing services. We will integrate various system resources to provide more comprehensive, instant and best HR services for our clients. We integrate projects such as storage and processing, semantic analysis and user behavior analysis through cloud big data, realize data-driven product development strategies, and convert 104's existing scale advantages of enterprise users and individual users into data scale and data-driven application service advantages. Through the group-wide user account integration project, the various services are put together to exert synergies, and monitor users' behaviors in each product to provide more accurate content and service referrals. In addition, it is expected that new products or services will be closely linked with technologies such as cloud, Internet of Things, smart chat robots, and artificial intelligence (AI) in the future. In 104, related research and development teams have been established to conduct technical research and development.

  • (b) Create the only online “Career Consultation Room” in Taiwan with mid-to-high rank Giver using the online platform to assist people who need career advice. Apart from highlighting their professional images, it also integrates online “many-to-many Q&A” to activate the community platform, systematically collects questions and answers from workers, and plans to establish a career consultation system for AI robots in order to fine-tune intelligent learning and expand the scale of services. We actively assist middle and high rank talents through the promotion of the BeAGiver platform to develop diverse careers and meet corporate needs of professional talents, aiming at expanding and extending the business model of executive searching and creating new services and revenues.

  • (c) On the platform of HR Portal, new assessment bank platform will be added and highly integrated with recruitment and human resources systems; on the payroll survey platform, in addition to optimizing user data entry procedures and interfaces, it will also deepen investigating content to meet the needs of large, small and medium businesses.

  • (d) Develop Senior Care Bank matchmaking platform: combined with Location-Based Service (LBS) mobile positioning service, Internet of Things (IoT) application technology, algorithm and evaluation technology to help elderly families with care needs to quickly search for service agencies and recommended housekeepers with good reputation and coaching skills in the neighborhood, eliminating the trouble of searching suppliers on your own. With detection technology, Wearable Gadgets assist the elderly in health prevention and risk detection, so that when the elderly need help, they can access this comprehensive service platform to obtain professional and suitable life support services (caring, meals, house services, consultation by professional medical teams, etc.). This platform also integrates with professional medical teams to develop online self-evaluation on health promotion, elaborates the feasibility of quantification and efficiency and further combines with the senior and high-quality housekeeper coaches to give caregivers more professional care guidance. Based on the individual needs of the elderly, health promotion proposals and housekeeper service plans are developed, and further aided by the development of multi-screen (computer, pad, mobile phone) cloud mode to create a senior care industry ecosystem.

  • (e) Student Career Exploration and Learning Platform: 104 World of Work provides students a more completed career exploration service. Apart from making it easier for students to learn about all

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walks of life, it also strengthens self-discovery services and guides students to understand their talents. This will help them explore career development and department of study that suits their own talents. 104Kids platform addresses the most urgent needs of school teachers, i.e. "learning archives" and examines whether children's talent reports truly reflect the children's talent status. In addition, we will also begin exploring content (such as the construction of multiple intelligence activities, competitions, courses, etc.) on the platform and build up the expert systems. In addition, 104 World of Work Platform will integrate with 104Kids Platform in 2018 to allow children to explore their careers from primary school to middle school and high school.

  • (f) The establishment of a common platform: to provide the common components needed for 104 internal products. In 2017, three services have been launched, including a notification system, a user profile system, and an instant messaging system. Of which, career community product has started using the notification system. The user profile system and instant messaging system will also be formally incorporated into the product in 2018.

  • (g) 104 Senior: The service model of 104 senior consultant was introduced, allowing retirees to provide services and also help companies pass on their knowledge and experience. In conjunction with the first theme “Guided Tour”, we have teamed up with a number of organizations that have extensive experiences in guided tours. We look forwards to more organizations and institutions that value retirees to join. Using "Senior" as the main theme on the channels and communities, we run the community website to reach more potential retirees and demanders in the hope that we can convey the spirit of "working even after retiring" and have more retirees to join.

  • (4) Short- and Long-Term Business Development Plans

Long-Term Business Development Plans:

  • A. Continue to develop new products: Continue to develop products or services that use mobile devices and online social communities in response to current trends. Backed by cloud services, an opensource platform will be formed to encourage other service providers to join and establish a comprehensive career ecosystem. Implement data-driven product development strategies, transform scale advantages of existing enterprise users and individual users into data scale and data-driven application service advantages.

  • B. Enhance brand value: Focus on creating differential brand image, and setting career and HR service benchmarks for the market.

  • C. Deepen career education: rooting down to help “parents, teachers and students” explore talents together, assist children in understanding school departments and career development that suit their talents, and cultivate the next generation's competitiveness.

  • D. With the trend of corporate and talent internationalization, we assist Taiwanese companies in recruiting supervisors and key talents for their westward and southward development. We also continue to target middle- and high-level career development, research and plan out new services, in order to establish a comprehensive middle- and high-rank talent service framework.

Short-term business development plans:

  • A. Strengthen market development: Develop SME customers through product segmentation, and offer diversified products and services to meet the needs of large corporations and expand into the China market.

  • B. Improve customer satisfaction: Continue to expand the supply and demand scale for job/talent seeking, improve the accuracy of the matchmaking mechanism, and enhance user experience, so as to enhance the effectiveness of the matchmaking between recruiting companies and job seekers.

  • C. Enhance profitability: Encourage the use of database, strive for product differentiation, and improve operational performance.

  • D. Fulfill social responsibility: Emphasize corporate governance and employee benefits.

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  • E. Highlight the value of middle- and high-level talents, plan new business models and new services to create career development opportunities for middle- and high-level talents.

2. Market and Sales Overview

  • (1) Market Analysis

  • A. Major Serviced Regions

104 service mainly focuses on Taiwanese companies, providing online recruiting services, online advertising, human resources management systems, and executive searching consultant etc.

B. Market Share

Print media posting and online posting can coexist in the market, and online posting can also be posted on different job websites, so its actual market share number is not so clear as what physical products survey shows. Besides, in terms of revenues and the number of members, revenues from job ad postings of the top two newspapers is non-public information, while no professional institutions analyze domestic job ad posting information in the Internet industry, so specific market share cannot be estimated.

C. Future Outlook of Market Supply, Demand and Growth

Online Service Business Group: As the global economy grows steadily, the demand for electronic products continues to increase, and emerging applications such as the Internet of Things, cloud applications, and artificial intelligence are expected to continue their export momentum, drive related business opportunities, and increase the willingness of companies to increase their recruitment. For Taiwan’s online manpower recruitment, we expect that the overall market recruitment advertising will continue to climb gradually thanks to the overall growth momentum. From the perspective of the long-term talent demand of the industry, the demand for manpower in the electronics, manufacturing, service sector, wholesale and retail businesses continue to grow, and the demands for talents have increased. The demands for manpower in various categories have increased, and the demands for skilled personnel, machinery and equipment operating professionals also gradually increased.

Platform and Consultation Business Group: With the recovery of business climate in 2017, the demands for talents in the domestic technology and service industries have risen significantly. In addition, due to the industry trend of big data and artificial intelligence, the domestic industry is actively transforming and upgrading. Companies need to recruit middle and high rank key talents specialized in new technology and new knowledge to enhance their competitiveness. Besides medium and large enterprises, small and medium business have begun to use talent seeking for recruitment. In addition, internationalization of Taiwanese talents is evident, and the demand for Taiwanese talent in China or other overseas markets continues to rise. The demand for recruiting Taiwanese cadres to relocate in China and ASEAN is also increasing. Recruiting companies are in great demand of business management talents and technical professionals. The recruitment service provided by 104 executive searching consultants is helping companies fulfill their demands for talent recruitment. The employee management mode of enterprises urgently needs better innovative mechanisms to respond to the rapid changes in technology. 104 published the “HR FBI Report” in October 2017 that surveyed the overall corporate personnel system from 2014 to 2017 for the percentage of operations that have not been electronized. The result falls at a rate of nearly 60% each year, indicating that the potential market is huge.

D. Competitive Niches

  • (a) Advantages of database competition: With the largest and most complete resumes, job openings, companies, and user behavior data in the market, 104 database enjoys an advantage supported by the large number of corporate users and job seekers that not only ensures user satisfaction and corporate loyalty, but also maximizes value of data through data science technology and provides more accurate information and personalized matchmaking service. All of these are not easy for

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competitors to imitate and exceed. In the future, we will continue to use Data-driven product development strategies to transform existing scale advantage from corporate users and individual users into data scale and data-driven application service advantage with higher entry barriers. Launching community platforms also helps job seekers and enterprises better understand each other's needs through interaction. 104 can also better understand user needs and broaden competitive advantage over peer competitors. As for our talent assessment service, we have collected over one million talent assessments from hundreds of enterprises since our inception. In recent years, we have also established a talent capital assessment service and helped enterprises undertake internal corporate culture and HR maturity assessment. This enables us to provide suggestions for companies on how to create unique cultures and competitive advantages.

  • (b) Comprehensive HR total solution: Previous products and services developed by 104, including interview assessment tools, training intelligence systems, HR knowledge systems, knowledge base of career development centers, Education and Carrier map, and our job function encyclopedia have all accumulated a considerable volume of information and data. After integrating such information with the online recruiting system, our system has already become the most comprehensive recruiting platform.

  • (c) Refined customer relationships and enhanced executive searching revenue: 104 consultancy service has established cooperative relationships with thousands of companies. In 2017, it established executive searching bases in Taipei, Taichung, Hsinchu, and Shanghai, effectively covering the entire Taiwan market, strengthening market operations, and obtaining more customers and cases. In recent years, it has focused more on long-term customer relationship management and effectively improved the source and quality of cases.

  • (d) Continuous investment in R&D of professional human resources and IT: We have professional R&D and consultation teams whose backgrounds include Ph.D. and Master degrees in HR management, psychology, computer science and information engineering, as well as information management. Consulting teams have years of experience in business administration and in turn ensure competitive advantages in product R&D and consultation services.

  • E. Favorable and Unfavorable Factors of the Development Prospect and the Corresponding Measures

  • Favorable Factors:

  • (a) Industry outlook:

    • i. The economic effectiveness of online recruiting has been recognized by most enterprises as the most cost-effective way of recruiting, so online recruiting and job-seeking has already become the dominant method for matching jobs and talents.

    • ii. Overall economic momentum in Greater China is recovering, so the demand for talent will continue to grow. Faced by regional and industrial competition, Taiwan's enterprises are also paying more attention to human resources policy and related investments. As the vacancy numbers of corporate online recruitment continue to increase, but the numbers of online job seekers affected by declining birth rates is relatively small, corporate recruitment is becoming more and more difficult. In particular, the supply of professionals is in short that will benefit the service development of recruitment and employer branding. In addition, as our offline executive searching model combines with online job bank, the complete and complementary service will provide perfect recruitment services for enterprises!

  • (b) Industry positioning: Good corporate image, high brand awareness, job seeker satisfaction and corporate loyalty, intangible brand assets, and influence all give 104 more favorable position and help us integrate with or to form strategic alliances with relevant industry resources.

  • (c) R&D capabilities:

    • i. Long-term accumulation of capability in key technology has made us the leading company in high-end key technology, equipped with the ability to design and integrate software.

    • ii. The database, which has reached the scale of economy, not only creates a threshold that is difficult for competitors to surpass, but also makes 104 one of the few companies in Taiwan

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that have databases that add value. In the future, it will continue to use Data-driven product development strategies to transform existing scale advantage from enterprise users and individual users into data scale and data-driven application service advantages with higher entry barriers.

Unfavorable factors and Response Measures:

Unfavorable factors:

  • (a)Political and Economic Situation: After the President of the U.S. Donald Trump took office, the protectionism was promoted to push the manufacturing industry back to the United States. Once the international trade war begins, the impact on Taiwan’s industrial supply chains will not be spared. Faced with the uncertainties of the macro environment, in addition to continuing to strengthen job/talent seeking matchmaking efficiency, 104 has also attracted more potential job seekers to join the platform through career community and helped companies reach out to more outstanding employees.

  • (b)Business conditions: After years of efforts, most of the medium-and-large enterprises in Taiwan have already become our customers. However, many competitors have entered the online recruitment market; therefore, we have to target small enterprises and the Greater China market with differentiated products and services to boost current market share.

  • (c)Imitation among competition: Since the establishment of 104, it has been a benchmark for the industry to imitate and compete. The products of the Company's various business groups are also the benchmark of competitors' product development. Therefore, in order to establish a lasting competitive advantage, it is necessary to integrate online and offline services to create a high degree of causal ambiguity to avoid imitation by competitors.

  • (d)The impact of economic fluctuations: From 2016 to the present, although the capital market is active, due to the drastic volatility and the government's adjustments to labor laws, the investments of companies in human resources products have been affected.

  • (e)The outflow of talent in Taiwan is serious, and the mainland China and Southeast Asian countries have been vigorously recruiting Taiwanese talents. This, coupled with Taiwan's low salary issue, has raised the concern of talent shortage for Taiwan companies.

  • (f) The increase in overall operating costs: In response to the continuous development of new business models and the continuous upgrading of existing products and services, including the upgrade of matchmaking technology and the continuous optimization of the website platform, a large number of R&D talents have been recruited. With the advent of the big data era, recruiting big data analytics talents will help improve the company’s competitiveness.

Countermeasures: holding true to our management vision of "more than an employee, we help you manage talent," the Company will continue to plan for appropriate talent recruitment solutions for the special needs and characteristics of SMEs. We also hope to expand our market share and enhance user adhesiveness to increase our future revenue base through introducing cloud-based enterprise management platform and through developing new products/services.

  • (2) Usage and manufacturing processes for the company's main products

  • A. Usage of main products: human resources services.

  • B. Manufacturing process: The Company is engaged in information services business, not classified as manufacturing sector, so it is not applicable.

  • (3) Supply situation for the Company's major raw materials: The Company is engaged in information services business, not classified as manufacturing sector, so it is not applicable.

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  • (4) Major suppliers and clients in the two most recent fiscal years

  • A. Purchase: The Company is engaged in information services business, so it is not applicable.

  • B. Sales: The Company has a huge number of customers, therefore, the transaction amount from single customer is not significant, and each customer accounts for a slight percentage of revenues, so it is not applicable.

  • (5) The production volume for the two most recent fiscal years: The Company is engaged in information services business, no act of manufacturing, so it is not applicable.

  • (6) Sales volume/value of the last two years:

Unit: NT$000

Year 2016 2017
Sales Volume & Value
Quantity Value Quantity Value
Item
Online service revenue (Note) 1,228,532 (Note)
1,264,428
Platform and Consulting Services
revenue		 226,221
275,567
Total 1,454,753 1,539,995

Note : The Company is in the information services business, not manufacturing sector with standardized services. There’s a very large difference among order sizes; hence, this is not applicable.

3. Human Resources

Year 2016 2017 As of March 31,2018
Supervisors or above 111 114 115
Online service 115
Number of 113 110
personnel
employees
General employee 414 472 478
Total 640 699 703
Average age 36 36 36
Average yearof services 5.4 5.3 5.3
Ph.D. 5 9 9
Master 157 179 175
College/University 455 488 491
Education
High school/Vocational
21 21 26
high school
Below high school 2 2 2

4. Environmental Protection Expenditure

  • (1) Total losses (including damage awards) and fines for environmental pollution for the two most recent fiscal years, and during the current fiscal year up to the date of the Annual Report, and explanations of the measures and possible disbursements to be made in the future: None.

  • (2) The Company is in the information services business and provides human resource products and services through the Internet and consultants. There is no pollution involved in our operations, and our working environment is limited to office space. No public hazards will be produced.

  • (3) The Company continued to invest in environmental protection expenditures. It invested NT$ 2,252,250 in replacement of the old air-conditioners in the computer room in 2016. In 2017, it invested NT$ 4,793,165 in replacement of the old UPS, air-conditioners and other electrical equipment in the computer room. It will also base on plans each year to replace old electrical equipment, improve equipment efficiency, and implement a low-energy working environment.

  • (4) Situation in response to EU’s ROHS: Not applicable.

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5. Labor Relations

  • (1) The company always complies with relevant regulations and adheres to business philosophy of benefiting employees. It plans and implement the systems and benefits, and provide a smooth complaint channel for promotion of labor-management harmony. Employees are offered complete training, development and appropriate incentive programs to enhance talent competitiveness, and related measures are as follows:

  • A. Employee benefit

  • (a) Insurance: Labor insurance, national health insurance and employee group insurance.

  • (b) Periodic health examination: Fully subsidize health examination conducted by contract hospital every two years.

  • (c) Annual bonus: Distribute according to employee performance and operating results of the Company.

  • (d) Employee compensation: Set aside from earnings according to company profit.

  • (e) Holiday cash gifts: Birthday, Dragon Boat Festival and the Mid-Autumn Festival employee cash gifts and subsidy for weddings and funerals.

  • (f) Employees and club activities: Organize employee activities such as employee travel, family day every year, and provide diversified club activities and subsidy.

  • (g) Employees injuries or sickness consolation and disaster relief.

  • B. Employee Education and Training

To effectively assist employees in improving knowledge and development, training and development plans are organized to conduct various training activities according to company policy, needs of departments and personal functional divides.

  • C. Retirement system and the status of its implementation

The Company has formulated retirement system and established Workers' Retirement Reserve Funds Oversight Committee. After appointing actuary, liabilities for pension reserve are made monthly, and 2% of gross salaries and wages are deposited in pension special account of Central Trust of China every month. Since implementation of New Pension System on July 1, 2005, except that payment is made for new employees who choose New System, employees with the original Old System (assume the post prior to July 1, 2005 and retain Old System seniority) continue to make the payment based on actuary's actuarial report.

  • D. The status of labor-management agreements and measures for preserving employees' rights and interests: The Company has Employee Benefits Committee, regularly conducts labor-management meeting, sets up employee opinion mail box, and broadly or individually discusses related employee benefit measures and management to promote harmonious labor-management relations. Through regular employee satisfaction survey, the company can understand satisfaction and suggestions of employees on the company's systems or measures, and departments and the management are able to plan improvement or upgrade programs to implement according to survey results.

  • (2) Any loss sustained as a result of labor disputes in the most recent two fiscal years, and during the current fiscal year up to the date of printing of the annual report, disclose an estimate of losses incurred to date or likely to be incurred in the future, and indicate mitigation measures: The company has no labor dispute as of the date of printing of the annual report.

6. Important Contracts

Contracting Restrictive
Nature Commencement/Expiration Dates Major Content
Parties Clauses
Composite Credit
Contract		 Mega
International
Commercial
Bank		 2017.05.29~2018.05.28 Guarantees to the
Ministry of Labor		 None

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VI. Financial Information

1. Five-Years Financial Summary

(1) 104 Group

A. Consolidated Concise Balance Sheet - IFRS

Unit: NT$000

Financial information from the last five ears(Nt 1)
Year yoe
As of March
Item 2013 2014 2015 2016 2017
31, 2018
Current assets 1,689,980
1,951,822
2,164,216
2,051,944
2,105,443
(Note 2)
Property, plant, and
160,807
158,328
178,593
218,993
206,619
equipment(Note 3)
Intangible Assets 20,142
15,382
13,757
12,175
6,705
Other Assets(Note 3) 33,620
31,048
22,417
23,582
23,532
Total Assets 1,904,549
2,156,580
2,378,983
2,306,694
2,342,299
Before
681,027
820,811
937,990
730,046
801,391
Current Distribution
liability After
879,018
1,052,593
1,202,979
1,088,884
(Note 4)
Distribution
Non-current liabilities 5,276
3,507
4,639
4,474
7,213
Before 686,303
824,318

942,629
734,520
808,604
Total Distribution
liabilities
After
884,294
1,056,100
1,207,618
1,093,358
(Note 4)
Distribution
Equity attributable to
1,214,273
1,325,634
1,428,721
1,565,167
1,526,216
shareholders of parent
Capital stock 329,897
331,197
331,237
332,417
332,417
Capital surplus 373,344
386,182
388,393
401,962
399,549
Before
501,975
615,588
710,334
844,798
800,916
Retained Distribution
Earnings After
303,984
383,806
445,345
485,960
(Note 4)
Distribution
Other equity 9,057
(7,333)		 (1,243) (14,010) (6,321)
Treasurystock - - - - -
Non-controlling 3,973
6,628

7,633
7,007
7,479
interest
Before
1,218,246
1,332,262
1,436,354
1,572,174
1,533,695
Total Distribution
equity After 1,020,255

1,100,480
1,171,365
1,213,336
(Note 4)
Distribution

Note 1: The financial information above has been audited by CPA. Note 2: As of the date of publishing of the Annual Report, 2018 financial information has not been reviewed by CPA. Note 3: Assets revaluation was not adopted in the years listed above. Note 4: 2017 earnings distribution is subject to the resolution of the Shareholders’ Meeting.

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B. Consolidated Concise Statement of Comprehensive Income - IFRS

Unit: NT$000

Financial information from the last five ears(Note 1)
Year y
2014 2015 2016 As of March
Item 2013 2017
(Note 3) (Note 3) (Note 3) 31, 2018
Operatingrevenue 2,197,961
1,293,180
1,409,398
1,454,753
1,539,995
(Note 2)
Grossprofit 1,074,419
1,154,353
1,269,440
1,318,938
1,389,841
Operating (loss)income 284,215
308,597
330,019
338,955
358,159
Non-operating income
8,236
27,772
21,192
37,680
23,626
and expenses
Income before income tax
292,451
336,369
351,211
376,635
381,785
Income from continuing
244,318
282,103
293,106
359,539
318,663
operations
Income (loss) from
- 30,899
37,712
38,765
-
discontinued operations
Net income 244,318
313,002
330,818
398,304
318,663
Other comprehensive
8,085
(5,071)
(4,172)
(3,756)
(4,087)
income (Net of tax)
Total comprehensive
252,403
307,931
326,646
394,548
314,576
income
Net income attributable to

241,423
310,589
329,656
398,368
318,123
shareholders ofparent
Net income attributable to

2,895
2,413
1,162
(64)
540
non-controllinginterests
Total comprehensive

income attributable to		 249,378
305,276
325,641
395,174
314,104
shareholders of parent
Total comprehensive

income attributable to		 3,025
2,655
1,005
(626)
472
non-controlling interests
Earningsper share(NT$) 7.46
9.41
9.99
12.04
9.60

Note 1: The financial information above has been audited by CPA.

Note 2: As of the date of publishing of the Annual Report, 2018 financial information has not been reviewed by CPA. Note 3: The Company resolved in the Board Meeting on December 29, 2015 to sell the shares of its subsidiary, 104 Human Resources Corporation, and the transaction was completed on January 5, 2016. The 2014 consolidated statement of comprehensive income has been reorganized and reported according to IFRS 5, and operational activities from the above subsidiary has were adjusted to the income (loss) from discontinued operations on the 2016 and 2015 consolidated statement of comprehensive income.

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(2) 104 Corporation

A. Concise Balance Sheet - IFRS

Unit: NT$000

Financial information from the last five ears(Note 1)
y
Year
As of
March
Item 2013 2014 2015 2016 2017
31,
2018
Current assets 1,351,253
1,569,392
1,831,941
1,916,528
1,978,300
N/A
Property, plant, and
158,233
155,590
177,399
218,588
206,451
equipment(Note 2)
Intangible assets 20,039
15,351
13,757
12,175
6,705
Other assets(Note 2) 190,634
182,180
149,137
149,408
137,927
Total assets 1,720,159
1,922,513
2,172,234
2,296,699
2,329,383
Before

501,372
594,544
738,874
727,058
795,954
Current Distribution
liabilities After

699,363
826,326
1,003,863
1,085,896
(Note 3)
Distribution
Non-current liabilities 4,514
2,335
4,639
4,474
7,213
Before

505,886
596,879
743,513
731,532
803,167
Total Distribution
liabilities After

703,877
828,661
1,008,502
1,090,370
(Note 3)
Distribution
Capital stock 329,897
331,197
331,237
332,417
332,072
Capital surplus 373,344
386,182
388,393
401,962
399,549
Before

501,975
615,588
710,334
844,798
800,916
Retained Distribution
earning After

303,984
383,806
445,345
485,960
(Note 3)
Distribution
Other equity 9,057
(7,333)		 (1,243) (14,010) (6,321)
Treasurystock - - - - -
Total Before
1,214,273
1,325,634
1,428,721
1,565,167
1,526,216
Diibi
’ struton
shareholders After
equity
1,016,282
1,093,852
1,163,732
1,206,329
(Note 3)
Distribution

Note 1: The financial information above has been audited by CPA. Note 2: Assets revaluation was not adopted in the years listed above.

Note 3: 2017 earnings distribution is subject to the resolution of the Shareholders’ Meeting.

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Unit: NT$000

B. Concise Statement of Comprehensive Income - IFRS
Fiil ifti f th lt fi
Year
nanca normaon rom e as ve years(Note)
As of
Item 2013 2014 2015 2016 2017 March 31,
2018
Operatingrevenue 1,126,042
1,199,633
1,321,971
1,429,014
1,512,766
N/A
Grossprofit 984,605
1,065,578
1,185,985
1,294,501
1,363,213
Operating (loss)income 264,571
292,977
279,885
292,201
317,663
Non-operating income
22,449
72,007
107,643
121,145
57,273
and expenses
Income before income tax
287,020
364,984
387,528
413,346
374,936
Continuing operation net
241,423
310,589
329,656
398,368
318,123
income
Loss from discontinued
- - - - -
operations
Net income 241,423
310,589
329,656
398,368
318,123
Other comprehensive
7,955
(5,313)
(4,015)
(3,194)
(4,019)
income (loss) (net of tax)
Total comprehensive
249,378
305,276
325,641
395,174
314,104
income (loss)
Earningsper share(NT$) 7.46
9.41
9.99
12.04
9.60

Note : The financial information above has been audited by CPA.

(3) Names of CPA and audit opinion for the past five years

Year Name Audit opinion
2013 Chun-Hsiu Kuang, Ya-LingChen Unqualified opinion
2014 Chun-Hsiu Kuang, Ya-LingChen Unqualified opinion
2015 Chun-Hsiu Kuang, Ya-LingChen Unqualified opinion
2016 Chun-Hsiu Kuang, LilyLu Unqualified opinion
2017 Chun-Hsiu Kuang, LilyLu Unqualified opinion

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2. Fire-Year Financial Analysis

(1) 104 Group - IFRS
Financial information from the last five years(Note 1)
Year
As of
Item 2013 2014 2015 2016 2017 March 31,
N 3
(ote ) 2018
Financial Debt to asset ratio 36 38 40 32 35 (Note 2)
structure Long-term capital to property, plant,
758 841 804 718 742
(%)
and equipmentratio
Current ratio 248 238 231 281 263
Solvency Quick ratio 248 237 230 280 261
%
() Interest earned ratio 2,322 - - - -
Op Accounts receivable turnover(times) 11.07
5.97
11.02
35.73		 37.55
era Average collection days 32.98
61.09
33.12
10.22		 9.72
tio Inventoryturnover(times) - - - - -
n p Accountspayable turnover(times) 224.78
33.11
23.38
18.30		 20.61
erf Average days in sale - - - - -
orman Property, plant and equipment
13.67 8.17 8.37 7.32 7.24
turnover(times)
ce Total assets turnover(times) 1.15 0.60 0.62 0.62 0.66
Return on assets(%) 14 15 15 17 14
Pro Return on equity (%) 21 25 24 26 21
fitabi Income before tax to paid-in capital
89 102 106 113 115
(%)
lity Net margin(%) 12 24 23 27 21
EPS(NT$) 7.46
9.41
9.99
12.04		 9.60
Cash flow ratio 53 62 57 54 55
Cash flow Cash flow adequacyratio 139 154 149 147 147
%
() Cash reinvestment ratio 18 24 21 7 5
Operatingleverage 7.45
3.91
4.01
4.05		 4.04
Leverage Financial leverage 1.00
1.00
1.00
1.00		 1.00

Note 1: The financial information above has been audited by CPA. Note 2: As of the date of publishing of the Annual Report, 2018 financial information has not been reviewed by CPA. Note 3: The Company resolved in the Board Meeting on December 29, 2015 to sell the shares of its subsidiary, 104 Human Resource, and the transaction was completed on January 5, 2016. The 2014 Consolidated Statement of Comprehensive Income has been reorganized and reported according to IFRS 5.

Reasons for changes in financial ratios over the past two fiscal years (the analysis is required if the difference exceeds 20%):

  1. Return on equity, net margin and earnings per share: In 2016 the Company recognized income from reversal of income tax in previous years and sale of subsidiary, causing 2017 return on equity, net margin and EPS to decrease.

  2. Cash reinvestment ratio: Cash from cash dividends increased in this period.

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(2) 104 Corporation - IFRS

Financial information from the last five years(Note)
Year
As of
Item 2013 2014 2015 2016 2017 March 31,
2018
Debt to asset ratio 29 31 34 32 34 N/A
Financial
Long-term capital to
structure

property, plant, and		 767 852 805 716 739
(%)
equipment ratio
Current ratio 270 264 248 264 249
Solvency
Quick ratio 269 263 247 263 247
(%)
Interest earned ratio - - - - -
Operation performance Accounts receivable
30.92
32.28
34.24
36.47		 38.47
turnover(times)
Average collection
12 11 11 10 9
days
Inventory turnover
- - - - -
(times)
Accounts payable
43.31
37.70
25.28
18.88		 20.53
turnover (times)
Average days in sale - - - - -
Property, plant and

equipment turnover		 7.12
7.71
7.94
7.22		 7.12
(times)
Total assets turnover
0.65 0.62 0.65 0.64 0.65
(times)
Profitability Return on assets(%) 15 17 16 18 14
Return on equity (%) 21 24 24 27 21
Income before tax to
paid-in capital ratio 87 110 117 124 113
(%)
Net margin(%) 21 26 25 28 21
EPS(NT$) 7.46
9.41
9.99
12.04		 9.60
Cash flow ratio 76 73 75 58 57

Cash flow adequacy
Cash flow 140 165 154 151 149

ratio
(%)
Cash reinvestment
19 18 22 8 5
ratio
Operatingleverage 3.97
3.80
4.44
4.62		 4.48
Leverage Financial leverage 1.00
1.00
1.00
1.00		 1.00

Note: The financial information above has been audited by CPA.

Reasons of changes in financial ratios over the past two fiscal years (the analysis is required if the difference exceeds 20%):

  1. Return on assets, return on equity, net margin and earnings per share: In 2016 the Company recognized income from reversal of income tax in previous years and sale of subsidiary, causing 2017 return on assets, return on equity, net margin and EPS to decrease.

  2. Cash reinvestment ratio: Cash from cash dividends increased in this period.

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Calculation formula:

  1. Financial structure

  2. (1)Debt to assets ratio = total liabilities / total assets.

  3. (2)Long-term capital to property, plant and equipment ratio = (net equity + non-current liabilities) / net worth of property, plant and equipment.

  4. Solvency

  5. (1)Current ratio = current assets / current liabilities

  6. (2)Quick ratio = (current assets – inventory – prepaid expenses) / current liabilities

  7. (3)Interest earned ratio = income before income tax and interest expenses / current interest expenses

  8. Operating performance

  9. (1)Accounts receivable (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period.

  10. (2)Average collection days = 365 / receivables turnover rate.

  11. (3)Inventory turnover rate = cost of goods sold/average inventory level.

  12. (4)Accounts payable (including accounts payable and notes payable arising from business operations) turnover rate = cost of goods sold / average payables (including accounts payable and notes payable arising from business operations) for each period.

  13. (5)Average days in sale = 365 / inventory turnover rate.

  14. (6)Property, plant and equipment turnover rate = net sales / average net worth of property, plant and equipment.

  15. (7)Total asset turnover rate = net sales / average total assets.

4. Profitability

  • (1)Return on assets = [net income + interest expenses (1- tax rate)] / average total assets.

  • (2)Return on equity = net income / average total shareholder's equity.

  • (3)Net margin = net income / net sales.

  • (4)Earnings per share = (net income (loss) attributable to owners of parent Company – dividends on preferred shares) / weighted average number of issued shares.

  • Cash flow

  • (1)Cash flow ratio = net cash flow from operating activities / current liabilities.

  • (2)Cash flow adequacy ratio = net cash flow from operating activities for the most recent five years / (capital expenditures + inventory increase + cash dividend) for the most recent five years.

  • (3)Cash reinvestment ratio = (net cash flow from operating activities – cash dividend) / gross fixed assets value + long-term investment + other assets + working capital).

  • Leverage:

  • (1)Operating leverage = (net operating revenue – variable operating costs and expenses) / operating income.

  • (2)Financial leverage = operating income / (operating income - interest expenses).

-97-

3. Supervisors' report for the most recent fiscal year

Supervisors' Review Report for 104 Corporation

The Board of Directors has prepared the 2017 Business Report, Financial Statements, and Earnings Distribution Proposal. Of which, the financial statements have been audited by CPAs Chun-Hsiu Kuang and Lily Lu of KPMG, and an audit report with unqualified opinion was issued. The aforementioned statements have been reviewed and determined to be correct and accurate by the supervisors. The Report is submitted in accordance with Article 219 of the Company Act.

To

2018 annual shareholder’s meeting of 104 Corporation

Supervisor: Askforce Corporation Representative: Mei-Fang Hsu Supervisor: Zan-Syong Cai

March 14, 2018

-98-

4. Consolidated Financial Statement for the Most Recent Fiscal Year

Representation Letter

The entities that are required to be included in the combined financial statements of 104 Corporation and its Subsidiaries as of and for the year ended 2017 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 its Subsidiaries do not prepare a separate set of combined financial statements.

Company name: 104 Corporation and its Subsidiaries Chairman: Chi-Kuan Yang Date: March 14, 2018

-99-

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Independent Auditors' Report

To the Board of Directors of 104 Corporation:

Opinion

We have audited the consolidated financial statements of 104 Corporation and its subsidiaries ("the Consolidated Company"), which comprise the consolidated balance sheets as of December 31, 2017 and 2016, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2017 and 2016, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Consolidated Company as at December 31, 2017 and 2016, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements taken as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Based on our judgement, the key audit matters that should be communicated in this audit report are as follows:

Revenue recognition

Please refer to note 4(13) for accounting policy related to revenue recognition, and note 6(12) for the disclosure related to revenue and deferred revenue of the consolidated financial statements.

==> picture [279 x 22] intentionally omitted <==

-100-

==> picture [86 x 33] intentionally omitted <==

Description of key audit matter:

The Consolidated Company's operating revenues mainly derive from providing online advertising and consulting services, wherein they are recognized in the following different ways: 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. The aforementioned matter is the basis for the Consolidated Company's management to determine the amount of revenue that can be recognized, therefore, revenue recognition was considered to be one of the key audit matters in our audit.

How the matter was addressed in our audit:

Our audit procedures included:

  • ‧ Assessing and testing the design, as well as the effectiveness of the operating on the control over sales and collection cycle. Selecting appropriate samples and comparing them to relevant documents such as customer order and confirmation of completion order signed by customer to assess whether revenue and deferred revenue have been appropriately recognized.

  • ‧ Performing comparison analysis on operating revenue of the current period to last period and the latest quarter to assess the existence of any significant exceptions, and further identify and analyze the reasons, if there is any significant exception.

  • ‧ Performing test-of-detail on operating revenue to assess the assertions of existence and accuracy, as well as the appropriateness of recognition.

  • ‧ Examining relevant documents of a period before and after the balance sheets date, such as customer order, information reported back from business department, or confirmation of completion of duty executed by customer, and verify the accuracy of the amount recognized as revenue in accordance with the timing of service provided or quantity provided to determine whether the deferred revenue should not be recognized as revenue and whether operating revenue has been appropriately recognized.

Other Matter

104 Corporation has prepared parent-company-only financial statements as of and for the years ended December 31, 2017 and 2016, on which we have expressed an unqualified opinion.

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

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

-101-

==> picture [87 x 33] intentionally omitted <==

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

Those charged with governance are responsible for overseeing the Consolidated Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

  1. Identify and assess the risks of material misstatement of the consolidated financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Consolidated Company's internal control.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Consolidated Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Consolidated Company to cease to continue as a going concern.

  5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

-102-

==> picture [87 x 33] intentionally omitted <==

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

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

The engagement partners on the audit resulting in this independent auditor's report are Chun-Hsiu Kuang and Lily Lu.

KPMG

Taipei, Taiwan (Republic of China) March 14, 2018

Note to Readers

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

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

-103-

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

104 CORPORATION AND ITS SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2017 and 2016

(Expressed in thousands of New Taiwan dollars)

Assets
Current assets:
Cash and cash equivalents (note 6(1))
Notes receivable, net (note 6(2))
Accounts receivable, net (note 6(2))
Other receivables (note 6(2))
Other current assets
Total current assets
Non-current assets:
Property, plant and equipment (note 6(4))
Intangible assets (note 6(5))
Deferred tax assets (note 6(8))
Refundable deposits
Other financial assets－non-current (note 8)
Total non-current assets		 December 31,
2017
Amount
%
$ 2,043,470
87
1,196
-
37,040
2
9,104
-
14,633
1		 December 31,
2017
Amount
%
$ 2,043,470
87
1,196
-
37,040
2
9,104
-
14,633
1		 December
2016
Amount
1,988,830
2,244
41,538
10,605
8,727		 31,
%

87

-

2

-
-
Amount
$ 2,043,470
1,196
37,040
9,104
14,633

2,105,443		 90
2,051,944		 89

206,619
6,705
5,692
7,840
10,000
9

-

-

-
1
218,993
12,175
5,115
8,467
10,000
10

1

-

-
-

236,856
10
254,750
11

$ 2,342,299 100 2,306,694 100

Liabilities and Equity
Current liabilities:
Notes payable
Accounts payable
Other payables (note 6(13))
Current tax liabilities
Deferred revenue (note 6(12))
Other current liabilities
Total current liabilities
Non-current liabilities:
Net defined benefit liability (note 6(7))
Total non-current liabilities
Total liabilities
Equity attributable to owners of parent (notes 6(7), (8), (9) and (10))
Common stock
Capital surplus
Retained earnings:
Legal reserve
Unappropriated earnings
Total retained earnings
Other equity:
Foreign currency translation differences for foreign operations
Others
Total other equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity		 December 31,
2017		 December 31,
2017		 December
2016
Amount
2
7,646

264,948

37,940

369,008

50,502		 31,
%

-

-

12

2

16

2
Amount
$ 2
6,920
312,516
46,472
391,760
43,721		 %

-

-

14

2

17

2

801,391

35

730,046

32

7,213

-
4,474

-

7,213

-
4,474

-

808,604

35

734,520

32

332,072

14

332,417

14

399,549

17

401,962

18

378,199
422,717

16

18

338,362

506,436

15

22

800,916

34

844,798

37

(2,941)
(3,380)

-

-
(2,320)
(11,690)

-

(1)

(6,321)

-
(14,010)


(1)

1,526,216

65

1,565,167


68

7,479

-
7,007

-

1,533,695

65

1,572,174

68

$
2,342,299

100

2,306,694

100

See accompanying notes to consolidated financial statements.

Total assets

-104-

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

104 CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2017 and 2016

(Expressed in thousands of New Taiwan dollars)

Operating revenue (note 6(12))
Operating costs (notes 6(4), (5), (6), (7), (10), (13) and 7)
Gross profit
Operating expenses (notes 6(2), (4), (5), (6), (7), (9), (10), (13) and 7):
Selling expenses
Administrative expenses
Research and development expenses
Total operating expenses
Operating income
Non-operating income and expenses (notes 6(14) and (15)):
Other income
Other gains and losses
Total non-operating income and expenses
Income before income tax
Less: income tax expenses (note 6(8))
Income from continuing operations
Income from discontinued operations:
Income from discontinued operations (note 6(3))
Net income
Other comprehensive income (loss):
Items that will not be reclassified subsequently to profit or loss(notes 6(7) and (8))
Remeasurements from defined benefit plans
Income tax related to items that will not be reclassified subsequently to profit or loss
Total items that will not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences for foreign operations
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
Other comprehensive loss
Total comprehensive income
Net income, attributable to:
Shareholders of the Company
Non-controlling interests
Total comprehensive income (loss) attributable to:
Shareholders of the Company
Non-controlling interests
Basic earnings per share (expressed in New Taiwan dollars) (note 6(11))
Net income from continuing operations
Net income from discontinued operations
Diluted earnings per share (expressed in New Taiwan dollars) (note 6(11))
Net income from continuing operations
Net income from discontinued operations		 2017 2017 %
100

10		 2016
Amount

1,454,753
135,815		 %
100

10
Amount
$ 1,539,995
150,154

1,389,841

90
1,318,938

90

552,749
180,871
298,062

36

12

19

632,682

155,671
191,630

43

11

13

1,031,682

67
979,983

67

358,159

23
338,955

23

25,632
(2,006)

2

-

34,588
3,092

2

-

23,626

2
37,680

2

381,785
63,122

25

4

376,635
17,096

25

1

318,663
-

21
-

359,539
38,765

24

3
318,663
21
398,304

27

(4,094)
696

-

-
1,285
(218)

-

-
(3,398)
-
1,067

-

(689)
-

-
-
(4,823)
-

-
-
(689)
-		 (4,823)
-

(4,087)

-
(3,756)

-

$
314,576

21
394,548

27

$ 318,123
540

21

-

398,368
(64)

27

-
$
318,663
21
398,304

27

$ 314,104
472

21

-

395,174
(626)

27

-
$
314,576
21
394,548

27

$ -
9.60


10.87
1.17
$ 9.60 12.04
$ - 9.51 10.75
1.16
$ 9.51 11.91

See accompanying notes to consolidated financial statements.

-105-

(English Translation of Consolidated and Report Originally Issued in Chinese) 104 CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2017 and 2016

(Expressed in thousands of New Taiwan dollars)

Balance at January 1, 2016
Appropriations and distributions
Legal reserve
Cash dividends
Net income (loss) for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Issuance of restricted employee shares
Adjustments for restricted employee shares
Cancellation of restricted employee shares
Compensation cost of restricted employee shares
Balance at December 31, 2016
Appropriations and distributions
Legal reserve
Cash dividends
Net income for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Adjustments for restricted employee shares
Cancellation of restricted employee shares
Compensation cost of restricted employee shares
Balance at December 31, 2017		 Equity attributable to owners of parent Equity attributable to owners of parent Equity attributable to owners of parent Equity attributable to owners of parent Equity attributable to owners of parent Total Total equity
attributable to
owners of parent		 Non-
controlling
interests		 Total equity

1,436,354
-
(264,989)

398,304

(3,756)

394,548
-
(443)
-
6,704

1,572,174
-
(358,838)

318,663

(4,087)

314,576
(952)
-
6,735

1,533,695
Common stock Capital
surplus		 Retained earnings Other equity
Foreign currency
translation
differences for
foreign
operations
Others
Legal
reserve		 Unappropriated
earnings		 Total
$ 331,237
-
-
-
-
388,393
-
-
-
-
305,396
32,966
-
-
-
404,938

(32,966)
(264,989)
398,368
1,067
710,334

-

(264,989)

398,368

1,067
1,941
-

-

-

(4,261)
(3,184)
-
-
-

-
(1,243)
-
-
-
(4,261)
1,428,721
-
(264,989)
398,368

(3,194)
7,633
-

-

(64)

(562)
- - -
399,435


399,435


(4,261)

-
(4,261)


395,174


(626)
1,250
-
(70)
-
13,991
(492)

70
-
-

-

-
-
-
18
-
-

-

18
-
-

-

-
-
-
(15,241)
31
-
6,704

(15,241)

31
-

6,704


-

(443)
-

6,704

-

-
-

-
332,417
-
-
-
-
401,962
-
-
-
-
338,362
39,837
-
-
-
506,436

(39,837)
(358,838)
318,123
(3,398)
844,798

-

(358,838)

318,123

(3,398)
(2,320)
-

-

-

(621)

(11,690)
-
-
-

-


(14,010)
-
-
-
(621)


1,565,167
-
(358,838)
318,123

(4,019)

7,007
-

-

540

(68)
- - -
314,725


314,725


(621)

-
(621)


314,104


472
-
(345)
-		 (2,758)

345
-
-

-
-
231
-
-


231
-
-


-
-
-
1,575
-
6,735

1,575
-

6,735


(952)
-

6,735

-
-

-
$
332,072
399,549		 378,199
422,717
800,916
(2,941)

(3,380)


(6,321)


1,526,216

7,479

See accompanying notes to consolidated financial statements.

-106-

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

104 CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2017 and 2016

(Expressed in thousands of New Taiwan dollars)

Cash flows from (used in) operating activities:
Income before tax
Adjustments:
Adjustments to reconcile profit:
Depreciation expense
Amortization expense
Provision (reversal of provision) on bad debt expense
Interest income
Compensation cost of restricted employee shares
Gain on disposal of property, plant and equipment
Adjustments for restricted employee shares
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Net changes in operating assets:
Notes receivable
Accounts receivable
Other receivables
Other current assets
Total net changes in operating assets
Net changes in operating liabilities:
Notes payable
Accounts payable
Other payables
Deferred revenue
Other current liabilities
Net defined benefit liabilities
Total net changes in operating liabilities
Total net changes in operating assets and liabilities
Total adjustments
Cash inflow generated from operations
Interest received
Income taxes paid
Net cash flows from operating activities
Cash flows from (used in) investing activities:
Proceeds from disposal of subsidiaries
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in refundable deposits
Acquisition of intangible assets
Net cash flows from (used in) investing activities
Cash flows used in financing activities:
Cash dividends paid
Net cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2017
$ 381,785
46,665
8,266
1,155
(12,643)
6,735
(57)
(952)		 2016

376,635

56,721

11,789

(66)

(14,032)

6,704

(795)

(443)

49,169


59,878

1,048
3,345
1,658
(5,906)


2,156

(8,218)

4,540

683

145

(839)
-
(726)
41,511
22,752
(6,781)
(1,355)
(280)

730

(22,937)

16,133

21,964

1,120

55,401


16,730

55,546


15,891

104,715


75,769

486,500
12,660
(54,645)


452,404

14,275

(71,569)

444,515


395,110

-
(30,521)
564
627
(1,026)

124,625

(98,346)

822

122

(10,672)

(30,356)


16,551

(358,838)


(264,989)

(358,838)


(264,989)

(681)


(4,784)

54,640
1,988,830


141,888

1,846,942

$
2,043,470


1,988,830

See accompanying notes to consolidated financial statements.

-107-

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

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

For the years ended December 31, 2017 and 2016

(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 its subsidiaries (the "Consolidated Company") are engaged in information technology, general advertising services, employment services and human resource consultancy. Please refer to note 14 for further information.

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

These consolidated financial statements were authorized for issuance by the board of directors on March 14, 2018.

(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, 2017:

New, Revised or Amended Standards and Interpretations
Amendments to IFRS 10, IFRS 12 and IAS 28 "Investment Entities: Applying
the Consolidation Exception"
Amendments to IFRS 11 "Accounting for Acquisitions of Interests in Joint
Operations"
IFRS 14 "Regulatory Deferral Accounts"
Amendment to IAS 1 "Disclosure Initiative"
Amendments to IAS 16 and IAS 38 "Clarification of Acceptable Methods of
Depreciation and Amortization"
Amendments to IAS 16 and IAS 41 "Agriculture: Bearer Plants"
Amendments to IAS 19 "Defined Benefit Plans: Employee Contributions"
Amendment to IAS 27 "Equity Method in Separate Financial Statements"
Amendments to IAS 36 "Recoverable Amount Disclosures for Non Financial
Assets"
Amendments to IAS 39 "Novation of Derivatives and Continuation of Hedge
Accounting"		 Effective date per
IASB
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2016
January 1, 2014
January 1, 2014

(Continued)

-108-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

New, Revised or Amended Standards and Interpretations
Annual Improvements to IFRSs 2010-2012 Cycle and 2011-2013 Cycle
Annual Improvements to IFRSs 2012-2014 Cycle
IFRIC 21 "Levies"		 Effective date per
IASB
July 1, 2014
January 1, 2016
January 1, 2014

The Consolidated Company assessed that the initial application of the above IFRSs would not have any material impact 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, 2018 in accordance with Ruling No. 1060025773 issued by the FSC on July 14, 2017:

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

Except for the following impact of adopting the IFRS 15 "Revenue from Contracts with Customers", the Consolidated Company believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements:

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 existing revenue recognition guidance, including IAS 18 "Revenue" and IAS 11 "Construction Contracts".

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Rendering of services

The Consolidated Company's contracts with customers include software licensing, customized services and other relevant services. Currently, the Consolidated Company identifies software licensing, customized services and other relevant services as a single performance obligation, and revenue is recognized on the percentage of services performed to date to total services to be performed during the period of contract. Under IFRS 15, the Consolidated Company has analyzed preliminary 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 to total services to be performed during the period of contract.

2. Transition

The Consolidated Company plans to adopt IFRS 15 using the cumulative effect approach. As a result, the comparative information for previous period is not restated and the cumulative effect of initially application of this Standard as an adjustment will be recognized in retained earnings as at January 1, 2018. The Consolidated Company plans to use the practical expedients for completed contracts. This means that completed contracts that presented at the date of the initial application (i.e. January 1, 2018) will not be restated.

The Consolidated Company estimates the adoption of IFRS15, resulting in the increse of $240 thousand and $3,753 thousand in accounts receivable and retained earnings, respectively; and a decrease of $3,513 thousand in deferred revenue on January 1, 2018.

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 IASB, but not yet endorsed by the FSC:

New, Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets Between an
Investor and Its Associate or Joint Venture"
IFRS 16 "Leases"
IFRS 17 "Insurance Contracts"
IFRIC 23 "Uncertainty over Income Tax Treatments"
Amendments to IFRS 9 "Prepayment features with negative compensation"
Amendments to IAS 28 "Long-term interests in associates and joint ventures"
Annual Improvements to IFRS Standards 2015-2017 Cycle
Amendments to IAS 19 "Plan Amendment, Curtailment or Settlement"		 Effective date
per IASB
Effective date to
be determined by
IASB
January 1, 2019
January 1, 2021
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Those which may be relevant to the Consolidated Company are set out below:

Issuance / Release
Dates
January 13, 2016
June 7, 2017		 Standards or
Interpretations
IFRS 16 "Leases"
IFRIC 23 "Uncertainty over
Income Tax Treatments"		 Content of amendment
The new standard of accounting for lease is
amended as follows:
‧For a contract that is, or contains, a lease, the
lessee shall recognize a right-of-use asset
and a lease liability in the balance sheet. In
the statement of profit or loss and other
comprehensive income, a lessee shall
present interest expense on the lease liability
separately from the depreciation charge for
the right-of-use asset during the lease term.
‧A lessor classifies a lease as either a finance
lease or an operating lease, and therefore, the
accounting remains similar to IAS 17.
‧In assessing whether and how an uncertain
tax treatment affects the determination of
taxable profit (tax loss), tax bases, unused
tax losses, unused tax credits and tax rates,
an entity shall assume that a taxation
authority will examine the amounts it has the
right to examine and have a full knowledge
on all related information when making
those examinations.
‧If an entity concludes that it is probable that
the taxation authority will accept an
uncertain tax treatment, the entity shall
determine the taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits
or tax rates consistently with the tax
treatment used or planned to be used in its
income tax filings. Otherwise, an entity shall
reflect the effect of uncertainty for each
uncertain tax treatment by using either the
most likely amount or the expected value,
depending on which method the entity
expects to better predict the resolution of the
uncertainty.

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

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(4) Summary of significant accounting policies

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

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").

  • 2) Basis of preparation

  • Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis except for the defined benefit liabilities, which is recognized as the present value of the defined benefit obligation less the fair value of plan assets and the effect of the asset ceiling mentioned in Note 4(14).

  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

  • 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 non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Intra-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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  1. List of subsidiaries in the consolidated financial statements

The Company's subsidiaries were as follows:

Name of
investor		 Name of
subsidiary		 Business activities
General advertising services, data processing
services, electronic information services,
management consultancy, and employment
services
General advertising services, IT software
services, electronic information services, talent
dispatching, management consultancy and data
processing services
Collecting, coordinating, publishing, and
consulting on human resource information;
recruitment; designing and developing computer
software, multimedia, and network systems;
designing and producing advertising
Developing network technologies and computer
software, selling products, providing technical
advice and services, and management
consultancy		 Percentage of
ownership (%)		 Percentage of
ownership (%)
December
31, 2017
100.00%
100.00%
70.00%
100.00%		 December
31, 2016
The Company
The Company
The Company
The Company		 104 Learn
Corporation
(104 Learn)
104 Consulting
Corporation
(104
Consulting)
104 Human
Resources
Consultancy
(Shanghai) Co.,
Ltd. (104
Human
Resources
Consultancy)
104 Redpoint
Information
Technology
(Shanghai) Co.,
Ltd. (Redpoint
Information)		 100.00%
100.00%
70.00%
100.00%

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

  • 4) Foreign currency

  • 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 currency differences arising on retranslation are recognized in profit or loss.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  1. 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;

  2. It is held primarily for the purpose of trading;

  3. It is expected to be realized within twelve months after the reporting period; or

  4. 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;

  2. It is held primarily for the purpose of trading;

  3. 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

  4. 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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

1. Financial assets

  • (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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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 operating expenses.

  • (C) Derecognition of financial assets

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

  2. (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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  • (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.

  • (C) Derecognition of financial liabilities

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) Discontinued operations

An operation will be classified as a discontinued operation upon disposal or when the operation meets the criteria to be classified as held for sale or held for distribution to owners, and is a separate major line of business or geographical area of operations or a subsidiary acquired exclusively with a view to resale and the disposal involves loss of control, whichever comes first.

  • 9) Property, plant and equipment

  • 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.

  1. 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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

3. 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:

plant and equipment are as follows:
Buildings 3 to 50 years
Computer equipment 2 to 5 years
Office equipment 3 to 5 years
Leasehold improvement 2 to 5 years
Transportation equipment 3 to 5 years
Other equipment 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.

10) Leases

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.

  • 11) Intangible assets

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

1. 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.

  1. 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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

  • 12) 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

  2. 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.

  • 13) Revenue recognition

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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  • 14) Employee benefits

  • 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.

2. 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. Any unrecognized past service costs and 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, any change in the present value of the defined benefit obligation, and any related actuarial gains or losses and past service cost that had not previously been recognized.

  1. Short-term employee benefits

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

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

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

The fair value of the amount payable to employees in respect of the share appreciation rights, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities over the period that the employees become unconditionally entitled to payment. The liability is re-measured at each reporting date and settlement date. Any changes in the fair value of the liability are recognized as personnel expenses in profit or loss.

  • 16) 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:

  1. 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.

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

  3. 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.

(Continued)

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104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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

  2. The taxing of deferred tax assets and liabilities fulfills one of the scenarios below:

  3. (A) Levied by the same taxing authority; or

  4. (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.

17) 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.

18) 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.

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.

(Continued)

-122-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to 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
Checking deposits
Demand deposits
Time deposits
Cash equivalents－RS bond
Cash and cash equivalents in the consolidated statement of
cash flows		 December 31,
2017
$ 3,210
105,082
1,881,178
54,000


December 31,
2016
3,254
87,890
1,710,686
187,000

$
2,043,470

1,988,830

Please refer to note 6(16) for the disclosure of the interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Consolidated Company.

  • 2) Notes and accounts receivable and other receivables
Notes receivable
Accounts receivable
Overdue receivable (recorded under other non-current
assets)
Other receivables
Less: Allowance for doubtful accounts－accounts
receivable
Allowance for doubtful accounts－overdue
receivable (recorded under other non-current assets)		 December 31,
2017
$ 1,196
37,696
5,959
9,104
(656)

(5,959)




December 31,
2016
2,244
41,907
5,918
10,605
(369)
(5,918)
$
47,340		 54,387

Impairment loss had been fully recognized for those overdue receivables.

The movement in the aforementioned allowance for doubtful accounts were as follows:

January 1, 2017
Impairment loss recognized
Amounts written off
Accounts recovered
Foreign exchange gains
December 31, 2017		 Individually
assessed
impairment
$ 5,918
913
(872)
47
-



Collectively
assessed
impairment
369
242
-
-
(2)

Total
6,287
1,155
(872)
47
(2)
$
6,006
609

6,615

(Continued)

-123-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

January 1, 2016
Impairment loss recognized (reversed)
Amounts written off
Foreign exchange gains
December 31, 2016		 Individually
assessed
impairment
$ 6,301
468
(851)
-


Collectively
assessed
impairment
910
(534)
-
(7)

Total
7,211
(66)
(851)
(7)
6,287
$
5,918
369

Impairment loss recognized for individually assessed is the difference between the carrying amount and the present value of the estimated future cash flows. The Consolidated Company does not hold any collateral for collectible amounts.

The Consolidated Company recognized an allowance of $5,595 thousand for their overdue receivables as of December 31, 2017 and 2016, resulting from the unexpected closure of the customers of Hsueh Cheng Educational Organization and Wells English. In 2016, the Taipei City Government cancelled their registration, therefore, all receivables of the Consolidated Company are accounted for as allowance for doubtful accounts.

3) Disposal of subsidiary

The Consolidated Company signed Share Purchase Agreement with Carewell Taiwan Ltd. on December 29, 2015 and sold all the shares of 104 Human Resource Corporation on January 5, 2016. The total selling price was $124,625 thousand (excluding securities transactions tax $375 thousand), gain on disposal recognized was $38,765 thousand, and was recorded as income from discontinued operations on the consolidated statements of comprehensive income. The procedure of equity transferred was completed and all payments was received.

The carrying amount of assets and liabilities of the Consolidated Company on the date of disposal were as follow:

Cash
Notes receivable, net
Account receivable, net
Other receivables
Other current assets
Deferred tax assets
Other financial assets－non-current
Other non-current assets
Total assets		 January 5, 2016
$ 84,122
325
167,357
1,558
134
32
3,000
7,537

264,065

(Continued)

-124-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Notes payable
Other payables
Current tax liabilities
Deferred revenue
Other current liabilities
Deferred tax liabilities
Total liabilities
Net disposal assets		 January 5, 2016
$ (1)
(172,566)
(60)
(502)
(3,795)
(1,281)

(178,205)

$
85,860

4) 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, 2017 and 2016, were as follows:

Cost or deemed cost:
January 1, 2017
Additions
Disposals
Reclassifications
Effect of movements
in exchange rates
December 31, 2017
January 1, 2016
Additions
Disposals
Effect of movements
in exchange rates
December 31, 2016
Depreciation and
impairment loss:
January 1, 2017
Depreciation
Disposals
Effect of movements
in exchange rates
December 31, 2017
January 1, 2016
Depreciation
Disposals
Effect of movements
in exchange rates
December 31, 2016
Carrying amount:
December 31, 2017
December 31, 2016
January 1, 2016		 Land Buildings

69,410
1,847
-
3,815
-		 Computer
equipment
295,881
24,458
(16,120)
-
(39)		 Office
equipment
4,516
11
(833)
-
(8)		 Leasehold
improvement

40,822

316

(1,281)
-
(11)		 Transportation
equipment
2,631
-
(1,000)
-
(12)		 Other equipment
25,994
617
(2,320)
3,744
-		 Unfinished
construction
-
7,559
-
(7,559)
-		 Total
542,816
34,808
(21,554)
-
(70)
$ 103,562
-
-
-
-
$
103,562		 75,072 304,180 3,686 39,846 1,619 28,035 - 556,000

$ 42,198
61,364
-
-

52,778

16,632
-
-
407,249
11,755
(122,457)
(666)
6,532
-
(1,849)
(167)

37,446
3,452

-
(76)
7,623
-
(4,901)
(91)
28,153
3,992
(6,151)
-		 -
-
-
-
581,979
97,195
(135,358)
(1,000)
$
103,562		 69,410 295,881 4,516 40,822 2,631 25,994 - 542,816

$ -
-
-
-
26,726
3,391
-
-
241,045
34,994
(16,100)
(36)
4,326
178
(832)
(7)

28,508

5,416

(870)
(4)
2,222
175
(924)
(14)
20,996
2,511
(2,320)
-		 -
-
-
-
323,823
46,665
(21,046)
(61)
$
-		 30,117 259,903 3,665 33,050 1,459 21,187 - 349,381
$ -
-
-
-
25,075
1,651
-
-
318,370
45,782
(122,457)
(650)
5,988
354
(1,849)
(167)

22,188

6,368

-
(48)
6,636
575
(4,901)
(88)
25,129
1,991
(6,124)
-		 -
-
-
-
403,386
56,721
(135,331)
(953)
$
-		 26,726 241,045 4,326 28,508 2,222 20,996 - 323,823
$
103,562
44,955
44,277
21
6,796
160
6,848		 -
206,619

$
103,562
42,684
54,836		 190
12,314		 409
4,998		 -
218,993

$
42,198
27,703
88,879		 544
15,258		 987
3,024		 -
178,593

(Continued)

-125-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

5) 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, 2017 and 2016, were as follows:

Costs:
Balance on January 1, 2017
Additions
Balance on December 31, 2017
Balance on January 1, 2016
Additions
Balance on December 31, 2016
Amortization and impairment loss:
Balance on January 1, 2017
Amortization for the year
Balance on December 31, 2017
Balance on January 1, 2016
Amortization for the year
Balance on December 31, 2016
Carrying amount:
Balance on December 31, 2017
Balance on December 31, 2016
Balance on January 1, 2016		 Software
$ 92,527
2,796

$
95,323

$ 82,320
10,207

$
92,527

$ 80,352
8,266

$
88,618

$ 68,563
11,789

$
80,352

$
6,705

$
12,175

$
13,757

The amortization of intangible assets in 2017 and 2016 was recorded as expenses under the following categories in the consolidated statements of comprehensive income:

Operating costs
Operating expenses
6)
Operating leases		 2017
$
4,469		 2016
6,081

$
3,797

5,708

Operating lease payments for offices were as follows:

Less than one year
Between one and five years		 December 31,
2017
$ 25,293
23,826
December 31,
2016
23,614
29,018

$
49,119

52,632

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

(Continued)

-126-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Operating lease expenses were as follows:

Operating lease expenses were as follows:
Operating costs
Operating expenses		 2017
$ 9,087
26,627
2016
10,778
29,425

$
35,714

40,203

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.

7) Employee benefits

1. Defined benefit plans

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

follows:
Present value of the defined benefit obligations
Fair value of plan assets
Net defined benefit liability		 December 31,
2017
$ 50,671
(43,458)
December 31,
2016
45,881
(41,407)

$
7,213

4,474

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 $43,458 thousand as of December 31, 2017. 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.

(Continued)

-127-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  • (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:

Defined benefit obligation at January 1
Current service costs and interest
Remeasurement of the net defined benefit
liability
－Actuarial gains and losses arising from
changes in financial assumptions
Past service cost
Defined benefit obligation at December 31		 2017
$ 45,881
975
3,815
-

2016
44,051
910
(1,591)
2,511
$
50,671
45,881
  • (C) Movements in fair value of plan assets

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

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


2016
39,412
670
(306)
1,631

$
43,458

41,407
  • (D) Expenses recognized in profit or loss

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

Current service costs
Net interest on the defined benefit liability
Past service cost
Operating costs
Selling expenses
Administrative expenses
Research and development expenses		 2017
$ 195
76
-
2016
161
79
2,511
$
271
2,751
$ 24
112
44
91



233
1,348
465
705
$
271		 2,751

(Continued)

-128-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  • (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 2017 and 2016 were as follows:

Cumulative amount at 1 January
Recognition during the year
Disposal of subsidiary
Cumulative amount at 31 December		 2017
$ 1,322
(4,094)
-
2016
2,463
1,285
(2,426)
$
(2,772)
1,322
  • (F) Actuarial assumptions

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

Discount rate
Future salary increases rate		 December 31,
2017
1.30%
3.50%		 December 31,
2016
1.70%
3.50%

The expected contribution to be made by the Consolidated Company to the defined benefit plans for the next annual reporting period is $1,615 thousand.

The weighted-average duration of the Company's defined benefit plans is 16 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, 2017 and 2016, the effect of changes in principal actuarial assumptions on the present value of the defined benefit obligations were as follows:

At December 31, 2017
Discount rate
Future salary increase rate
At December 31, 2016
Discount rate
Future salary increase rate		 Effect on the defined benefit
obligation
Increase 0.25%
Decrease 0.25%
(1,919)
2,010
1,835
(1,766)
(1,815)
1,904
1,751
(1,682)
Increase 0.25%
(1,919)
1,835
(1,815)
1,751

(Continued)

-129-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

2. Defined contribution plans

The Consolidated Company allocates 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.

The Consolidated Company's pension costs under the defined contribution method were $32,066 thousand and $29,469 thousand for 2017 and 2016, respectively.

8) Income taxes

  1. The components of income tax expense (benefit) in the years 2017 and 2016 were as follows:
Current tax expense (benefit)
Current period
Adjustment for prior periods
10% surtax on unappropriated retained earnings
Deferred tax expense (benefit)
Origination and reversal of temporary differences
Income tax expense		 2017
$ 65,325
(2,398)
76

2016
60,194
(44,440)
2,847
63,003
18,601

119

(1,505)
$
63,122
17,096

The amount of income tax expense (benefit) recognized in other comprehensive income (loss) for 2017 and 2016 were as follows:

Items that will not be reclassified subsequently to
profit or loss
Remeasurements of defined benefit plans		 2017
$
(696)		 2016
218

Reconciliation of income tax and profit before tax for 2017 and 2016 were as follows:

Income before tax from continuing operations
Income before tax from discontinued operations
Income before income tax		 2017
$ 381,785
-		 2016
376,635
38,765
$
381,785
415,400

(Continued)

-130-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Income tax using the Company's domestic tax rate
Effect of tax rates in foreign jurisdictions
Non-deductible expenses
Gains derived from the securities transactions
Adjustment for prior periods
Utilization of loss carry forward
10% surtax on unappropriated retained earnings
Total		 2017
$ 64,903
540
1
-
(2,398)
-
76



2016
70,618
44
(1)
(6,590)
(44,440)
(5,382)
2,847
$
63,122
17,096

  1. Deferred tax assets and liabilities

  2. (A) Unrecognized deferred tax assets

One of the Company's subsidiary had been liquidated in 2014. According to the Income Tax Act, the Company can utilize the loss on disposal of investment of $43,135 thousand to offset its annual income tax; however, it was uncertain whether the tax authorities will approve it in the future; therefore, the deferred tax asset, in respect of this item, had not been recognized for the year ended December 31, 2015. However, on April 7, 2016, the Company had received notice of assessment of tax from the tax authorities, and the loss on disposal of investment had been approved, therefore, the Company recognized the amount of $43,135 thousand as tax income for the year ended December 31, 2016.

  • (B) Recognized deferred tax assets
Balance at January 1, 2017
Recognized in profit or loss
Recognized in other
comprehensive income
Balance at December 31, 2017
Balance at January 1, 2016
Recognized in profit or loss
Recognized in other
comprehensive income
Balance at December 31, 2016		 Defined benefit
plans
$ 760
(230)
696
Cumulative
compensated
absences
3,412
92
-
Allowance for
bad debts
943
19
-		 Total
5,115
(119)
696
$
1,226		 3,504 962 5,692

$ 788
190
(218)

1,952
1,460
-
1,088
(145)
-
3,828
1,505
(218)
$
760		 3,412 943 5,115
  1. Examination and approval

The R.O.C. income tax authorities have examined and approved the Company's income tax returns through 2015.

(Continued)

-131-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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 2017.

  1. Information related to the unappropriated earnings and tax deduction ratio is summarized below:
1997 and prior years
1998 and after
Balance of ICA (imputation credit account)
Tax deduction ratio for earnings distribution to R.O.C.
residents		 December 31,
2017
(Note)
(Note)
(Note)
(Note)
2017 (estimated)
(Note)
 December 31,
2016
$ -
506,436

$
506,436

$
45,242

2016 (actual)

13.73 %

The above stated information was prepared in accordance with information letter No. 10204562810 issued by the Ministry of Finance of the R.O.C. on October 17, 2013.

Note: 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, effective January 1, 2018, companies will no longer be required to establish, record, calculate, and distribute their ICA due to the abolishment of the imputation tax system.

  • 9) Share capital and other equity

As of December 31, 2017 and 2016, 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 33,207 thousand shares and 33,242 thousand shares, respectively, were issued.

(Continued)

-132-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Shares

Reconciliation of shares outstanding and issued for 2017 and 2016 were as follows:

Balance of shares outstanding at January 1
Granted of restricted employee shares
Balance of shares outstanding at December 31
Balance of restricted employee shares at January 1
Issuance of restricted employee shares
Granted of restricted employee shares
Cancellation of restricted employee shares
Balance of restricted employee shares at December
31
Balance of shares issued at December 31		 Unit: Thousand shares
2017
2016
33,111
33,051
36
60		 Unit: Thousand shares
2017
2016
33,111
33,051
36
60		 Unit: Thousand shares
2017
2016
33,111
33,051
36
60
33,147 33,111

131
-
(36)
(35)



73
125
(60)
(7)

60

131
33,207 33,242

2. Capital surplus

The details of capital surplus were as follows:

Paid-in capital in excess of par value
Restricted employee shares		 December 31,
2017
$ 391,986
7,563
December 31,
2016
387,378
14,584

$
399,549

401,962

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.

3.

Earning distribution

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.

(Continued)

-133-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

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.

Earning distribution for 2015 was decided via the general meeting of shareholders held on June 7, 2016. The Company decided to distribute a cash dividend of $8 (dollars) per share, totaling $264,989 thousand.

The employee restricted shares are not required to be repaid according to the Company's agreement with employees. For the years 2017 and 2016, the amount adjusted to selling expense after considering the employee turnover rate are $231 thousand and $18 thousand, respectively.

The related information about the aforementioned earnings distribution of 2016 and 2015 is available on the Market Observation Post System Website.

  • －

  • 10) 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 first restricted shares in 2014 during the board meeting held on August 13, 2014, with the board resolution date as the record date, at a fair value of $125 (dollars) per share. All shares have been issued, and the Company has completed the registration process.

The Company decided to issue 12 thousand first restricted shares in 2014 during the board meeting held on July 2, 2015, with the board resolution date as the record date, at a fair value of $145 (dollars) per share. 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.

(Continued)

-134-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

  2. Issuance price: to issue new shares to employees gratuitously without any charges.

  3. Shares can be issued in whole or in parts within 1 year after the effective registration with the authority.

  4. 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:

  5. (A) 1/3 of the restricted employee shares are vested in year 1 after the grant date

  6. (B) 1/3 of the restricted employee shares are vested in year 2 after the grant date

  7. (C) 1/3 of the restricted employee shares are vested in year 3 after the grant date

  8. 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.

(Continued)

-135-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

The resolution was passed during the board of directors' meeting held on March 16, 2017, for the cancellation of 14.5 thousand unvested shares, and the registration was completed on April 10, 2017.

The resolution was passed during the board of directors' meeting held on August 10, 2017, for the cancellation of 18.5 thousand unvested shares, and the registration was completed on September 11, 2017.

For the years 2017 and 2016, the amounts adjusted to capital surplus after considering the estimated employee turnover rate are $2,758 thousand and $492 thousand, respectively, and the amounts adjusted to other equity-other are $1,575 thousand and $31 thousand, respectively.

Compensation costs of the aforementioned restricted employee shares amounted to $6,735 thousand and $6,704 thousand were recognized as operating costs and expenses in 2017 and 2016, respectively.

11) Earnings per share

The calculation of basic and diluted earnings per share in 2017 and 2016 were as follows:

Basic EPS:
Income from continuing operations
Income from discontinued operations
Net income
Weighted-average number of common shares
outstanding (thousand shares)
Basic EPS－continuing operations (New Taiwan
dollars)
Basic EPS－discontinued operations (New Taiwan
dollars)
Diluted EPS:
Income from continuing operations
Income from discontinued operations
Net income
Weighted-average number of common shares
outstanding (thousand shares)
Effect of potentially dilutive common stock
Employees' compensation
Restricted employee shares
Weighted-average number of common shares
outstanding－diluted (thousand shares)
Diluted EPS－continuing operations (New Taiwan
dollars)
Diluted EPS－discontinued operations (New Taiwan
dollars)		 2017
$ 318,123
-		 2016
359,603
38,765
$
318,123
398,368

33,125

33,075

$
9.60

10.87
$
-		 1.17
$ 318,123
-		 359,603
38,765
$
318,123
398,368

33,125
264
67



33,075
329
57
33,456 33,461

$
9.51

10.75
$
-		 1.16

(Continued)

-136-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

12) Revenue and deferred revenue

The details of revenue were as follows:

The details of revenue were as follows:
Revenue of online services
Revenue of platform and consultation services
Net operating revenue
The details of deferred revenue were as follows:
Revenue of online services
Revenue of platform and consultation services
Others
Total		 2017
$ 1,264,428
275,567
2016
1,228,532
226,221

$
1,539,995

1,454,753

December 31,
2017
$ 348,873
42,793
94



December 31,
2016
326,763
42,232
13
$
391,760		 369,008

13) Employees' compensation and remunerations of directors and supervisors

In accordance with the Articles of incorporation, if the Company operates at a profit (the profit so-called 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, 2017 and 2016, the Company estimated its employees' compensation to be $34,465 and $36,742 thousand, respectively, and the remuneration of directors and supervisors to be $8,355 and $9,185 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 2017 and 2016. 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, 2017 and 2016.

(Continued)

-137-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

14) Other income

The details of other income in 2017 and 2016 were as follows:

Interest income
Others
Total		 2017
$ 12,643
12,989		 2016
14,032
20,556

$
25,632
34,588

15) Other gains and losses

The details of other gains and losses in 2017 and 2016 were as follows:

Gains on disposal of property, plant and equipment
Net foreign exchange (losses) gains
Others
Total		 2017
$ 57
(1,898)
(165)		 2016
795
2,476
(179)

$
(2,006)
3,092

  • 16) Financial instruments

  • Credit risk

    • (A) Credit risk exposure

The carrying value of financial assets represents the maximum risk exposure. The maximum risk exposure amounts were $2,108,650 thousand and $2,061,684 thousand as at December 31, 2017 and 2016, respectively.

  • (B) Concentration of credit risk

Trade receivables relate to a wide range of customers. The Consolidated Company has no credit risk exposure to any single counterparty. The Consolidated Company continues to assess the financial condition of its customers, but does not require pledged assets for credit guarantee from its customers.

  1. Liquidity risk

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

December 31, 2017
Non-derivative
financial
liabilities
Notes and accounts
payable
Other payables		 Carrying
amount
$ 6,922
112,443
Contractual
cash flows
6,922
112,443		 Within 6
months
6,922
112,443
6-12 months
-
-		 1-2 years 2-5 years
-
-		 Over 5 years
-
-		 -
-

$
119,365
119,365
119,365		 - - - -

(Continued)

-138-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2016
Non-derivative
financial
liabilities
Notes and accounts
payable
Other payables		 Carrying
amount
$ 7,648
90,313		 Contractual
cash flows
7,648
90,313		 Within 6
months
7,648
90,313
6-12 months
-
-		 1-2 years
-
-		 2-5 years
-
-		 Over 5 years
-
-

$
97,961
97,961
97,961		 - - - -

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

3. Currency risk

  • (A) Exposure to foreign currency risk

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

Financial assets
Monetary items
USD		 Dec ember 31, 2017
TWD
31,807		 De
Foreign
currency
1,113		 cember 31, 2016
TWD
35,883
Foreign
currency
$ 1,069		 Exchange
rate
29.76		 Exchange
rate
32.25
  • (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, 2017 and 2016, would have increased the net profit after tax by $264 thousand and $298 thousand for the years ended December 31, 2017 and 2016, respectively.

  • (C) Foreign exchange gains and losses on monetary items

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

TWD
CNY		 2017
Exchange
gains and
losses
Average
exchange
rate
$ 127
-
(448)
4.52		 2016
Exchange
gains and
losses
Average
exchange
rate
135
-
492
4.76
Exchange
gains and
losses
$ 127
(448)		 Exchange
gains and
losses
135
492
  1. Interest rate analysis

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

(Continued)

-139-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  1. Fair value of financial instruments

The financial assets of the Consolidated Company include cash and cash equivalents, notes receivable, accounts receivable, other receivables, and refundable deposits. The financial liabilities measured at amortized cost include notes payable, accounts payable, and other payables. Since the carrying value of the aforementioned financial assets and liabilities is a reasonable approximation of fair value, disclosure of fair value information is not required.

  • 17) Financial risk management

  • 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.

  1. 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.

  1. 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. The maximum exposure to credit risk is the carrying amount of the aforementioned financial assets recognized on the balance sheet date.

(Continued)

-140-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

  • (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.

5. 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.

(Continued)

-141-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

18) 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, 2017.

(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
104 Hope Foundation		 Relationship with the Consolidated Company
Other related party

  • 2) Transactions with related parties

  • Rental income

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

104 Hope Foundation 2017
$
12		 2016
6

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

  1. Donations

The Consolidated Company assists related parties to successfully implement the foundation business, the amount of donation is as follows:

Name of related party Item 2017
$
-		 2016
30,000
104 Hope Foundation Selling expenses
  • 3) Key management personnel compensation

Key management personnel compensation comprised:

Key management personnel compensation comprised:
Short-term employee benefits
Termination benefits
Share-based payments		 2017
$ 72,881
1,401
6,096

2016
75,625
3,415
4,134

$
80,378

83,174

(Continued)

-142-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(8) Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets Object December 31,
2017
$
10,000		 December 31,
2016
10,000
Time deposits (recorded under
other financial assets－
non-current)		 Guarantee for
employment services

(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, 2017 and 2016, 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

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 FY 2018 corporate income tax return. The change of tax rate does not affect the amounts of the current or deferred income taxes recognized on December 31, 2017. It will affect the amounts of the current or deferred income taxes in the future but there is no significant influence.

(12) Other

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

Function
Account		 2017 2017 2017 2016 2016 2016
Operating
costs		 Operating
expenses		 Total Operating
costs		 Operating
expenses		 Total
Employee benefits
Salary
Health and labor insurance
Pension
Other personnel expense
Depreciation
Amortization		 58,687
4,745
2,662
3,260
21,191
4,469
703,425

49,717

29,675

22,386

25,474

3,797
762,112

54,462

32,337

25,646

46,665

8,266
51,539

4,294

2,648

3,369

27,171

6,081
645,553

44,585

29,572

22,988

29,550

5,708
697,092

48,879

32,220

26,357

56,721

11,789

(Continued)

-143-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(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 2017:

  1. Loans to other parties: None.

  2. Guarantees and endorsements for other parties: None.

  3. Securities held as of December 31, 2017 (excluding investment in subsidiaries, associates, and joint ventures): None.

  4. Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock: None.

  5. Acquisition of individual real estate with amount exceeding TWD300 million or 20% of the capital stock: None.

  6. Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.

  7. Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock: None.

  8. Receivables from related parties with amount exceeding the lower of TWD100 million or 20% of the capital stock: None.

  9. Trading in derivative instruments: None.

  10. Business relationships and significant intercompany transactions:

Number
(note 1)		 Name of
company		 Name of
counterparty		 Nature of
relationship
(note 2)		 Intercompany transactions Intercompany transactions Intercompany transactions Intercompany transactions

Account name		 Amount
(note 3)		 Trading terms Percentage of the
consolidated total
operating revenue or
total assets
0

0

0

0

2

2
 The Company
The Company
The Company
The Company
104
Consulting
104
Consulting		 104
Consulting
104
Consulting
104 Human
Resource
Consultancy
104
Consulting
The Company
The Company		 1

1

1

1


2


2
 Sales
Miscellaneous
income
Miscellaneous
income
Other
receivables
Sales
Accounts
receivable		 1,972
3,083
1,777
1,011
56,036
15,634		 No significant differences
with third-party transactions
Income for service support
and asset authorization;
there are no other customers
for comparison
Income for service support
and asset authorization;
there are no other customers
for comparison
There are no other
customers for comparison
There are no other
customers for comparison
There are no other
customers for comparison
0.13％

0.20％

0.12％
0.04％
3.64％
0.67％

(Continued)

-144-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 1: 1. 0 represents the Company

  1. 1 represents 104 Learn

  2. 2 represents 104 Consulting

  3. 3 represents 104 Human Resource Consultancy

  4. 4 represents Redpoint Information

Note 2: 1. Parent company to subsidiary company.

  1. Subsidiary company to parent company.

  2. 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 2017 (excluding information on investees in Mainland China):

Name of
investor		 Name of
investee		 Location Main business and
products		 Original investment amount Original investment amount Balance of December 31, 2017 Balance of December 31, 2017 Balance of December 31, 2017 Highest

balance
during the
year		 Net income
(loss) of
investee
Share of
profit/
losses of
investee
(note 1)		 Remarks

December 31,
2017		 December 31,
2016		 Shares Percentage of
ownership
Book
value
(note 1)
The Company
The Company		 104 Learn

104 Consulting		 Taiwan

Taiwan
 General advertising
services, data
processing services,
electronic
information
services,
management
consultancy, and
employment
services
General advertising
services, IT software
services, electronic
information
services, talent
dispatching,
management
consultancy and data
processing services		 11,470


12,678
11,470

12,678		 1,000
1,219
100.00%

100.00%
12,772

53,806
11,470

12,678
14

28,561
14

28,561		 Subsidiary
Subsidiary

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

  • 3) Information on investment in Mainland China:

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

Unit: th ousand dollars
Name of
investee		 Main businesses
and products		 Total
amount of

paid-in
capital
(note 4)		 Method of
investment
(note 1)		 Aggregate
investment
amount
remitted from
Taiwan at

beginning of
year (note 4)		 Amount r
returned in		 emitted or
**current year **		 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, 2017
(notes 2
and 3)		 Amount of
investment
income
remitted back
to Taiwan at
end of year
Invested
amount		 Returned
amount
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		 34,091
(1)		 23,909
(USD770)

-		 - 23,909
(USD770)

1,799
70.00%
23,909
1,259
17,450		 -

(Continued)

-145-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

==> picture [435 x 120] intentionally omitted <==

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

Aggregate
investment Aggregate Percentage of Amount of
amount investment direct or Book value investment
Total remitted from Amount remitted or amount indirect The highest as of income
amount of Method of Taiwan at returned in current year remitted from Net income ownership by holding Investment December remitted back
Name of Main businesses paid-in beginning of Invested Returned Taiwan at end (loss) of the during the gain (loss) 31, 2017 to Taiwan at
investee and products capital investment year (note 4) amount amount of year investee Company (%) year (notes 2 (notes 2 end of year
(note 4) (note 1) (note 4) and 3) and 3)
Redpoint Developing 60,365 (1) 60,365 - - 60,365 (2,747) 100.00% 60,365 (2,747) 33,670 -
Information network technologies and (USD2,000) (USD2,000)
computer
software, selling
products,
providing
technical advice
and services, and
management
consultancy
----- End of picture text -----

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.

  • Limitation on investment in Mainland China:

Note 4: Based on historical exchange rates.
Limitation on investment in Mainland China:		 Note 4: Based on historical exchange rates.
Limitation on investment in Mainland China:		 Note 4: Based on historical exchange rates.
Limitation on investment in Mainland China:
Unit: thousand dollars
Aggregate investment amount
remitted from Taiwan to
Mainland China at the end of the
period		 Investment amount approved by
Investment Commission of
Ministry of Economic Affairs
Limitation on investment in
Mainland China by Investment
Commission of Ministry of
Economic Affairs (Note 1)
84,274
(USD 2,770)		 82,435
(USD 2,770)		 915,730

  • Note 1: Limitation on investment in Mainland China: 60% of the Company's stockholders' equity of $1,526,216 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, 2017 (USD:NTD=1:29.76).

  • Significant transactions:

There is no significant inter-company transaction with the investment in Mainland China for the year ended December 31, 2017.

(Continued)

-146-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

(14) Segment information

1) General information

The Consolidated Company has two reportable segments: Online services and platform and consultation services. Online services are responsible for the on-line advertising service for vacant positions; platform and consultation services are responsible for performing strategic planning, developing marketing, and promoting human resource consultation service. The Consolidated Company's reportable segments are strategic business units providing various products and services. Due to the fact that each strategic business unit requires different technology and marketing strategies, they need to be managed separately. All reportable segments did not have asymmetrical allocations. The reported amount should be consistent with the report used by the chief operating decision maker. The accounting policies of the operating segments are the same as described in note 4 "Summary of significant accounting policies". The profits and losses of the operating segment of the Consolidated Company are measured based on the income before income tax (excluding any extraordinary activity gains or losses), and are used as the basis for assessing the segment's performance.

Revenue:
Revenue from external customers
Revenue from transactions between
segments
Interest revenue
Total revenue
Depreciation and amortization
Segment's profit or loss
Revenue:
Revenue from external customers
Revenue from transactions between
segments
Interest revenue
Total revenue
Depreciation and amortization
Segment's profit or loss		 2017 2017 2017 Consolidated
1,539,995
-
12,643
1,552,638
54,931
381,785
Consolidated
1,454,753
-
14,032
1,468,785
68,510
376,635
Online
services
$ 1,264,428
1,315
-
Platform and
consultation
services
275,567
57,128
-
Adjustments
and
eliminations
-
(58,443)
12,643
$
1,265,743		 332,695
(45,800)

$
37,927

5,025

11,979

$
788,955

45,021

(452,191)

2016
Online
services
Platform and
consultation
services
226,221
68,141
-
Adjustments
and
eliminations
-
(81,816)
14,032
$
1,242,207		 294,362
(67,784)

$
43,453

6,505

18,552

$
754,773

14,789

(392,927)
  • 2) 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.

(Continued)

-147-

104 CORPORATION AND ITS SUBSIDIARIES

Notes to Consolidated Financial Statements

3) 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

Revenue from external customers
Region 2017
$ 1,504,131
35,864
2016
1,427,823
26,930
Taiwan
Others
Total
Other assets:
Region

$
1,539,995

1,454,753

December 31,
2017
$ 213,156
168


December 31,
2016
230,763
405
Taiwan
Others
Total
$
213,324		 231,168

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

4) Information on major customers

There was no major customer whose revenue was more than 10% of operating revenue of the Consolidated Company in 2017 and 2016.

-148-

  1. Financial Statement for the Most Recent Fiscal Year Audited by CPA

  2. Please refer to page 125 to 169 of the Chinese annual report.

  3. Financial conditions of the Company and its affiliates of the most recent fiscal year :

None.

-149-

VII. Review of Financial Conditions, Financial Performance and Risk Management

1. Financial position

Unit: NT$000

Year Difference Difference
Dec. 31, 2017 Dec. 31, 2016
Item amount %
Current assets 2,105,443
2,051,944
53,499
2.61
Property, plant and
206,619
218,993
(12,374)
(5.65)
equipment
Intangible assets 6,705
12,175
(5,470)		 (44.93)
Other assets 23,532
23,582
(50)		 (0.21)
Total assets 2,342,299
2,306,694
35,605
1.54
Current liabilities 801,391
730,046
71,345
9.77
Longterm liabilities - - - -
Other liabilities 7,213
4,474
2,739
61.22
Total liabilities 808,604
734,520
74,084
10.09
Common stock 332,072
332,417
(345)		 (0.10)
Capital surplus 399,549
401,962
(2,413)		 (0.60)
Retained earnings 800,916
844,798
(43,882)		 (5.19)
Other equity (6,321) (14,010) 7,689
(54.88)
Non-controlling
7,479
7,007
472
6.74
interests
Total equity 1,533,695
1,572,174
(38,479)		 (2.45)

Explanation Description of material significant changes in accounting items (increase/decrease of more than 20% with amount of change reaching NT$10 million): None.

2. Financial performance

Unit: NT$000

Year Increase Proportion
of Change
%
Analysis of
2017 2016 (decrease) in
Item changes
amounts
Operatingrevenue 1,539,995
1,454,753
85,242
5.86
Operatingcost 150,154
135,815
14,339
10.56
Grossprofit 1,389,841
1,318,938
70,903
5.38
Operatingexpenses 1,031,682
979,983
51,699
5.28
Operatingincome 358,159
338,955
19,204
5.67
Non-operating income
23,626
37,680
(14,054)
(37.30)		 (1)

and expenses
Income before income tax 381,785
376,635
5,150
1.37
Income tax expenses 63,122
17,096
46,026
269.22		 (2)
Income from continuing
318,663
359,539
(40,876)
(11.37)

operations
Income from discontinued
-
38,765
(38,765)
(100.00)		 (3)
operations
Net income 318,663
398,304
(79,641)		 (20.00) (2)(3)
Other comprehensive
(4,087)
(3,756)
(331)
8.81

income(net of tax)
Total comprehensive
314,576
394,548
(79,972)
(20.27)		 (2)(3)

income

-150-

  • (1) Description of significant changes in items (increase/decrease of more than 20% with amount of change reaching NT$10 million):

  • A. The Company had recognized income from other service in 2016.

  • B. The Company had recognized income from reversal of income tax in previous period in 2016.

  • C. The Company had recognized income from sale of subsidiary in 2016.

  • (2) Expected sales volume and its basis over the next year: Not applicable.

  • (3) Possible impacts on the Company's future financial operations and countermeasures: Not applicable.

3. Cash flow

  • (1) Analysis of changes in cash flow in the current period
Unit: NT$000 Unit: NT$000 Unit: NT$000
Increase
Item 2017 2016
(decrease)
Net cash inflow(outflow)from operatingactivities 444,515 395,110
49,405
Net Cash inflow(outflow)from investingactivities (30,356) 16,551
(46,907)
Net cash inflow(outflow)from financingactivities (358,838) (264,989) (93,849)
Cash and cash equivalents increase(decrease) 54,640 141,888
(87,248)

  • A. Increase of net cash inflow from operations is due to the decrease of the payment of bonus and income tax in 2017.

  • B. Net cash inflow from investment decreased because the Company had disposed of a subsidiary in 2016.

  • C. Increase of net cash outflow from financing activities is due to increased cash dividend compared to 2016.

  • (2) Remedial measures to improve liquidity deficit: The Company showed no signs of liquidity deficit.

  • (3) Liquidity analysis of the next period:

Unit: NT$000

Cash and cash
equivalents at
beginning of
year		 Projected net
cash inflow from
operating
activities
throughout the
year		 Projected net cash
outflow in investing
and financing
activities for the year		 Projected cash
surplus (deficit)
amount		 Remedial measures for
projected cash deficit		 Remedial measures for
projected cash deficit
Investing
plan		 Financing
plan
2,043,470
340,383
(344,886)
2,038,967
-		 -

4. Major capital expenditures during the most recent fiscal year

  • (1) The use and funding sources of major capital expenditures:
Unit: NT$000
Project plan Sources of capital 2017 2016
Purchase of property,
plant and equipment		 Working capital 30,521 98,346
  • (2) Projected potential benefits: Enhance service quality and market competitiveness

5. Reinvestment policies, reasons for profit/loss, plans for improvement in the recent year and future investment plan in the coming year

The Company's policies and scope of reinvestment are based upon the development of the Group and would be beneficial toward developing the overall ecosystem of the platform, and all relevant services, products and technologies. We will prudently evaluate any and all reinvestment plans based on these guidelines.

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6. Analysis of risk management

  • (1) The impact upon the company's income/loss due to changes in interest rate, exchange rates, and inflation as well as the measures the company’s response measures:

  • A. Interest rate:

    • (a) Impact on the Company's profit/loss:

      • i. Liabilities: All liability items are not related to interest rate.

      • ii. Assets: Interest rates of New Taiwan dollars still remain low, slightly affecting the income of the Company's short-term capital.

    • (b) Response measures in the future: Actively use short-term funds to reduce demand deposit position, and increase time deposits, RP, and money market funds.

  • B. Exchange rate: The ratio of the Company's foreign clients is very low, and we have few costs and expenses that are imported or denominated in foreign currency. Therefore, exchange rate movements have no significant impact on the Company.

  • C. Inflation: Inflation has little impact on the Company. The target consumer of our products (services) are mainly enterprises, and also our products are mainly related to advertisement posting instead of common goods.

  • (2) High-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future:

  • The Group did not engage in high risk, high leverage investments in the current period.

  • (3) Future research and development projects, and expenditures expected in connection therewith: The Company's research and development focuses on market trends and technology changes. Our R&D team adjusts existing product functions and services, launches new functions and services based on user response and development progress of established product. The Company expects R&D expenses in 2018 will be NT$327,803 thousands an increase over relevant expenses in 2017. Please refer to pages 82 to 85 of the Annual Report for more details of future R&D plans.

  • (4) Effect on the company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response:

  • The Company's financial operations are undertaken according to regulations. So far, there has not been any impact of important policy and legal changes whether at home or abroad.

  • (5) Effect on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response:

  • A. The rise of social network: the ratio and will of enterprises in adopting social networks have risen in each year, particularly in the final stage of selecting possible recruitment candidates. HR or recruitment managers wish to further confirm personality traits and characteristics that are hard to perceive on a candidate's resume or during interview on their social network footprints. In addition to Linkedin's entry into Taiwan, the main market competitors based mainly on community recruitment chiefly focus on medium-to-large-sized companies and middle- and high-level talents, as well as professional white-collar workers. Facebook also launched talent recruitment services in North America at the end of 2016. In March of this year, it expanded the talent/job seeking function in 40 countries, including Taiwan market, mainly targeting at local SMEs and blue/grey-collar workers. According to Alexa, although Linkedin's traffic flow in Taiwan is much lower than the major job banks, and the number of FB's job openings remains small, they are still potential threats to the Company's recruitment service business.

    • Countermeasures: We have already launched a product for the next generation - 104 Career Social Community, and as of the end of March 2018, we have already developed nearly 750,000 users and finished linking this platform to our enterprise recruitment management system. At the same time, we also offer traditional recruitment and social network recruitment services.

  • B. Popularity of smart mobile devices: users have gradually turned away from traditional personal computers (PCs) to mobile devices, and in particular, since recruitment is a highly private matter, users favor mobile devices for their high mobility and security. As the volume of job-seekers

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gradually turn to mobile devices, this may impact the effectiveness and motivation of enterprise clients in placing advertisements on PC-based platforms, as well as our revenue from advertisements from PCs.

Countermeasures: 104 continuously improves the experience of using its mobile services and provides APP applications and mobile web services simultaneously to meet the various needs of different groups, and also introduces more accurate job referrals based on user behavioral preferences. These together drove the overall matchmaking number of job/talent seeking in 2017 to grow by more than 13% compared to the previous year. The mobile version has already had advertisement layout that successfully took over the traffic flow transferred from PCs. Moreover, because the frequency of mobile phone job search is higher than that of PC, the mobile phone advertisement gains more eye-catching effect. Plus, as mobile job search app mostly stays at login status, it is helpful to provide deeper personalized services.

  • C. Application of "Big Data" and "Artificial Intelligence": As Big Data related technologies are increasingly mature, companies with big data and relevant technologies enjoy more competitive advantages. 104 is the leading enterprise in Taiwan's job/talent seeking industry and has accumulated largest number of users and enterprise information, as well as data scale of user behaviors. It possesses the key advantages in developing Big Data and artificial intelligence applications. 104 has already launched Big Data related applications, i.e. "Education and Career Map" and "Job Function Encyclopedia", and both of them are highly praised. In terms of technology applications, we possess technologies that enable us to perform job referrals for job seekers, talent referrals for recruiting companies, as well as content referrals for career community. 104 has unified and migrated the scattered content data and behaviors (functionality) to the cloud environment. With the powerful and flexible crowd-computing environment, we can make full use of the biggest advantage of 104 database. At present, information on the three major service platforms for job seeking, talent seeking and career Social has been integrated on the cloud platform. In the future, we will continue to use Data-driven product development strategies to transform existing scale advantage from enterprise users and individual users into data scale and data-driven application service with higher entry barriers, and lay foundation for the development of artificial intelligence (AI).

  • D. Integrate the Q&A content of career consultation with artificial intelligence to develop robot consulting services. At the same time, with real-person, real-time online consultation and career broker services, we build a consultation service system that combines technology and consultants to serve the broad masses of employees!

  • E. In the future, corporate HR personnel can select consultants and system services according to their own needs. If customers have limited budgets, they can choose “on demand” based on their key needs. This means that the product portfolio is highly flexible to meet clients' needs in response to market volatility indirectly.

  • (6) Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response:

The Company has committed to maintaining a positive corporate image for years, and complies with legal regulations. In case of impacts on the corporate image or violation of the law, a special group will be formed to develop response strategies.

  • (7) Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken: None.

  • (8) Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken: None.

  • (9) Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken: The Company is in the information service sector and does not sell physical products. Hence, this is not applicable.

  • (10)Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken: None.

  • (11)Effect upon and risk to company associated with any change in governance personnel or top

-153-

management, and mitigation measures being or to be taken: None.

  • (12)Any substantial impact upon shareholders' equity or prices for the company's securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving a company director, supervisor, general manager, de facto representative, or major shareholder with a stake of more than 10 percent, and the matter which was finalized or remained pending, and dispute facts, dispute amount, commencement date of litigation, major litigation parties and progress up to the printing date of the annual report: None.

  • (13)Other important matters: None.

7. Other Items: None.

-154-

VIII. Special Items

1. Affiliated companies

  • (1) Overview of affiliated companies

  • A. Organization chart of affiliated companies

==> picture [502 x 179] intentionally omitted <==

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

104 Corporation
(100%) (100%) (70%) (100%)
104 104 104 Redpoint
Learn Consulting Human Resource information
Corporation Corporation Consultancy Technology
(Shanghai) Co., (Shanghai) Co.,
Ltd. Ltd.
----- End of picture text -----

-155-

B. Name, establishment date, address, paid-up capital and major business activities of the affiliated companies:

Date of
Company name Address Capital Primary business or products
establishment
General advertising services,
6F, No. 119-1,
data processing services,
104 Learn Baozhong Rd., NT$ 10
electronic information
2005.02.04
Corporation Xindian Dist., New million services, management
Taipei City consultancy, and employment
services
General advertising services,
6F, No. 119-1,
IT software services,
104 Consulting Baozhong Rd., NT$ 12.19 electronic information
2007.12.12
Corporation Xindian Dist., New million services, talent dispatching,
Taipei City management consultancy and
data processing services
Collecting, coordinating,
publishing, and consulting on
104 Human
Room 05, 9F, No. 329,
human resource information;
Resource
Heng Feng Road, US$ recruitment; designing and
Consultancy 2007.02.26
Zhabei District, 1.1 million developing computer
(Shanghai) Co.,
Shanghai software, multimedia, and
Ltd.
network systems; designing
and producing advertising
Developing network
Redpoint
Room 05, 9F, No. 329,
technologies and computer
information
Heng Feng Road, US$
software, selling products,
Technology 2013.7.10
Zhabei District, 2 million providing technical advice
(Shanghai) Co.,
Shanghai and services, and
Ltd.
management consultancy

  • C. Disclosures related to controlling and subordinate relation presumed in Article 369-3 of the Company Act: None.

  • D. Business operations covered by affiliated companies: Business operations covered by the Company's affiliated companies are general advertising services, employment services, staffing services, and management consulting.

-156-

  • E. Name, shareholding or investment of Directors, Supervisors and General Manager of the affiliated companies:
December31,2017 December31,2017
Shares owned
Number
Name Job Title Name or Representative Percentage
of
of Shares
Shares
104 Learn Corporation Chairman 104 Corporation
Representative: Chi-Kuan Yang		 1,000,000
100.00%
Director 104 Corporation
Representative: Chi-Yang Chen		 1,000,000
100.00%
Director 104 Corporation
Representative:Hung-WenSu		 1,000,000
100.00%
Supervisor 104 Corporation
Representative: Jung-Chuen
Wang		 1,000,000
100.00%
General Manager Chi-Kuan Yang - -
104 Consulting
Corporation		 Chairman 104 Corporation
Representative: Chi-Kuan Yang		 1,218,990
100.00%
Director 104 Corporation
Representative: Hung-Wen Su		 1,218,990
100.00%
Director 104 Corporation
Representative: Jung-Chuen
Wang		 1,218,990
100.00%
Supervisor 104 Corporation
Representative: Chien-AnJuan		 1,218,990
100.00%
General Manager Chi-Kuan Yang - -
104 Human Resource Chairman 104 Corporation
Representative: Chi-Kuan Yang		 - 70.00%
Director 104 Corporation
Representative: Yu-Chun Huang		 - 70.00%

Director		 Shanghai Askforce Human
Resources Co., Ltd.
Representative: Bing-Sheng
Deng		 - 30.00%
Consultancy (Shanghai)

Co., Ltd.
Supervisor 104 Corporation
Representative: Hung-Wen Su		 - 70.00%
General Manager &
legal representative		 Bing-Sheng Deng - -
Redpoint Information Executive Director &
legal representative		 104 Corporation
Representative: Chi-Kuan Yang		 - 100.00%
Supervisor 104 Corporation
Representative: Jung-Chuen
Wang		 - 100.00%
Technology (Shanghai)
Co., Ltd.
General Manager Bing-ShengDeng - -

-157-

(2) Overview of affiliated companies:

Overview of affiliated companies: Overview of affiliated companies:
December 31, 2017 Units: NT$000
Income Earnings
Total Total Net Operating Operating (loss) in
Per Share
Name Currency Capital
Assets Liabilities Worth
Revenue
Income		 the period (NT$)
(after tax) (after tax)
104 Learn Corporation NTD 10,000
13,181
409
12,772
16
(72)		 14
0.01
104 ConsultingCorporation NTD 12,190
67,379
13,573
53,806
58,035
34,032
28,561
23.43
104 Human Resource Consultancy
(Shanghai) Co., Ltd.
NTD		 34,091
33,233
8,304
24,929
26,531
1,873
1,799
-
Redpoint information Technology
(Shanghai) Co., Ltd.
NTD		 60,365
33,944
274
33,670
1,089
(1,025)
(2,747)
-
  • (3) Consolidated financial statements of affiliated companies:

Please refer to page 99-148 for details.

2. Private placement of securities in the most recent fiscal year and up to the date of the annual report printed: None.

3. Holding or disposal of shares in the Company by the Company's subsidiaries in the most recent fiscal year and up to the date of the annual report printed: None.

4. Other matters that require additional description : None.

IX. Material Matters that Impacted Shareholders' Equity or Securities Price in the Most Recent Fiscal Year and Up to the Date of the Annual Report Printed: None.

-158-

104 Corporation

Chairman Chi-Kuan Yang

-159-

==> picture [442 x 787] intentionally omitted <==

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