parent company only financial statements for the years...

Taiwan Optical Platform Co., Ltd.

Parent Company Only Financial Statements for the

Years Ended December 31, 2018 and 2017 and

Independent Auditors’ Report

--------------------------------------------------------------------------------------------- ---------------------------------------------------

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial

statements have been translated into English from the original Chinese version prepared and used in the Republic of

China. In the event of any discrepancy between the English version and the original Chinese version or any differences

in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

Stock Code: 6464

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INDEPENDENT AUDITOR'S REPORT

To: Taiwan Optical Platform Co., Ltd.

AUDIT REPORT

The Individual Balance Sheet of the Taiwan Optical Platform Co., Ltd. (hereinafter referred to

as "top") as of December 31, 2018 and 2017, and Individual Statements of Comprehensive Income,

Individual Statement of Changes in Equity, Individual Cash Flow Statement, and Notes to the

Individual Financial Statements (including material accounting policies) from January 1 to December

31, 2018 and 2017 have been audited by the CPA.

In the opinion of the CPA, the individual financial statements mentioned above have been

prepared in accordance with the Regulations Governing the Preparation of Financial Reports by

Securities Issuers in all material aspects, and can be reasonably expressed to present the individual

financial conditions of top as of December 31, 2018 and 2017, as well as their financial performance

and individual cash flow from January 1 to December 31, 2018 and 2017.

Basis of Audit

Our CPA conducted our audits in accordance with the Regulations Governing the Auditing and

Attestation of Financial Statements by Certified Public Accountants and 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 Individual Financial Statements section of this

report. Our CPAs have complied with the ethical requirements of accountants, fulfilled their assigned

responsibilities as per requirements and are independent of top. We believe that the documents

provided are of sufficient evidence to provide the basis for our audit report.

Key Audit Matters

The Key Verification Items pertain to the most important items of top's 2018 Individual

Financial Statements as per the professional judgment of the CPA. These matters were addressed in

our audit of the individual financial statements as a whole, and in forming our audit opinion. We do

not express a separate opinion on these matters.

Listed below are the details of the CPA's verification of the key items in top's 2018 Individual

Financial Statements:

Goodwill impairment assessment for investments accounted for through the equity method

As shown in Notes 4 and 10 of the Individual Financial Statements, the investment amount

assessed as of December 31, 2018 using the equity method amounted to NT$9,026,964 thousand

which accounted for 96% of the total assets. This amount is material to the Individual Financial

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Statements and the management has assessed whether there is any impairment of goodwill of

subsidiary companies under the equity method on each balance sheet date. An overall assessment is

made of the investee's financial report and then compares the recoverable amount and the carrying

amount to arrive at the impaired amount. As assessment of asset impairment involves a high level of

discretion on the part of the management, the CPA has therefore listed the item in key audit matters.

The CPA has conducted the main auditing procedures as follows for the significant estimates

and assumptions used by the management in the assessment of the impairment of assets, the estimated

future operating cash flows and the weighted average cost of capital:

1. The CPA assessed has the expertise, competence, and objectivity of an independent person to

assess the personnel appointed by the management, and verified their qualifications. The CPA

has also discussed the scope of work of the assessment personnel with the management and

reviewed its appointment conditions to ensure that there were no conditions that affect their

objectivity or inhibit their scope of work, and that the methods used by them are consistent with

IFRSs and industry regulations.

2. The CPA understands the process and basis of the management's estimation of the growth rate

in sales and profit margin of the investees in future operations. He/She has also reviewed if the

estimates on cash flow volume in future operations are consistent with the future plans of the

Board of Directors.

3. The CPA has adopted the evaluation models and important assumptions (including discount rate

etc.) provided by financial experts of the accounting firm. The CPA has also used the data in

assumptions made by the management to compare with market and historical data, and checked

the calculation to ensure the appropriateness of the management's judgment.

Responsibility of the Management and the Governing Body for the Individual Financial

Statements

It is the management’s responsibility to fairly present the Individual Financial Statements in

conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers,

and to sustain internal controls respecting preparation of the Standalone Financial Statements so as

to avoid material misstatements due to fraud or errors therein.

In preparing for the Individual Financial Statement, the management is also responsible for

evaluating the ability of top to continue its operations, make relevant disclosures, and adopt

accounting standards for continuing operations, unless it intends to liquidate top or cease its

operations, or if there are no feasible plans other than liquidation or discontinuation of operations.

The governance units (including supervisors) of top are responsible for supervising the process

of reporting on the financial status.

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Responsibilities of the CPA in Auditing the Consolidated Financial Report

Our objectives are to obtain reasonable assurance on whether the individual financial statements

as a whole are free from material misstatement arising from fraud or error, and to issue an independent

auditors' report. 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. False expressions may be due to fraud or

obvious errors. If it could be reasonably anticipated that the misstated individual amounts or

aggregated sums could have influence on the economic decisions made by the users of the

consolidated financial statements, they will be deemed as material.

The CPA has made professional judgment and maintained professional vigilance while auditing

in conformity with GAAP. The CPA has also followed the following procedures:

1. Identified and assessed the risks of material misstatement arising from fraud or error within the

individual financial statements; design and execute counter-measures in response to those risks,

and obtain sufficient and appropriate audit evidence to provide a basis for our opinion. As fraud

may involve collusion, forgery, deliberate omissions, false statements or violation of internal

control, its risks outweigh those due to obvious errors.

2. To understand the internal controls which concern audit and provide appropriate audit

procedures under such circumstances. However, its purpose is not to offer any opinion on the

effectiveness of internal controls at top.

3. Evaluated the appropriateness of accounting policies adopted by the management and the

rationale behind the accounting estimates and relevant disclosures.

4. To arrive at a conclusion on the appropriateness of the accounting basis the management has

adopted for continuing operations, as well as to examine if there are factors which cause major

uncertainty in the sustainability of top. If the opinion of the CPA indicates that a material

uncertainty exists, we shall remind users of the individual financial statements to pay attention

to relevant disclosures in the notes to those statements within our audit report. If such

disclosures are inadequate, we need to modify our opinion. The CPA's conclusion is based on

the auditing evidence obtained up to the date of the report. However, unpredictable future

incidents or conditions might force top to cease operations.

5. Evaluated the overall presentation, structure and content of the individual financial statements

(including relevant notes), and whether the individual financial statements adequately represent

the underlying transactions and events.

6. Obtained sufficient and appropriate evidence of auditing of top's internal formation for

individual financial information and express opinion on the Individual Financial Statements.

The CPA is responsible for guiding, supervising and implementing the auditing work and for

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the formulation of audit opinion on top.

The CPA's communications with the organization include the scope of planned auditing, the

timeframe and material findings (including significant deviations identified in the internal control

during auditing operations).

The CPA has also provided a statement on the accounting firm's personnel under governance of

independence to the governance unit, and has communicated on the relations and other items

(including relevant protective measures) that could affect the CPA's operational independence.

The CPA has identified the key audit matters to inspect in top's 2018 Individual Financial

Statement in communication with the governance unit. The CPA has clearly indicated such matters in

the audit report. Unless legal regulations prohibit the public disclosure of specific items, or in

extremely rare cases, where the CPA has decided not to communicate on specific items in the audit

report, it is believed to be reasonable that the negative effects of such disclosure would be far greater

than the public interest they bring forth.

Deloitte, Taiwan

Chiang Shu-Chin, CPA

Tseng Dong-Yuin, CPA

Financial Supervisory Commission

Approval Document No.

Jin-Guan-Zheng-Shen No. 1000028068

Securities and Futures Bureau Approval

Document No.

Tai-Cai-Zheng-6 No. 0920123784

February 26, 2019

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Individual Balance Sheets

As of December 31, 2018 and 2017

Unit: NT$1,000

December 31, 2018 December 31, 2017

Code Asset Amount ％ Amount ％

Current assets

1100 Cash (Notes 3 and 6) $ 146,358 2 $ 85,445 1

1120 Financial asset measured at fair value through other

comprehensive income - current (Notes 3, 4, and 7)

440 - - -

1125 Available- for-sale financial assets - current (Notes 3, 4 and 8) - - 484 -

1150 Notes receivables (Notes 3, 4, 9, and 16) 18,423 - 148 -

1170 Accounts receivable - non-related parties (Notes, 3, 4, 9, and

16)

32,833 - 91,655 1

1180 Accounts receivable --related parties (Notes 3, 4, 16, and 23) 95,126 1 97,756 1

1200 Other receivables (Notes 3 and 23) 38,545 1 42,387 -

1470 Other current assets 10,079 - 5,774 -

11XX Total current assets 341,804 4 323,649 3

Non-current assets

1550 Equity-accounted investments (Note 3, 4 , 5 and 10) 9,026,964 96 9,137,349 97

1600 Property, plant, and equipment (Note 4 and 11) 12,713 - 18,128 -

1840 Deferred income tax assets (Notes 4 and 18) 3,721 - 4,524 -

1920 Guarantee deposits paid (Notes 3 and 20) 2,282 - 4,059 -

15XX Total non-current assets 9,045,680 96 9,164,060 97

1XXX Total assets $ 9,387,484 100 $ 9,487,709 100

Code Liabilities and equity

Current liabilities

2100 Short-term bank loans (Note 12) $ 200,000 2 $ - -

2150 Notes payable 120,404 1 54,003 -

2170 Accounts payable - non-related parties 84,169 1 333,321 3

2180 Accounts payable - related parties (Note 23) 5,157 - 8,620 -

2200 Other payables - non-related parties (Note 13) 68,703 1 82,541 1

2220 Other payables - related parties (Note 23) 1,702,509 18 1,573,518 17

2230 Current income tax liabilities (Notes 4 and 18) 104,721 1 64,946 1

2320 Long-term bank loans due within one year (Note 12) 40,000 1 552,400 6

2399 Other current liabilities 1,898 - 3,359 -

21XX Total current liabilities 2,327,561 25 2,672,708 28

Non-current liabilities

2540 Long-term bank loans (Note 12) 610,000 6 200,000 2

2XXX Total liabilities 2,937,561 31 2,872,708 30

Equity

3110 Capital from common stock 1,266,394 14 1,269,292 13

3200 Additional paid-in capital 3,692,603 39 4,088,024 43

Retained earnings

3310 Statutory surplus reserve 726,226 8 662,610 7

3320 Special surplus reserve 106,595 1 122,420 2

3350 Undistributed earnings 1,452,420 15 1,254,489 13

3400 Other equity ( 151,619 ) ( 1 ) ( 106,595 ) ( 1 )

3500 Treasury stock ( 642,696 ) ( 7 ) ( 675,239 ) ( 7 )

3XXX Total equity 6,449,923 69 6,615,001 70

Total liabilities and equity $ 9,387,484 100 $ 9,487,709 100

The Notes included below are part of the Individual Financial Statements

Chairman: Chien, Sun-yuan Manager: Liao, Tzu-chen Accounting Officer: Lin, Shu-ling

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Individual Statements of Comprehensive Income

January 1 to December 31, 2018 and 2017

Unit: NT$1,000

except for earnings per share which are in NT$

2018 2017

Code Amount ％ Amount ％

4000 Operating revenue (Note 4, 16

and 23)

$ 1,272,284 100 $ 1,292,492 100

5000 Operating costs (Note 17 and

23)

613,679 48 667,698 52

5900 Gross profit 658,605 52 624,794 48

5920 Realized gains from

subsidiaries (Note 4)

8,052 1 10,910 1

5950 Realized operating margin 666,657 53 635,704 49

6000 Operating expenses (Note 17

and 23)

147,935 12 170,269 13

6900 Net operating profit 518,722 41 465,435 36

Non-operating income and

expenses

7070 Share of profits of

subsidiaries accounted

for using equity method

(Note 4 and 10)

210,379 17 236,213 18

7100 Interest income (Note 4) 68 - 77 -

7130 Dividend income (Note 4) 16 - 10 -

7190 Other revenue 91,777 7 89,047 7

7510 Interest expenses (Notes 4

and 23)

( 35,486 ) ( 3 ) ( 38,191 ) ( 3 )

7590 Other expenses ( 74 ) - ( 73 ) -

7000 Total non-operating

income and

expenses

266,680 21 287,083 22

7900 Net profit before tax 785,402 62 752,518 58

7950 Income tax expenses (Notes 4

and 18)

148,475 12 116,360 9

8200 Net profit 636,927 50 636,158 49

(Continued on next page)

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(Continued from previous page)

2018 2017

Code Amount ％ Amount ％

Other comprehensive income

(Notes 4 and 15)

8310 Items that will not be

reclassified subsequently

to profit or loss

8316 Unrealized valuation

loss (gain) on

investments in an

equity instrument

measured at

FVTOCI

( $ 38 ) - $ - -

8330 Share of other

comprehensive

income/losses on

equity-accounted

subsidiaries (net

value after tax)

( 39,967 ) ( 3 ) 8,632 1

( 40,005 ) ( 3 ) 8,632 1

8360 Items that may be

reclassified to profit or

loss:

8362 Unrealized loss on

available-for-sale

financial assets

- - ( 15 ) -

8380 Share of other

comprehensive

income/losses on

equity-accounted

subsidiaries

- - 15,840 1

- - 15,825 1

8300 Other comprehensive

income (net value

after tax) in this

year

( 40,005 ) ( 3 ) 24,457 2

8500 Total combined comprehensive

income for this year

$ 596,922 47 $ 660,615 51

Earnings per share (Note 19)

9750 Basic $ 5.21 $ 5.11

9850 Diluted $ 5.21 $ 5.10



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Individual Statements of Changes in Equity


Unit: NT$1,000 Retained earnings (Notes 3 and 15) Other equity (Notes 3. 4 and 15)

Code

Capital from

common stock (Note

15)

Additional paid-in

capital (Note 15) Legal surplus reserve

Special surplus

reserve

Undistributed

earnings

Unrealized gains and

losses on available-

for-sale financial

products

Other comprehensive

income measured at

fair value

through profit or loss

Unrealized gains and

losses

Treasury stock

(Note 15) Total equity

A1 Balance as of January 1, 2017 $ 1,243,670 $ 4,184,671 $ 589,203 $ 484 $ 1,239,298 ( $ 122,420 ) $ - ( $ 684,373 ) $ 6,450,533

Appropriation and distribution of 2016 earnings

B1 Legal reserve - - 73,407 - ( 73,407 ) - - - -

B3 Special reserve - - - 121,936 ( 121,936 ) - - - -

B5 Cash dividends - - - - ( 238,112 ) - - - ( 238,112 )

B9 Stock dividends 23,811 - - - ( 23,811 ) - - - -

C13 Stock dividends distributed from additional paid-

in capital

23,811 ( 23,811 ) - - - - - - -

D1 2017 net profit - - - - 636,158 - - - 636,158

D3 Other comprehensive profit/loss in 2017 - - - - 8,632 15,825 - - 24,457

D5 2017 total comprehensive profit/loss - - - - 644,790 15,825 - - 660,615

L1 Repurchased treasury stock - - - - - - - ( 258,035 ) ( 258,035 )

L3 Disposal of treasury stocks ( 22,000 ) ( 72,836 ) - - ( 172,333 ) - - 267,169 -

Z1 Balance as of December 31, 2017 1,269,292 4,088,024 662,610 122,420 1,254,489 ( 106,595 ) - ( 675,239 ) 6,615,001

A3 Effects of retrospective application and

retrospective restatement

- - - - 1,176 106,595 ( 117,351 ) - ( 9,580 )

A5 Balance as of January 1, 2018 after re-

compilation

1,269,292 4,088,024 662,610 122,420 1,255,665 - ( 117,351 ) ( 675,239 ) 6,605,421

Appropriation and distribution of 2017 earnings

B1 Legal surplus reserve - - 63,616 - ( 63,616 ) - - - -

B3 Special surplus reserve - - - ( 15,825 ) 15,825 - - - -

B5 Cash dividends - - - - ( 242,036 ) - - - ( 242,036 )

B9 Stock dividends 12,102 - - - ( 12,102 ) - - - -

C15 Cash dividend distributed from capital reserve - ( 363,055 ) - - - - - - ( 363,055 )

D1 2018 net profit - - - - 636,927 - - - 636,927

D3 Other comprehensive profit/loss in 2018 - - - - ( 5,737 ) - ( 34,268 ) - ( 40,005 )

D5 2018 total comprehensive profit/loss - - - - 631,190 - ( 34,268 ) - 596,922

L1 Repurchased treasury stock - - - - - - - ( 147,329 ) ( 147,329 )

L3 Disposal of treasury stocks ( 15,000 ) ( 32,366 ) - - ( 132,506 ) - - 179,872 -

Z1 Balance as of December 31, 2018 $ 1,266,394 $ 3,692,603 $ 726,226 $ 106,595 $ 1,452,420 $ - ( $ 151,619 ) ( $ 642,696 ) $ 6,449,923



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Individual Cash Flow Statement


Unit: NT$1,000

Code 2018 2017

Cash Flows from Operating Activities

A10000 Income before income tax for the year $ 785,402 $ 752,518

A20000 Income and expense items

A20100 Depreciation 6,539 6,468

A20900 Interest expenses 35,486 38,191

A21200 Interest income ( 68 ) ( 77 )

A21300 Dividend income ( 16 ) ( 10 )

A22400 Share of profits on equity-accounted

subsidiaries, associates and joint

ventures

( 210,379 ) ( 236,213 )

A23900 Realized gains from subsidiaries ( 8,052 ) ( 10,910 )

A30000 Changes in operating assets and liabilities

A31130 Notes receivable ( 18,275 ) 16,930

A31150 Accounts receivable 61,452 ( 65,043 )

A31180 Other receivables 3,842 ( 1,482 )

A31240 Other current assets ( 4,305 ) 1,693

A32130 Notes payable 66,401 ( 86,346 )

A32150 Accounts payable ( 252,615 ) 328,321

A32180 Other payables ( 15,154 ) ( 3,752 )

A32230 Other current liabilities ( 1,461 ) 779

A33000 Cash from operating activities 448,797 741,067

A33100 Interest received 68 77

A33300 Interest paid ( 35,711 ) ( 38,606 )

A33500 Income tax paid ( 107,897 ) ( 95,015 )

AAAA Net cash inflow from operating

activities

305,257 607,523

Cash flow from investing activities

B00030 Financial assets measured at FVTOCI -

return of capital due to capital reduction

6 -

B00300 Acquisition of available-for-sale financial

assets

- ( 499 )

B02700 Purchase of property, plant and equipment ( 592 ) ( 4,824 )

B03700 Increase (decrease) in guarantee deposit

paid

1,777 ( 5 )

B07600 Collection of other dividends from

subsidiaries

279,285 182,932

BBBB Net cash inflow from investment

activities

280,476 177,604

(Continued on next page)

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(Continued from previous page)

Code 2018 2017

Cash flow from financing activities

C00100 Increase (decrease) in short-term banks

loans

$ 200,000 ( $ 250,000 )

C01600 Borrowing long-term bank loans 450,000 200,000

C01700 Repaying long-term bank loans ( 552,400 ) ( 868,600 )

C03800 Other accounts payable - increase in

related parties

130,000 320,000

C04500 Distribution of cash dividends ( 605,091 ) ( 238,112 )

C04900 Treasury stock payment transaction cost ( 147,329 ) ( 257,195 )

CCCC Net cash outflow from financing

activities

( 524,820 ) ( 1,093,907 )

EEEE Increase (decrease) in cash in the current year 60,913 ( 308,780 )

E00100 Cash balance at beginning of year 85,445 394,225

E00200 Cash balance at end of year $ 146,358 $ 85,445



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Individual Financial Report Notes


(Unless otherwise specified, the unit shall be NT$1,000)

I. Company History

Taiwan Optical Platform Co., Ltd. (hereinafter referred to as "top") was established in

August 2006 and its original name was Baoyue Investment Co., Ltd. Its main business was

general investment. The Company merged the subsidiary company Taiwan Optical Platform

Co., Ltd. on December 1, 2012. The Company's name was changed to its current name in

January 2013. Its main business was also modified to include investment, shareholding,

consultancy, and channel copyright agency for cable TV system operators.

The Company's stocks were approved for public listing by the Securities Listing

Review Committee of Taiwan Stock Exchange Corporation in September 2015 and its Board

of Directors in October. They were officially traded in December 2015.

The Individual Financial Report is shown in NT$, the Company's functional currency.

II. Date and procedures of the passage of the Financial Report

The Individual Financial Report was approved in the Board of Directors' meeting on

February 26, 2019.

III. Applicability of New announcements, Revisions, Amendments of Standards and

Interpretations

(I) The first application of the amended Regulations Governing the Preparation of

Financial Reports by Securities Issuers and the International Financial Reporting

Standards (IFRS), International Accounting Standards (IAS), International Financial

Reporting Interpretations Committee (IFRIC), and Standard Interpretations

Committee (SIC) (hereinafter "IFRSs") endorsed by the Financial Supervisory

Commission (hereinafter "FSC").

With the exception of the following, the applicability of the aforementioned

revised Regulations Governing the Preparation of Financial Reports by Securities

Issuers and the IFRSs endorsed and announced by the FSC should not result in major

changes to the accounting policies of the Company:

1. IFRS 9 "Financial instruments" and related amendments (including amendments

for early adoption)

IFRS 9 "Financial instruments" replaced IAS 39 "Financial instruments:

Recognition and Measurement and resulted in the consequential amendment of

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IFRS 7 "Financial instruments: Disclosure" and other standards. New

requirements in IFRS 9 specify the classification, measurement, and impairment

of financial assets and general accounting for hedging. Please refer to Note 4 for

related accounting policies.

Classification, measurement, and impairment of financial assets

Based on existing facts and conditions on January 1, 2018, the Company has

made restatements on the measurement types of existing financial assets and

chosen not to restate the comparison period. The measurement types as

determined by IAS 39 and IFRS 9, the carrying amount and changes therein of the

various financial assets as of January 1, 2018 are summarized below:

Types of measurement Carrying amount

Category of financial

assets IAS 39 IFRS 9 IAS 39 IFRS 9

Description

Cash Loans and

receivables

Measured at amortized

cost

$ 85,445 $ 85,445 (2)

Investment in stocks Financial assets

available for sale

Equity instruments

measured at FVTOCI

484 484 (1)

Notes receivables,

accounts

receivables and

other receivables

Loans and

receivables


cost

231,946 231,946 (2)

Guarantee deposits

paid

Loans and

receivables


cost

4,059 4,059

(2)

Carrying amount as

of January 1, 2018

(IAS 39) Reclassification

Carrying amount as

of January 1, 2018

(IFRS 9) Description

Financial assets measured at FVTOCI $ -

- Equity instruments

Add: Reclassification of available-for-

sale financial assets (IAS 39)

-

$ 484

$ 484 (1)

- 484 484

Financial assets measured at amortized

cost

-

Add: Reclassification of loans and

receivables

-

321,450

321,450 (2)

- 321,450 321,450

Total $ - $ 321,934 $ 321,934

(1) The Company’s investments in listed stocks, which were classified as

available-for-sale financial assets under IAS 39, are designated by the

Company per IFRS 9 to be measured at FVTOCI, and the relevant amount of

NT$ 15 thousand under “Other equity - unrealized gains or losses of

available-for-sale financial assets” is reclassified under “Other equity -

unrealized gains or losses of financial assets measured at FVTOCI".

(2) Cash, notes receivable, accounts receivable, other receivables, guarantee

deposits paid, and other financial assets, which were classified as loans and

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receivables under IAS 39, are now classified as financial assets measured at

amortized cost under IFRS 9 and will be evaluated for expected credit loss.

(3) As subsidiaries adopted IFRS 9 retroactively, the Company recognizes the

following interest from changes in equity of affiliates as of January 1, 2018:

Carrying amount

as of January 1,

2018

(IAS 39)

Adjustment for

first-time

adoption

Carrying amount

as of January 1,

2018 (IFRS 9)

Retained

earnings as of

January 1, 2018.

Amount affected

Other equity as

of January 1,

2018

Amount affected

Equity-accounted

investments

$9,137,349 ( $ 9,580 ) $9,127,769 $ 1,176 ( $ 10,756 )

2. IFRS 15 “Revenue from Customer Contracts” and related amendments

IFRS 15 stipulates the principle of recognition of revenue from customer

contracts. The guideline will replace IAS 18 "Income" and IAS 11 "Construction

Contract" and related interpretations. Refer to Note 4 for related accounting

policies.

(II) The Regulations Governing the Preparation of Financial Reports by Securities Issuers

and IFRSs endorsed by FSC for application starting in 2019

New/Revised/Amended Standards and Interpretations

Effective Date Published

by IASB (Note 1)

"Annual Improvements 2015-2017 cycle" January 1, 2019

IFRS 16 "Leases" January 1, 2019

Amendments to IAS 19 in "Plan Amendment,

Curtailment or Settlement"

January 1, 2019 (Note 2)

Amendments to IAS 28 "Long-term Interests in

Associates and Joint Ventures"

January 1, 2019

IFRIC 23 "Uncertainty over Income Tax Treatments" January 1, 2019

Note 1: Unless otherwise specified, the aforementioned New/Revised/Amended

Standards and Interpretations shall be effective for the fiscal year after the

specified dates.

Note 2: Plan amendments, curtailment or settlement occurring after January 1, 2019

shall be applicable to this amendment.

IFRS 16 "Leases"

IFRS 16 stipulates accounting treatments for the identification of lease agreements

and lessors and lessees. It will replace IAS 17 "Leases", IFRIC 4 "Determining

Whether an Arrangement Contains a Lease", and related interpretations.

Definitions of leases

For the first-time application of IFRS 16, the Company shall elect to determine

whether contracts signed (or changed) after January 1, 2019 are (or include) leases in

accordance with IFRS 16. The lease contracts identified in accordance with IAS 17

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and IFRIC 4 shall not be reassessed and shall be processed in accordance with

transitional regulations in IFRS 16.

Where the Company is the lessee

For the first-time application of IFRS 16, the Company shall recognize right-of-

use assets and lease liabilities for all leases on the consolidated balance sheets except

for small-amount and short-term leases which shall be recognized on a straight-line

basis. Other leases shall recognize usage right assets and lease liabilities on the Parent

Company Only Balance Sheets. On the Parent Company Only Statements of

Comprehensive Income, the depreciation expense on right-of-use asset and interest

expense computed by using effective interest method on the lease liability shall be

presented separately. On the Parent Company Only Statements of Cash Flows,

principal of the lease liability shall be classified as financing activities and interest

payments shall be classified as operating activities. Before the adoption of IFRS 16,

costs of contracts classified as operating leases are recognized as expenses based on

straight-line method. Cash flow from operating leases is shown in operating activities

on the Individual Cash Flow Statement.

The Company expects to retroactively implement adjustments for the cumulative

effect of changes applicable to IFRS 16 in the retained earnings as of January 1, 2019

and it shall not recompile comparative information.

Current agreements processed as operating rental contracts under IAS 17 will be

discounted by the remaining lease payments at the increase borrowing rate of the lessee

on January 1, 2019. All right-of-use assets will be measured as lease liabilities on that

day. IAS 36 will be applicable to impairment assessment on all right-of -use assets

recognized.

The Company is expected to adopt the following measures in response:

1. Use a single discount rate to measure lease liabilities for a combination of leases

with reasonably similar characteristics.

2. Process leases set to terminate before December 31, 2019 as short-term leases.

3. Exclude the original direct costs into the measurement of right-of-use assets as of

January 1, 2019.

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4. When measuring lease liabilities, decisions regarding the lease period shall be

adopted retroactively.

December 31,

2018

Carrying amount

Adjustment for first-time

adoption

January 1, 2019

After adjustment

Carrying amount

Right-of-use assets $ - $ 9,619 $ 9,619

Impact of assets $ - $ 9,619 $ 9,619

Lease liabilities - current $ - $ 5,002 $ 5,002

Lease liabilities - non-

current

- 4,617 4,617

Impact of liabilities $ - $ 9,619 $ 9,619

Where the Company is the lessor

No adjustments will be made to the lessor's leases during the transition and IFRS

16 will be applied from January 1, 2019.

Except for the aforementioned impact, as of the date of authorization of the

Individual Financial Statement, the Company's assessment of the effects of

amendments to other standards and interpretations shall not cause material effects on

the financial status and performance.

(III) IFRSs issued by the International Accounting Standards Board (IASB) but not yet

endorsed by the FSC

New/Revised/Amended Standards and Interpretations

Effective Date Published

by IASB (Note 1)

Amendment to IFRS 3 "Definition of a Business" January 1, 2020 (Note 2)

Amendments to IFRS 10 and IAS 28 "Sale or

Contribution of Assets between an Investor and its

Associate or Joint Venture"

To be determined

IFRS17 "Insurance Contracts" January 1, 2021

Amendment to IAS 1 and IAS 8 "Definition of Material" January 1, 2020 (Note 3)

Note 1: Unless otherwise specified, the aforementioned New/Revised/Amended

Standards and Interpretations shall be effective for the fiscal year after the

specified dates.

Note 2: Corporate mergers with an acquisition date between the starting date of the

annual report on January 1, 2020 and assets acquired after this date shall be

applicable to this amendment.

Note 3: Accounts in the fiscal years starting after January 1, 2020 shall be applicable

to this amendment.

As of the date of publication of the Individual Financial Statement, the Company

shall continue to assess the effects of revisions of other standards and interpretations

on the financial status and financial performance. Related effects shall be disclosed

upon the completion of the assessment.

- 16 -

IV. Summarized Remarks on Significant Accounting Policies

(I) Statement of Compliance

The parent company only financial statements were prepared in accordance with

the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of Preparation

The parent company only financial statements were prepared on a historical cost

basis, except for financial instruments measured at fair value.

The fair value measurement is classified into 3 levels based on the observability

and importance of related input:

1. Level 1 inputs: Quoted (unadjusted) prices of identical assets or liabilities

obtainable in active markets on the measurement date

2. Level 2 inputs: Inputs, other than quoted market prices within level 1, that are

observable directly (i.e. the price) or indirectly (deduced from the price) for the

assets or liabilities.

3. Level 3 inputs: Unobservable inputs for the assets or liabilities.

The Company accounts for subsidiaries by using the equity method in the

preparation of the parent company only financial statements. To ensure consistency

between the profit or loss of the current year, other comprehensive profit or loss, and

equity in the Individual Financial Statements and the profit or loss of the current year,

other comprehensive profit or loss, and equity in the Company's Consolidated

Financial Statements, certain accounting processing differences under the individual

and consolidated basis were adjusted by "Investment using equity method", "shares in

profit or loss distribution of subsidiaries adopting the equity method", "shares in other

comprehensive income and profit distribution of subsidiaries" and other related equity

items.

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

Current assets include:

1. Assets held primarily for the purpose of trading;

2. Assets expected to be realized within 12 months after the balance sheet date; and

3. Cash (excluding assets restricted from being exchanged or used to settle a liability

for at least 12 months after the reporting period).

Current liabilities include:

1. Liabilities held primarily for the purpose of trading;

2. Liabilities with expected repayment within 12 months of the publication date of

the Assets and Liabilities Statement (long-term refinancing or rearrangement of

- 17 -

payment terms completed after the publication date of the Assets and Liabilities

Statement and before the publication of the Financial Report will be deemed as

current liabilities); and

3. Liabilities with a repayment deadline that cannot be unconditionally deferred till

at least 12 months after the balance sheet date. Terms of a liability that could, at

the option of the counterparty, result in its settlement by the issuance of equity

instruments, do not affect its classification.

The Company shall classify all other assets or liabilities that are not specified

above as non-current.

(IV) Investment in subsidiaries

The Company has adopted the equity method to account for investments in

subsidiaries.

Subsidiaries are entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost. The

carrying amount of investment is adjusted thereafter for the post-acquisition changes

in the Company's share of profit or loss and other comprehensive income and profit

distribution of the subsidiary. In addition, changes in other equity of the subsidiary

attributable to the Company shall be recognized in accordance with the Company's

shareholding percentage.

When a change in the Company's ownership interests in a subsidiary does not

cause it to lose control of the subsidiary, it shall be accounted for as equity transaction.

The difference between the carrying amounts of the investment and the fair value of

the consideration paid or received is recognized directly in equity.

The net fair value of the number of shares of identifiable assets acquired and

liabilities assumed of the subsidiary by the Company on the acquisition date will be

shown as goodwill. The goodwill is included in the carrying amount of the investment

and may not be amortized. The portion of the net fair value of the number of shares of

identifiable assets acquired and liabilities assumed of the subsidiary by the Company

on the acquisition date that exceeds the acquisition cost will be shown as profit or loss

in the current year.

When the Company assesses impairment, the test shall be performed on the basis

of cash generating unit within the financial statements. The recoverable amount and

the carrying amount of cash generating unit shall be compared. If the recoverable

amount of the asset later increases, the reversal of the impairment loss shall be

recognized as profits, but the carrying amount of the asset after reversal of impairment

- 18 -

loss may not exceed the carrying amount of the asset before recognizing the

impairment loss, net of amortization. Impairment loss attributable to goodwill shall

not be reversed in subsequent periods.

In the event of the Company losing control of a subsidiary, the Company shall list

the difference between the remaining investment in the subsidiary calculated through

fair value on the date of the loss of control, the fair value of the remaining investment,

and any disposal prices and fees, and the carrying amount of the investment on the

date of the loss of control as profit or loss of the current year. In addition, the

accounting practices for amounts of the subsidiary shown in other comprehensive

profit or loss account shall follow the same basis as that followed by the Company for

direct disposal of related assets or liabilities.

The unrealized profit or loss in downstream transactions between the Company

and the subsidiary shall be eliminated in the parent company only financial statements.

Profit or loss generated in upstream transactions between the Company and

subsidiaries or transactions between subsidiaries shall only be recognized in the parent

company only financial statements when it is not related to the Company's interest in

the subsidiaries.

(V) Property, plant and equipment (PP&E)

PP&E are stated at cost and subsequently measured at cost less accumulated

depreciation and impairment.

PP&E under construction are recognized at cost less accumulated impairment.

The cost shall include professional service expenses and the cost of loans eligible for

capitalization. Such assets shall be classified into appropriate PP&E categories upon

completion and reaching the expected use status and the depreciation shall begin.

The depreciation of PP&E in its useful life is considered on straight-line basis and

each major part/component will be shown independently. The Company shall conduct

at least one annual review at the end of each year to assess the estimated useful life,

residual value, and depreciation methods. The effects of changes in accounting

estimates shall be applied prospectively.

When derecognizing PP&E, the difference between the net disposal proceeds and

the carrying amount of the asset shall be recognized in loss or profit.

(VI) Impairment of tangible assets

The Company shall assess whether there are any indications of the possible

impairment of tangible assets on each balance sheet date. If there is any sign of

impairment, an estimate is made of its recoverable amount. If it is not possible to

- 19 -

determine the recoverable amount for an individual asset, the Company shall

determine the recoverable amount of the asset's cash generating unit. Common assets

are amortized reasonably consistently for the minimum cash-generating unit/group.

The recoverable amount is the fair value minus cost of sales or its value in use,

whichever is higher. If the individual asset or recoverable amount of the cash

generating unit is lower than the carrying amount, the carrying amount of the asset or

of the cash generating unit will be reduced to the extent of recoverable amount and the

impairment loss will be recognized in profit and loss account.

When the impairment loss is subsequently reversed, the carrying amount of the

asset or of the cash-generating unit will be reduced to the extent of recoverable amount

prior to revision, provided the increased carrying amount does not exceed the carrying

amount (less depreciation) of the asset or cash-generating unit not treated as

impairment loss in the previous years. The reversed impairment loss will be recognized

in profit and loss account.

(VII) Financial instruments

Financial assets and financial liabilities shall be recognized in the parent company

only balance sheet when the Company becomes a party of the financial instrument

contract.

When showing the original financial assets and liabilities, if their fair value was

not assessed based on profit or loss, it is the fair value plus the cost of transaction, that

is, of its acquisition or issuance of the financial assets or financial liabilities. The

transaction costs directly attributable to the acquisition or issuance of financial assets

or financial liabilities at fair value through profit or loss shall be immediately

recognized. This is shown as gain and loss.

Financial assets

Regular trading of financial assets shall be recognized and derecognized in

accordance with trade date accounting.

1. Assessment category

2018

The Company’s holding of financial assets are financial assets measured at

amortized cost, and equity investments measured at FVTOCI.

(1) Financial assets measured at amortized cost

The Company's investment financial assets shall be classified as financial

assets measured at amortized cost if both conditions below are met:

A. Held under a certain business model of which the objective of holding

- 20 -

the financial assets is to collect contractual cash flows; and

B. The cash flows on specific dates that are generated from the contractual

terms of the financial assets are solely payments of the principal and

interest on the principal amount outstanding.

After initial recognition, the total book value of the financial assets

measured at amortized cost including cash, receivables measured at amortized

cost, guarantee deposits paid, and debt instrument investments are measured

at amortized cost after deducting any impairment loss through the effective

interest method. Any foreign currency exchange gain and loss are recognized

as profit or loss.

Except for the following two circumstances, interest revenue is

calculated at the value of effective interest rate times the gross carrying

amount of financial assets:

A. The interest income of a credit-impaired financial asset purchased or

provided for the founding is calculated by multiplying the credit-adjusted

effective interest rate by the amortized cost of the financial asset.

B. Financial assets that are not credit impairment from purchases or at the

time of founding but subsequently become credit impairments shall be

calculated by multiplying the effective interest rate in the reporting

period after the credit impairment by the cost after the amortization of

financial assets.

(2) Investments in equity instruments measured at fair value through other

comprehensive income

The Company may, at initial recognition, make an irrevocable election to

designate an equity instrument that is neither held for trading nor contingent

consideration arising from a business combination to be measured at FVTOCI.

Investments in an equity instrument measured at FVTOCI are measured

at fair value, and any subsequent fair value changes are recognized in other

comprehensive income and accumulated in other equity. Upon disposal,

cumulative gain or loss is directly transferred to retained earnings and are not

reclassified to profit or loss.

Dividends of investments in equity instruments measured at FVTOCI are

recognized in profit or loss when the Company’s right to receive payment is

established unless such dividends clearly represent the recovery of a part of

the investment cost.

- 21 -

2017

Financial assets of the Company are available-for-sale financial assets, loans,

and accounts receivable.

(1) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that

have been designated as available for sale, uncategorized loans and accounts

receivable, held-to-maturity investment, or financial assets at fair value

through profit or loss.

These assets are evaluated at fair value; changes in the carrying amount

of these assets that have profit or loss in foreign currencies, interest income

derived on the basis of effective interest method, and dividends from

available-for-sale equity investments are recognized in profit or loss account.

Changes in the carrying amount of the remaining available-for-sale financial

assets are recognized in other consolidated profit and loss accounts,

reclassified as profit or loss on the disposal of the investment or on

determination of the impairment.

The dividend proceeds from the sale of equity interest are recognized

when the rights of the Company for payment collection are identified.

(2) Loans and receivables

Loans and receivables including cash, accounts receivable, and guarantee

deposit paid will be the assessed amount after following the effective interest

method and deduction of impairment loss on amortization, unless the interest

on short-term accounts receivable is insignificant.

2. Impairment of financial assets

2018

The impairment loss of financial assets (including accounts receivable)

measured by the Company on the balance sheet date is based on the estimated

amortized cost on each balance sheet date.

Allowances shall be appropriated for accounts receivable for expected credit

impairment for the duration of their existence. Other financial assets are first

assessed based on whether the credit risk has increased significantly since the

original recognition. If there is no significant increase in risks, an allowance for

expected credit loss shall be recognized based on a 12-month period. If the risks

have increased significantly, an allowance for losses shall be recognized in the

duration of the existence of such assets.

- 22 -

The expected credit loss is the weighted average credit loss determined by the

risk of default. The 12-month expected credit losses represent the expected credit

losses from possible defaults of the financial instrument within 12 months after

the reporting date. The lifetime expected credit losses represent the expected credit

losses from all possible defaults of the financial instrument during the expected

period of existence.

The impairment loss of all financial assets is reduced based on the allowance

account. However, the allowance for the investment in the debt instruments

measured at fair value through other comprehensive income is recognized in other

comprehensive income and shall not reduce its carrying amount.

2017

The Company assesses for objective evidence of impairment of financial

assets on each balance sheet date. When such evidence shows the estimated future

cash flow of financial assets is caused by single or multiple events occurring after

their original acquisition, it will be deemed as impaired.

Financial assets reported at cost after amortization, such as accounts

receivable, are subject to collective impairment assessment if no objective

evidence is available following separate assessment. Such evidence includes the

Company's fund collection experience, overdue payments above the average

period, and observable changes in national or regional economic conditions

related to arrears of receivables.

The amount of impairment loss of financial assets measured at amortized cost

is measured as the difference between the carrying amount of asset and the present

value of estimated future cash flows discounted at the original effective interest

rate of the financial asset.

If, in a subsequent period, the amount of impairment loss of financial assets

measured at amortized cost decreases and the decrease can be related objectively

to an event occurring after the impairment loss was recognized, the previously

recognized impairment loss is reversed directly or through adjustments of the

allowance account to the extent that the carrying amount of the financial asset

does not exceed its amortized cost that would have been at the date of reversal if

the impairment loss not been recognized previously.

When the fair value of the available-for-sale equity investment is lower than

its cost and if there is a substantial or persistent decline, it is evidence of objective

impairment.

- 23 -

The amount of accumulated losses originally recognized as other

comprehensive profits and losses will be reclassified as profit or loss when the

available-for-sale financial assets is impaired.

Impairment loss of an investment in an equity instrument recognized in profit

or loss account cannot be reversed through profit or loss. Any increase in the fair

value after recognition of impairment loss has to be recognized in other

comprehensive profits and losses. If the fair value of the available-for-sale debt

instrument increases in subsequent periods, and the increase can be objectively

linked to an occurrence after the impairment loss is recognized in profit or loss

account, the loss will be reversed and recognized as profit or loss.

All impairment losses of financial assets are directly deducted from the

carrying amount of financial assets. However, carrying amount of accounts

receivable is reduced through the use of an allowance account. When it is

determined a receivable is uncollectible, it is written off via the allowance account.

The original account written off but subsequently recovered must be entered in

the allowance account. Except for written-off because the receivable is

uncollectible, changes in the carrying amount of the allowance account shall be

recognized in profit or loss.

3. Derecognition of financial assets

The Company derecognizes financial assets when the contractual rights to the

cash inflow from the asset expire or when the Company transfers the financial

assets with substantially all the risks and rewards of ownership to other enterprises.

When derecognizing an entire financial asset before 2017 (inclusive), the

difference in the accumulated interest or loss between the nominal value and the

additional consideration collected that has been recognized in other

comprehensive income has to be recognized in the profit or loss account.

Starting from 2018, when decognizing an entire financial asset measured at

amortized cost, the difference between the carrying amount and the consideration

received is recognized in profit or loss. When the Company's equity instruments

are measured at fair value through other comprehensive income, the accumulated

profit or loss is transferred directly to retained earnings and is not reclassified to

profit or loss.

Financial liabilities

1. Subsequent assessment

Financial liabilities are measured at amortized cost by the effective interest

- 24 -

method.

2. Derecognition of financial liabilities

When derecognizing financial liabilities, the difference between its carrying

amount and the paid consideration (including any transferred non-cash assets or

liabilities assumed) shall be recognized in profit or loss.

(VIII) Revenue recognition

2018

After the Company identifies its performance obligations in contracts with

customers, it shall amortize the transaction costs to each obligation in the contract and

recognize revenue upon satisfaction of performance obligations.

The Company does not adjust the transaction price in a contract for the effects of

a significant financing component, if the period between when the customer pays for

services and when the entity transfers the services is one year or less.

Income from labor services

Revenue from labor services is recognized during the provision of labor within

the contract period.

2017

Revenue is assessed at fair value of the received or receivable consideration less

discounts and other rebates.

1. Provision of labor

Revenue generated by the provision of labor as per contract is recognized in

accordance with the stage of completion of the contract.

2. Dividend and interest income

Dividend from investment is recognized when the shareholders' rights to

receive the payment has been established, provided that it is probable the

economic benefits will flow to the Group and the amount of income can be

measured reliably.

Interest income from a financial asset is recognized when the economic

benefits flow to the Company and the amount can be assessed reliably. It is

recognized as per the rate of interest applicable to similar duration loans for all

principal in external circulation.

(IX) Leases

Leases in which the lessee assumes substantially all of the risks and rewards of

ownership are considered as finance leases. All other leases are treated as operating

leases.

- 25 -

Payment for operating leases are recognized during the lease period is considered

as expenses based on straight-line method.

(X) Cost of loans

Cost of loans directly attributable to acquisition, construction, or production of

assets that meet requirements is considered as part of the cost of the asset until it

reaches the stage of functional use or is ready for sale.

Special loans, such as income earned from investments in suspension of

investment prior to capitalization, are deducted from the cost of loans eligible for

capitalization.

With the exception of the above, all other costs of loans will be recognized in

profit and loss account in the year they occur.

(XI) Employee benefits

1. Short-term employee benefits

Short-term employees are eligible for some benefits and the liabilities arising

out of such employment are assessed by non-discounted cash amount.

2. Benefits after retirement

Pension funds contributed for retiring employees are treated as expenses

based on the amount of contribution during the employee's service.

(XII) Income taxes

Income tax expenses are the sum of the tax in the current year and deferred income

tax.

1. Income tax in the current year

A tax is levied on the unappropriated earnings pursuant to the Income Tax Act

and is recorded as income tax expense in the year when the shareholders' meeting

resolves to appropriate the earnings.

Adjustments to prior year income taxes are shown in the taxes of the current

year.

2. Deferred income tax

Deferred income tax is calculated based on the temporary difference between

the carrying amount of the assets and liabilities in the Individual Financial

Statements and the taxable basis of the taxable income. Deferred income tax

liabilities and deferred income tax assets are considered, respectively, for taxable

temporary differences and deferred income tax assets are recognized when they

are likely to be taxable and to reduce income tax due to temporary differences.

The carrying amount of the deferred income tax assets is re-examined at each

- 26 -

balance sheet date and the carrying amount is reduced for assets that are no longer

likely to generate sufficient taxable income to recover all or part of the assets.

Assets that have not been recognized as deferred income tax assets are re-

examined at each balance sheet date and the carrying amount is increased for

assets that are likely to generate sufficient taxable income to recover all or part of

the assets.

Deferred income tax assets and liabilities are measured at the tax rate of the

period of expected repayment of liabilities or realization of assets. The rate is

based on the tax rate and tax laws that have been enacted prior to the balance sheet

date or have been substantially legislated. The measurement of deferred income

tax liabilities and assets reflects the tax consequences generated by the expected

manner of recovery or repayment of the carrying amount of the assets and

liabilities on the balance sheet date.

3. Current and deferred income tax of the current year

Current and deferred income tax are recognized in profit or loss, except when

they relate to items that are recognized in other comprehensive income or directly

in equity, in which case, the current and deferred tax are also recognized in other

comprehensive income or directly in equity, respectively.

V. Significant Accounting Judgments, Estimates and Key Sources of Uncertainty over

Assumptions

When the Company adopts accounting policies, the management must make

judgments, estimates and assumptions based on historical experience and other critical factors

for related information that are not readily available from other sources. Actual results may

differ from original estimates.

The management shall continue to review the estimates and basic assumptions. If a

correction of estimates affects only the current year, they are shown in the current period of

corrections; if a correction of accounting estimates affects the current year and future periods,

they will be shown in the current year and future periods.

Impairment of goodwill contained in investee subsidiaries

If the goodwill in investee subsidiaries has been impaired, that acquired through

merger on the acquisition date shall be amortized into the cash-generating unit the Company

expects to benefit from the comprehensive effects of the merger to evaluate the value in use

of the goodwill amortized in the cash-generating unit. To calculate the value in use, the

- 27 -

management must estimate the future cash flows from cash-generating units with the

amortized goodwill and assign an appropriate discount rate for calculating the present value.

Significant impairment loss may occur if actual cash flows are lower than forecast.

VI. Cash


Cash on hand and petty cash $ 666 $ 737

Bank demand deposit 145,692 84,708

$ 146,358 $ 85,445

VII. Financial Assets measured at Fair Value through Other Comprehensive Income - 2018

Investments in equity instruments measured at FVTOCI

December 31, 2018

Current

Domestic investment

Listed stocks $ 440

The Company invested in domestic and foreign common stock for long-term strategic

purposes. The management of the Company believes that it is not consistent with the

aforementioned long-term investment planning if the short-term fair value changes of such

investment in profit or loss. Therefore, the Company elects to designate such investment as to

be measured at FVTOCI. Such investments were originally classified as available-for-sale

financial assets in accordance with IAS 39. Please refer to Notes 3 and 8 for the reclassification

and information in 2017.

VIII. Available-for-sale financial assets - 2017

December 31, 2017

Current

Domestic listed securities $ 484

- 28 -

IX. Notes and accounts receivable - non-related parties


Notes receivable

Arising from operations $ 18,423 $ 148

Accounts receivable - non-

related parties

Measured at amortized cost

Total carrying amount $ 32,833 $ 91,655

2018

The Company mainly operates as a channel copyright distributor. Its sales customers'

average credit period is 30 days and no interest is calculated for accounts receivable. The

Company has adopted a policy to conduct transactions with counterparties of equivalent or

higher investment ratings. The Company shall use publicly obtainable financial information

and past transaction records to grade main customers. The Company continues to monitor

credit risk exposure and the credit ratings of counterparties and distributes total transaction

amounts among qualified customers only. It also manages credit risk exposure through

reviews and credit line approval through the management.

To lower the credit risk, management of the Company appoints a specific team to

handle decisions on credit limits, credit approval and other monitoring procedures to ensure

that appropriate actions are taken to recover overdue receivables. In addition, the Company

reviews the recoverable amount of each receivables on the balance sheet dates to ensure that

impairment loss is recognized for unrecoverable receivables. As such, the Company's

management concludes that the credit risk of the Company is significantly reduced.

The Company adopted simplified methods in IFRS 9 to recognize the allowance for

losses for accounts receivable based on the expected credit losses in the period of existence.

Lifetime expected credit losses are calculated based on the bad debt provision matrix which

accounts for the customer's past default records, current financial status, and economic

conditions in the industry. GDP forecasts and the outlook of the industry are also considered.

Since the Company’s historical experience of credit loss indicates no significant difference in

the loss patterns between the various customer segments, the Company does not classify

customers into different segments but determines the expected credit loss rate based on the

overdue days of accounts receivables.

The Company writes off accounts receivable when there is information indicating that

the debtor is experiencing severe financial difficulty and there is no realistic prospect of

recovery of the receivables. For accounts receivable that have been written off, the Company

continues to engage in enforcement activity to attempt to recover the receivables due. Where

- 29 -

recoveries are made, these are recognized in profit or loss.

The aging analysis of notes and accounts receivable is as follows:

December 31, 2018

Notes receivable Accounts receivable

0 to 60 days $ - $ 5,472

61 to 90 days - -

91 to 180 days 148 8,208

Over 181 days 18,275 19,153

$ 18,423 $ 32,833

The above amounts are balance prior to deduction of allowance for bad debts and the

overdue periods analyzed based on the account opening dates.

The Company has no overdue but unimpaired accounts receivable.

2017

The Company's credit policy in 2017 was the same as its credit policy in 2018. The

Company considers any changes in the credit quality of accounts receivable from the original

credit date to the balance sheet date when determining the recoverability of accounts

receivable. The allowance for bad debts is used to estimate unrecoverable accounts by

referencing the transaction counterparty's past delayed payment records and its current

financial status.

For accounts receivable that are overdue on the balance sheet date but have not been

considered by the Company as bad debt, if their credit quality has not undergone significant

change and still considered recoverable. The Company does not have any collateral or other

credit enhancement protection with regard to such accounts receivable.

The aging analysis of notes and accounts receivable is as follows:

December 31, 2017

Notes receivable Accounts receivable

0 to 60 days $ - $ 23,437

61 to 90 days - -

91 to 180 days - 20,465

Over 181 days 148 47,753

$ 148 $ 91,655

The above amounts are balance prior to deduction of allowance for bad debts and the

overdue periods analyzed based on the account opening dates.

The Company has no overdue but unimpaired accounts receivable.

- 30 -

X. Investments using equity method

The ratios of all ownership, equities, and voting rights of the Company in subsidiaries

as of the balance sheet date are as follows:


Investment in subsidiary

companies Amount Shares (%) Amount Shares (%)

top Light Communications

Co., Ltd. (top Light

Communications)

$ 2,778,184 92 $ 2,827,965 92

CNT CATV Co., Ltd.

(CNT CATV) 1,825,690 100 1,874,557 100

Taiwan Infrastructure

Network Technologies

Co., Ltd. (tint)

1,754,485 100 1,732,936 100

Chia-Lien Cable TV Corp.

(Chia-Lien Cable TV) 1,370,437 98 1,377,146 98

Da-Tun Cable TV Co.,

Ltd. (Da-Tun Cable TV) 1,296,613 97 1,307,264 97

Sin-Long Multimedia Co.,

Ltd. (Sin-Long

Multimedia)

1,555 100 17,481 100

$ 9,026,964 $ 9,137,349

The income of subsidiaries and other comprehensive income amounts in 2018 and

2017 established through the equity method are shown in accordance with financial reports of

the same period audited by CPAs.

XI. Property, plant and equipment

2018

Opening

balance Increase Decrease

Closing

balance

Costs

Transportation equipment $ 3,221 $ - $ - $ 3,221

Profit-generating

equipment

11,079 398 -

11,477

Other equipment 20,215 726 - 20,941

34,515 $ 1,124 $ - 35,639

Accumulated depreciation

Transportation equipment 1,323 $ 567 $ - 1,890

Profit-generating

equipment

5,475 2,127 -

7,602

Other equipment 9,589 3,845 - 13,434

16,387 $ 6,539 $ - 22,926

$ 18,128 $ 12,713

- 31 -

2017

Opening

balance Increase Decrease Closing balance

Costs

Transportation equipment $ 2,913 $ 308 $ - $ 3,221

Profit-generating

equipment

10,104 1,277 ( 302 )

11,079

Other equipment 21,862 3,239 ( 4,886 ) 20,215

34,879 $ 4,824 ( $ 5,188 ) 34,515

Accumulated depreciation

Transportation equipment 751 $ 572 $ - 1,323

Profit-generating

equipment

3,811 1,966 ( 302 )

5,475

Other equipment 10,545 3,930 ( 4,886 ) 9,589

15,107 $ 6,468 ( $ 5,188 ) 16,387

$ 19,772 $ 18,128

PP&E are depreciated based on the straight-line method in accordance with the

following useful life:

Transportation equipment 3 to 5 years

Profit-generating instruments 3 to 6 years

Other equipment 3 to 10 years

XII. Loans

(I) Short-term bank loans


Unsecured loans $ 200,000 $ -

Annual interest rate (%) 1.25 -

(II) Long-term bank loans - Unsecured loans


Bank name Loan period Major provisions Amount

Annual

interest

rate Amount

Annual

interest

rate

Chinatrust Commercial

Bank Co., Ltd. (CTBC

Bank)

From January 2014

to January 2018

(Note)

Repayment in 5 quarterly

installments starting from

January 2017

$ - - $ 112,400 1.46% From November

2014 to

November 2018 (Note)

Repayment in 5 equal

quarterly installments

starting from November 2017. The Company has

completed repayment

early in May 2018

- - 440,000 1.36% May 2018 to April

2021

Repayment in 5 equal

quarterly installments

starting from May 2020

450,000 1.36% - - Taishin International Bank

Co., Ltd. (Taishin

International Bank)

From December

2017 to

December 2020

Repayment in 5 quarterly

installments starting from

December 2019

200,000 1.39% 200,000 1.39% 650,000 752,400

Less: Liabilities due within

one year

( 40,000 )

( 552,400 )

$ 610,000 $ 200,000

- 32 -

Note: The Company has entered into a supplementary contract with the bank in the

fourth quarter of 2015. The credit period of the loan was extended by 1 year and

the repayment schedule was also postponed from 24 months to 36 months after

the initial usage date as the first installment.

As of December 31, 2018, the Company has obtained the following lines of credit

from banks:

Borrower Joint Guarantor Bank name Credit line

The

Company

Chien, Sun-yuan and Liao,

Tzu-chen CTBC Bank $ 750,000

The

Company

Chien and Sun-yuan and Liao,

Tzu-chen

Taishin International

Bank 200,000

$ 950,000

The Company and subsidiaries shall maintain specific financial ratios (EBITDA

and debt ratio), keep their net profit after tax, deposit amount, and net value higher

than a specific amount, and maintain certain principal interest protection multiples in

the period of the loan in accordance with the credit contracts. The calculation of the

above financial standards shall be calculated in accordance with the semi-annual

Consolidated Financial Statement of the Company and subsidiaries.

XIII. Other Accounts payable - Non-related parties


Payable salary $ 37,926 $ 42,936

Payable director and supervisor

remuneration

13,590

13,000

Payable employee remuneration 8,071 7,712

Payable interest 551 673

Others 8,565 18,220

$ 68,703 $ 82,541

XIV. Welfare plan after retirement

The pension system of the "Labor Pension Act" applicable to the Company is a defined

contribution plan under government administration that contributes 6% of employees'

monthly salaries to their personal accounts at the Bureau of Labor Insurance. The pension

funds appropriated in 2018 and 2017 were NT$ 1,482 thousand and NT$1,407 thousand,

respectively.

- 33 -

XV. Equity

(I) Capital


Authorized shares (in thousands) 220,000 220,000

Authorized capital stock $ 2,200,000 $ 2,200,000

Number of shares issued and fully

paid (in thousand shares)

126,639 126,929

Issued capital $ 1,266,394 $ 1,269,292

The Company resolved in meetings of the Board of Directors in December 2016,

November and December 2017, and February and December 2018 resolved to cancel

a total of 3,700 thousand shares of treasury stocks at the nominal value of NT$10. It

has reduced the amount of outstanding capital stock by NT$37,000 thousand and it has

established January 5, November 8, and December 28, 2017 and March 1 and

December 27, 2018 as the reference dates for capital decrease. As of the date of the

audit report, the capital decrease plans have been approved by the competent

authorities and the registration of the change in capital stock has been completed.

The Company processed the transfer of earnings to capital increase of 1,210

thousand shares in 2017 and the transfer of earnings to capital increase and capital

surplus to capital increase in 2016 with a total of 4,762 thousand shares at the nominal

value of NT$10 per share to increase outstanding capital stock by NT$59,724 thousand.

It also established July 17, 2018 and July 5, 2017 as the capital increase baseline date.

As of the review date of the Report, the capital increase has been approved by the

competent authorities and the registration of the change in capital stock has been

completed.

(II) Capital surplus


Stock issuance premium $ 2,421,358 $ 2,816,779

Recognized value of changes in

equity of ownership of

subsidiaries 1,271,245 1,271,245

$ 3,692,603 $ 4,088,024

The capital surplus from stock issuance premiums may be used to cover losses

and may also be used as cash or capital replenishment when the Company has no loss.

However, the capital replenishment is restricted to a certain ratio of paid-in capital

each year.

The capital surplus of the recognized value of changes in the equity of ownership

of subsidiaries is the value of affected equity transactions recognized for changes in

the equity of subsidiaries, or the adjustment value of the capital surplus of the

- 34 -

subsidiary that is recognized by the Company through the equity method.

(III) Retained earnings and dividend policy

The Company's earnings appropriation policy in the Articles of Incorporation

stipulates that any earnings of the Company concluded in a financial year are first

subject to taxation and recoupment of previous losses before setting aside 10% as legal

reserve. However, if the legal reserve has equaled the capital, the distribution may be

exempted. According to law or regulations of the competent authority, any balance of

the legal reserve shall be appropriated as shareholder bonus at a rate not lower than

25%. The Board of Directors shall formulate an appropriation policy that includes the

retained earnings of previous years and seek shareholders’ approval. Please refer to

Note 17 for remuneration for employees, Directors, and Supervisors in the Articles of

Incorporation of the Company.

The distribution of dividend by the Company in accordance with the Articles of

Incorporation shall in principle include cash dividend of not less than 50% of the total

appropriated dividend of the year. However, adjustments may be made based on the

Company's plans for financial restructuring or major capital expenditure; the ratio for

cash dividend appropriation may be increased or lowered by the shareholders.

The legal surplus is supplemented until the balance equals the Company's total

paid-in capital. The legal surplus may be used to make up for losses. When the

Company has no loss, the portion of the legal surplus reserve that exceeds 25% of the

total paid-in capital may be appropriated in cash in addition to being transferred to

capital stock.

The Company appropriates and reverses special reserve in accordance with the

regulations in Jin-Guan-Zheng-Fa's Letter No. 1010012865 from the FSC and "Q&A

on the Applicability of the Appropriation of Special Reserve after the Adoption of the

International Financial Reporting Standards (IFRSs)".

The Company held general shareholders’ meetings in May 2018 and 2017, during

which the earnings appropriation of 2017 and 2016 were passed as follows:

Earnings appropriation

proposal

Dividends per share

(NT$)

2017 2016 2017 2016

Legal surplus reserve $ 63,616 $ 73,407

Appropriation (reversal) for

special surplus reserve

( 15,825 ) 121,936

Cash dividends 242,036 238,112 $ 2 $ 2

Stock dividends 12,102 23,811 0.1 0.2

- 35 -

The Company's general shareholders' meeting resolved on May 30, 2018 and May

26, 2017 to issue cash dividends with NT$363,055 thousand from capital surplus and

converted NT$23,811 thousand from capital surplus to capital increase. The Board of

Directors resolved to establish July 5, 2017 as the capital increase baseline date and

the Company obtained the approval of the Ministry of Economic Affairs on July 28,

2017 for the completion of the registration.

The 2018 appropriation of earnings proposed by the Board of Directors' meeting

on February 26, 2019 was as follows:

Earnings appropriation

proposal

Dividends per share

(NT$)

Allocation to statutory reserve $ 63,693

Allocation to special surplus

reserve

45,025

Cash dividends 243,257 $ 2

Stock dividends 12,163 0.1

The 2018 appropriations of earnings are subject to the resolution of the

shareholders' meeting to be held in May 2019.

(IV) Other equities

1. Unrealized gain or loss on available-for-sale financial assets

Balance as of January 1, 2017 ( $ 122,420 )

Accrued in the current year

Unrealized gains and losses ( 15 )

Share of profits on equity-accounted associated

companies

15,840

Other comprehensive income of the year 15,825

Balance as of December 31, 2017 ( 106,595 )

Adjustments arising from retrospective application of

IFRS 9

106,595

Balance as of January 1, 2018 (IFRS 9) $ -

2. Unrealized gain or (loss) on financial assets measured at FVTOCI

2018

Opening balance (IAS 39) $ -

Adjustments arising from retrospective application of

IFRS 9

( 117,351 )

Opening balance (IFRS 9) ( 117,351 )

Accrued in the current year

Unrealized gains and losses - equity instruments ( 38 )

Share of profits on equity-accounted associated

companies

( 34,230 )

Other comprehensive income of the year ( 34,268 )

Closing balance ( $ 151,619 )

- 36 -

(V) Treasury stock

Reason for reclamation

Number of shares

at start of year

(thousand shares) Increase

Decrease

(Cancellation)

Number of

shares at end of

year

(thousand

shares)

2018

Shares transferred to

employees

4,711 - - 4,711

Maintenance of

company credit and

shareholders' equity

564 1,236 ( 1,500 ) 300

5,275 1,236 ( 1,500 ) 5,011

2017

Shares transferred to

employees

4,711 - - 4,711

Maintenance of

company credit and

shareholders' equity

600 2,164 ( 2,200 ) 564

5,311 2,164 ( 2,200 ) 5,275

Treasury stocks held by the Company may not be pledged nor assigned rights such

as dividend appropriation and voting rights in accordance with the Securities and

Exchange Act.

XVI. Operating income

2018 2017

Revenue from contracts with customers

Income from labor services $ 1,253,158 $ 1,267,561

Others 19,126 24,931

$ 1,272,284 $ 1,292,492

Contract balance

December 31, 2018

Notes receivable $ 18,423

Accounts receivable - non-related parties 32,833

Accounts receivable - related parties 95,126

$ 146,382

- 37 -

XVII. Employee benefits, depreciation, and amortization expenses

Type

Attributable to

operating cost

Attributable to

operating expenses Total

2018

Short-term employee

benefits

$ 7,469 $ 67,248 $ 74,717

Post-retirement benefits Defined contribution

plans

- 1,482 1,482

Remuneration of Directors - 18,554 18,554

Labor and health insurance

premiums

152 4,095 4,247

Other employee benefits 44 2,154 2,198

Depreciation expenses 35 6,504 6,539

2017

Short-term employee

benefits

11,628 72,984 84,612

Post-retirement benefits Defined contribution

plans

- 1,407 1,407

Remuneration of Directors - 17,970 17,970

Labor and health insurance

premiums

148 3,886 4,034

Other employee benefits 38 2,122 2,160

Depreciation expenses 89 6,379 6,468

As of December 31, 2018 and 2017, the number of employees of the Company were

58 and 56, respectively. There were 8 directors who do not serve concurrently as employees

and they are subject to consistent basis of calculation and employee welfare expenses.

Remuneration for employees, Directors and Supervisors

The Company's remuneration for employees, directors and supervisors based on the

Articles of Incorporation shall be 1% to 5% and under 3% of the earnings before tax of the

year and before deducting remuneration for employees, directors, and supervisors.

Remuneration for employees and for directors and supervisors in 2018 and 2017 were

respectively determined by the Board of Directors in February 2019 and 2018 as follows:

2018 2017

Estimated

ratio Amount

Estimated

ratio Amount

Remuneration to employees 1% $ 8,071 1% $ 7,712

Remuneration to Directors and

Supervisors

1.7%

13,590

1.7%

13,000

If there are changes made to the amount after the issuance of parent company only

annual financial statements, the changes shall be accounted for as changes in accounting

estimates and recognized in the financial statements of the following year.

- 38 -

The actual employee compensation and remuneration to directors and supervisors in

2017 and 2016 were consistent with the recognized amounts in the parent company only

financial statements for 2017 and 2016. However, as the independent director of the Company

resigned and did not collect the director remuneration, the difference in directors and

supervisors’ remuneration in 2016 was adjusted into the income of the 2017 fiscal year.

Please refer to the "Market Observation Post System" of Taiwan Stock Exchange for

information on the Company's remuneration policy for employee and for directors and

supervisors passed at the 2019 and 2018 Board of Directors meetings.

XVIII. Income tax of continuing operations

(I) Main composition of income tax expenses recognized in profit or loss

2018 2017

Income tax in the current year

Generated in the current year $ 113,400 $ 85,944

Surtax on unappropriated retained earnings 34,286 28,573

Adjustments from previous years ( 14 ) -

147,672 114,517

Deferred income tax

Generated in the current year 1,601 1,843

Tax rate variation ( 798 ) -

803 1,843

Income tax expenses recognized in profit or loss $ 148,475 $ 116,360

Adjustments for accounting income and income tax expenses are as follows:

2018 2017

Income tax expenses calculated as the product

of income before income tax and the

statutory tax rate

$ 157,080

$ 127,928

Tax-exempted income ( 42,079 ) ( 40,158 )

Non-deductible expenses - 17

Surtax on unappropriated retained earnings 34,286 28,573

Adjustments from previous years ( 14 ) -

Tax rate variation ( 798 ) -

Income tax expenses recognized in profit or

loss

$ 148,475

$ 116,360

The Company's applicable tax rate in 2017 was 17%. The Income Tax Act of the

Republic of China amended in February 2018 adjusted the business income tax rate

from 17% to 20%. The amendment was implemented in 2018. In addition, the

applicable tax rate for undistributed earnings in 2018 was reduced from 10% to 5%.

As there are uncertainties in the earnings appropriation in the 2019 general

shareholders meeting, the potential income tax impact for the 5% income tax imposed

on unappropriated earnings of 2018 cannot be reliably determined.

- 39 -

(II) Deferred income tax assets

2018

Opening

balance

Recognized in profit or

loss

Closing

balance

Deferred income tax assets

Temporary differences

Unrealized gross

margin

$ 4,325 ( $ 847 ) $ 3,478

Payable holiday

benefits

193 49 242

Unrealized loss on

exchange

6 ( 5 ) 1

$ 4,524 ( $ 803 ) $ 3,721

2017

Deferred income tax assets

Temporary differences

Unrealized gross

margin

$ 6,180 ( $ 1,855 ) $ 4,325

Payable holiday

benefits

184 9 193

Unrealized loss on

exchange

3 3 6

$ 6,367 ( $ 1,843 ) $ 4,524

(III) Income tax approval status

The income tax applications of the Company as at the end of 2016 have all been

approved by the taxation authorities.

XIX. Earnings per share

Net profit

Number of shares

(thousand shares)

Earnings per

share (NT$)

2018

Basic earnings per share

Net profit attributable to shareholders

of ordinary stocks $ 636,927

122,140 $ 5.21

Effect of dilutive potential ordinary shares

Remuneration to employees - 81

Diluted earnings per share


of ordinary stocks and effect of

potential ordinary shares $ 636,927

122,221 $ 5.21

- 40 -

Net profit

Number of shares

(thousand shares)

Earnings per

share (NT$)

2017

Basic earnings per share


of ordinary stocks $ 636,158

124,547 $ 5.11

Effect of dilutive potential ordinary shares

Remuneration to employees - 74

Diluted earnings per share


of ordinary stocks and effect of

potential ordinary shares $ 636,158

124,621 $ 5.10

When calculating the earnings per share, the impact of non-remunerative share

allotment has been retroactively adjusted and July 17, 2018 was established as the baseline

date. Due to the retroactive adjustment, changes in the basic and diluted earnings per share in

2017 are as follows:

Before retroactive

adjustment

After retroactive

adjustment

Basic earnings per share (NT$) $ 5.16 $ 5.11

Diluted earnings per share (NT$) $ 5.16 $ 5.10

If the Company can choose between stocks and cash for the appropriation of employee

compensation, it shall assume the employee compensation would be appropriated in stocks

for the calculation of diluted EPS. The dilutive potential common stocks shall be incorporated

in the weighted average number of stocks outstanding when calculating the diluted EPS. The

dilutive effect of such potential common stocks shall continue to be considered when

calculating the diluted EPS before resolving the number of stocks to be distributed as

employee compensation in the following year.

XX. Operating lease agreements

The operating leases of the Company are leased offices and company vehicles with a

lease period of 3 to 6 years. The lease agreements can be renewed on expiry. The Company

has no bargaining option for purchase on the termination of the lease period.

As of December 31, 2018 and 2017, the guarantee deposits paid by the Company to

the operating lease agreements amounted to NT$2,282 thousand and NT$4,048 thousand,

respectively.

- 41 -

The total minimum future payable amount for operating leases that cannot be canceled

are as follows:


No more than 1 year $ 5,323 $ 6,437

1 to 5 years 4,778 10,062

$ 10,101 $ 16,499

XXI. Capital risk management

The Company manages capital under the sustainable development condition to

maximize the benefit for its shareholders by optimizing debt and equity.

The capital structure of the Company comprises net liabilities (loans deducted by cash)

and equities (capital, capital reserve, retained earnings, and other equity items).

The management of the Company periodically reassesses its capital structure and its

inspections include assessment of various costs of capital and related risks. The Company will

distribute dividend, issue new stocks and new debts, repurchase shares, or repay old debts

among other methods to balance its overall capital structure in accordance with the

recommendations of its management.

XXII. Financial instruments

(I) Fair value information

1. Fair value information - Financial instruments not measured at fair value

The management of the Company believes that nominal value of financial

assets and liabilities not assessed at fair value are close to their fair value or their

fair value cannot be reliably assessed.

2. Fair value information - Financial instruments measured at fair value based on a

recurring basis

Level 1 Level 2 Level 3 Total

December 31, 2018

Financial assets measured at

FVTOCI

Investment in equity instrument

－ Domestic listed securities $ 440 $ - $ $ 440

December 31, 2017

Available-for-sale financial assets

Securities listed on domestic

market - equity investment

$ 484 $ - $ - $ 484

Transfers without Level 1 or 2 fair value assessment in 2018 and 2017.

- 42 -

(II) Financial instrument categories


Financial assets

Loans and Receivables (Note 1) $ - $ 321,450

Available-for-sale financial assets - 484

Financial assets measured at FVTOCI -

equity instruments 440 -

Financial assets measured at amortized

cost (Note 2) 333,567 -

Financial liabilities

Valuation of cost after amortization

(Note 3) 2,830,942 2,804,403

Note 1: The balance of loans and receivables include cash, bills and accounts

receivable, other accounts receivable, and guarantee deposit paid assessed at

cost after amortization.

Note 2: The balance of financial assets measured at amortized cost include cash, notes

and accounts receivable, other receivables, and guarantee deposits paid.

Note 3: The balance assessed through amortized cost consists of financial liabilities

at amortized cost including short-term bank loans, bills and accounts

receivable, other accounts receivable, and long-term bank loans (including

those that are due in a year).

(III) Financial risk management objectives and policy

The main financial instruments of the Company include equity investment,

accounts receivable, accounts payable, and loans. The finance management

department of the Company provides services to business units and coordinates

operations in the domestic financial market by supervising internal risk exposure

reports and managing financial risks related to the operations of the Company in

accordance with the risk level. Such risks include market risks (including interest rate

risks), credit risks, and liquidity risks.

1. Market risks

The operations of the Company cause its main financial risk to be the risk of

interest rate fluctuations.

The management and assessment methods of the Company of market risks

for financial instruments and risk exposure remain unchanged.

Interest rate risks

The Company's interest rate risks come mainly from deposits and loans with

floating interest rates that expose it to such risks.

- 43 -

The nominal value of financial assets exposed to interest rate and nominal

value of financial liabilities of the Company on the balance sheet date are as

follows:


Interest rate risks with fair value

Financial liabilities $ 1,700,000 $ 1,570,000

Interest rate risks with cash flow

Financial assets 145,692 84,708

Financial liabilities 850,000 752,400

Sensitivity analysis of interest rate risks determines the exposure of the

Company to interest rate risk of non-derivative instruments on the balance sheet

date. For liabilities float rate, the analysis method assumes the liabilities in

external circulation on the reporting date remain so throughout the reporting

period. The Company's internal report shows the change in the interest rate to be

±0.25%, which also represents the assessment of the management level on the

scope of reasonable changes of the interest rate. When interest rates fluctuate by

0.25%, the Company's net profit before tax for 2018 and 2017 fluctuate by

NT$1,761 thousand and NT$1,669 thousand, respectively.

2. Credit risk

Credit risks refer to risks that cause financial loss of the Company due to the

counterparty's delay in performing contractual obligations. As of the balance sheet

date, the largest credit risk exposure for the Company due to the counterparty's

failure to perform obligations and financial losses caused by the financial

guarantees provided by the Company originates mainly from:

(1) The nominal value of financial assets recognized in the Individual Balance

Sheet.

(2) The maximum possible amount payable by the Company for providing

financial guarantees regardless of the probability of occurrence.

The policies followed by the Company are applicable only for transactions

with reputable counterparties. When necessary, sufficient collateral must be

obtained to reduce the risk of financial losses. The Company uses publicly

obtainable financial information and past transaction records to grade main

customers. The Company continues to monitor credit risk exposure and the credit

ratings of counterparties and distributes total transaction amounts among qualified

- 44 -

customers only. It also controls credit risk exposure through reviews and credit

line approval through the management.

The Company does not have material credit exposure with any singular

transaction counterparty or any combination of transaction counterparties of

similar characteristics. Where the parties in a transaction are affiliate enterprises,

the Company defines them as transaction counterparties of similar characteristics.

As the customer base of the Company is vast and unrelated, the concentration

of credit risk is low.

3. Liquidity risk

The Company supports business operations of the Company and reduces cash

flow fluctuation through appropriate management and the maintenance of

sufficient cash. The Company's management supervises bank financing terms and

ensures compliance with loan contracts.

The expected maturity periods of the Company's non-derivative financial

liabilities with agreed repayment period are as follows:

Non-derivative financial

liabilities Within 1 year

More than 1

year

Total

December 31, 2018

Non-interest-bearing liabilities $ 277,942 $ - $ 277,942

Floating interest rate

instruments

240,000 610,000

850,000

Fixed interest rate instruments 1,700,000 - 1,700,000

$ 2,217,942 $ 610,000 $ 2,827,942

December 31, 2017

Non-interest-bearing liabilities $ 479,003 $ - $ 479,003

Floating interest rate

instruments

552,400 200,000

752,400

Fixed interest rate instruments 1,570,000 - 1,570,000

$ 2,601,403 $ 200,000 $ 2,801,403

- 45 -

XXIII. Related-party transactions

In addition to those disclosed in other Notes, the transactions between the Company

and related parties were as follows.

(I) The names and relations of related parties

Related party Relations with the company

top Light Communications Subsidiary

CNT CATV Subsidiary

Da-Tun Cable TV Subsidiary

Chia-Lien Cable TV Subsidiary

tint Subsidiary

A-First Technology Co., Ltd. (A-First) Sub-subsidiary

Sin Trend Video Co., Ltd. (Sin Trend Video) Sub-subsidiary

Sin-Ho Digital Technology Co., Ltd. (Sin-Ho

Digital)

Sub-sub-subsidiary

Peikang Cable TV Co., Ltd. (Peikang Cable TV) Affiliate enterprise

Hsin Yeong An Cable TV Co., Ltd. Other related parties

Ta Yang Cable Television Co., Ltd. Other related parties

Chen-Ho Construction Co., Ltd. Other related parties

Yuan Fu Enterprises Co., Ltd. Other related parties

Ching-Hsin International Co., Ltd. Other related parties

Sai-Na-Mei Recreation Development Co., Ltd. Other related parties

Fu-Le Investment Co., Ltd. Other related parties

(II) Operating revenue

Category of related parties/Name 2018 2017

Subsidiaries

CNT CATV $ 266,510 $ 268,616

top Light Communications 253,916 262,442

Chia-Lien Cable TV 220,911 226,772

Da-Tun Cable TV 195,335 198,023

Others 46,003 44,537

Affiliate enterprise 84,452 91,603

Other related parties 600 -

$ 1,067,727 $ 1,091,993

Income on sales to related parties includes agency income on copyright of

channels and programs, consulting fees as well as engineering income, etc. The price

is calculated in accordance with contracts and fees are collected monthly. As the main

transaction counterparties are related parties, there are no regular transaction

counterparties to provide comparison.

- 46 -

(III) Operating cost

Category of related parties 2018 2017

Subsidiaries $ 43,168 $ 88,653


$ 48,338 $ 98,524

Transactions with the abovementioned affiliate companies mainly relate to agency

cost paid to related parties for the lease of channels. The price calculation and fee

collection are done as per contracts. As the main transaction counterparties are related

parties, no comparison is possible.

(IV) Operating expenses - Rental expenses


Other related parties $ 1,578 $ 1,550

The Company leases offices from related parties and the rent is paid on monthly

basis.

(V) Operating expenses - Deposits


Subsidiaries $ 596 $ 4,230

(VI) Operating expenses


Other related parties $ 2,991 $ 5,447

Subsidiaries 30 36

$ 3,021 $ 5,483

(VII) Accounts receivable

Category of related

parties/Name December 31, 2018 December 31, 2017

Subsidiaries

CNT CATV $ 23,905 $ 23,590

top Light

Communications

22,817

24,331


Da-Tun Cable TV 17,090 17,399

Others 4,016 3,751



$ 95,126 $ 97,756

The days sales outstanding of accounts receivable without collateral or listing are

- 47 -

recognized as expenses on bad debts.

(VIII) Other accounts receivable

Category of related parties/Name December 31, 2018 December 31, 2017

Subsidiaries

tint $ 18,602 $ 17,516

CNT CATV 8,760 11,288

Da-Tun Cable TV 6,306 7,503


Others 500 500


$ 38,516 $ 42,356

(IX) Accounts payable

Category of related parties/Name December 31, 2018 December 31, 2017

Subsidiaries

top Light Communications $ 1,261 $ 2,150

CNT CATV 1,259 2,086


Da-Tun Cable TV 982 1,633

Others 3 22

Affiliate enterprise

Peikang Cable TV 548 864

$ 5,157 $ 8,620

(X) Other payables

Category of related parties December 31, 2018 December 31, 2017

Other related parties $ 376 $ 343

Subsidiaries 79 1,018

$ 455 $ 1,361

(XI) Loans from related parties

Category of related parties December 31, 2018 December 31, 2017

Subsidiaries $ 1,700,000 $ 1,570,000

The interest rate on Company's loans from related parties is consistent with the

prevailing market rates. The loans from subsidiaries are all unsecured ones. The

interest expenses in 2018 and 2017 were NT$26,018 thousand and NT$22,866

thousand, respectively; The payable interest as of December 31, 2018 and December

31, 2017 were NT$2,054 thousand and NT$2,157 thousand, respectively.

- 48 -

(XII) Endorsements: Attachment 2.

(XIII) Management level remuneration

2018 2017

Short-term employee benefits $ 77,811 $ 91,074

Post-retirement benefits 441 455

$ 78,252 $ 91,529

The remuneration to Directors and other key management is determined by the

Remuneration Committee based on personal performance and market trends.

XXIV. Other disclosure items

(I) Major transactions and

(II) Related information of reinvestments in subsidiaries

1. Financing provided to others: Attachment 1.

2. Endorsements for others: Attachment 2.

3. Marketable securities held at the end of the year (excluding investments in

subsidiaries, associates, and joint control entities): Attachment 3

4. Accumulated purchase or disposal of individual marketable securities in excess of

NT$300 million or 20% of the paid-in capital: None.

5. Acquisition of real estate at price in excess of NT$300 million or 20% of the paid-

in capital: None.

6. Disposal of real estate at price in excess of NT$300 million or 20% of the paid-in

capital: None.

7. Purchases and sales with related parties amounting to NT$ 100 million or more

than 20% of the paid-up capital: Attachment 4.

8. Accounts receivable from related parties reaching NT$100 million or 20% of its

paid-in capital: Attachment 5.

9. Derivative financial instrument transactions: None.

10. Investee companies’ information: Attachment 6.

(III) Mainland China investments: None.

- 49 -

Taiwan Optical Platform Co., Ltd. and Subsidiaries

Lending to Others

January 1 to December 31, 2018

Attachment 1: Unit in NT$1,000

No. Lender

Borrower

(Note 3)

Transaction

account

Related

party

status

Highest

balance in

the current

year

(Note 4)

Closing

balance

(Note 4)

Actual

expenditure

Amount

(Note 5)

Interest

rate range

(%) Nature of loan

Business

transaction

Amount

Reasons for

short-term

financing

Listed

allowances

for bad debts

Collateral Limitation on

financing

loans for

individual

counterparties

Loan limit

(Note 1)

Total limit

on loans

(Note 2) Name Value

1 top Light

Communications

The Company Other

receivables

- related

parties

Yes $ 400,000 $ 400,000 $ 400,000 1.4 Short-term

financing

$ - Operating

capital

$ - － $ - $ 573,696 $ 573,696

2 CNT CATV The Company Other

receivables

- related

parties

Yes 300,000 300,000 300,000 1.4 Short-term

financing

- Operating

capital

- － - 334,411 334,411

3 Chia-Lien Cable

TV

The Company Other

receivables

- related

parties

Yes 270,000 270,000 270,000 1.4 Short-term

financing

- Operating

capital

- － - 302,802 302,802

4 Da-Tun Cable TV The Company Other

receivables

- related

parties

Yes 260,000 110,000 110,000 1.4 Short-term

financing

- Operating

capital

- － - 300,196 300,196

5 tint The Company Other

receivables

- related

parties

Yes 520,000 520,000 520,000 1.4 Short-term

financing

- Operating

capital

- － - 703,050 703,050

6 Sin Trend Video The Company Other

receivables

- related

parties

Yes 100,000 100,000 100,000 1.4 Short-term

financing

- Operating

capital

- － - 162,126 162,126

Note 1: The amount of loan a subsidiary provides to a single company with business relationship shall not exceed 100% of the total business transaction amount between the two parties in the 12 months prior to the loan (the

business transaction amount refers to the amount of purchase or sales between the two parties, whichever is higher) and it cannot exceed 40% of the net value of the subsidiary. Where necessary for short-term

financing, the loan is restricted to 40% of the net value of the subsidiary.

Note 2: The total amount of loan a subsidiary can provide is restricted to 95% of the net value of the subsidiary. For companies with business relations, the total amount shall not exceed 95% of the net value of the subsidiary.

Where necessary for short-term financing, the total loan amount shall be restricted to 40% of the net value of the subsidiary.

Note 3: Please refer to Note 13 in the Consolidated Financial Statement.

Note 4: Amount approved at the resolution of the Board of Directors meeting.

- 50 -


Endorsement Guarantee for Others



No.

Endorsement

Guarantor

Company Name

Recipient of Endorsement or

Guarantee

Ceiling limit

on

endorsements

and guarantees

for a single

enterprise

(Note 2)

Maximum

endorsement

guarantee

balance

End of year

endorsement

guarantee

balance

Actual

expenditure

Property-

guaranteed

endorsement

or guarantee

amount

Cumulative

endorsement

guarantee

amount as a

ratio of current

financial

report

Endorsement

and guarantee

ceiling

(Note 2)

Endorsement

guarantee for

the

subsidiary by

the parent

company

Endorsement

guarantee for

the parent

company by

the

subsidiary

Endorsement

guarantee for

entities in

Mainland

China Note Company Name

Relations with

the company

0 The Company top Light

Communications

(Note 1) $ 12,899,846 $ 612,000 $ - $ - $ - - $ 22,574,730 Y －－－

CNT CATV (Note 1) 12,899,846 550,000 - - - - 22,574,730 Y －－－

tint (Note 1) 12,899,846 200,000 - - - - 22,574,730 Y －－－

1 top Light

Communications

The Company (Note 1) 2,151,361 612,000 - - - - 4,302,723 － Y －－

2 CNT CATV The Company (Note 1) 1,254,042 550,000 - - - - 2,508,084 － Y －－

3 tint The Company (Note 1) 2,636,439 200,000 - - - - 5,272,878 － Y －－

Note 1: Please refer to Note 13 in the Consolidated Financial Statement.

Note 2: "Restriction on endorsement guarantee for a single company": 200% of the net value of the latest financial report for the Company; 150% of the net value of the latest financial report for top Light Communications,

CNT CATV, and tint.

"Maximum amount of endorsement guarantee": 350% of the net value of the latest financial report for the Company; 300% of the net value of the latest financial report for top Light Communications, CNT CATV,

and tint.

- 51 -


Securities Held at End of Year

December 31, 2018

Attachment 3: Unit in NT$1,000/1,000 shares

Company holding shares Type and name of securities

Relationship with

the issuer of the

securities Financial statement account

End of year

Shares/Unit

Carrying amount

(Note)

Shareholding

ratio (%) Fair value

The Company Equities

Eastern Media International

Corporation － Financial asset in other comprehensive income measured at fair

value through profit and loss - current

2 $ 32 - $ 32

Far Eastern International Bank Co.,

Ltd. － Financial asset in other comprehensive income measured at fair


1 11 - 11

Taiwan Mobile Co., Ltd. － Financial asset in other comprehensive income measured at fair


1 107 - 107

Pili International Multimedia Co.,

Ltd. － Financial asset in other comprehensive income measured at fair


1 50 - 50

China Television Company, Ltd. － Financial asset in other comprehensive income measured at fair


1 5 - 5

Fubon Financial Holding Co., Ltd. － Financial asset in other comprehensive income measured at fair


1 47 - 47

MOMO.COM INC. － Financial asset in other comprehensive income measured at fair


1 188 - 188

Chia-Lien Cable TV Equities

Da-Feng Cable TV Co., Ltd. (Da-

Feng Cable TV) － Financial asset in other comprehensive income measured at fair

value through profit and loss - non-current

904 30,736 1 30,736

CNT CATV Equities

Da-Feng Cable TV － Financial asset in other comprehensive income measured at fair


2,382 80,989 2 80,989

LifePlus Co., Ltd. － Financial asset in other comprehensive income measured at fair


6,400 29,730 19 29,730

ttop Light

Communications

Equities



4,382 148,993 3 148,993

Taiwan Mobile Communication Inc. － Financial asset in other comprehensive income measured at fair


1 21 - 21

Da-Tun Cable TV Equities

Asia Pacific Telecom Co., Ltd. － Financial asset in other comprehensive income measured at fair


2,000 13,800 - 13,800



2,249 76,456 1 76,456

Taiwan First Multimedia Co., Ltd. － Financial assets at fair value through profit or loss - non-current 200 - 17 -

Citron Network Inc. － Financial assets at fair value through profit or loss - non-current 500 - 4 -

Sin Trend Video Equities

Faithball Co., Ltd. － Financial assets at fair value through profit or loss - non-current 2,000 - 40 -

A-First Technology Equities

Xin He Technology Co., Ltd. － Financial assets at fair value through profit or loss - non-current 300 - - -

Note: The carrying amount of accounts measured at fair value refers to the balance of the carrying amount after fair value valuation adjustment.

- 52 -


Amount of purchases from and sales to related parties reaching NT$100 million or 20% of its paid-in capital



Supplier (buyer)

company

Transaction

counterparty Relationship

Transaction details

Unusual trade conditions

and its reasons

Notes and accounts receivable

(payable)

Note Purchase/Sale Amount

Ratio of total

procurement

(sales) Credit period Unit price

Credit

period Balance

Percentage of

total receivable

(payable) notes

and accounts

The Company top Light

Communications

Subsidiary Program copyright

agency income etc.

( $ 253,916 ) ( 20 ) No significant

difference

(Note 1) (Note 1) $ 22,817 16

CNT CATV Subsidiary Program copyright

agency income etc.

( 266,510 ) ( 21 ) No significant

difference

(Note 1) (Note 1) 23,905 16

Chia-Lien Cable TV Subsidiary Program copyright

agency income etc.

( 220,911 ) ( 17 ) No significant

difference

(Note 1) (Note 1) 19,756 13

Da-Tun Cable TV Subsidiary Program copyright

agency income etc.

( 195,335 ) ( 15 ) No significant

difference

(Note 1) (Note 1) 17,090 12

top Light

Communications

The Company Parent company Program copyright cost

etc.

235,887 40 No significant

difference

(Note 1) (Note 1) ( 21,268 ) ( 77 )

CNT CATV The Company Parent company Program copyright cost

etc.


difference

(Note 1) (Note 1) ( 18,938 ) ( 72 )

Chia-Lien Cable TV The Company Parent company Program copyright cost

etc.


difference

(Note 1) (Note 1) ( 16,755 ) ( 76 )

Da-Tun Cable TV The Company Parent company Program copyright cost

etc.


difference

(Note 1) (Note 1) ( 14,598 ) ( 79 )

Note: As the main transaction counterparties are related parties, there are no regular transaction counterparties to provide comparison.

- 53 -


Accounts receivable from related parties reaching NT$100 million or 20% of its paid-in capital

December 31, 2018


Company with accounts

receivable

Transaction

counterparty Relationship

Balance of accounts receivable from

related party

Turnover ratio

(times)

Overdue receivables from related parties Receivables from

related parties

Amounts received in

subsequent periods

Listed allowances

for losses Amount Processing method

tint The Company Parent

company

Other accounts receivable - related

parties $ 520,607

- $ - － $ 607 $ -

CNT CATV The Company Parent

company

Accounts receivable 1,259 7.03 - － 1,259 -

Other accounts receivable - related party

300,305

- - － 305 -

Chia-Lien Cable TV The Company Parent

company



270,315

- - － 315 -

Da-Tun Cable TV The Company Parent

company

Accounts receivable 982 6.95 - － 982 -


110,288

- - － 288 -

top Light Communications The Company Parent

company



400,422

- - － 422 -

Sin Trend Video The Company Parent

company

Accounts receivable 3 10.32 - － 3 -


100,117

- - － 117 -

- 54 -


Investee companies’ information


Attachment 6: Unit in NT$1,000/1,000 shares

Name of investor

Investee company

name Location Main businesses

Initial investment Holdings at the end of period

Investee

company profit

(loss) in the

current period

Investment

profit (loss)

recognized in

the current

period Note

End of this

year

End of

previous year

Number of

shares Ratio

Carrying

amount

The Company top Light

Communications

Taichung

City

Cable television system operations $ 3,217,374 $ 3,217,374 115,442 92 $ 2,778,184 ($ 47,006 ) ( $ 43,412 ) Subsidiary

CNT CATV Nantou

County

Cable television system operations 1,256,059 1,256,059 60,000 100 1,825,690 55,758 55,758 Subsidiary

tint Taichung

City

Type 2 Telecommunication Enterprise etc. 1,366,667 1,366,667 78,178 100 1,754,485 149,849 151,789 Subsidiary

Chia-Lien Cable TV Yunlin

County


Da-Tun Cable TV Taichung

City


Sin-Long Multimedia Taipei City Production of TV shows 30,000 30,000 3,000 100 1,555 ( 15,926 ) ( 15,926 ) Subsidiary

top Light

Communications

Peikang Cable TV Yunlin

County

Cable television system operations 131,361 131,361 2,058 9 132,737 12,378 1,158 －

CNT CATV Peikang Cable TV Yunlin

County


tint Sin Trend Video Taichung

City

Broadcasting and television advertisement,

production of TV shows etc.

476,609 476,609 24,000 100 521,989 79,718 79,718 Sub-

subsidiary

A-First Technology Taichung

City

Wholesale and retail of telecommunication

equipment etc.

41,914 41,914 4,600 100 52,652 2,169 2,169 Sub-

subsidiary

top Light

Communications

Taichung

City

Cable television system operations 118,590 118,590 8,045 7 99,888 ( 47,006 ) ( 3,027 ) Sub-

subsidiary

Chia-Lien Cable TV Yunlin

County

Cable television system operations 21,654 21,654 953 1 23,387 24,282 355 Sub-

subsidiary

Da-Tun Cable TV Taichung

City

Cable television system operations 20,611 20,611 1,080 2 21,246 39,665 680 Sub-

subsidiary


County

Cable television system operations 7,860 7,860 335 2 8,056 12,378 188 －

Da-Tun Cable

TV


County


Sin Trend Video Sin-Ho Digital Taichung

City

Online shopping operations 50,000 50,000 5,000 100 14,356 ( 8,260 ) ( 8,260 ) Sub-sub-

subsidiary

Media Development

Company

Taipei City Film production, film distribution etc. 60,000 60,000 6,000 32 - - - －

Note: With the exception of Peikang Cable TV and Media Development Company, the balance amounts have been written off.

- 55 -

Table of Contents for Statements of Material Accounts

ITEM CODE/INDEX

Statements of Assets, Liabilities and Equity Items

Cash Statement Statement 1

Statement of Accounts Receivables - Non-related Party Statement 2

Statement of Changes in Investments Accounted for Using

Equity Method

Statement 3

Statement of Changes in Property, Plant and Equipment Note 11

Statement of Changes in Accumulated Depreciation of

Property, Plant and Equipment

Note 11

Statement of Deferred Income Tax Assets Note 18

Statement of Notes Payable Statement 4

Statement of Accounts Payables - Non-related Party Statement 5

Statement of Other Payables - Non-related Party Note 13

Statement of Long-term Bank Loans Statement 6

Statements of Profit or Loss Items

Statement of Operating Revenue Statement 7

Statement of Operating Cost Statement 8

Statement of Operating Expenses Statement 9

Summary Table of Employee Benefit, Depreciation,

Depletion and Amortization Expenses for the Current

Year

Note 17

- 56 -


Cash Statement

December 31, 2018

Statement 1 Unit: NT$1,000

Item Amount

Cash on hand and petty cash $ 666

Bank demand deposit 145,692

$ 146,358

- 57 -


Statement of Accounts Receivables - Non-related Party

December 31, 2018


Customer Name Amount

Era International Hi-Tech Media Park Development Co., Ltd. $ 18,509

Eastern Broadcasting Co., Ltd. 6,897

Fox Networks Group Asia Pacific Limited, Taiwan Branch (H.K.) 3,912

Videoland Inc. 3,104

Others (Note) 411

$ 32,833

Note: The balance for each customer did not exceed 5% of the balance of this account.

- 58 -


Statement of Changes in Investments Accounted for Using Equity Method


Statement 3

Unit: NT$1,000

unless otherwise specified

Investee company name

Opening balance Share of profit and loss in

subsidiaries, affiliates, and

joint ventures accounted

for using equity method

Cash

dividends

Actuarial losses on

defined benefit

plan

Financial products

unrealized gains and

losses

Realized

(Unrealized) profits

from sales

Affected amount of

retrospective application

and restatement

Closing balance

Market price or

net equity

Number of shares

(thousand shares) Amount

Number of shares

(thousand shares)

Shareholding

% Amount

top Light

Communications

115,442 $ 2,827,965 ( $ 43,412 ) $ - ( $ 8,936 ) ( $ 1,490 ) $ 3,798 $ 259 115,442 92 $ 2,778,184 $ 1,324,572

CNT CATV 60,000 1,874,557 55,758 ( 70,282 ) ( 106 ) ( 35,671 ) 999 435 60,000 100 1,825,690 836,028

tint 78,178 1,732,936 151,789 ( 131,586 ) 659 ( 321 ) 937 71 78,178 100 1,754,485 1,757,625

Chia-Lien Cable TV 63,648 1,377,146 23,671 ( 32,915 ) 1,391 ( 220 ) 1,364 - 63,648 98 1,370,437 728,427

Da-Tun Cable TV 61,148 1,307,264 38,499 ( 44,486 ) 1,255 ( 7,284 ) 954 411 61,148 97 1,296,613 737,931

Sin-Long Multimedia 3,000 17,481 ( 15,926 ) - - - - - 3,000 100 1,555 1,555

$ 9,137,349 $ 210,379 ( $ 279,269 ) ( $ 5,737 ) ( $ 44,986 ) $ 8,052 $ 1,176 $ 9,026,964 $ 5,386,138

Note: The net equity is calculated based on the CPA-certified financial report and the Company's shareholding ratio.

- 59 -


Statement of Notes Payable

December 31, 2018


Supplier name Amount

Global Digital Media Co., Ltd. $ 33,504

Ta-Hsiang Multimedia, Ltd. 31,740

Tung Yu Investment Co., Ltd. 18,226

Yung-Hsin Multimedia Co., Ltd. 18,086

Best News Entertainment Corp. 17,239

Others (Note) 1,609

$ 120,404


- 60 -


Statement of Accounts Payables - Non-related Party

December 31, 2018


Supplier name Amount

Win TV Broadcasting Co., Ltd. $ 51,417

Hao-Ming Co., Ltd. 16,247

Yun Cheng Multimedia Co., Ltd. 12,791

Others (Note) 3,714

$ 84,169


- 61 -


Statement of Long-term Bank Loans

December 31, 2018


Creditor bank Loan period Repayment method

Annual

interest

rate (%)

Mature within one

year

Mature after one

year Total

Collateral or

Pledge

Unsecured loans

CTBC Bank 2018.5.2-2021.4.30 Repayment in 5 quarterly installments starting from May 2020 1.36 $ - $ 450,000 $ 450,000 None

Taishin International

Bank

2017.12.18-2020.12.18 Repayment in 5 quarterly installments starting from December

2019

1.39 40,000 160,000 200,000 None

$ 40,000 $ 610,000 $ 650,000

- 62 -


Statement of Operating Revenue



Item Amount

Income from channel copyright agency - copyright $ 861,661

Income from consulting fees 186,940

Income from channel copyright agency - shopping 117,404

Income from advertisement agency 87,153

Construction revenue 19,126

$ 1,272,284

- 63 -


Statement of Operating Cost



Item Amount

Program copyright costs $ 553,074

Program agency costs 42,635

Construction costs 12,450

Advertisement agency costs 5,520

$ 613,679

- 64 -


Statement of Operating Expenses



Item Management and

general expenses

Salary expenses $ 67,248

Remuneration of Directors and Supervisors 18,554

Others 62,133

$ 147,935

parent company only financial statements for the years...

Documents