CTCI CORPORATION AND SUBSIDIARIES · CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL...

CTCI CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

MARCH 31, 2019 AND 2018

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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.

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (The balance sheets as of March 31, 2019 and 2018 are reviewed, not audited)

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March 31, 2019 December 31, 2018 March 31, 2018 Assets Notes AMOUNT % AMOUNT % AMOUNT %

Current assets 1100 Cash and cash equivalents 6(1) $ 17,013,679 24 $ 15,070,992 20 $ 14,289,845 22 1110 Financial assets at fair value

through profit or loss - current

6(2)

410,613 1 554,638 1 368,357 1 1120 Financial assets at fair value

through other comprehensive

income - current

6(3)

517,490 1 500,327 1 615,924 1 1140 Contract assets - current 6(23) 20,803,659 30 24,823,432 32 25,799,544 39 1150 Notes receivable, net 6(4) 14,614 - 75,006 - 139,237 - 1170 Accounts receivable, net 6(4) 5,284,252 8 9,092,332 12 4,775,516 7 1180 Accounts receivable - related

parties

7

461,030 1 944,071 1 66,614 - 1200 Other receivables 170,805 - 338,477 - 108,521 - 1220 Current income tax assets 144,683 - 134,826 - 107,658 - 130X Inventories 186,176 - 167,345 - 127,241 - 1410 Prepayments 6(5) 4,305,582 6 4,253,895 6 4,392,176 7 1470 Other current assets 6(6) and 8 307,859 - 579,218 1 189,389 -

11XX Total current assets 49,620,442 71 56,534,559 74 50,980,022 77

Non-current assets 1510 Financial assets at fair value

through profit or loss - non-

current

6(2)

- - - - 68,574 -

1517 Financial assets at fair value


income - non-current

6(3)

780,958 1 788,611 1 650,895 1 1550 Investments accounted for

using equity method

6(7)

3,538,560 5 3,680,933 5 3,599,573 6 1600 Property, plant and equipment,

net

6(8) and 8

10,602,336 15 10,432,036 13 6,626,453 10 1755 Right-of-use assets 6(9) 393,422 1 - - - - 1760 Investment property, net 6(10) and 8 807,052 1 808,129 1 811,521 1 1780 Intangible assets 189,587 - 191,198 - 80,495 - 1840 Deferred income tax assets 575,125 1 493,335 1 506,484 1 1900 Other non-current assets 6(11) and 8 3,371,143 5 3,568,532 5 2,839,907 4

15XX Total non-current assets 20,258,183 29 19,962,774 26 15,183,902 23

1XXX Total assets $ 69,878,625 100 $ 76,497,333 100 $ 66,163,924 100

(Continued)

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (The balance sheets as of March 31, 2019 and 2018 are reviewed, not audited)

The accompanying notes are an integral part of these consolidated financial statements.

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March 31, 2019 December 31, 2018 March 31, 2018 Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %

Current liabilities 2100 Short-term borrowings 6(12) $ 10,947,586 16 $ 13,414,459 18 $ 7,498,485 11 2120 Financial liabilities at fair value

through profit or loss - current 6(2)

36 - 548 - 1,432 - 2130 Contract liabilities - current 6(23) 15,629,871 22 13,920,198 18 11,473,886 17 2150 Notes payable 11,319 - 18,788 - 4,056 - 2170 Accounts payable 6(13) 9,790,524 14 9,991,262 13 9,299,130 14 2180 Accounts payable - related

parties 7

717,262 1 1,359,712 2 1,038,693 2 2200 Other payables 6(14) 1,689,094 2 4,692,516 6 1,581,943 2 2230 Current income tax liabilities 494,799 1 371,943 - 458,905 1 2280 Current lease liabilities 147,908 - - - - - 2300 Other current liabilities 6(15)(16) 3,137,767 5 7,650,660 10 8,475,318 13 21XX Total current liabilities 42,566,166 61 51,420,086 67 39,831,848 60 Non-current liabilities 2540 Long-term borrowings 6(16) 3,407,744 5 1,423,586 2 1,879,150 3 2570 Deferred income tax liabilities 400,994 1 411,810 1 493,356 1 2580 Non-current lease liabilities 197,096 - - - - - 2600 Other non-current liabilities 6(17) 2,232,207 3 2,615,692 3 2,451,229 3 25XX Total non-current

liabilities

6,238,041 9 4,451,088 6 4,823,735 7 2XXX Total liabilities 48,804,207 70 55,871,174 73 44,655,583 67 Equity attributable to owners of

parent

Share capital 6(20) 3110 Common stock 7,632,738 11 7,632,738 10 7,632,738 12 Capital surplus 6(21) 3200 Capital surplus 3,587,786 5 3,545,053 4 3,422,730 5 Retained earnings 6(22) 3310 Legal reserve 3,558,894 5 3,558,894 5 3,278,360 5 3320 Special reserve 763,794 1 763,794 1 765,904 1 3350 Unappropriated retained

earnings

2,437,044 3 2,217,619 3 3,566,717 5 Other equity interest 3400 Other equity interest ( 223,456 ) - ( 247,534 ) - ( 280,823 ) - 3500 Treasury stocks 6(20) ( 11,835 ) - ( 11,835 ) - ( 11,835 ) - 31XX Equity attributable to

owners of the parent

17,744,965 25 17,458,729 23 18,373,791 28 36XX Non-controlling interest 4(3) 3,329,453 5 3,167,430 4 3,134,550 5 3XXX Total equity 21,074,418 30 20,626,159 27 21,508,341 33 Significant contingent liabilities

and unrecognised contract

commitments

9

3X2X Total liabilities and equity $ 69,878,625 100 $ 76,497,333 100 $ 66,163,924 100

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) (UNAUDITED)


~5~

Three months ended March 31

2019 2018

Items Notes AMOUNT % AMOUNT %

4000 Operating revenue 6(23) and 7 $ 13,712,458 100 $ 14,540,582 100 5000 Operating costs 6(27)(28) and 7 ( 12,673,888 ) ( 92 ) ( 13,359,663 ) ( 92 ) 5900 Gross Profit 1,038,570 8 1,180,919 8 Operating expenses 6(27)(28) 6200 General and administrative expenses ( 409,167 ) ( 3 ) ( 435,650 ) ( 3 ) 6300 Research and development expenses ( 25,173 ) - ( 28,812 ) - 6000 Total operating expenses ( 434,340 ) ( 3 ) ( 464,462 ) ( 3 ) 6900 Operating income 604,230 5 716,457 5 Non-operating income and expenses 7010 Other income 6(24) 75,398 1 61,249 - 7020 Other gains and losses 6(25) 27,864 - ( 130,698 ) ( 1 ) 7050 Finance costs 6(26) ( 82,057 ) ( 1 ) ( 36,689 ) - 7060 Share of (loss) profit of associates

and joint ventures accounted for under equity method

6(7)

( 148,680 ) ( 1 ) 14,310 - 7000 Total non-operating income and

expenses

( 127,475 ) ( 1 ) ( 91,828 ) ( 1 ) 7900 Profit before income tax 476,755 4 624,629 4 7950 Income tax expense 6(29) ( 133,088 ) ( 1 ) ( 187,577 ) ( 1 ) 8200 Profit for the period $ 343,667 3 $ 437,052 3

Components of other comprehensive

income that will not be reclassified to

profit or loss

8316 Unrealized gain or loss on valuation

of financial assets at fair value through other comprehensive income

6(3)

$ 36,894 - $ 31,144 - 8320 Share of other comprehensive

income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss

- - 1,079 - 8349 Income tax related to components of

other comprehensive income that will not be reclassified to profit or loss

6(29)

- - 19,379 - Components of other comprehensive

income that will be reclassified to

profit or loss

8361 Cumulative translation differences of

foreign operations

23,971 - ( 48,553 ) - 8300 Total other comprehensive income for

the period

$ 60,865 - $ 3,049 -

8500 Total comprehensive income for the

period

$ 404,532 3 $ 440,101 3

Profit attributable to: 8610 Owners of the parent $ 221,473 2 $ 318,740 2 8620 Non-controlling interest 122,194 1 118,312 1 Total $ 343,667 3 $ 437,052 3

Comprehensive income attributable

to:

8710 Owners of the parent $ 243,503 2 $ 311,269 2 8720 Non-controlling interest 161,029 1 128,832 1 Total $ 404,532 3 $ 440,101 3

9750 Basic earnings per share 6(30) $ 0.29 $ 0.42

9850 Diluted earnings per share 6(30) $ 0.29 $ 0.42


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

(UNAUDITED)

Equity attributable to owners of the parent

Retained Earnings Other equity interest

Notes

Common stock

Capital surplus

Legal reserve

Special reserve

Unappropriated

earnings

Cumulative

translation

differences of

foreign operations

Unrealized gains

(losses) from

financial assets

measured at fair

value through

other

comprehensive

income

Unrealized gain or

loss on available-

for-sale financial

assets

Treasury

stocks

Total

Equity

attributable to

former owner of

business

combination

under common

control

Total equity


~6~

For the three-month period ended March 31, 2018

Balance at January 1, 2018 $ 7,632,738 $ 3,395,620 $ 3,278,360 $ 765,904 $ 3,061,699 ( $ 226,282 ) $ - $ 55,828 ( $ 11,835 ) $ 17,952,032 $ 3,088,125 $ 21,040,157

Effect of retrospective application and retrospective restatement 6(22) - - - - 166,327 - ( 47,070 ) ( 55,828 ) - 63,429 - 63,429

Balance at January 1 after adjustments 7,632,738 3,395,620 3,278,360 765,904 3,228,026 ( 226,282 ) ( 47,070 ) - ( 11,835 ) 18,015,461 3,088,125 21,103,586

Profit for the period - - - - 318,740 - - - - 318,740 118,312 437,052

Other comprehensive income - - - - - ( 39,464 ) 31,993 - - ( 7,471 ) 10,520 3,049

Total comprehensive income - - - - 318,740 ( 39,464 ) 31,993 - - 311,269 128,832 440,101

Appropriation of 2017 earnings 6(22)

Cash dividends - - - - - - - - - - ( 73,092 ) ( 73,092 )

Employee stock options exercised by subsidiary 6(21) - 2,119 - - - - - - - 2,119 ( 9,970 ) ( 7,851 )

Share-based payment transactions 6(21) - 24,991 - - - - - - - 24,991 148 25,139

Impact of change in tax rate - - - - 19,951 - - - - 19,951 507 20,458

Balance at March 31, 2018 $ 7,632,738 $ 3,422,730 $ 3,278,360 $ 765,904 $ 3,566,717 ( $ 265,746 ) ( $ 15,077 ) $ - ( $ 11,835 ) $ 18,373,791 $ 3,134,550 $ 21,508,341


Balance at January 1, 2019 $ 7,632,738 $ 3,545,053 $ 3,558,894 $ 763,794 $ 2,217,619 ( $ 290,028 ) $ 42,494 $ - ( $ 11,835 ) $ 17,458,729 $ 3,167,430 $ 20,626,159

Profit for the period - - - - 221,473 - - - - 221,473 122,194 343,667

Other comprehensive income - - - - - ( 6,186 ) 28,216 - - 22,030 38,835 60,865

Total comprehensive income - - - - 221,473 ( 6,186 ) 28,216 - - 243,503 161,029 404,532

Employee stock options exercised by subsidiary 6(21) - 31 - - - - - - - 31 - 31

Share-based payment transactions 6(21) - 42,702 - - - - - - - 42,702 994 43,696

Disposal of investments in equity instruments designated at fair value through other comprehensive income

- - - - ( 2,048 ) - 2,048 - - - - -

Balance at March 31, 2019 $ 7,632,738 $ 3,587,786 $ 3,558,894 $ 763,794 $ 2,437,044 ( $ 296,214 ) $ 72,758 $ - ( $ 11,835 ) $ 17,744,965 $ 3,329,453 $ 21,074,418

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (UNAUDITED)

Three-month periods ended March 31

Notes 2019 2018

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CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 476,755 $ 624,629 Adjustments Adjustments to reconcile profit (loss) (Gain) loss on valuation of financial assets 6(25) ( 30,151 ) 23,861 Gain on reduction of capital of investments 6(25) - ( 86 ) (Gain) loss on disposal of property, plant and equipment 6(25) ( 30 ) 62 Share of loss (profit) of associates and joint ventures

accounted for under equity method 6(7)

148,680 ( 14,310 ) Depreciation 6(27) 143,153 89,026 Amortization 6(27) 38,447 41,691 Expected credit loss 12(2) 13,666 1,715 Interest income 6(24) ( 58,160 ) ( 49,727 ) Interest expense 6(26) 82,057 36,689 Compensation costs for employee stock options 43,549 25,328 Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss 108,517 204,195 Notes receivable 60,392 ( 105,649 ) Accounts receivable 3,794,414 547,722 Accounts receivable - related parties 483,041 ( 24,254 ) Contract assets - current 4,019,773 ( 2,040,234 ) Other receivables 159,991 124,690 Inventories ( 18,831 ) 65,933 Prepayments ( 25,348 ) ( 245,054 ) Other current assets 271,359 141,993 Other non-current assets 157,462 58,152 Changes in operating liabilities Notes payable ( 7,469 ) ( 13 ) Accounts payable ( 200,738 ) ( 2,579,144 ) Accounts payable - related parties ( 642,450 ) 111,983 Contract liabilities - current 1,709,673 ( 2,406,220 ) Other payables ( 1,223,615 ) ( 1,241,562 ) Other current liabilities ( 4,585,497 ) 920,973 Other non-current liabilities ( 345,898 ) ( 264,450 )

Cash inflow (outflow) generated from operations 4,572,742 ( 5,952,061 ) Interest received 65,841 56,621 Dividends received 6(7) - 71,982 Interest paid ( 75,904 ) ( 34,940 ) Income tax paid ( 19,185 ) ( 140,760 )

Net cash flows from (used in) operating activities 4,543,494 ( 5,999,158 )

(Continued)

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (UNAUDITED)

Three-month periods ended March 31

Notes 2019 2018


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CASH FLOWS FROM INVESTING ACTIVITIES

Interest received $ - $ 379

Financial assets at fair value through other comprehensive

income - current

23,074 69,706

Increase in investments accounted for under the equity

method

6(7)

- ( 27,500 )

Acquisition of property, plant and equipment 6(33) ( 1,874,915 ) ( 36,052 )

Proceeds from disposal of property, plant and equipment 186 476

Increase in prepayments for equipment ( 164,347 ) -

Decrease (increase) in refundable deposits 8,836 ( 1,084 )

Increase in other non-current assets ( 7,096 ) ( 476 )

Net cash flow from acquisition of subsidiaries ( 38,749 ) -

Net cash flows (used in) from investing activities ( 2,053,011 ) 5,449

CASH FLOWS FROM FINANCING ACTIVITIES

(Decrease) increase in short-term borrowings ( 2,466,873 ) 959,468

Increase (decrease) in long-term borrowings 2,056,762 ( 42,000 )

Lease liabilities 6(9) ( 100,098 ) -

Decrease in deposits received (recognized in other non-

current liabilities)

( 37,587 ) ( 1,401 )

Proceeds from employee stock options exercised - 12,607

Net cash flows (used in) from financing activities ( 547,796 ) 928,674

Net increase (decrease) in cash and cash equivalents 1,942,687 ( 5,065,035 )

Cash and cash equivalents at beginning of period 15,070,992 19,354,880

Cash and cash equivalents at end of period $ 17,013,679 $ 14,289,845

~9~


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT AS OTHERWISE INDICATED)

(UNAUDITED)

1. HISTORY AND ORGANISATION

CTCI Corporation (the “Company”) was incorporated as a company limited by shares under the

provisions of the Company Law of the Republic of China on April 6, 1979 and commenced its operations

on May 1, 1979. The main business activities of the Company and its subsidiaries (collectively referred

herein as the “Group”) are the design, survey, construction and inspection of various engineering and

construction projects, plants, machinery and equipment and environmental protection projects. The

Company’s shares have been listed and traded on the Taiwan Stock Exchange since May 1993.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were reported to the Board of Directors on May 3, 2019.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as

follows:

Except for the following, the above standards and interpretations have no significant impact to the

Group’s financial condition and financial performance based on the Group’s assessment.

New Standards, Interpretations and Amendments

Effective date by

International

Accounting

Standards Board

Amendments to IFRS 9, ‘Prepayment features with negative compensation’ January 1, 2019

IFRS 16, ‘Leases’ January 1, 2019

Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019

Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ January 1, 2019

IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019

Annual improvements to IFRSs 2015-2017 cycle January 1, 2019

~10~

IFRS 16, ‘Leases’

A. IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard

requires lessees to recognise a ‘right-of-use asset’ and a lease liability (except for those leases with

terms of 12 months or less and leases of low-value assets). The accounting stays the same for

lessors, which is to classify their leases as either finance leases or operating leases and account

for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be

provided by lessors.

B. The Group has elected to apply IFRS 16 by not restating the comparative information (referred

herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as

endorsed by the FSC. Accordingly, the Group increased ‘right-of-use asset’ by $416,416 and

increased ‘lease liability’ by $416,416 with respect to the lease contracts of lessees on January 1,

2019.

C. The Group has used the following practical expedients permitted by the standard at the date of

initial application of IFRS 16:

(a) Reassessment as to whether a contract is, or contains, a lease is not required, instead, the

application of IFRS 16 depends on whether or not the contracts were previously identified as

leases applying IAS 17 and IFRIC 4.

(b) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

(c) The accounting for operating leases whose period will end before December 31, 2019 as short-

term leases and accordingly, rent expense of $5,856 was recognised in the first quarter of

2019.

(d) The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.

(e) The use of hindsight in determining the lease term where the contract contains options to

extend or terminate the lease.

D. The Group calculated the present value of lease liabilities by using the weighted average

incremental borrowing interest rate of 0.68%.

E. The Group recognised lease liabilities which had previously been classified as ‘operating leases’

under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments

under IAS 17 measured at the present value of the remaining lease payments, discounted using the

lessee’s incremental borrowing rate and lease liabilities recognised as of January 1, 2019 is as

follows:

Operating lease commitments disclosed by applying IAS 17 as at

December 31, 2018 768,470$

Less: Short-term leases 20,952)(

Add/Less: Adjustments relating to changes in the index or rate

affecting variable lease payments 331,102)(

Total lease contracts amount recognised as lease liabilities by

applying IFRS 16 on January 1, 2019 416,416$

~11~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

None.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as

endorsed by the FSC are as follows:

The above standards and interpretations have no significant impact to the Group’s financial condition

and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial

statements for the year ended December 31, 2018, except for the compliance statement, basis of

preparation, basis of consolidation and additional policies as set out below. These policies have been

consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

A. The consolidated financial statements of the Group have been prepared in accordance with the

“Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the

International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.

B. These consolidated financial statements are to be read in conjunction with the consolidated

financial statements for the year ended December 31, 2018.

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under

the historical cost convention:

(a) Financial assets and financial liabilities (including derivative instruments) at fair value through

profit or loss.

(b) Financial assets at fair value through other comprehensive income.

New Standards, Interpretations and Amendments

Effective date by

International Accounting

Standards Board

Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of

Material’

January 1, 2020

Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020

Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets

between an investor and its associate or joint venture’

To be determined by

International Accounting

Standards Board

IFRS 17, ‘Insurance contracts’ January 1, 2021

~12~

(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less

present value of defined benefit obligation.

B. The preparation of financial statements in conformity with IFRS, requires the use of certain critical

accounting estimates. It also requires management to exercise its judgement in the process of

applying the Group’s accounting policies. The areas involving a higher degree of judgement or

complexity, or areas where assumptions and estimates are significant to the consolidated financial

statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:

The basis for preparation of these consolidated financial statements is the same as that for the

preparation of the consolidated financial statements as of and for the year ended December 31,

2018.

B. Subsidiaries included in the consolidated financial statements:

Name of Investor Name of SubsidiaryMain Business

Activities

March 31,

2019

December 31,

2018

March 31,

2018Description

CTCI Corp. CTCI Advanced

Systems Inc.

Design and

installation of

software

48.72 48.72 48.72 Note 1

CTCI Corp. CTCI Development

Corp.

Real estate and

leasing business

100.00 100.00 100.00 Note 2,3

CTCI Corp. CTCI Investment

Corp.

Investments 100.00 100.00 100.00 Note 3

CTCI Corp.

CTCI Investment

Corp.

CTCI Smart

Engineering Corp.

Planning and

design of

construction

projects

97.09 97.09 97.09 Note 3

CTCI Corp.

CTCI Development

Corp.

CTCI Resources

Engineering Inc.

Planning, design

and

supervision of

mechanical and

electrical

engineering

projects

99.06 99.06 99.06 Note 3

CTCI Corp. CTCI Americas,

Inc.

Business

development and

related engineering

services and

planning

100.00 100.00 100.00 Note 3

CTCI Corp. CTCI Singapore Pte.

Ltd.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

Ownership (%)

~13~


Activities

March 31,

2019

December 31,

2018

March 31,

2018Description

CTCI Investment

Corp.

CTCI Development

Corp.

ECOVE Environment

Services Corp.

CTCI Smart

Engineering Corp.

CTCI Resources

Engineering Inc.

CTCI Chemical

Corp.

Manufacturing of

chemical products

75.49 75.49 75.49 Note 3

CTCI Corp.

CTCI Investment

Corp.

CTCI Development

Corp.

ECOVE

Environment Corp.

Investments 57.72 57.72 57.87

ECOVE Environment

Corp.

ECOVE Environment

Services Corp.

ECOVE Wujih

Energy Corp.

Environmental

engineering

100.00 100.00 100.00

ECOVE Environment

Corp.

ECOVE Waste

Management Corp.

Environmental

engineering

100.00 100.00 100.00

ECOVE Environment

Corp.

ECOVE Waste

Management Corp.

ECOVE

Environment

Services Corp.

Environmental

engineering

93.16 93.16 93.16

ECOVE Environment

Corp.

ECOVE Environment

Services Corp.

ECOVE Miaoli

Energy Corp.

Environmental

engineering

75.00 75.00 75.00

ECOVE Environment

Corp.

ECOVE Waste

Management Corp.

Yuan Ding

Resources

Management Corp.

Environmental

engineering

100.00 100.00 100.00 Note 3

ECOVE Environment

Services Corp.

ECOVE

Environment

Consulting Corp.

Environmental

engineering

100.00 100.00 100.00 Note 3

CTCI Corp.

ECOVE Environment

Services Corp.

SINOGAL-Waste

Services CO., Ltd.

Environmental

engineering

60.00 60.00 60.00 Note 3

CTCI Corp. CTCI Overseas

(BVI) Corp.


CTCI Overseas (BVI)

Corp.

CTCI Overseas Co.,

Ltd.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

Ownership (%)

~14~


Activities

March 31,

2019

December 31,

2018

March 31,

2018Description

CTCI Overseas Co.,

Ltd.

CTCI Beijing Co.,

Ltd.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Overseas Co.,

Ltd.

CIMAS Engineering

Company

Planning and

design of

construction

projects

83.00 50.00 50.00 Note 3,7

CTCI Overseas Co.,

Ltd.

Universal

Engineering (BVI)

Corp.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Overseas Co.,

Ltd.

CIPEC Construction

Company Inc.

Planning and

design of

construction

projects

39.89 39.89 39.89 Note 1,3

CTCI Overseas Co.,

Ltd.

CINDA Engineering

& Construction

Private Limited

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Corp.

CTCI Overseas Co.,

Ltd.

CTCI Arabia Ltd. Design and

construction of

chemical factories

100.00 100.00 100.00 Note 3

CTCI Smart

Engineering

Corp.

CTCI Overseas Co.,

Ltd.

CTCI Shanghai Co.,

Ltd.

Consulting services

for construction

projects

- - 100.00 Note 3,6

CTCI Beijing Co.,

Ltd.

CTCI Shanghai Co.,

Ltd.

Consulting services

for construction

projects

100.00 100.00 - Note 3,6

CTCI Shanghai Co.,

Ltd.

CTCI Trading

Shanghai Co., Ltd.

General trade 100.00 100.00 100.00 Note 3,6

CTCI Corp.

CTCI Overseas Co.,

Ltd.

CTCI Engineering

& Construction

Sdn. Bhd.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Overseas Co.,

Ltd.

Sumber Mampu

Sdn. Bhd.

Investments 10.00 10.00 10.00 Note 1, 3

Ownership (%)

~15~


Activities

March 31,

2019

December 31,

2018

March 31,

2018Description

Sumber Mampu Sdn.

Bhd.

CTCI Engineering &

Construction Sdn.

Bhd.

CTCI Corp.

Superiority

(Thailand) Co., Ltd.

CTCI (Thailand)

Co., Ltd.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Advanced

Systems Inc.

Century Ahead Ltd. Investments 100.00 100.00 100.00 Note 3

Century Ahead Ltd. CTCI Advanced

Systems Shanghai

Inc.

Computer skills

services

100.00 100.00 100.00 Note 3

Universal

Engineering (BVI)

Corp.

Superiority


Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Corp. CTCI Machinery

Corp.

Planning and

design of

construction

projects

100.00 100.00 100.00 Note 3

CTCI Corp. CCJV P1

Engineering &

Construction Sdn.

Bhd.

Planning of

construction

projects

99.00 99.00 99.00 Note 3

CTCI Development

Corporation

Crown Asia-2

Investment Limited


CTCI Singapore Pte.

Ltd.

CTCI Netherlands

B.V.

Engineers and

other technical

design and

consultancy

100.00 100.00 100.00 Note 3

CTCI Corp. CTCI & HEC Water

Business Co., Ltd.

Waste water

treatment

Sewerage System

51.00 51.00 51.00 Note 3

CTCI Corp. CTCI CMCE JV

SDN. BHD.

Planning and

design of

construction

projects

51.00 51.00 51.00 Note 3

ECOVE Environment

Corp.

ECOVE Environment

Services Corp.

ECOVE Solvent

Recycling

Corporation

Environmental

engineering

90.00 90.00 - Note 3,4

ECOVE Environment

Corp.

ECOVE Solar

Energy Corporation

Electric Power

Supply

100.00 100.00 50.00 Note 5

CTCI MALAYSIA

Sdn. Bhd.

Planning and

design of

construction

projects

100.00 100.00100.00 Note 3

Ownership (%)

~16~

Note 1: Being the Company’s controlled entities, these subsidiaries that were under 50% owned

by the Company directly or indirectly were included in the consolidated financial

statements.

Note 2: On December 12, 2018, the Company's Board of Directors decided to increase its share

in the subsidiary, CTCI Development Corp., with a total investment amount of

$1,800,000. As of March 31, 2019 and December 31, 2018, the Company has invested

$180,000.

Note 3: The financial statements of the entity as of and for the three-month periods ended March

31, 2019 and 2018 were not reviewed by the independent accountants as the entity did

not meet the definition of significant subsidiary.

Note 4: In May 2018, the subsidiaries, ECOVE Environment Corp. and ECOVE Environment

Services Corp., acquired ECOVE Solvent Recycling Corp. by cash, which became a

subsidiary whose 90% equity was indirectly held by the Company. The acquiree was

consolidated into the financial statements effective from the date of acquisition.

Note 5: The subsidiary, ECOVE Environment Corp., originally held 50% of the equity of ECOVE

Solar Energy Corporation, acquired the remaining shares of ECOVE Solar Energy

Corporation by cash in September 2018, and became a subsidiary whose 100% equity

was indirectly held by the Group. The acquiree was consolidated into the financial

statements effective from the date of acquisition.

Note 6: In August 2018, the subsidiary, CTCI Beijing Co., Ltd, acquired a 100% equity interest

of the subsidiaries, CTCI Smart Engineering Corp. and CTCI Overseas Co., Ltd., by cash

and shares.

Note 7: In March 2019, CTCI Overseas Co., Ltd. purchased 646 thousand shares of CIMAS

Engineering Company and obtained 33% of the shares.

C. Subsidiaries not included in the consolidated financial statements: None.

D. Adjustments for subsidiaries with different balance sheet date: None.

E. Significant restrictions: None.


Activities

March 31,

2019

December 31,

2018

March 31,

2018Description

ECOVE Solar Energy

Corporation

ECOVE Solar

Power Corporation

Electric Power

Supply

100.00 100.00 100.00 Note 3,5

ECOVE Solar Energy

Corporation

ECOVE Central

Corporation Ltd.

Electric Power

Supply

100.00 100.00 100.00 Note 3,5

ECOVE Solar Energy

Corporation

ECOVE South

Corporation Ltd.

Electric Power

Supply

100.00 100.00 100.00 Note 3,5

ECOVE Solar Energy

Corporation

G.D International,

LLC.

Electric Power

Supply

100.00 100.00 100.00 Note 3,5

G.D International,

LLC.

Lumberton Solar

W2-090, LCC.

Electric Power

Supply

100.00 100.00 100.00 Note 3,5

Ownership (%)

~17~

F. Subsidiaries that have non-controlling interests that are material to the Group:

As of March 31, 2019, December 31, 2018 and March 31, 2018, the non-controlling interest

amounted to $3,329,453, $3,167,430 and $3,134,550, respectively. The information on non-

controlling interest and respective subsidiaries is as follows:

Summarized financial information of the subsidiaries:

Balance sheets

Statements of comprehensive income

Name of subsidiary

Principal place

of business Amount Ownership (%) Amount Ownership (%) Amount Ownership (%)

ECOVE Environment

Corp.

Taiwan 2,693,511$ 42.28% 2,571,278$ 42.28% 2,483,920$ 42.13%

December 31, 2018 March 31, 2018March 31, 2019

Non-controlling interest

March 31, 2019 December 31, 2018 March 31, 2018

Current assets 3,820,332$ 3,574,782$ 4,202,733$

Non-current assets 5,660,221 5,500,925 3,359,324

Current liabilities 1,454,760)( 1,496,920)( 1,706,724)(

Non-current liabilities 2,340,334)( 2,157,428)( 538,489)(

Total net assets 5,685,459$ 5,421,359$ 5,316,844$

ECOVE Environment Corp.

2019 2018

Revenue 1,283,837$ 1,188,112$

Profit before income tax 301,205 306,211

Income tax expense 56,768)( 85,459)(

Profit for the period 244,437 220,752

Other comprehensive income (loss), net of tax 17,010 19,539)(

Total comprehensive income for the period 261,447$ 201,213$

Comprehensive income attributable

to non-controlling interest 48,335$ 34,955$

Dividends paid to non-controlling interest -$ -$


For the three-month periods ended March 31,

~18~

Statements of cash flows

(4) Leasing arrangements (lessee)－right-of-use assets/ lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at

which the leased asset is available for use by the Group. For short-term leases or leases of low

value assets, lease payments are recognised as an expense on a straight-line basis over the lease

term.

B. Lease liabilities include the net present value of the remaining lease payments at the commencement

date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the

fixed payments, less any lease incentives receivable.

The Group subsequently measures the lease liability at amortised cost using the interest method and

recognises interest expense over the lease term. The lease liability is remeasured and the amount of

remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the

lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

(a) The amount of the initial measurement of lease liability;

(b) Any lease payments made at or before the commencement date.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the

commencement date to the earlier of the end of the asset’s useful life or the end of the lease term.

When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment

to the right-of-use asset.

(5) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected

to be paid in respect of service rendered by employees in a period and should be recognised as

expense in that period when the employees render service.

2019 2018

Net cash provided by operating activities 81,573$ 513,656$

Net cash provided by (used in) investing

activities 111,612 506,274)(

Net cash provided by financing activities 87,815 19,589

Increase in cash and cash equivalents 281,000 26,971

Cash and cash equivalents, beginning of period 1,543,162 1,657,955

Cash and cash equivalents, end of period 1,824,162$ 1,684,926$



~19~

B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when

they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent

of a cash refund or a reduction in the future payments.

(b) Defined benefit plans

i. Net obligation under a defined benefit plan is defined as the present value of an amount of

pension benefits that employees will receive on retirement for their services with the Group

in current period or prior periods. The rate used to discount is determined by using interest

rates of high-quality corporate bonds that are denominated in the currency in which the

benefits will be paid, and that have terms to maturity approximating the terms of related

pension liability; when there is no deep market in high-quality corporate bonds, the Group

uses interest rates of government bonds (at the balance sheet date) instead.

ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive

income in the period in which they arise and are recorded as retained earnings.

iii. Past service costs are recognised immediately in profit or loss.

iv. Pension cost for the interim period is calculated on a year-to-date basis by using the pension

cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted

for significant market fluctuations since that time and for significant curtailments,

settlements, or other significant one-off events. Also, the related information is disclosed

accordingly.

C. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of

employment as a result from either the Group’s decision to terminate an employee’s employment

before the normal retirement date, or an employee’s decision to accept an offer of redundancy

benefits in exchange for the termination of employment. The Group recognizes expense as it can

no longer withdraw an offer of termination benefits or it recognizes relating restructuring costs,

whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet

date shall be discounted to their present value.

D. Employees’ compensation, directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognized as

expenses and liabilities, provided that such recognition is required under legal or constructive

obligation and those amounts can be reliably estimated. Any difference between the resolved

amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

~20~

(6) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or

loss, except to the extent that it relates to items recognized in other comprehensive income or items

recognized directly in equity, in which cases the tax is recognized in other comprehensive income

or equity.

B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively

enacted at the balance sheet date in the countries where the Company and its subsidiaries operate

and generate taxable income. Management periodically evaluates positions taken in tax returns

with respect to situations in accordance with applicable tax regulations. It establishes provisions

where appropriate based on the amounts expected to be paid to the tax authorities. An additional

10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense

in the year the stockholders resolve to retain the earnings.

C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences

arising between the tax bases of assets and liabilities and their carrying amounts in the

consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have been

enacted or substantially enacted by the balance sheet date and are expected to apply when the

related deferred tax asset is realized or the deferred income tax liability is settled.

D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit

will be available against which the temporary differences can be utilized. At each balance sheet

date, unrecognized and recognized deferred tax assets are reassessed.

E. Current tax assets and liabilities are offset and the net amount reported in the balance sheet when

there is a legally enforceable right to offset the recognized amounts and there is an intention to

settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets

and liabilities are offset on the balance sheet when the entity has the legally enforceable right to

offset current tax assets against current tax liabilities and they are levied by the same taxation

authority on either the same entity or different entities that intend to settle on a net basis or realize

the asset and settle the liability simultaneously.

F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from

research and development expenditures, to the extent that it is possible that future taxable profit

will be available against which the unused tax credits can be utilized.

G. The interim period income tax expense is recognised based on the estimated average annual

effective income tax rate expected for the full financial year applied to the pretax income of the

interim period, and the related information is disclosed accordingly.

H. If a change in tax rate is enacted or substantively enacted in an interim period, the Group

recognises the effect of the change immediately in the interim period in which the change occurs.

The effect of the change on items recognised outside profit or loss is recognised in other

comprehensive income or equity while the effect of the change on items recognised in profit or

loss is recognised in profit or loss.

~21~

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

There have been no significant changes as of March 31, 2019. Please refer to Note 5 of the consolidated

financial statements for the year ended December 31, 2018.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse

credit risk, so it expects that the probability of counterparty default is remote.

B. Details of the Group’s cash and cash equivalents pledged to others as collateral are provided in

Note 8.

(2) Financial assets and liabilities at fair value through profit or loss


Cash on hand and revolving funds $ 285,976 $ 353,440 105,087$

Checking accounts and demand deposits 10,229,321 8,820,471 7,522,615

Time deposits 6,498,382 5,897,081 6,662,143

17,013,679$ 15,070,992$ 14,289,845$

Items March 31, 2019 December 31, 2018 March 31, 2018

Current items:

Financial assets mandatorily measured at

fair value through profit or loss

Beneficiary certificates 345,546$ 505,965$ 365,958$

Derivatives 64,569 50,315 2,157

410,115 556,280 368,115

Valuation adjustment 498 1,642)( 242

410,613$ 554,638$ 368,357$

Financial liabilities mandatorily

measured at fair value through profit or loss

Derivatives 36$ 548$ 1,432$

Non-current items:


fair value through profit or loss

Unlisted shares -$ -$ 409,200$

Valuation adjustment - - 340,626)(

-$ -$ 68,574$

~22~

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or

loss are listed below:

B. The Group entered into contracts relating to derivative financial assets and liabilities which were

not accounted for under hedge accounting. The information is listed below:

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import

or export proceeds. However, these forward foreign exchange contracts are not accounted for

under hedge accounting.

C. Information relating to credit risk of financial assets at fair value through profit or loss is provided

in Note 12(2).

2019 2018

Financial assets mandatorily measured at fair value

through profit or loss

Beneficiary certificates 2,651$ 2)($

Derivatives 27,500 12,269)(

Unlisted shares - 15,117)(

30,151$ 27,388)($


Contract Period

Foreign exchange swap contract (1 item) THB 69,250 thousand 2018.05.18~2019.05.22

Foreign exchange swap contract (11 items) USD 90,000 thousand 2019.03.05~2019.04.11

Foreign exchange contract-buy (11 items) USD 35,370 thousand 2018.05.02~2019.09.17

Merchandise exchange contract (1 items) USD 1,160 thousand 2019.01.03~2019.04.03

March 31, 2019

Contract Amount

(notional principal)

Contract Period




Merchandise exchange contract (3 items) USD 3,580 thousand 2018.10.31~2019.03.29

December 31, 2018

Contract Amount


Contract Period




March 31, 2018

Contract Amount


~23~

(3) Financial assets at fair value through other comprehensive income

A. The Group has elected to classify investments that are considered to be strategic investments or

steady dividend income as financial assets at fair value through other comprehensive income.

B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial

assets at fair value through other comprehensive income are listed below:

C. Information relating to credit risk of financial assets at fair value through other comprehensive

income is provided in Note 12(2).

Items March 31, 2019 December 31, 2018 March 31, 2018

Current items:

Debt instruments

Corporate bonds 27,572$ 26,953$ 68,109$

Valuation adjustment 126)( 175)( 3,388)(

27,446 26,778 64,721

Equity instruments

Listed stocks 323,576 349,894 532,676

Valuation adjustment 166,468 123,655 18,527

490,044 473,549 551,203

517,490$ 500,327$ 615,924$

Non-current items:

Equity instruments

Unlisted shares 919,414$ 919,414$ 759,956$

Valuation adjustment 138,456)( 130,803)( 109,061)(

780,958$ 788,611$ 650,895$

2019 2018

Equity instruments at fair value through

other comprehensive income

Fair value change recognised in other

comprehensive income 36,855$ 30,775$

Cumulative losses reclassified to

retained earnings due to derecognition (2,048)$ -$

Debt instruments at fair value through

other comprehensive income

Fair value change recognised in other

comprehensive income 39$ 369$

Exchange gain recognised in profit or loss 620$ 562$

Interest income recognised in profit or loss 267$ 2,927$


~24~

(4) Notes and accounts receivable

For the long-term receivables due in one year, please refer to Note 6 (11), 12 (2) C. (b) for detailed

information.

The ageing analysis of notes receivable and accounts receivable that were past due but not impaired

is as follows:

The above analysis is calculated based on past due date.

(5) Prepayments

(6) Other current assets

Note: Other financial assets are time deposits with maturity over three months.


Notes receivable 14,614$ 75,006$ 139,240$

Accounts receivable 5,042,012 8,839,281 4,591,695

Long-term receivable due in one year 281,501 278,646 270,453

Less: Allowance for bad debts 39,261)( 25,595)( 86,635)(

5,298,866$ 9,167,338$ 4,914,753$


Up to 30 days 3,369,773$ 6,504,537$ 2,789,085$

31 to 90 days 1,141,481 1,956,758 1,081,583

91 to 180 days 194,641 218,242 533,024

Over 180 days 592,971 487,801 511,061

5,298,866$ 9,167,338$ 4,914,753$


Prepayment for materials 2,861,470$ 2,581,564$ 2,688,351$

Prepayment for construction in progress 517,938 480,547 143,576

Others 926,174 1,191,784 1,560,249

4,305,582$ 4,253,895$ 4,392,176$


Other financial assets (Note) 30,460$ 370,331$ 168,144$

Others 277,399 208,887 21,245

307,859$ 579,218$ 189,389$

~25~

(7) Investments accounted for under the equity method

A. Associates

(a) The basic information of the associates that are material to the Group is as follows:

(b) The summarized financial information of the associates that are material to the Group is as

follows:

2019 2018

At January 1 3,680,933$ 3,627,018$

Addition of investments accounted for using

equity method - 27,500

Share of profit or loss of investments accounted

for using equity method 148,680)( 14,310

Earnings distribution of investments accounted

for under equity method - 71,982)(

Changes in other equity items 6,307 2,727

At March 31 3,538,560$ 3,599,573$

Associates: March 31, 2019 December 31, 2018 March 31, 2018

Pan Asia Corp. 435,571$ 526,590$ 534,508$

Powertec Energy Corp. 1,135,627 1,227,090 1,437,837

Boretech Resource Recovery Engineering Co.,

Ltd. (Cayman) 442,164 438,252 440,583

MIE Industrial SDN. BHD 570,571 556,704 466,291

Blue Whale Water Technology Co., Ltd. 455,274 434,937 379,671

EVER ECOVE Corp. 295,957 295,971 -

HDEC-CTCI (Linhai) Corporation 203,396 201,389 -

Joint ventures:

ECOVE Solar Energy Corporation - - 340,683

3,538,560$ 3,680,933$ 3,599,573$

Company

name

Principal

place

of business

March 31,

2019

December

31, 2018

March 31,

2018

Nature of

relationship

Method of

measurement

Powertec

Energy Corp.

Taiwan 16.03% 16.03% 18.89% Associates Equity method

Shareholding ratio

~26~

Balance sheet

Statement of comprehensive income

(c) The carrying amount of the Group’s interests in all individually immaterial associates and the

Group’s share of the operating results are summarized below:

As of March 31, 2019, December 31, 2018 and March 31, 2018, the carrying amount of the

Group’s individually immaterial associates amounted to $2,402,933, $2,453,843 and

$1,821,053, respectively.

(d) In August 2018, the Board of Directors during its meeting resolved to jointly establish Ever

Ecove Corporation with Evergreen Steel Corporation, and the investment amount is $300,000.

(e) In September 2018, the Board of Directors during its meeting resolved to jointly establish

HDEC-CTCI (Linhai) Corporation with Hsin Dar Environment Corp., and the investment

amount is $202,500.

(f) The above investments accounted for using the equity method have not been reviewed by

independent accountants as of March 31, 2019 and 2018.

(g) The above investments accounted for using the equity method, Pan Asia Corp., Powertec

Engergy Corp., Blue Whale Water Technology Co. Ltd., EVER ECOVE Corp., and HDEC-

CTCI (Linhai Corporation), were recognized based on the financial statements which have

been audited by other auditors as of December 31, 2018.


Current assets 1,436,352$ 1,636,879$ 857,253$

Non-current assets 21,186,451 20,905,041 19,690,850

Current liabilities 449,018)( 707,663)( 510,718)(

Non-current liabilities 11,482,981)( 10,572,795)( 9,081,874)(

Total net assets 10,690,804$ 11,261,462$ 10,955,511$

Share in associate's net assets 1,713,736$ 1,805,212$ 2,069,496$

Carrying amount of the associate 1,135,627$ 1,227,090$ 1,437,837$

Powertec Energy Corp.

2019 2018

Revenue -$ -$

Total comprehensive loss 570,659)($ 246,325)($

Powertec Energy Corp.


2019 2018

Total comprehensive income 200,453)($ 115,004$


~27~

B. Joint venture

(a) The basic information of the joint ventures that are material to the Group is as follows:

(b) The summarized financial information of the joint ventures that are material to the Group is

as follows:

Balance sheet

Shareholding ratio

Company

name

Principal

place

of business March 31, 2019

Nature of

relationship

Method of

measurement

ECOVE

Solar Energy

Corporation

Taiwan 50.00% Joint

ventures

Equity

method

ECOVE Solar Energy Corporation

March 31, 2018

Cash and cash equivalents 79,004$

Other current assets 331,564

Current assets 410,568

Non-current assets 907,415

Total assets 1,317,983$

Current financial liabilities 19,540$

Other current liabilities 309,946

Current liabilities 329,486

Non-current liabilities 307,107

Total liabilities 636,593$

Total net assets 681,390$

Share in associate's net assets 340,695$

Carrying amount of the associate 340,683$

~28~

Statement of comprehensive income

C. Explanation for holding ECOVE Solar Energy Corporation shares:

(a) The Group holds 50% equity in the joint venture - ECOVE Solar Energy Corporation and its

main activity is environmental engineering.

(b) The Board of Directors had resolved to invest in ECOVE Solar Energy Corporation, in March

2018. The Group invested in ECOVE Solar Energy Corporation amounting to $27,500.

(c) On September 20, 2018, the Group acquired 50% equity interest of ECOVE Solar Energy

Corporation by cash, which became a subsidiary whose 100% equity was indirectly held by

the Group. The acquiree was consolidated into financial statements from the date of acquisition.

Please refer to Note 6(31) for further information.

ECOVE Solar Energy Corporation

For the three-month period ended March 31,

2018

Revenue 12,460

Depreciation and amortization 5,376)(

Interest income 152

Interest expense 1,721)($

Profit before income tax 13,291$

Income tax expense 1,551)(

Profit for the period 11,740

Other comprehensive loss-

net of tax 7,602)(

Total comprehensive income 4,138$

~29~

(8) Property, plant and equipment

Land

Buildings and

structures Machinery

Transportation

equipment

Office

equipment

Unfinished

construction and

prepayments

for equipment Others Total

At January 1, 2019

Cost 5,519,050$ 4,254,061$ 2,853,926$ 262,446$ 239,739$ 290,187$ 771,729$ 14,191,138$

Accumulated depreciation - 1,777,331)( 936,086)( 206,580)( 230,037)( - 609,068)( 3,759,102)(

5,519,050$ 2,476,730$ 1,917,840$ 55,866$ 9,702$ 290,187$ 162,661$ 10,432,036$

Three-month period ended

March 31, 2019

Opening net book amount 5,519,050$ 2,476,730$ 1,917,840$ 55,866$ 9,702$ 290,187$ 162,661$ 10,432,036$

Additions 20 89 14,824 1,244 195 69,464 3,119 88,955

Disposals - - 16)( - - - 140)( 156)(

Depreciation charge - 31,550)( 52,845)( 4,854)( 1,234)( - 27,423)( 117,906)(

Reclassifications - 114,413 139,899 - - 88,614)( - 165,698

Net exchange differences 1,617 27,645 2,476 289 84 352 1,246 33,709

Closing net book amount 5,520,687$ 2,587,327$ 2,022,178$ 52,545$ 8,747$ 271,389$ 139,463$ 10,602,336$

At March 31, 2019

Cost 5,520,687$ 4,368,563$ 3,008,633$ 263,690$ 239,934$ 271,389$ 774,708$ 14,447,604$


5,520,687$ 2,587,327$ 2,022,178$ 52,545$ 8,747$ 271,389$ 139,463$ 10,602,336$

~30~

A. The Group had no borrowing costs capitalized for the three-month periods ended March 31, 2019 and 2018.

B. Please refer to Note 8 for the details of pledged property, plant and equipment.

Land

Buildings and

structures Machinery

Transportation

equipment

Office

equipment

Unfinished

construction and

prepayments

for equipment Others Total

At January 1, 2018

Cost 3,357,596$ 4,396,599$ 961,309$ 244,873$ 238,180$ 45,951$ 750,426$ 9,994,934$


3,357,596$ 2,776,277$ 134,947$ 57,143$ 13,051$ 45,951$ 275,151$ 6,660,116$


March 31, 2018

Opening net book amount 3,357,596$ 2,776,277$ 134,947$ 57,143$ 13,051$ 45,951$ 275,151$ 6,660,116$

Additions - - 17,795 760 1,064 4,152 12,281 36,052

Disposals - 3)( 150)( - 31)( - 354)( 538)(

Depreciation charge - 34,039)( 15,517)( 4,610)( 59)( - 33,670)( 87,895)(

Reclassifications - 113)( 284)( - 626)( - 1,023 -

Net exchange differences 1,086 18,341 82)( 180 111)( 109)( 587)( 18,718

Closing net book amount 3,358,682$ 2,760,463$ 136,709$ 53,473$ 13,288$ 49,994$ 253,844$ 6,626,453$

At March 31, 2018

Cost 3,358,682$ 4,414,766$ 975,593$ 245,813$ 238,725$ 49,994$ 761,287$ 10,044,860$


3,358,682$ 2,760,463$ 136,709$ 53,473$ 13,288$ 49,994$ 253,844$ 6,626,453$

~31~

(9) Leasing arrangements－lessee

A. The Group leases various assets including land, buildings, business vehicles, multifunction printers.

Rental contracts are typically made for periods of 1 to 28 years. Lease terms are negotiated on an

individual basis and contain a wide range of different terms and conditions. The lease agreements

do not impose covenants, but leased assets may not be used as security for borrowing purposes.

B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

C. For the three-month period ended March 31, 2019, the additions to right-of-use assets was $1,111.

D. The information on income and expense accounts relating to lease contracts is as follows:

E. For the three-month period ended March 31, 2019, the Group’s total cash outflow for leases was

$100,098.

F. The impact of variable lease payments on lease liabilities:

(a) The part of subject of the variable lease payment clause in The Group's lease contract is linked

to the amount of electricity generated by solar energy. Changes of variable lease payment

related to the situation mention above are recognized as expenses in the period which according

to the payment terms.

(b) When The Group generating electricity with solar energy arise 1%, the variable lease payment

will also arise approximately 1% according to the lease contract.

March 31, 2019

For the three-month

period ended

March 31, 2019

Carrying amount Depreciation charge

Land $ 217,610 $ 7,709

Buildings 49,386 5,664

Machinery and equipment - -

Transportation equipment (Business vehicles) 44,349 5,720

Office equipment (Photocopiers) 44,459 3,583

Other equipment 37,618 1,494

393,422$ 24,170$

For the three-month period

ended March 31, 2019

Items affecting profit or loss

Interest expense on lease liabilities $ 618

~32~

(10) Investment property

Buildings and

Land structures Total

At January 1, 2019

Cost 718,428$ 126,572$ 845,000$

Accumulated depreciation - 36,871)( 36,871)(

718,428$ 89,701$ 808,129$


March 31, 2019

Opening net book amount 718,428$ 89,701$ 808,129$

Depreciation charge - 1,077)( 1,077)(

Closing net book amount 718,428$ 88,624$ 807,052$

At March 31, 2019

Cost 718,428$ 126,572$ 845,000$


718,428$ 88,624$ 807,052$

Buildings and

Land structures Total

At January 1, 2018

Cost 718,428$ 126,572$ 845,000$


718,428$ 94,224$ 812,652$


March 31, 2018

Opening net book amount 718,428$ 94,224$ 812,652$

Depreciation charge - 1,131)( 1,131)(

Closing net book amount 718,428$ 93,093$ 811,521$

At March 31, 2018

Cost 718,428$ 126,572$ 845,000$


718,428$ 93,093$ 811,521$

~33~

A. Rental income from the lease of the investment property and direct operating expenses arising

from the investment property are shown below:

B. The fair value of the investment property held by the Group as at March 31, 2019 and 2018 were

$923,715 and $713,112, respectively, which are based on the real estate market transaction price.

Also, the fair value as at December 31, 2018 was $930,000, which was valued by independent

valuers. Valuations were made using the income approach with key assumptions as follows:

C. Information about the investment property that was pledged to others as collateral is provided in

Note 8.

(11) Other non-current assets

2019 2018

Rental income from investment property 7,803$ 7,803$

Direct operating expenses arising from the

investment property that generated rental

income in the period 1,077$ 1,131$

Direct operating expenses arising from the

investment property that did not generate

rental income in the period -$ -$


December 31, 2018

Gross margin 2.55%

Growth rate 1%~1.5%

Discount rate 3.30%


Long-term receivables 2,631,986$ 2,670,985$ 2,615,714$

Less: Long-term receivables due in one year 281,501)( 278,646)( 270,453)(

2,350,485 2,392,339 2,345,261

Long-term prepaid rent - 37,897 41,803

Restricted bank deposits 119,944 188,619 58,747

Refundable deposits 121,331 130,167 133,226

Prepayments for business facilities 544,993 546,344 40,500

Air pollution fee 54,267 54,267 54,267

Others 180,123 218,899 166,103

3,371,143$ 3,568,532$ 2,839,907$

~34~

A. Long-term receivables:

The Group contracted with the government (grantor) a service concession arrangement. The

consideration receivable from the grantor in respect of the service concession arrangement is

recognized at its fair value. Such consideration is recognized as a financial asset based on the

way of the consideration from the grantor to the operator being made as specified in the

arrangement. The consideration receivable from the grantor is recognized as accounts receivable

if it is expected to be realized within 12 months after the balance sheet date (please refer to Note

6(4)), and is recognized as long-term accounts receivable if it is expected to be realized more

than 12 months after the balance sheet date. The major terms of the arrangement are as follows:

(a) The subsidiary, ECOVE Wujih Energy Corp., obtained the operation for the construction of

Wujih Refuse Incineration Plant by build - operate - transfer (BOT) mode since April, 2000.

In September, 2000, the “Taichung City waste incineration, commission contract” between

ECOVE Wujih Energy Corp., and Taichung Government had been signed. The operating

period is for 20 years starting from September 6, 2004. However, according to the contract,

if it is expired in advance or extended during construction or operation, duration of the

operation will be deemed to be matured or extended, but not to exceed 50 years. In order to

work the “Waste Incineration Taichung City Commission Contract”, ECOVE Wujih Energy

Corp., obtained the land-use right that has continued for 20 years since the plant began

operation.

(b) The subsidiary, ECOVE Miaoli Energy Corp., obtained the operation for the construction of

Miaoli County Refuse Incineration Plant by build - operate - transfer (BOT) mode since

August, 2002. In September, 2002, the “Waste Incineration Commission Contract” between

ECOVE Miaoli Energy Corp., and Miaoli County Government had been signed. The

operating period is for 20 years starting from February 29, 2008. However, according to the

contract, if it is expired in advance or extended during construction or operation, duration of

the operation will be deemed to be matured or extended. In order to work the “Waste

Incineration Miaoli County Commission Contract”, ECOVE Miaoli Energy Corp., obtained

the land-use right of Miaoli Refuse Incineration Plant. Therefore, duration of the land – use

right is from September 13, 2002 to March 12, 2026.

(c) ECOVE Wujih Energy Corp., and Fortune Energy Corp. need to comply with the guarantee

tonnage of waste from government according to the contract during construction or operation.

(d) Per service cost is calculated and adjusted based on the “Waste Incineration Commission

Contract”, “Index of average regular earnings of employees-manufacturing” and “Consumer

price index”.

B. Long-term prepaid rents were due to the land-use rights obtained by ECOVE Wujih Energy Corp.,

and ECOVE Miaoli Energy Corp., according to the “BOT Agreement”.

C. Information about the restricted bank deposits and refundable deposits that were pledged to

others as collateral is provided in Note 8.

~35~

D. Information about the air pollution fee is provided in Note 9(7).

(12) Short-term borrowings

(13) Accounts payable

Type of borrowing March 31, 2019 Interest rate range Collateral

Unsecured borrowings 8,950,436$ 0.68%-8.05% -

Secured borrowings 1,997,150 1.09%-1.24% Properties pledged by

subsidiary-CTCI

Development Corp.,

and were guaranteed

and endorsed by the

Company

10,947,586$

Type of borrowing December 31, 2018 Interest rate range Collateral

Unsecured borrowings 11,287,309$ 0.68%-8.05% -

Secured borrowings 2,127,150 1.04%-1.24% Properties pledged by

subsidiary-CTCI

Development Corp.

and time deposits of

USD 4,560 thousand

mortgaged to banks,

and all were

guaranteed and

endorsed by the

Company

13,414,459$

Type of borrowing March 31, 2018 Interest rate range Collateral

Unsecured borrowings 7,498,485$ 0.65%-7.8%

-


Materials payable 4,318,013$ 4,743,519$ 3,179,229$

Sub-contract costs payable 4,972,029 4,818,197 5,505,288

Maintenance costs payable 304,718 281,003 430,166

Equipment burying costs payable 15,141 36,861 53,963

Others 180,623 111,682 130,484

9,790,524$ 9,991,262$ 9,299,130$

~36~

(14) Other payables

Note: Payables on land purchases arise from the payment that the subsidiary, CTCI Development

Corp. purchases the land.

(15) Other current liabilities

As of March 31, 2019, December 31, 2018, and March 31, 2018, as the accumulated cost was greater

than the accumulated capital injection, the joint venture was recognized in “other current liabilities”.


Accrued payroll 735,508$ 1,664,616$ 680,924$

Accrued employees’ compensation, directors’

and supervisors’ remuneration 197,307 148,763 175,718

Accrued insurance 75,052 83,359 89,604

Accrued pension 37,181 33,206 29,620

Payables on land purchases (Note) - 1,785,960 -

Others 644,046 976,612 606,077

1,689,094$ 4,692,516$ 1,581,943$


Joint venture 2,730,966$ 7,323,938$ 7,868,906$

Long-term borrowings - current portion 200,872 128,268 344,000

Receipt in advance 118,954 161,659 199,754

Others 86,975 36,795 62,658

3,137,767$ 7,650,660$ 8,475,318$

~37~

(16) Long-term borrowings

Type of borrowings

Borrowing period

and repayment term

Interest

rate range Collateral

Financing

amount March 31, 2019 December 31, 2018 March 31, 2018

Subsidiary - ECOVE Miaoli

Energy Corp.

Mega International

Commercial Bank

secured borrowings (Note 1)

Borrowing period is

from November 2010

to April 2019; interest

is payable monthly.

1.3877%

~1.3950%

Machineries and other

equipment

constructed or

acquired

523,200$ 4,000$ 4,000$ 180,000$

Subsidiary - ECOVE Solvent

Recycling Corp.

Chang Hwa Bank

secured borrowings (Note 2)

Borrowing period is

from September 2014

to September 2021;

interest is payable

monthly.

2.30%

~2.47%

Land and buildings

and structures

29,500 23,313 25,645 -

Subsidiary - ECOVE Solar

Energy Corporation

The Shanghai Commercial &

Savings Bank, Ltd.

secured borrowings

Borrowing period is

from June 2018 to

June 2033; Principal

and interest are

payable monthly.

1.7% ECOVE Solar Energy

Corporation issued a

promissory note of

$302,760 thousand,

which is guaranteed

by ECOVE

Environment Corp.

310,000 298,167 302,755 -


Energy Corporation

KGI Bank

secured borrowings

Borrowing period is

from May 2015 to

May 2021; Principal

and interest are

payable monthly.

1.5% G.D. Development

Corp. issued a

promissory note of

$152,690 thousand,

which is guaranteed

by ECOVE

Environment Corp.

220,000 146,694 151,191 -

~38~

Type of borrowings

Borrowing period

and repayment term

Interest


Financing



Energy Corporation

Chang Hwa Bank

secured borrowings

Borrowing period is

from June 2016 to

August 2030; interest

is payable monthly.

1.89%~1.9% Guaranteed by ECOVE

Environment Corp.

155,000$ 138,327$ 141,124$ -$


Power Corporation

First Bank

secured borrowings

Borrowing period is

from January 2014 to

December 2029;

interest is payable

monthly.



promissory note of

$81,760 thousand, which

is guaranteed by ECOVE

Solar Energy Corporation

108,000 76,082 77,794 -


Power Corporation

Bank SinoPac

secured borrowings

Borrowing period is

from August 2014 to


is payable monthly.



promissory note of




149,800 115,586 118,360 -


Power Corporation

Bank SinoPac

secured borrowings

Borrowing period is

from August 2018 to


is payable monthly.

1.6% 〃 280,000 225,383 226,996 -


Power Corporation

Bank SinoPac

secured borrowings

Borrowing period is

from March 2019 to

March 2024; interest

is payable monthly.

1.5% 〃 217,000 120,000 - -

~39~

Type of borrowings

Borrowing period

and repayment term

Interest


Financing



Power Corporation

Hua Nan Bank

secured borrowings

Borrowing period is

from June 2015 to

June 2030; interest is

payable monthly.



promissory note of




38,430$ 23,820$ 24,423$ -$


Power Corporation

Far Eastern International Bank

Co., Ltd.

secured borrowings

Borrowing period is

from September 2015

to September 2020;

principal is payable

seasonally, and

interest is payable

monthly.



promissory note of $27

million, which is

guaranteed by ECOVE


27,000 3,940 4,480 -


Power Corporation

KGI Bank

secured borrowings

Borrowing period is

from November 2017

to November 2032;

interest is payable

monthly.



promissory note of $85

million, which is

guaranteed by ECOVE


100,000 79,654 81,113 -

~40~

Type of borrowings

Borrowing period

and repayment term

Interest


Financing


Subsidiary - ECOVE Central

Corporation Ltd.

Bank SinoPac

secured borrowings

Borrowing period is

from December 2018

to December 2023;

interest is payable

monthly.

1.6% ECOVE Environment

Corp. issued a promissory

note of $16 million, which



16,000$ 15,600$ 16,000$ -$

Subsidiary - ECOVE South

Corporation Ltd.

Bank SinoPac

secured borrowings

Borrowing period is

from December 2018

to December 2023;

interest is payable

monthly.

1.6% ECOVE Environment

Corp. issued a promissory

note of $14 million, which



14,000 13,650 14,000 -

Subsidiary - LUMBERTON

SOLAR

Bank SinoPac

secured borrowings

Borrowing period is

from September 2017

to August 2023;

interest is payable

monthly.



promissory note of

US$14,640 thousand,

which is guaranteed by

ECOVE Solar Energy

Corporation

449,931 358,440 363,973 -

~41~

Note 1: ECOVE Miaoli Energy Corp, commited to maintain the following financial ratios and criteria during the period of the contract:

a. Current ratio (current assets + restricted assets provided as a compensation for the credit loan)/current liabilities: More than 100%

b. Liability ratio (total liabilities/ net equity): Less than 190%.

c. Interest coverage ratio ((income before tax + interest expense) / interest expense): At least 150%.

Note 2: ECOVE Solvent Recycling Corporation committed that if the construction has been completed, ECOVE Solvent Recycling Corporation will

complete the registration of ownership on the construction and pledge with the basement of construction in first priority to Chang Hwa Bank.

Type of borrowings

Borrowing period

and repayment term

Interest


Financing


Subsidiary - CTCI

Development Corporation

KGI Bank

secured borrowings

Borrowing period is

from January 2019 to

December 2048;

interest is payable

monthly, and principal

is payable

semiannually.

1.4% Land and buildings and

structures

4,000,000$ 1,965,960$ -$ -$

Subsidiary - CTCI

Development Corporation

Taiwan Cooperative Bank

secured borrowings

Borrowing period is

from April 2009 to

April 2029; interest is

payable monthly, and

principal is payable

semiannually.

1.3504% Land and buildings and

structures

3,600,000 - - 2,043,150

Less: Current portion 200,872)( 128,268)( 344,000)(

3,407,744$ 1,423,586$ 1,879,150$

~42~

(17) Other non-current liabilities

Note: Deferred revenue is a cash grant received from New Jersey government since Lumberton

builds and operates a solar power station in New Jersey. The construction period of the solar

power station is 15 years.

(18) Pensions

A. Defined benefit pension plan

(a) The Company and its domestic subsidiaries have a defined benefit pension plan in

accordance with the Labor Standards Law, covering all regular employees’ service years prior

to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of

employees who chose to continue to be subject to the pension mechanism under the Law.

Under the defined benefit pension plan, two units are accrued for each year of service for the

first 15 years and one unit for each additional year thereafter, subject to a maximum of 45

units. Pension benefits are based on the number of units accrued and the average monthly

salaries and wages of the last 6 months prior to retirement. The Company contributes monthly

an amount equal to 6.5% of the employees’ monthly salaries and wages to the retirement fund

deposited with Bank of Taiwan, the trustee, under the name of the independent retirement

fund committee. Also, the Company would assess the balance in the aforementioned labor

pension reserve account by the end of December 31, every year. If the account balance is

insufficient to pay the pension calculated by the aforementioned method, to the employees

expected to be qualified for retirement next year, the Company will make contributions to

cover the deficit by next March.

(b) For the aforementioned pension plan, the Group recognized pension cost of $10,839 and

$14,063 for the three-month periods ended March 31, 2019 and 2018, respectively.

(c) Expected contributions to the defined benefit pension plans of the Group for the year ending

December 31, 2020 amount to $86,581.


Net defined benefit liabilities 1,518,647$ 1,847,269$ 1,888,227$

Deposits received 370,062 407,649 357,236

Accrued recovery costs 97,356 98,932 90,990

Deferred revenue (Note) 166,545 169,741 -

Others 79,597 92,101 114,776

2,232,207$ 2,615,692$ 2,451,229$

~43~

B. Defined contribution pension plan

(a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined

contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”),

covering all regular employees with R.O.C. nationality. Under the New Plan, the Company

and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’

monthly salaries and wages to the employees’ individual pension accounts at the Bureau of

Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of

employment.

(b) The pension costs under the defined contribution pension plans of the Group for the three-

month periods ended March 31, 2019 and 2018 were $51,848 and $50,647, respectively.

(c) Some overseas subsidiaries adopted a defined contribution pension plan, covering all regular

employees. Appropriation of pension cost for the three-month periods ended March 31, 2019

and 2018 were $31,954 and $21,603, respectively.

(19) Share-based payment - employee compensation

A. The Company

(a) For the three-month periods ended March 31, 2019 and 2018, the Company’s share-based

payment arrangements were as follows:

Type of arrangement Grant date

Quantity

granted

Contract

period

Vesting

conditions

Fifth plan of employee

stock options

2017.04.11 20,000 units 6 years Service of 2 to

4 years

Sixth plan of employee

stock options


4 years

Seventh plan of

employee stock options


4 years

~44~

(b) The above employee stock options are set forth below:

i. Details of the fifth plan of employee stock options outstanding as of March 31, 2019 and

2018 are set forth below:

ii. Details of the sixth plan of employee stock options outstanding as of March 31, 2019 and

2018 are set forth below:

No. of units

Weighted-

average No. of units

Weighted-

average

(shares in exercise price (shares in exercise price

Stock options thousands) (in dollars) thousands) (in dollars)

Options outstanding

at beginning of period 18,328.55 NT$49.60 19,125.30 NT$49.60

Options granted - - - -

Options waived 154.88)( - 214.21)( -

Options exercised - - - -

Options outstanding

at end of period 18,173.67 NT$49.60 18,911.09 NT$49.60

Options exercisable

at end of period - - - -


2019 2018

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period 19,294.54 NT$45.90 - -

Options granted - - 20,000.00 NT$45.90

Options waived 188.34)( - 26.18)( -

Options revoked - - - -

Options outstanding

at end of period 19,106.20 NT$45.90 19,973.82 NT$45.90

Options exercisable



2019 2018

~45~

iii. Details of the seventh plan of employee stock options outstanding as of March 31, 2019 is

set forth below:

(c) The weighted-average stock price of stock options at exercise dates for the three-month

periods ended March 31, 2019 and 2018 were NT$47.64 and NT$52.2, respectively.

(d) As of March 31, 2019, December 31, 2018 and March 31, 2018, the range of exercise prices

of stock options outstanding were NT$45.90~NT$49.60; the weighted-average remaining

contractual period was as follows:

(e) The fair value of stock options is measured using the Black-Scholes option-pricing model or

other. Relevant information is as follows:

No. of units

Weighted-

average

(shares in exercise price

Stock options thousands) (in dollars)

Options outstanding

at beginning of period - -

Options granted 20,000.00 NT$48.90

Options waived 77.54)( -

Options revoked - -

Options outstanding

at end of period 19,922.46 NT$48.90

Options exercisable

at end of period - -


Type of arrangement March 31, 2019 December 31, 2018 March 31, 2018

Fifth plan of employee stock options 4~5 years 4~5 years 4~5 years

Sixth plan of employee stock options 4~5 years 4~5 years 4~5 years

Seventh plan of employee stock options 4~5 years - -

Type of

arrangement

Grant

date

Stock

price

(in dollars)

Exercise

price

(in dollars)

Expected

price

volatility

Expected

option

life

Expected

dividends

Risk free

interest

rate

Fair value

per unit

(in dollars)

Fifth plan of

employee stock

options

2017.4.11 NT$ 52.2 NT$ 52.2 28.06%~

29.05%

4~5

years

0% 0.80%~

0.89%

NT$12.19~

NT$14.17

Sixth plan of

employee stock

options

2018.3.9 NT$ 45.9 NT$ 45.9 24.96%~

26.37%

4~5

years

0% 0.63%~

0.72%

NT$ 9.56~

NT$11.29

Seventh plan of

employee stock

options

2019.3.8 NT$ 48.9 NT$ 48.9 22.88%~

23.56%

4~5

years

0% 0.64%~

0.67%

NT$ 9.38~

NT$10.82

~46~

(f) For the three-month periods ended March 31, 2019 and 2018, expense recognised arising

from share-based payment amounted to $31,663 and $20,257, respectively.

B. Subsidiary – CTCI Advanced System Inc.

(a) For the three-month periods ended March 31, 2019 and 2018, the subsidiary’s share-based

payment transactions are set forth below:


i. Details of the sixth plan of employee stock options outstanding as of March 31, 2019 and

2018 are set forth below

Type of arrangement Grant date

Quantity

granted

Contract

period

Vesting

conditions


stock options

2018.03.23 600 units 6 years Service of

2 to 4 years

Seventh plan of employee

stock options

2019.03.08 600 units 6 years Service of

2 to 4 years

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period 583.00 NT$44.00 - -

Options granted - - 600.00 NT$46.85

Options waived 4.00)( NT$44.00 - -


Options outstanding

at end of period 579.00 NT$44.00 600.00 NT$46.85

Options exercisable

at end of period - - 600.00 NT$46.85


2019 2018

~47~

ii. Details of the seventh plan of employee stock options outstanding as of March 31, 2019

and 2018 are set forth below:

(c) As of March 31, 2019, December 31, 2018 and March 31, 2018, no stock options had been

executed.

(d) As of March 31, 2019, December 31, 2018 and March 31, 2018, the exercise price of stock

options outstanding were NT$42.20, NT$46.85 and NT$ 46.85, respectively. The weighted-

average remaining contractual period were 0～6 years, 0～5.25 years and 0～6 years,

respectively.



(f) For the three-month periods ended March 31, 2019 and 2018, the expenses incurred on share-

based payment transactions were $462 and $47, respectively.

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period - - - -

Options granted 600.00 NT$42.20 - -

Options waived - - - -


Options outstanding

at end of period 600.00 NT$42.20 - -

Options exercisable



2019 2018

Type of

arrangement

Grant

date

Stock

price

(in dollars)

Exercise

price

(in dollars)

Expected

price

volatility

Expected

option

life

Expected

dividends

Risk free

interest

rate

Fair value

per unit

(in dollars)

Sixth plan of

employee stock

options

2018.03.23 NT$46.85 NT$46.85 21.33%~

22.13%

4～5

years

0% 0.65%~

0.72%

NT$ 27.51

Seventh plan of

employee stock

options

2019.03.08 NT$42.20 NT$42.20 19.42%~

20.74%

4～5

years

0% 0.64%~

0.67%

NT$ 22.82

~48~

C. Subsidiary – ECOVE Environment Corp.

(a) For the three-month periods ended March 31, 2019 and 2018, the subsidiary’s share-based

payment transactions are set forth below:


i. Details of the fourth plan of employee stock options outstanding as of March 31, 2019 and

2018 are set forth below: all options were exercised.

Type of

arrangement Grant date Quantity granted Contract period Vesting conditions

Fourth plan of employee

stock options

2011.6.17 1,200 units 6 years Service of

2 years

Fifth plan of employee

stock options


2 years


stock options


2 years

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period - - 3.00 NT$106.30


Options exercised - - - -

Options outstanding


Options exercisable



2019 2018

~49~

ii. Details of the fifth plan of employee stock options outstanding as of March 31, 2019 and

2018 are set forth below: all options were exercised.

iii. Details of the sixth plan of employee stock options outstanding as of March 31, 2019 is

set forth below:

(c) The weighted-average stock price of stock options at exercise dates for the years ended March

31, 2019 and 2018 were NT$173.5 and NT$169.78, respectively.

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period - - 298.25 NT$103.00


Options exercised - - 122.25)( NT$103.00

Options outstanding


Options exercisable



2019 2018

No. of units

Weighted-

average

(shares in exercise price

Stock options thousands) (in dollars)

Options outstanding

at beginning of period1,448.00

NT$173.50

Options granted - -

Options waived 12.00)( -

Options exercised - -

Options outstanding at end

of period 1,436.00 NT$163.90

Options exercisable at end

of period - -


~50~

(d) As of March 31, 2019, December 31, 2018, and March 31, 2017, the range of exercise prices

of stock options outstanding were NT$173.5, NT$173.5 and NT$103 ～ NT$106.3,

respectively; the weighted-average remaining contractual period was as follows:



(f) For the three-month periods ended March 31, 2019 and 2018, the expenses incurred on share-

based payment transactions were $2,524 and $0, respectively.

(20) Share capital

A. As of March 31, 2019, the Company’s authorized capital was $9,000,000, (including 800 million

shares reserved for employee stock options), and the paid-in capital was $7,632,738, consisting

of 763,273,848 shares with a par value of NT$10 per share.

B. Treasury shares

(a) Reason for share reacquisition and movements in the number of the Company’s treasury

shares are as follows:

Type of arrangement March 31, 2019 December 31, 2018 March 31, 2018

Fourth plan of employee stock options - - -

Fifth plan of employee stock options - - 0.25 year

Sixth plan of employee stock options 5.25 years 5.5 year -

Type of

arrangement

Grant

date

Stock

price

(in dollars)

Exercise

price

(in dollars)

Expected

price

volatility

Expected

option

life

Expected

dividends

Risk free

interest

rate

Fair value

per unit

(in dollars)

Fourth plan of

employee stock

options

2011.6.17 NT$146.0 NT$146.0 38.65% 4.50

years

0% 1.05% NT$48.82

Fifth plan of

employee stock

options

2012.6.28 NT$145.0 NT$145.0 33.63% 4.60

years

0% 1.00% NT$42.79

Sixth plan of

employee stock

options

2018.7.9 NT$173.5 NT$173.5 11.38%~

12.71%

4~5

years

0% 0.66%~0.

71%

NT$17.88

~51~

Name of company Reason for Number of shares

holding the shares reacquisition (shares in thousands) Carrying amount

Subsidiary-ECOVE

Environmental Services

Corp.

To maintain

stockholders’ equity

1 $ 10

Subsidiary-CTCI Investment

Corp."

344 3,241

Subsidiary-CTCI Development

Corp."

912 8,584

$ 11,835



Subsidiary-ECOVE


Corp.

To maintain


1 $ 10


Corp."

344 3,241


Corp."

912 8,584

$ 11,835



Subsidiary-ECOVE


Corp.

To maintain


1 $ 10


Corp."

344 3,241


Corp."

912 8,584

$ 11,835

March 31, 2019

December 31, 2018

March 31, 2018

~52~

(b) Pursuant to the R.O.C. Securities and Exchange Law, the number of shares bought back as

treasury share should not exceed 10% of the number of the Company’s issued and

outstanding shares and the amount bought back should not exceed the sum of retained

earnings, paid-in capital in excess of par value and realized capital surplus.

(21) Capital surplus

A. Pursuant to the R.O.C. Company Law, capital surplus arising from paid-in capital in excess of

par value on issuance of common stocks and donations can be used to cover accumulated deficit

or to issue new stocks or cash to shareholders in proportion to their share ownership, provided

that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law

requires that the amount of capital surplus to be capitalized mentioned above should not exceed

10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated

deficit unless the legal reserve is insufficient.

B. The details and movements of capital surplus are provided as follows:

C. Please refer to Note 6 (19) for details about the capital surplus - employee stock options.

Share premium

Treasury share

transactions

Difference

between

consideration and

carrying amount of

subsidiaries

acquired or

disposed

Employee stock

options Others Total

At January 1, 2019 2,865,969$ 5,043$ 211,172$ 453,627$ 9,242$ 3,545,053$

Employee stock options

exercised by subsidiary - - - 31 - 31

Share-based payment

transaction - - - 42,702 - 42,702

At March 31, 2019 $ 2,865,969 $ 5,043 $ 211,172 $ 496,360 $ 9,242 $ 3,587,786

Share premium

Treasury share

transactions

Difference

between

consideration and

carrying amount of

subsidiaries

acquired or

disposed

Employee stock

options Others Total

At January 1, 2018 2,865,969$ 5,043$ 205,931$ 309,435$ 9,242$ 3,395,620$

Employee stock options

exercised by subsidiary - - 2,119 - - 2,119

Share-based payment

transaction - - - 24,991 - 24,991

At March 31, 2018 $ 2,865,969 $ 5,043 $ 208,050 $ 334,426 $ 9,242 $ 3,422,730

~53~

(22) Retained earnings

Note: The Company has adopted the modified retrospective approach under IFRS 9. For details of

the effect as at January 1, 2018, please refer to Note 12(4) B of the consolidated financial

statements and for 2018.

A. When net profit occurs in the annual accounts, the Company may, after reserving a sufficient

amount of the income before tax to cover the accumulated losses, with the resolution of the Board

of Directors, distribute 1.5% to 5% of the income before tax to pay to the employees as

remuneration, and distribute no more than 1.5% of the income before tax to pay to the Board of

Directors as remuneration. The remuneration could be in the form of stock or cash, and the

employee remuneration could be distributed to the employees of subsidiaries of the Company

under certain conditions. A report of the distribution of employee remuneration or the Board of

Directors’ remuneration shall be submitted to the stockholders’ meeting.

B. The Company shall, after all taxes and dues have been paid and its losses have been covered and

at the time of allocating surplus profits, first set aside 10% of such profits as legal reserve.

However, when the legal reserve amounts to the authorized capital, this shall not apply.

Furthermore, in accordance with the provisions of laws and regulations and the rules prescribed

by the central competent authority, a special reserve shall be set aside. If there is recovery of the

balance of special reserve, the recovered amount shall be included in the distribution of the profit

for the current year.

The allocable profit for the current year, which is the balance after the profit distribution and

covering losses aforementioned as the preceding paragraph, together with the undistributed

retained earnings accrued from prior years shall be referred to as accumulated distributable

earnings, which shall be distributed as dividends to shareholders according to shareholders’

resolutions.

To meet the requirements in business expansion and industry growth, fulfilling future operating

needs and stabilizing financial structure is the priority of the Company's dividend policy. Thus,

the distribution of the accumulated distributable earnings is in accordance with the shareholders’

resolutions. Also, the amount of shareholders’ bonus shall not be less than 50% of accumulated

distributable earnings of the Company, and in particular cash dividends shall not be less than

20%.

2019 2018

At January 1 2,217,619$ 3,061,699$

Effect of retrospective restatement (Note) - 166,327

At January 1 (revised) 2,217,619$ 3,228,026$

Profit for the period 221,473 318,740

Valuation adjustment transferred to retained

earnings 2,048)( -

Impact of change in tax rate - 19,951

At March 31 $ 2,437,044 $ 3,566,717

~54~

C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in

proportion to their share ownership, the legal reserve shall not be used for any other purpose.

The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their

share ownership is permitted, provided that the balance of the reserve exceeds 25% of the

Company’s paid-in capital.

D. Special reserve

(a) In accordance with the regulations, the Company shall set aside special reserve from the debit

balance on other equity items at the balance sheet date before distributing earnings. When

debit balance on other equity items is reversed subsequently, the reversed amount could be

included in the distributable earnings.

(b) The amounts previously set aside by the Company as special reserve on initial application of

IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012,

shall be reversed proportionately when the relevant assets are used, disposed of or reclassified

subsequently. Such amounts are reversed upon disposal or reclassified if the assets are

investment property of land, and reversed over the use period if the assets are investment

property other than land.

E. The Company’s appropriation of 2018 earnings had been proposed at the Board of Directors’

meeting on March 8, 2019. The appropriation of 2017 earnings had been resolved at the

stockholders’ meeting on May 29, 2018. Details are summarized below:

As of May 3, 2019, the appropriation of 2018 earnings has not yet been resolved by the

shareholders.

F. For information relating to employees’ compensation (bonuses) and directors’ remuneration,

please refer to Note 6(28).

(23) Operating revenue

Amount

Dividends

per share

(in NT dollars) Amount

Dividends

per share

(in NT dollars)

Set aside as legal reserve 182,754$ -NT$ 280,535$ -NT$

Reversal of special reserve 1,417)( - 2,110)( -

Cash dividends 1,721,210 2.255 2,468,202 3.23

1,902,547$ 2.255$ 2,746,627$ 3.23$

2018 2017

2019 2018

Revenue from contracts with customer contracts 13,577,243$ 14,421,321$

Other-service concession revenue 135,215 119,261

$ 13,712,458 $ 14,540,582


~55~

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services over time and at a point in

time in the following major product lines and geographical regions:

For the three-month

period ended

March 31, 2019

Construction

Engineering

Revenue Service Revenue

Other Operating

Revenue Total

Total segment

revenue

12,245,003$ 1,143,122$ 189,118$ 13,577,243$

Inter-segment

revenue 550,042 5,500 194,220 749,762

12,795,045$ 1,148,622$ 383,338$ 14,327,005$

Revenue from

external

customer

contracts

Timing of

revenue

recognition

At a point time -$ 1,143,122$ 189,118$ 1,332,240$

Over time 12,245,003 - - 12,245,003

12,245,003$ 1,143,122$ 189,118$ 13,577,243$

For the three-month

period ended

March 31, 2018

Construction

Engineering

Revenue Service Revenue

Other Operating

Revenue Total

Total segment

revenue

13,255,779$ 1,173,314$ 111,489$ 14,540,582$

Inter-segment

revenue 603,994 14,797 119,046 737,837

13,859,773$ 1,188,111$ 230,535$ 15,278,419$

Revenue from

external

customer

contracts

Timing of

revenue

recognition

At a point time -$ 1,173,314$ 111,489$ 1,284,803$

Over time 13,255,779 - - 13,255,779

13,255,779$ 1,173,314$ 111,489$ 14,540,582$

~56~

B. Contract assets and liabilities

The Group has recognised the following revenue-related contract assets and liabilities:

(24) Other income

(25) Other gains and losses

(26) Finance costs


Contract assets-construction contract revenue 20,803,659$ 24,823,432$ 25,799,544$

Contract liabilities-construction contract revenue 15,629,871)( 13,920,198)( 11,473,886)(

5,173,788$ 10,903,234$ 14,325,658$

2019 2018

Interest incomt:

Interest income from bank deposits 58,160$ 49,727$

Rental revenue 1,557 1,522

Dividend income 102 -

Gains on reversal of bad debts 31 -

Other income-others 15,548 10,000

75,398$ 61,249$


2019 2018

Gains (losses) on disposal of property, plant and

equipment 30$ 62)($

Gains on disposal of investments - 86

Foreign exchange gains (losses) 394 100,073)(

Gains (losses) on financial liabilities at fair value

through profit or loss 30,151 23,861)(

Other gains and losses 2,711)( 6,788)(

27,864$ 130,698)($


2019 2018

Interest expense

Interest on loan 81,439$ 36,689$

Interest on lease liability 618 -

82,057$ 36,689$


~57~

(27) Expenses by nature

(28) Employee benefit expense

A. According to the Articles of Incorporation of the Company, when distributing earnings, the

Company shall distribute bonus to the employees and pay remuneration to the directors that

should be 1.5% to 5% and not be higher than 1.5%, respectively, of the total distributed amount.

B. For the three-month periods ended March 31, 2019 and 2018, employees’ compensation was

accrued at $10,937 and $12,515, respectively; directors’ remuneration was accrued at $4,500 and

$4,500, respectively. The aforementioned amounts were recognized in other expenses.

The employees’ compensation and directors’ remuneration were estimated and accrued based on

an amount of 1.5% to 5% and not higher than 1.5% of distributable profit of current period for

the three-month period ended March 31, 2019.

Employees’ compensation and directors’ remuneration for 2018 as resolved at the meeting of

Board of Directors were in agreement with those amounts recognized in the 2018 financial

statements.

Information about employees’ compensation and directors’ remuneration of the Company as

resolved at the meeting of Board of Directors will be posted in the “Market Observation Post

System” at the website of the Taiwan Stock Exchange.

2019 2018

Subcontract costs 5,507,251$ 4,843,092$

Materials 4,043,107 5,325,869

Employee benefit expense 2,420,316 2,390,830

Amortisation charges on buried equipment 101,131 72,411

Temporary equipment 4 71,463

Depreciation charges on property, plant and

equipment 143,153 89,026

Amortisation on intangible assets 38,447 41,691

Others 854,819 989,743

13,108,228$ 13,824,125$


2019 2018

Salaries and wages 2,064,930$ 2,047,151$

Employee stock options 43,918 25,328

Labor and health insurance fees 138,130 149,613

Pension costs 94,641 86,313

Other personnel expenses 78,697 82,425

2,420,316$ 2,390,830$


~58~

(29) Income tax

A. Income tax expense

(a) Components of income tax expense:

(b) The income tax (charge)/credit relating to components of other comprehensive income is as

follows:

B. Assessment of income tax

The Company’s income tax returns through 2014 and 2016 have been assessed and approved by

the Tax Authority.

C. The Company’s subsidiary, CTCI Arabia Ltd., was ordered by the local tax authorities to pay

back taxes in the amount of $134,635 (SAR 17,212) for the years 2007 through 2010. CTCI

Arabia Ltd. has appealed the decision and paid tax beforehand in the amount of $134,635 (SAR

17,212) in order to conduct subsequent administrative litigation, therefore it is difficult to assess

the maximum possible loss that CTCI Arabia Ltd. could incur from this tax dispute.

D. Under the amendments to the Income Tax Act which was promulgated by the President of the

Republic of China in February, 2018, the Company’s applicable income tax rate was raised from

17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in

income tax rate.

2019 2018

Current tax:

Current tax on profits for the period 225,694$ 97,273$

Deferred tax:

Origination and reversal of temporary

differences 92,606)( 73,554

Impact of change in tax rate - 16,750

Total deferred tax 92,606)( 90,304

Income tax expense 133,088$ 187,577$


2019 2018

Impact of change in tax rate -$ 19,379$


~59~

(30) Earnings per share

Amount

after tax

Weighted-average

number of ordinary

shares outstanding

(shares in

thousands)

Earnings per share

(in dollars)

Basic earnings per share

Profit attributable to the ordinary

shareholders of the parent221,473$ 762,016 0.29NT$

Diluted earnings per share

Assumed conversion of all

dilutive potential ordinary shares

Employees' compensation - 239

Profit attributable to ordinary

shareholders of the parent plus

assumed conversion of all

dilutive potential ordinary shares 221,473$ 762,255 0.29NT$

Amount

after tax

Weighted-average

number of ordinary

shares outstanding

(shares in

thousands)

Earnings per share

(in dollars)

Basic earnings per share

Profit attributable to the ordinary

shareholders of the parent318,740$ 762,016 0.42NT$

Diluted earnings per share

Assumed conversion of all

dilutive potential ordinary shares

Employees' compensation - 287

Profit attributable to ordinary

shareholders of the parent plus

assumed conversion of all

dilutive potential ordinary shares 318,740$ 762,303 0.42NT$



~60~

(31) Business combinations

A. ECOVE Solvent Recycling Corporation

(a) On May 10, 2018, the Group acquired a 90% equity interest of ECOVE Solvent Recycling

Corporation in the amount of $49,590 in the form of cash, and had control over ECOVE

Solvent Recycling Corporation which is primarily engaged in operating basic chemical

industry and manufacture of other chemical products. As a result of the acquisition, the Group

is expected to increase its presence in these markets. It also expects to reduce costs through

economies of scale.

(b) The following table summarises the consideration paid for ECOVE Solvent Recycling

Corporation and the fair values of the assets acquired and liabilities assumed at the acquisition

date, as well as the non-controlling interest’s proportionate share of the recognised amounts

of acquiree’s identifiable net assets at the acquisition date:

(c) The operating revenue included in the consolidated statement of comprehensive income since

May 10, 2018 contributed by ECOVE Solvent Recycling Corporation was $0. ECOVE

Solvent Recycling Corporation also contributed loss before income tax of ($7,014) over the

same period. Had ECOVE Solvent Recycling Corporation been consolidated from January 1,

2018, the consolidated statement of comprehensive income would show operating revenue

of $1,485 and profit before income tax of ($734).

B. ECOVE Solar Energy Corporation

(a) On September 20, 2018, the Group acquired a 50% equity interest of ECOVE Solar Energy

Corporation in the amount of $455,384 by cash, and have control over ECOVE Solar Energy

Corporation.

May 10, 2018

Purchase consideration

Cash paid 49,590$

Non-controlling interest’s proportionate share of the recognised

amounts of acquiree’s identifiable net assets 4,126

53,716

Fair value of the identifiable assets acquired and liabilities

assumed

Cash 150

Prepayments 291

Property, plant and equipment 68,492

Other non-current assets 588

Other payables 143)(

Other current liabilities 325)(

Long-term borrowings 27,800)(

Total identifiable net assets 41,253

Goodwill 12,463$

~61~

(b) The following table summarises the consideration paid for ECOVE Solar Energy Corporation

and the fair values of the assets acquired and liabilities assumed at the acquisition date, as

well as the non-controlling interest’s proportionate share of the recognised amounts of

acquiree’s identifiable net assets at the acquisition date:

(c) The operating revenue included in the consolidated statement of comprehensive income since

September 20, 2018 contributed by ECOVE Solar Energy Corporation was $83,600, also

contributed profit before income tax of $12,047 over the same period. Had ECOVE Solar

Energy Corporation been consolidated from January 1, 2018, the consolidated statement of

comprehensive income would show operating revenue of $67,373 and profit before income

tax of $13,292.

(d) The fair value of the identifiable property, plant and equipment obtained is tentatively set at

$1,533,559 and the assets are subject to final valuation.

September 20, 2018

Purchase consideration

Cash paid 455,384$

Fair value of equity interest in ECOVE Solar Energy

Corporation held before the business combination 388,193

843,577

Fair value of the identifiable assets acquired and liabilities

assumed Cash 298,165

Accounts receivable 13,501

Other receivables 5,509

Prepayments 29,536

Property, plant and equipment 1,533,559

Deferred income tax assets 1,516

Other non-current assets 721,902

Short-term borrowings 143,000)(

Accounts payable 5,245)(

Current income tax liabilities 8,903)(

Other payables 33,310)(

Other current liabilities 138,880)(

Long-term borrowings 1,376,650)(

Deferred income tax liabilities 2,773)(

Other non-current liabilities 175,040)(

Total identifiable net assets 719,887

Goodwill 123,690$

~62~

(32) Operating leases

Prior to 2019

The Group’s future aggregate minimum lease payments under non-cancellable operating leases are

as follows:

(33) Supplemental cash flow information

Investing activities with partial cash payments

December 31, 2018 March 31, 2018

Not later than one year 143,352$ 220,359$

Later than one year but not later than five years 254,239 243,257

Later than five years 370,879 13,591

768,470$ 477,207$

2019 2018

Purchase of property, plant and equipment 88,955$ 36,052$

Add: Opening balance of payable on equipment 1,785,960 -

Less: Ending balance of payable on equipment - -

Cash paid during the year 1,874,915$ 36,052$

~63~

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

(2) Significant transactions and balances with related parties

A. Sales of services

The price on the construction contracts entered into with related parties are set through negotiation

by both parties. The collection terms were approximately the same as those with third parties.

Names of related parties Relationship with the Group

Pan Asia Corp. Associate

Boretech Resource Recovery Associate

MIE Industrial Sdn. Bhd. Associate

ZheJiang Boretech Environmental

Engineering Co., Ltd.Associate

Blue Whale Water Technology Corp. Associate

Powertech Energy Corp. Associate

EVER ECOVE CORP. Associate

HDEL-CTCI (Linhai) Associate

ECOVE Solar Energy Corporation The Group was a joint venture before

September 20, 2018, and became a subsidiary

starting from September 20, 2018.

Hsin Dar Environment Corp. Other related party

Gintech Energy Corporation Other related party

CTCI Foundation Other related party

CTCI Education Foundation Other related party

Gintech (Thailand) Limited Other related party

ECOVE Central Corporation Ltd. It was a related party before September 20,

2018, and became a subsidiary starting from

September 20, 2018.

ECOVE South Corporation Ltd. It was a related party before September 20,

2018, and became a subsidiary starting from

September 20, 2018.

2019 2018

Associates 503,403$ 216,687$

Joint ventures - 72,618

Other related parties 1,109 1,628

504,512$ 290,933$


~64~

B. Purchases of services

The price on the construction subcontracts entered into with related parties are set through

negotiation by both parties.

C. Accounts receivable

D. Accounts payable

E. Rental expense

F. Disposal of financial assets

2019 2018

Associates 371,784$ 986,787$

Other related parties 14,455 3,379

386,239$ 990,166$



Associates 457,811$ 942,076$ 44,094$

Joint ventures - - 19,520

Other related parties 3,219 1,995 3,000

461,030$ 944,071$ 66,614$


Associates 717,262$ 1,359,712$ 1,038,693$

Lessor Leased assets Rental amount 2019 2018

Other related parties Land / Buildings $698/month/

semiannual

payment-$ 2,093$

ended March 31,

For the three-month periods

Accounts No. of shares Objects Proceeds Gain/(loss)

Other related parties Financial assets

at fair value

through profit

or loss-non

current

17,556,000 Utech Solar Corp. 132,851$ 64,277$

For the year ended

March 31, 2018

~65~

G. Provision for endorsements and guarantees

H. The Group donated $15,000 to the CTCI Education Foundation in March, 2018 for personnel

training and enterprise social responsibility.

(3) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

In addition to those items which have been disclosed in Notes 6(23) and (29), the significant contingent

liabilities and unrecognized contract commitments of the Group as of March 31, 2019 were as follows:


Associates 2,071,800$ 1,984,300$ 769,300$

Joint ventures - - 554,412

2,071,800$ 1,984,300$ 1,323,712$

2019 2018

Salaries and other short-term employee

benefits

94,262$ 89,179$

Post-employment benefits 259 1,634

Other long-term benefits 505 307

Share-based payments 2,725 2,129

97,751$ 93,249$


Pledged assets March 31, 2019 December 31, 2018 March 31, 2018 Purpose

Other current assets

Guarantee for wages 5,950$ 5,816$ 11,557$ Guarantee for wages

Other non-current assets

Pledged time deposits 112,685 141,948 16,501 Guarantee for oil expense, litigation

deposits and short-term borrowing

Refundable deposits 121,331 130,167 133,226 Guarantee for oil expense, rent,

golf certificates, tender bonds,

construction contracts

Right-of-use assets 15,954 - - Guarantee for long-term borrowings

Long-term prepaid rent - 16,530 18,260 Guarantee for long-term borrowings

Property, plant and

equipment

5,922,726 5,937,741 3,769,234 Guarantee for long-term and short-

term borrowings

Investment property 807,052 808,129 811,521 Guarantee for long-term and short-

term borrowings

6,985,698$ 7,040,331$ 4,760,299$

Book value

~66~

A. Guarantee

(a) The Group had outstanding notes payable for security deposits under various construction

projects amounting to $5,415,433.

(b) The Group had outstanding notes payable for bank financing amounting to $100,025,465.

B. The Group had unused and outstanding letters of credit of $1,083,256.

C. The Group had outstanding commitments for construction subcontracts and services contracts, less

accounts payable that were already paid and accrued in the future, of $38,992,483.

D. The Group had entered into contracts for acquisition of inventory amounting to $423,504.

E. The Company had a joint procurement project with Mitsubishi Heavy Industries, Ltd. in 1997. The

construction was completed on February 19, 2001 and accepted by the Environmental Protection

Administration (the “EPA”) on May 16, 2011. According to the contract, the Company provided

warranty deposit amounting to $141,690 on the materials of the equipment. As the Kaohsiung County

government, the user of the incineration, had a dispute with the operating manufacturer, the EPB

rejected to repay the deposit. The EPA availed of the warranty deposit on February 4, 2010. As a result,

the Company had to remit $73,253 to the procurement department of Bank of Taiwan Co., Ltd.

Consequently, the Company took action to cancel the deposit of $141,690 and filed a lawsuit requiring

EPA to repay the $73,253. The EPA indicated that it had repaid $9,299 to the Company in 2010.

Therefore, the Company reduced the lawsuit claim to $63,954 plus interest of $830 and damage loss

of $1,708. The case was reverted back to the Taiwan High Court after being taken up by the Supreme

Court. The Taiwan High Court then reverted the case back again to the Supreme Court. The Taiwan

High Court reversed the original judgement and denied the Group’s claim, the Group then filed to the

third instance. The Supreme Court remanded the case to the Taiwan High Court. The Taiwan High

Court denied the appeal of EPA, who then filed to the third instance, and remanded the case to the

Taiwan High Court as well. The case is being taken up by the Taiwan High Court as 105-Zhong-

Shang-Geng-3-11. According to the Company’s lawyer, the outcome of the case is still uncertain and

it is difficult to estimate any potential gain or loss on the case.

F. The subsidiary, CTCI Smart Engineering Corp., has entered into an electrical and mechanical contract

with RPTI International Ltd. (RPTI) on behalf of the joint venture by RSEA Engineering Corporation

and CTCI Smart Engineering Corp. for partial permanent work of electrical and mechanical

engineering. However, as RPTI International Ltd. was behind the schedule, it agreed that CTCI

SMART ENGINEERING CORP. hire others to carry out the pending construction. In addition,

because RPTI was unable to perform the air conditioning construction as stated in the contract, CTCI

SMART ENGINEERING CORP. revoked the air conditioning construction, and re-contract out to

JEHNG LONG ENGINEERING CORP. The aforementioned construction expenses for hiring others

and for working on the terminated construction and losses were expected to be paid using RPTI’s

estimated assessment amount and retention payment. However, RPTI filed a lawsuit with the Taiwan

Taipei District Court, alleging improper deduction by CTCI SMART ENGINEERING CORP. and

requesting construction payment of $72,024 along with an interest at 5% per annum from November

28, 2007 until the date of repayment. The case was still in trial and CTCI SMART ENGINEERING

CORP. filed a counter-claim on August 8, 2008, alleging RPTI’s estimated assessment amount and

retention amount were insufficient to cover all payables, and requesting payment of $94,569. The

~67~

amount of $22,947 of the requested payment of $94,569 shall be paid along with an interest at 5%

per annum from July 16, 2008 until the date of repayment, while the remaining request amount shall

be paid along with an interest at 5% per annum from the date when RPTI receives the transcription

of counter-complaint until the date of repayment. RPTI expanded its claim to request a payment of

$111,079 along with an interest. On April 27, 2015, Taiwan Taipei District Court rendered a

judgement (Year 2008, Zian-Zi No. 21, Civil case) that CTCI SMART ENGINEERING CORP. needs

to pay RPTI an amount of $84,305 which comprises of $72,574 along with an interest at 5% per

annum from November 28, 2007 and of the remaining $11,731 along with an interest at 5% per annum

from December 15, 2010 until the date of repayment. RPTI’s remaining appeal and CTCI SMART

ENGINEERING CORP.’s counter-claim were refuted. CTCI SMART ENGINEERING CORP.

disagreed with the verdict and filed an appeal with the Taiwan High Court in the prescribed time,

asking for rejection to RPTI’s claim and judgment of the counter-claim. The counter-claim is

requesting RPTI to pay an amount of $75,166 which comprises of $22,947 along with an interest at

5% per annum from July 16, 2008 and of remaining $52,218 along with an interest at 5% per annum

from August 9, 2008 until the date of repayment. RPTI filed an incidental appeal requesting CTCI

SMART ENGINEERING CORP. to pay another amount of $7,092 along with an interest at 5% per

annum from November 28, 2007 until the date of repayment. Taiwan High Court rendered the

judgement on August 30, 2017. Refuted the verdict above and commanded that RPTI needs to pay

CTCI SMART ENGINEERING CORP. $57,899 along with an interest at 5% per annum from August

9, 2008 until the date of repayment. RPTI appealed to the Supreme Court during the legal period

because they disagreed with the judgement. The Supreme Court rendered the judgement that the

verdict Taiwan High Court rendered was void and reverted the case back to the Taiwan High Court

for a retrial. During the retrial, the judge gave explicit instructions that CTCI SMART

ENGINEERING CORP. should obey the tenor sent by the Supreme Court and amend the statement

of payment request to the statement of creditor's rights confirmation request, the statement declares

that CTCI SMART ENGINEERING CORP. needs to pay RPTI an amount of $57,899 which

comprises of $22,947 along with an interest at 5% per annum from July 16, 2008 and of remaining

$34,952 along with an interest at 5% per annum from August 9, 2008 until the date of repayment and

they would be included in the Group’s claim in bankruptcy. According to the Company’s appointed

lawyers, the case is still pending in the Taiwan High Court, and the case number is Year 2018, Chong-

Shang-Gang-Yi-Zi No. 65.

G. The Company’s subsidiary, ECOVE Environment Services Corp., was ordered to pay $54,267 for air

pollution prevention fees by the Environmental Protection Department of the New Taipei City

Government on October 28, 2014, and the penalty was upheld after filing an administrative appeal.

On July 6, 2015, ECOVE Environment Services Corp. asked the Taipei High Administrative Court to

revoke both the original penalty and the subsequent decision on the administrative appeal, but the

request was denied. ECOVE Environment Services Corp. filed an appeal with the Supreme Court.

On January 18, 2018, the Supreme Court has rendered a judgement that the verdict rendered by the

Taiwan High Court was void and reverted the case back to the Taiwan High Court for a retrial which

is ongoing. The lawyer representing ECOVE Environment Services Corp. regards the original penalty

to be illegal and invalid, therefore no provisions for the lawsuit have been recognized in the financial

statements.

~68~

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENT AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a

going concern in order to provide returns for shareholders and to maintain an optimal capital

structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group

may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new

shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio.

This ratio is calculated as net debt divided by total capital. Total borrowings are including ‘current

and non-current borrowings’ as shown in the consolidated balance sheet. Total capital is calculated

as ‘equity’ as shown in the consolidated balance sheet.

The gearing ratios as of March 31, 2019, December 31, 2018 and March 31, 2018 were as follows:


Total borrowings 14,556,202$ 14,966,313$ 9,721,635$

Total equity 21,074,418$ 20,626,159$ 21,508,341$

Gearing ratio 69.07% 72.56% 45.20%

~69~

(2) Financial risk of financial instruments

A. Financial instruments by category


Financial assets

Financial assets at fair value through profit

or loss


fair value through profit or loss 410,613$ 554,638$ 436,931$

Financial assets at fair value through other

comprehensive income

Designation of equity instrument 1,271,002$ 1,262,160$ 1,202,098$

Qualifying debit instrument 27,446 26,778 64,721

1,298,448$ 1,288,938$ 1,266,819$

Financial assets at amortised cost

Cash and cash equivalents 17,013,679$ 15,070,992$ 14,289,845$

Notes receivable 14,614 75,006 139,237

Accounts receivable 5,284,252 9,092,332 4,775,516

Accounts receivable due from related

parties 461,030 944,071 66,614

Other receivables 170,805 338,477 108,521

Refundable deposits 121,331 130,167 133,226

Long-term accounts receivable 2,350,485 2,392,339 2,345,261

Other financial assets 141,368 558,950 226,891

25,557,564$ 28,602,334$ 22,085,111$

~70~

B. Risk management policies

(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign

exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

(b) Risk management is carried out by a central treasury department (Group treasury) under

policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges

financial risks in close cooperation with the Group’s operating units. The Board provides

written principles for overall risk management, as well as written policies covering specific

areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of

derivative financial instruments and non-derivative financial instruments, and investment of

excess liquidity.

C. Significant financial risks and degrees of financial risks

(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to exchange rate risk arising from the

transactions of the Company and its subsidiaries used in various functional currency,

primarily with respect to the USD and EUR. Exchange rate risk arises from future

commercial transactions and recognised assets and liabilities.

ii. Management has set up a policy to require group companies to manage their foreign

exchange risk against their functional currency. The companies are required to hedge their

entire foreign exchange risk exposure with the Group treasury.


Financial liabilities

Financial liabilities at fair value through

profit or loss

Financial liabilities mandatorily measured

at fair value through profit or loss 36$ 548$ 1,432$

Financial liabilities at amortised cost

Short-term borrowings 10,947,586$ 13,414,459$ 7,498,485$

Notes payable 11,319 18,788 4,056

Accounts payable 9,790,524 9,991,262 9,299,130

Accounts payable due to related parties 717,262 1,359,712 1,038,693

Other payables (including related parties) 1,689,094 4,692,516 1,581,943

Lease liability 345,004 - -

Long-term borrowings (including current

portion) 3,608,616 1,551,854 2,223,150

Guarantee deposits received 370,062 407,649 357,236

27,479,467$ 31,436,240$ 22,002,693$

~71~

iii The Group’s businesses involve some non-functional currency operations (the Company’s

and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional

currency: USD and RMB). The information on assets and liabilities denominated in foreign

currencies whose values would be materially affected by the exchange rate fluctuations is

as follows:

Foreign Currency

Amount

(In Thousands) Exchange Rate Book Value

(Foreign currency: functional

currency)

Financial assets

Monetary items

USD：NTD 256,494$ 30.8300 7,907,710$

EUR：NTD 22,282 34.6236 771,483

JPY：NTD 2,321,220 0.2783 645,996

USD：VND 8,616 23,200.0000 259,859

MOP：NTD 55,887 3.8075 212,790

SGD：NTD 6,625 22.7427 150,670

RMB：NTD 22,048 4.5771 100,916

THB：USD 82,520 0.0314 79,987

RMB：USD 13,268 0.1485 60,729

USD：SAR 1,452 3.7503 44,765

USD：MYR 923 4.0810 28,456

AUD：NTD 650 21.8554 14,206

THB：NTD 6,601 0.9693 6,398

USD：THB 181 31.8065 5,580

USD：PHP 113 52.7189 3,484

EUR：USD 50 1.1230 1,731

SAR：NTD 127 8.2206 1,044


Monetary items

USD：NTD 7,302 30.8300 225,121

EUR：USD 1,074 1.1230 37,186

USD：MYR 881 4.0810 27,161

EUR：NTD 501 34.6236 17,346

MOP：NTD 4,301 3.8075 16,376

SGD：NTD 492 22.7427 11,189

USD：VND 153 23,200.0000 4,614

USD：THB 93 31.8065 2,867

USD：INR 48 69.1721 1,480

March 31, 2019

~72~

Foreign Currency

Amount


(Foreign currency: functional

currency)

Financial assets

Monetary items

USD : NTD 275,169$ 30.7400 8,458,695$

THB : NTD 817,495 0.9491 775,884

EUR : NTD 7,889 35.2327 277,951

USD : MYR 8,888 4.1575 273,217

MOP : NTD 53,270 3.8042 202,650

JPY : NTD 556,648 0.2779 154,692

RMB : NTD 23,979 4.4742 107,287

USD : THB 3,186 32.3886 97,938

SGD : NTD 4,271 22.4552 95,898

THB：USD 71,220 0.0309 67,595

RMB：USD 4,240 0.1455 18,971

USD：SAR 247 3.7523 7,593

SAR：NTD 555 8.1922 4,547

EUR：USD 80 1.1462 2,819


Monetary items

USD : SAR 32,700 3.7523 1,005,198

USD : NTD 10,733 30.7400 329,932

USD : MYR 4,298 4.1575 132,121

EUR : MYR 2,297 4.7651 80,930

EUR : NTD 1,316 35.2327 46,366

EUR：USD 1,198 1.1462 42,209

SGD : NTD 537 22.4552 12,064

MOP : NTD 2,723 3.8042 10,359

RMB：NTD 1,764 4.4742 7,892

SAR：NTD 406 8.1922 3,325

USD：SGD 95 1.3689 2,920

December 31, 2018

~73~

v. The unrealized exchange gain (loss) arising from significant foreign exchange variation

on the monetary items held by the Group for the three-month periods ended March 31,

2019 and 2018 amounted to $4,488 and ($45,620), respectively.

Foreign Currency

Amount


(Foreign currency:

functional currency)

Financial assets

Monetary items

USD：NTD 180,523$ 29.1350 5,259,538$

EUR：NTD 18,489 35.8783 663,354

JPY：NTD 587,256 0.2743 161,084

GBP：NTD 65 40.8749 2,657

AUD：NTD 1,318 22.3873 29,506

MOP：NTD 43,478 3.5986 156,460

HKD：NTD 1,292 3.7120 4,796

SGD：NTD 1,665 22.2210 36,998

RMB：NTD 56,104 4.6490 260,827

SAR：NTD 6,153 7.7692 47,804

USD：THB 1,718 31.2205 50,054

USD：SAR 2,856 3.7501 83,210

USD：MYR 10,617 3.8615 309,326

USD：RMB 8,354 6.2669 243,392

USD：VND 2,719 22,810 80,627

EUR：MYR 402 4.7552 14,423

EUR：USD 580 1.2315 20,809


Monetary items

USD：NTD 5,992 29.1350 174,577

EUR：NTD 4,135 35.8783 148,357

SGD：NTD 795 22.2210 17,666

THB：NTD 3,372 0.9332 3,147

SEK：NTD 1,450 3.4861 5,055

MOP：NTD 10,626 3.5986 38,239

RMB：NTD 36,459 4.6490 169,498

USD：MYR 4,361 3.8615 127,058

JPY：USD 54,000 0.0094 14,812

USD：THB 64 31.2205 81,673

March 31, 2018

~74~

vi. Analysis of foreign currency market risk arising from significant foreign exchange

variation:

Degree of Effect on Profit

Effect on Other

Comprehensive

Variation or Loss Income

( Foreign currency:


Financial assets

Monetary items

USD：NTD 1% 79,077$ -$

EUR：NTD 1% 7,715 -

JPY：NTD 1% 6,460 -

USD：VND 1% 2,599 -

MOP：NTD 1% 2,128 -

SGD：NTD 1% 1,507 -

RMB：NTD 1% 1,009 -

THB：USD 1% 800 -

RMB：USD 1% 607 -

USD：SAR 1% 448 -

USD：MYR 1% 285 -

AUD：NTD 1% 142 -

THB：NTD 1% 64 -

USD：THB 1% 56 -

USD：PHP 1% 35 -

EUR：USD 1% 17 -

SAR：NTD 1% 10 -


Monetary items

USD：NTD 1% 2,251 -

EUR：USD 1% 372 -

USD：MYR 1% 272 -

EUR：NTD 1% 173 -

MOP：NTD 1% 164 -

SGD：NTD 1% 112 -

USD：VND 1% 46 -

USD：THB 1% 29 -

USD：INR 1% 15 -

March 31, 2019

Sensitivity Analysis

~75~


Effect on Other

Comprehensive


( Foreign currency:


Financial assets

Monetary items

USD : NTD 1% $ 84,587 -$

THB : NTD 1% 7,759 -

EUR : NTD 1% 2,780 -

USD : MYR 1% 2,732 -

MOP : NTD 1% 2,027 -

JPY : NTD 1% 1,547 -

RMB : NTD 1% 1,073 -

USD : THB 1% 979 -

SGD : NTD 1% 959 -

THB：USD 1% 676 -

RMB：USD 1% 190 -

USD：SAR 1% 76 -

SAR：NTD 1% 45 -

EUR：USD 1% 28 -


Monetary items

USD : SAR 1% 10,052 -

USD : NTD 1% 3,299 -

USD : MYR 1% 1,321 -

EUR : MYR 1% 809 -

EUR : NTD 1% 464 -

EUR：USD 1% 422 -

SGD : NTD 1% 121 -

MOP : NTD 1% 104 -

RMB：NTD 1% 79 -

SAR：NTD 1% 33 -

USD：SGD 1% 29 -


December 31, 2018

~76~


Effect on Other

Comprehensive


( Foreign currency:


Financial assets

Monetary items

USD：NTD 1% $ 52,595 -$

EUR：NTD 1% 6,634 -

JPY：NTD 1% 1,611 -

GBP：NTD 1% 27 -

AUD：NTD 1% 295 -

MOP：NTD 1% 1,565 -

HKD：NTD 1% 48 -

SGD：NTD 1% 370 -

RMB：NTD 1% 2,608 -

SAR：NTD 1% 478 -

USD：THB 1% 501 -

USD：SAR 1% 832 -

USD：MYR 1% 3,093 -

USD：RMB 1% 2,434 -

USD：VND 1% 806 -

EUR：MYR 1% 144 -

EUR：USD 1% 208 -


Monetary items

USD：NTD 1% 1,746 -

EUR：NTD 1% 1,484 -

SGD：NTD 1% 177 -

THB：NTD 1% 31 -

SEK：NTD 1% 51 -

MOP：NTD 1% 382 -

RMB：NTD 1% 1,695 -

USD：MYR 1% 1,271 -

JPY：USD 1% 148 -

USD：THB 1% 817 -

March 31, 2018


~77~

Price risk

The Group’s equity securities, which are exposed to price risk, are the held financial assets at

fair value through other comprehensive income, financial assets at fair value through profit or

loss and available-for-sale financial assets. To manage its price risk arising from investments

in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done

in accordance with the limits set by the Group.

Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates

expose the Group to cash flow interest rate risk which is partially offset by cash and cash

equivalents held at variable rates. During the three-month periods ended March 31, 2019 and

2018, the Group’s borrowings at variable rate were denominated in NTD and USD.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the

clients or counterparties of financial instruments on the contract obligations. According to

the Group’s credit policy, each local entity in the Group is responsible for managing and

analyzing the credit risk for each of their new clients before standard payment and delivery

terms and conditions are offered.

ii. Individual risk limited is controlled by internal risk that assesses the credit quality of the

customers, taking into account their financial position, past experience and other factors.

iii. The Group adopts the assumption under IFRS 9, that is, if the contract payments were past

due over 30 days based on the terms, there has been a significant increase in credit risk on

that instrument since initial recognition.

iv. The Group adopts the assumption under IFRS 9, that is, the default occurs when the

customers’ contract payments are past due over 90 days.

v. The Group classifies customers’ accounts receivable and contract assets in accordance

with customer types. The Group applies the simplified approach using provision matrix

and loss rate methodology to estimate expected credit loss under the provision matrix basis.

vi. The Group used the forecastability of Taiwan Institute of Economic Research boom

observation report to adjust historical and timely information to assess the default

possibility of accounts receivable. On March 31, 2019, December 31, 2018 and March 31,

2018, the provision matrix is as follows:

~78~

Note 1: Government institutions, state-owned enterprises and listed companies

Note 2: Companies that are not included in Note 1.

Movements in relation to the Group applying the simplified approach to provide loss

allowance for accounts receivable, contract assets and lease payments receivable are as

follows:

Excellent

customers

(Note 1)

General

customers

(Note 2)

Individual

assessment

customers Total

March 31, 2019

Expected loss rate 0.03%~0.4% 0.03%~100% 50%~100%

Total book value 2,709,056$ 2,627,985$ 1,086$ 5,338,127$

Loss allowance 2,385)( 35,806)( 1,070)( 39,261)(

December 31, 2018


Total book value 4,488,537$ 4,699,248$ 5,148$ 9,192,933$

Loss allowance 2,749)( 19,019)( 3,827)( 25,595)(

March 31, 2018


Total book value 2,764,311$ 2,137,623$ 99,454$ 5,001,388$

Loss allowance 3,805 13,945 68,885 86,635

2019

Accounts receivable

At January 1 25,595$

Provision for impairment 13,697

Reversal of impairment 31)(

At March 31 39,261$

2018

Accounts receivable

At January 1_IAS 39 84,920$

Adjustments under new standards -

At January 1_IFRS 9 84,920

Provision for impairment 1,715

At March 31 86,635$

~79~

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated

by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity

requirements to ensure it has sufficient cash to meet operational needs so that the Group

does not breach borrowing limits or covenants on any of its borrowing facilities. Such

forecasting takes into consideration the Group’s debt financing plans, covenant

compliance, compliance with internal balance sheet ratio targets.

ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled

derivative financial liabilities into relevant maturity groupings based on the remaining

period at the balance sheet date to the contractual maturity date for non-derivative

financial liabilities and to the expected maturity date for derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

March 31, 2019 Less than 1 year More than 1 year

Short-term borrowings 10,947,586$ -$

Notes payable 11,319 -

Accounts payable (including related parties) 10,507,786 -

Other payables (including related parties) 1,689,094 -

Lease liabilities 147,908 197,096


portion)200,872 3,407,744

Non-derivative financial liabilities

December 31, 2018 Less than 1 year More than 1 year






portion)131,788 1,670,586

Non-derivative financial liabilities:

March 31, 2018 Less than 1 year More than 1 year






portion)

348,976 2,135,633

~80~

(d) Cash flow risk from variations of rates

There is no significant cash flow risk from variations of rates since accounts payable are due

less than one year.

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of

financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the

entity can access at the measurement date. A market is regarded as active if it meets

all the following conditions: the items traded in the market are homogeneous; willing

buyers and sellers can normally be found at any time; and prices are available to the

public. The fair value of the Group’s investment in listed stocks, beneficiary

certificates with quoted market prices is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly or indirectly. The fair value of the Group’s investment

in most derivative instruments is included in Level 2.

Level 3: Inputs for the asset or liability that are not based on observable market data.

Derivative financial liabilities:

Between 3 months

March 31, 2019 Less than 3 months and 1 year

Exchange rate swaps (net-settled) $ 36 $ -


Between 3 months

December 31, 2018 Less than 3 months and 1 year

Forward exchange contracts $ 548 $ -


Between 3 months

March 31, 2018 Less than 3 months and 1 year

Exchange rate swaps (net-settled) $ 1,084 $ -

Forward exchange contracts 348 -

~81~

B. The related information of financial and non-financial instruments measured at fair value by level

on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

(a) The related information of the nature of the assets and liabilities is as follows:

March 31, 2019 Level 1 Level 2 Level 3 Total

Financial assets:

Financial assets at fair value


　Beneficiary certificates 346,044$ -$ -$ 346,044$

　Derivative instruments - 64,569 - 64,569



income

　Equity securities-current 490,044 - - 490,044

　Equity securities

-non-current - - 780,958 780,958

　Debt securities - 27,446 - 27,446

Total 836,088$ 92,015$ 780,958$ 1,709,061$

Financial liabilities:

Financial liabilities at fair value


　Derivative instruments -$ 36$ -$ 36$

December 31, 2018 Level 1 Level 2 Level 3 Total

Financial assets:









-non-current - - 788,611 788,611

　Bond securities - 26,778 - 26,778

Total 977,872$ 77,093$ 788,611$ 1,843,576$




　Derivative instruments -$ 548$ -$ 548$

~82~

(b)The methods and assumptions the Group used to measure fair value are as follows:

i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are

listed below by characteristics:

ii. Except for financial instruments with active markets, the fair value of other financial

instruments is measured by using valuation techniques or by reference to counterparty quotes.

C. There was no transfer between Level 1 and Level 2 for the three-month periods ended March 31,

2019 and 2018.

March 31, 2018 Level 1 Level 2 Level 3 Total

Financial assets:




　Equity securities - - 68,574 68,574




income



-non-current - - 650,895 650,895

　Debt securities - 64,721 - 64,721

Total 917,403$ 66,878$ 719,469$ 1,703,750$




　Derivative instruments -$ 1,432$ -$ 1,432$

Listed shares Open-end fund

Market quoted price Closing price Net asset value

~83~

D.Movements on Level 3 for the three-month periods ended March 31, 2019 and 2018 are as follows:

E. For the year ended December 31, 2018, there was no transfer into or out from Level 3.

F. Group finance segment is in charge of valuation procedures for fair value measurements being

categorised within Level 3, which is to verify independent fair value of financial instruments.

Such assessment is to ensure the valuation results are reasonable by applying independent

information to make results close to current market conditions, confirming the resource of

information is independent, reliable and in line with other resources and represented as the

exercisable price, and frequently calibrating valuation model, performing back-testing, updating

inputs used to the valuation model and making any other necessary adjustments to the fair value.

Investment property is valuated regularly by the Group’s Finance segment based on the valuation

methods and assumptions announced by the Financial Supervisory Commission, Securities and

Futures Bureau or through outsourced appraisal performed by the external valuer.

G. The following is the qualitative information of significant unobservable inputs and sensitivity

analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair

value measurement:

2019 2018

Equity securities Equity securities

At January 1 788,611$ 739,940$

Gains and losses recognised in profit or loss

Recorded as non-operating income and expenses - 15,117)(

Recorded as unrealised gains (losses) on

valuation of investments in equity

instruments measured at fair value

through other comprehensive income

7,660)( 5,361)(

Effects of changes in foreign exchange rates 7 7

At March 31 780,958$ 719,469$

Fair value at

March 31,

2019

Valuation

technique

Significant

unobservable

input

Range (weighted

average)

Relationship of

inputs to fair

value

Non-derivative

equity

instrument:

Unlisted shares 231,955$ Market

comparable

companies

Price to book

ratio multiple,

discount for

lack of

marketability

Median:1.86

Average:1.81

Liquidity discount:

17.5%

The higher the

multiple and

control

premium, the

higher the fair

value

~84~

H. The Group has carefully assessed the valuation models and assumptions used to measure fair

value. However, use of different valuation models or assumptions may result in different

measurement. The following is the effect of profit or loss or of other comprehensive income from

financial assets and liabilities categorised within Level 3 if the inputs used to valuation models

have changed:

Fair value at

December 31,

2018

Valuation

technique

Significant

unobservable

input

Range (weighted

average)

Relationship of

inputs to fair

value

Non-derivative

equity

instrument:


comparable

companies

Price to book

ratio multiple,

discount for

lack of

marketability

Median:1.86

Average:1.79

Liquidity discount:

17.5%

The higher the

multiple and

control

premium, the

higher the fair

value

Fair value at

March 31,

2018

Valuation

technique

Significant

unobservable

input

Range (weighted

average)

Relationship of

inputs to fair

value

Non-derivative

equity

instrument:


comparable

companies

Price to book

ratio multiple,

discount for

lack of

marketability

Median:1.87

Average:1.322

Liquidity discount:

10%~17.50%

The higher the

multiple and

control

premium, the

higher the fair

value

Unlisted shares 389,539 Net assets

value

Not applicable - Not applicable

~85~

Input Change

Favourable

change

Unfavourable

change

Favourable

change

Unfavourable

change

Financial assets

Equity

instrument

Price to book

ratio multiple,

discount for

lack of

marketability

± 1% $ - $ - $ 2,816 ($ 2,816)

Input Change

Favourable

change

Unfavourable

change

Favourable

change

Unfavourable

change

Financial assets

Equity

instrument

Price to book

ratio multiple,

discount for

lack of

marketability

± 1% $ - $ - $ 24,521 ($ 24,521)

Input Change

Favourable

change

Unfavourable

change

Favourable

change

Unfavourable

change

Financial assets

Equity

instrument

Price to book

ratio multiple,

discount for

lack of

marketability

± 1% $ 686 ($ 686) $ 2,614 ($ 2,614)

Equity

instrument

Not applicable± 1% $ - $ - $ 3,895 ($ 3,895)

March 31, 2018

Recognised in

profit or loss

Recognised in other


March 31, 2019

Recognised in

profit or loss

Recognised in other


December 31, 2018

Recognised in

profit or loss

Recognised in other


~86~

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.

B. Provision of endorsements and guarantees to others: Please refer to table 2.

C. Holding of marketable securities at the end of the period (not including subsidiaries, associates

and joint ventures): Please refer to table 3.

D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million

or 20% of the Company’s paid-in capital: None.

E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-

in capital or more: Please refer to table 4.

H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:

Please refer to table 5.

I. Derivative financial instruments undertaken during the reporting periods: Please refer to Notes

6(2) and 12(2).

J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland

China)：Please refer to table 7.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 8.

B. Significant transactions, either directly or indirectly through a third area, with investee

companies in the Mainland Area: None.

14. SEGMENTAL FINANCIAL INFORMATION

(1) General information

A. The Group has identified which segments should be reported based on the information used by

the Board of Directors to make decisions.

B. The Board of Directors classify reportable segments as construction engineering department,

environmental resource department, sales department and other operating departments.

~87~

(2) Measurement of segmental financial information

The Board of Directors evaluates the performance of segments based on segmental income. Interest

income and expenses cannot be attributed to any segment because such activity is handled by the

Company’s financial department.

(3) Segmental income, assets and liabilities of segments

The segmental financial information provided to the Board of Directors is as follows:

Construction

Engineering

Environmental

Resource Sales

Other

Operating

Department Department Department Departments Total

External revenues 12,245,003$ 1,278,337$ 24,205$ 164,913$ 13,712,458$

Internal revenues 550,042 5,500 - 194,220 749,762

Segmental revenues 12,795,045$ 1,283,837$ 24,205$ 359,133$ 14,462,220$

Segmental income 258,067$ 302,607$ 1,235$ 39,090$ 600,999$

Depreciation and

amortization 104,428$ 54,082$ 2,858$ 20,232$ 181,600$


Construction

Engineering

Environmental

Resource Sales

Other

Operating

Department Department Department Departments Total

External revenues 13,255,779$ 1,173,314$ 14,062$ 97,427$ 14,540,582$

Internal revenues 603,994 14,797 - 119,046 737,837

Segmental revenues 13,859,773$ 1,188,111$ 14,062$ 216,473$ 15,278,419$

Segmental income 346,096$ 292,071$ 772$ 68,691$ 707,630$

Depreciation and

amortization 99,723$ 8,900$ 34$ 22,060$ 130,717$


~88~

(4) Reconciliation information of segmental income

Intra-segment sales are of arm’s length transactions. The measurement of external revenues reported

to the Board of Directors is consistent with revenues in the statement of comprehensive income. The

reconciliation information of income from continuing operations before income tax and segmental

income is as follows:

2019 2018

Segmental income 600,999$ 707,630$

Adjustment and elimination 3,231 8,827

Share of profit (loss) of associates and

joint ventures accounted for using equity

method 148,680)( 14,310

Interest income 58,160 49,727

Foreign exchange gain (loss) 394 100,073)(

Finance costs 82,057)( 36,689)(

Reversal of provision for bad debts expense 31 -

Others 44,677 19,103)(

Income from continuing operations before

income tax 476,755$ 624,629$


Item Value

0 CTCI Corp. CTCI

Engineering &

Construction

Sdn. Bhd.

Other

receivables

Yes 1,081,150$ 1,079,050$ -$ - 2 - For

operational

need

-$ - -$ 3,548,993$ 7,097,986$ -

0 CTCI Corp. CTCI Singapore

Pte. Ltd.

Other

receivables

Yes 1,390,050 1,387,350 1,372,272 2.68~2.80% 2 - For

operational

need

- - - 3,548,993 7,097,986 -

0 CTCI Corp. CTCI Arabia

Ltd.

Other

receivables

Yes 1,451,830 1,449,010 1,371,935 2.60~2.80% 2 - For

operational

need

- - - 3,548,993 7,097,986 -

0 CTCI Corp. CTCI Machinery

Corp.

Other

receivables

Yes 650,000 650,000 632,000 1.01% 2 - For

operational

need

- - - 3,548,993 7,097,986 -

0 CTCI Corp. CTCI Smart

Engineering

Corp.

Other

receivables

Yes 500,000 500,000 363,000 1.01% 2 - For

operational

need

- - - 3,548,993 7,097,986 -

Allowance

for

doubtful

accounts

CollateralLimit on loans

granted to

a single party

（Note 7）

Ceiling on

total loans

granted

（Note 7） Footnote

Reason

for short-term

financing

（Note 6）

No.

（Note 1） Creditor Borrower

General

ledger

account

（Note 2）

Is a

related

party

Maximum

outstanding

balance during

three-month

period ended

March 31, 2019

(Note 3)

Balance at

March 31,

2019

（Note 8）

Actual amount

drawn down

Interest

rate

Nature of

loan

（Note 4）

Amount of

transactions

with the

borrower

（Note 5）

CTCI Corporation and its subsidiaries

Loans to others


Table 1 Expressed in thousands of NTD

(Except as otherwise indicated)

Table 1 Page 1

Item Value

Allowance

for

doubtful

accounts


granted to

a single party

（Note 7）

Ceiling on

total loans

granted


Reason

for short-term

financing

（Note 6）

No.


General

ledger

account

（Note 2）

Is a

related

party

Maximum

outstanding

balance during

three-month

period ended

March 31, 2019

(Note 3)

Balance at

March 31,

2019

（Note 8）

Actual amount

drawn down

Interest

rate

Nature of

loan

（Note 4）

Amount of

transactions

with the

borrower

（Note 5）

0 CTCI Corp. CTCI (Thailand)

Co., Ltd.

Other

receivables

Yes 800,000$ 800,000$ 405,167$ 1.01% 2 - For

operational

need

-$ - -$ 3,548,993$ 7,097,986$ -

0 CTCI Corp. CIPEC

Construction Inc.

Other

receivables

Yes 617,800 616,600 - - 2 - For

operational

need

- - - 3,548,993 7,097,986 -

1 CTCI Advanced

System Inc.

CTCI Corp. Other

receivables

Yes 45,000 45,000 - - 2 - For

operational

need

- - - 57,165 228,659 -

2 CTCI Overseas

Co., Ltd.

Superiority

(Thailand) Co.,

Ltd.

Other

receivables

Yes 67,865 67,038 67,038 2.83% 2 - For

operational

need

- - - 690,818 690,818 -

2 CTCI Overseas

Co., Ltd.

CIPEC

Construction Inc.

Other

receivables

Yes 312,472 21,334 21,323 2.63% 2 - For

operational

need

- - - 690,818 690,818 -

2 CTCI Overseas

Co., Ltd.

CTCI CMCE JV

SDN. BHD.

Other

receivables

Yes 37,704 21,581 8,941 3.75% 2 - For

operational

need

- - - 690,818 690,818 -

2 CTCI Overseas

Co., Ltd.

CTCI Americas

Inc.

Other

receivables

Yes 126,403 126,403 33,913 2.60% 2 - For

operational

need

- - - 690,818 690,818 -

Table 1 Page 2

Item Value

Allowance

for

doubtful

accounts


granted to

a single party

（Note 7）

Ceiling on

total loans

granted


Reason

for short-term

financing

（Note 6）

No.


General

ledger

account

（Note 2）

Is a

related

party

Maximum

outstanding

balance during

three-month

period ended

March 31, 2019

(Note 3)

Balance at

March 31,

2019

（Note 8）

Actual amount

drawn down

Interest

rate

Nature of

loan

（Note 4）

Amount of

transactions

with the

borrower

（Note 5）

2 CTCI Overseas

Co., Ltd.

CCJV P1

Engineering &

Construction

Sdn. Bhd.

Other

receivables

Yes 308,300$ 308,300$ 308,300$ 2.64% 2 - For

operational

need

-$ - -$ 690,818$ 690,818$ -

3 CTCI Overseas

(BVI) Corp.

CIPEC

Construction Inc.

Other

receivables

Yes 20,811 - - - 2 - For

operational

need

- - - 698,646 698,646 -

4 ECOVE

Environment Corp.

CTCI Solar

Energy

Corporation

Other

receivables

Yes 200,000 200,000 110,000 1.01% 2 - For

operational

need

- - - 509,385 2,037,541 -

5 ECOVE Waste

Management Corp.

CTCI Machinery

Corp.

Other

receivables

Yes 7,000 7,000 - - 2 - For

operational

need

- - - 13,278 53,110 -

5 ECOVE Waste

Management Corp.

CTCI Smart

Engineering

Corp.

Other

receivables

Yes 7,000 7,000 - - 2 - For

operational

need

- - - 13,278 53,110 -

6 ECOVE

Environment

Services Corp.

ECOVE Solvent

Recycling

Corporation

Other

receivables

Yes 70,000 70,000 50,000 1.57% 2 - For

operational

need

- - - 105,656 422,625 -

6 ECOVE

Environment

Services Corp.

ECOVE Miaoli

Energy Corp.

Other

receivables

Yes 70,000 70,000 - - 2 - For

operational

need

- - - 105,656 422,625 -

Table 1 Page 3

Item Value

Allowance

for

doubtful

accounts


granted to

a single party

（Note 7）

Ceiling on

total loans

granted


Reason

for short-term

financing

（Note 6）

No.


General

ledger

account

（Note 2）

Is a

related

party

Maximum

outstanding

balance during

three-month

period ended

March 31, 2019

(Note 3)

Balance at

March 31,

2019

（Note 8）

Actual amount

drawn down

Interest

rate

Nature of

loan

（Note 4）

Amount of

transactions

with the

borrower

（Note 5）

6 ECOVE

Environment

Services Corp.

CTCI Machinery

Corp.

Other

receivables

Yes 35,000$ 30,000$ -$ - 2 - For

operational

need

-$ - -$ 105,656$ 422,625$ -

6 ECOVE

Environment

Services Corp.

CTCI Resources

Engineering Inc.

Other

receivables

Yes 35,000 - - - 2 - For

operational

need

- - - 105,656 422,625 -

6 ECOVE

Environment

Services Corp.

CTCI Corp. Other

receivables

Yes 70,000 30,000 - - 2 - For

operational

need

- - - 105,656 422,625 -

6 ECOVE

Environment

Services Corp.

CTCI Smart

Engineering

Corp.

Other

receivables

Yes 70,000 30,000 - - 2 - For

operational

need

- - - 105,656 422,625 -

7 ECOVE Solar

Energy Corporation

ECOVE South

Corporation Ltd.

Other

receivables

Yes 14,000 14,000 14,000 1.71% 2 - For

operational

need

- - - 297,813 297,813 -

7 ECOVE Solar

Energy Corporation

ECOVE Solar

Power

Corporation

Other

receivables

Yes 200,000 156,000 - - 2 - For

operational

need

- - - 297,813 297,813 -

7 ECOVE Solar

Energy Corporation

ECOVE Central

Corporation Ltd.

Other

receivables

Yes 17,000 17,000 - - 2 - For

operational

need

- - - 297,813 297,813 -

8 CTCI Beijing Co.,

Ltd.

CTCI Shanghai

Co., Ltd.

Other

receivables

Yes 275,922 274,626 - - 2 - For

operational

need

- - - 712,899 712,899 -

Table 1 Page 4

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the name of account in which the loans are recognised, such as receivables-related parties, current account with stockholders, prepayments, temporary payments, etc.

Note 3: Fill in the maximum outstanding balance of loans to others during the three-month period ended March 31, 2018

Note 4:.The numbers filled in for the nature of loans are as follows:

　　　(1) Business association is labeled as “1”

　　　(2) Short-term financing is labeled as “2”.

Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.

Note 6: Fill in purpose of loan when nature of loan belongs to short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.

Note 7: The calculation and amount on ceiling of loans are as follows:

　　　[The company]

　　　(1) The limit on loans granted to a single party shall not exceed 20% of the Company's net assets value.

　　　(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.

　　　[Domestic subsidiaries and overseas subsidiaries]

　　　(1) The limit on loans granted to a single party by domestic subsidiaries and overseas subsidiaries shall not exceed 10% and 40% of the Company's net value, respectively.

　　　(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.

Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Govering Loaning of Funds and Making

of Endorsements/Guarantees by public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they

have not yet been appropriated. However, this balance should excluded the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has

authorised the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2,of the “Regulations Governing Loaning of Funds and Making of Endorsements/

Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be

excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

Table 1 Page 5

Company name

Relationship

with the

endorser/

guarantor

（Note 2）

0 CTCI Corp. Universal Engineering

(BVI) Corporation

2 53,234,895$ 30,890$ 30,830$ -$ -$ 0.17% 106,469,790$ Y N N -

0 CTCI Corp. CTCI Machinery Corp. 2 53,234,895 2,074,316 375,436 334,201 - 2.12% 106,469,790 Y N N -

0 CTCI Corp. CTCI Development

Corp.

2 53,234,895 500,000 500,000 - - 2.82% 106,469,790 Y N N -

0 CTCI Corp. CTCI Americas, Inc. 2 53,234,895 1,409,604 1,406,866 119,748 - 7.93% 106,469,790 Y N N -

0 CTCI Corp. CTCI Engineering &

Construction Sdn.

Bhd.

2 53,234,895 1,852,096 1,851,469 1,419,849 - 10.43% 106,469,790 Y N N -

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee

amount to net

asset value of

the endorser/

guarantor

company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

March 31, 2019

（Note 5）


Provision of endorsements and guarantees to others




Number

（Note 1）

Endorser/

guarantor

Party being

endorsed/guaranteedLimit on

endorsements/

guarantees

provided for a

single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

March 31, 2019

（Note 4）

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

Table 2 Page 1

Company name

Relationship

with the

endorser/

guarantor

（Note 2）

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee

amount to net

asset value of

the endorser/

guarantor

company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

March 31, 2019

（Note 5）

Number

（Note 1）

Endorser/

guarantor

Party being


endorsements/

guarantees

provided for a

single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

March 31, 2019

（Note 4）

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

0 CTCI Corp. CTCI Singapore Pte.

Ltd.

2 53,234,895$ 2,467,030$ 2,463,254$ 163,103$ -$ 13.88% 106,469,790$ Y N N -

0 CTCI Corp. CINDA Engineering &

Construction Pvt. Ltd.

2 53,234,895 2,896,128 2,896,128 1,338,166 - 16.32% 106,469,790 Y N N -

0 CTCI Corp. CTCI Arabia Ltd. 2 53,234,895 3,797,435 3,614,398 1,990,089 - 20.37% 106,469,790 Y N N -

0 CTCI Corp. CTCI Overseas Co.,

Ltd.

2 53,234,895 4,846,840 4,836,635 1,471,351 - 27.26% 106,469,790 Y N N -

0 CTCI Corp. CTCI Trading

Shanghai Co., Ltd.

2 53,234,895 161,239 86,324 - - 0.49% 106,469,790 Y N Y -

0 CTCI Corp. CTCI Shanghai Co.,

Ltd.

2 53,234,895 971,383 967,416 254,035 - 5.45% 106,469,790 Y N Y -

0 CTCI Corp. CTCI Beijing Co., Ltd. 2 53,234,895 1,096,232 1,091,508 112,772 - 6.15% 106,469,790 Y N Y -

Table 2 Page 2

Company name

Relationship

with the

endorser/

guarantor

（Note 2）

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee

amount to net

asset value of

the endorser/

guarantor

company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

March 31, 2019

（Note 5）

Number

（Note 1）

Endorser/

guarantor

Party being


endorsements/

guarantees

provided for a

single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

March 31, 2019

（Note 4）

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

0 CTCI Corp. CCJV P1 E&C Sdn.

Bhd.

2 53,234,895$ 1,220,155$ 1,217,785$ -$ -$ 6.86% 106,469,790$ Y N N -

0 CTCI Corp. CTCI Smart

Engineering Corp.

2 53,234,895 28,959 28,903 - - 0.16% 106,469,790 Y N N -

0 CTCI Corp. CTCI (Thailand) Co.,

Ltd.

2 53,234,895 1,160,511 1,157,682 625,320 - 6.52% 106,469,790 Y N N -

0 CTCI Corp. CTCI Chemical Corp. 2 53,234,895 19,692 19,654 12,047 - 0.11% 106,469,790 Y N N -

0 CTCI Corp. CTCI & HEC Water

Business Co., Ltd.

6 53,234,895 102,000 102,000 102,000 - 0.57% 106,469,790 Y N N -

0 CTCI Corp. CB&I-CTCI B.V. 6 53,234,895 6,545,554 6,532,840 6,532,840 - 36.82% 106,469,790 N N N -

0 CTCI Corp. Blue Whale Water

Technology Co., Ltd.

6 53,234,895 769,300 769,300 673,260 - 4.34% 106,469,790 N N N -

Table 2 Page 3

Company name

Relationship

with the

endorser/

guarantor

（Note 2）

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee

amount to net

asset value of

the endorser/

guarantor

company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

March 31, 2019

（Note 5）

Number

（Note 1）

Endorser/

guarantor

Party being


endorsements/

guarantees

provided for a

single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

March 31, 2019

（Note 4）

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

0 CTCI Corp. HDEC-CTCI (Linhai)

Corporation

6 53,234,895$ 1,215,000$ 1,215,000$ 180,000$ -$ 6.85% 106,469,790$ N N N -

0 CTCI Corp. CIPEC Construction

Inc.

2 53,234,895 525,036 524,861 275,243 - 2.96% 106,469,790 Y N N -

0 CTCI Corp. EVER ECOVE Corp. 6 53,234,895 87,500 87,500 87,500 - 0.49% 106,469,790 N N N -

0 CTCI Corp. CTCI Malaysia Sdn.

Bhd.

2 53,234,895 834,030 832,410 15,864 - 4.69% 106,469,790 Y N N -

0 CTCI Corp. CTCI CMCE JV SDN.

BHD.

6 53,234,895 470,254 - - - - 106,469,790 N N N -

1 CTCI Advanced

System Inc.

Century Ahead Ltd. 2 571,648 18,534 18,498 - - 3.24% 1,143,296 N N N -

2 CTCI Machinery

Corp.

CTCI Smart

Engineering Corp.

5 1,441,303 560,000 560,000 560,000 - 116.56% 2,882,607 N N N -

Table 2 Page 4

Company name

Relationship

with the

endorser/

guarantor

（Note 2）

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee

amount to net

asset value of

the endorser/

guarantor

company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

March 31, 2019

（Note 5）

Number

（Note 1）

Endorser/

guarantor

Party being


endorsements/

guarantees

provided for a

single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

March 31, 2019

（Note 4）

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

3 CTCI Chemical

Corp.

CTCI Machinery Corp. 5 716,009$ 532,830$ 532,830$ 532,830$ -$ 223.25% 1,432,019$ N N N -

3 CTCI Chemical

Corp.

CTCI Corp. 3 716,009 18,817 18,817 18,817 - 7.88% 1,432,019 N Y N -

4 CTCI Shanghai

Co., Ltd.

CTCI Trading

Shanghai Co., Ltd.

2 1,530,330 68,981 68,657 68,657 - 13.46% 3,060,661 N N Y -

5 CTCI Resources

Engineering Inc.

CTCI Smart

Engineering Corp.

5 867,506 267,102 267,102 267,102 - 92.37% 1,735,011 N N N -

6 ECOVE

Environment

Corp.

ECOVE Solar Power

Corporation

2 10,187,704 217,000 217,000 120,000 - 4.26% 15,281,556 N N N -

6 ECOVE

Environment

Corp.

ECOVE Solar Energy

Corporation

2 10,187,704 1,345,376 1,344,661 989,818 - 26.40% 15,281,556 N N N -

6 ECOVE

Environment

Corp.

EVER ECOVE Corp. 6 10,187,704 17,500 17,500 17,500 - 0.34% 15,281,556 N N N -

Table 2 Page 5

Company name

Relationship

with the

endorser/

guarantor

（Note 2）

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee

amount to net

asset value of

the endorser/

guarantor

company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

March 31, 2019

（Note 5）

Number

（Note 1）

Endorser/

guarantor

Party being


endorsements/

guarantees

provided for a

single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

March 31, 2019

（Note 4）

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

7 ECOVE Solar

Energy

Corporation

ECOVE South

Corporation Ltd.

2 2,978,132$ 14,000$ 14,000$ 13,650$ -$ 1.88% 4,467,198$ N N N -

7 ECOVE Solar

Energy

Corporation

ECOVE Central

Corporation Ltd.

2 2,978,132 16,790 16,790 16,390 - 2.26% 4,467,198 N N N -

7 ECOVE Solar

Energy

Corporation

ECOVE Solar Power

Corporation

2 2,978,132 708,699 708,699 571,655 - 95.19% 4,467,198 N N N -

8 ECOVE Solar

Power

Corporation

ECOVE Solar Energy

Corporation

3 816,246 12,420 12,420 12,420 - 6.09% 1,224,369 N N N -

Table 2 Page 6

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.


Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories; fill in the number of category each case belongs to:

(1)Having business relationship.

(2)The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3)The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

(4)The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.

(5)Mutual guarantee of the trade as required by the construction contract.

(6)Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s

“Procedures for Provision of Endorsements and Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount

of endorsements/guarantees provided in the footnote.

　　[The company]

　　　(1)The limit on endorsements and guarantees granted to a single party shall not exceed 300% of the Company’s net assets value in last financial statements which was audited by accountant.

　　　(2)The ceiling on total endorsements and guarantees shall not exceed 600% of the Company’s net assets value in last financial statements which was audited by accountant.

　　[Domestic subsidiaries and overseas subsidiaries]

　　　(1)The limit on endorsements and guarantees granted to a single party shall not exceed 100% to 300% of the Company's net assets value in last financial statements which was audited by accountant.

　　　(2)The ceiling on total endorsements and guarantees shall not exceed 200% to 600% of the Company's net assets value in last financial statements which was audited by accountant.

Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. And all other

events involve endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees.

Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 2 Page 7

Type of marketable

securities Name of Investee company

Number of shares/

denominations

Book value

(Note 3) Ownership (%) Market value

CTCI Corp. Fund BlackRock Global Fund - European

Value Fund A2 USD Hedged

N/A Financial assets at fair

value through profit or

loss-current

12,438 4,602$ - 4,371$ -

CTCI Corp. Fund Fubon US Preferred Stock ETF N/A Financial assets at fair

value through profit or

loss-current

500,000 10,000 - 9,775 -

14,602 14,146$

Adjustment 456)(

14,146$

CTCI Corp. Common Stock China Steel Chemical Corp. The Company is the

supervisor

Financial asset at fair value


income-current

1,776,916 100,615$ - 238,995$ -

CTCI Corp. Common Stock United Renewable Energy Co., Ltd. N/A Financial asset at fair value


income-current

862,015 8,706 - 8,620 -

CTCI Corp. Common Stock Taiwan Cement Corp. N/A Financial asset at fair value


income-current

1,980,000 68,448 - 81,675 -

177,769 329,290$

Adjustment 151,521

329,290$

Footnote

（Note 4）


Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

For the three-month period ended March 31, 2019Table 3 Expressed in thousands of NTD


Securities held by

(Note 1)

Relationship with the

securities issuer

(Note 2)

General

ledger account

As of March 31, 2019

Table 3 Page 1

Type of marketable


Number of shares/

denominations

Book value


Footnote

（Note 4）Securities held by

(Note 1)


securities issuer

(Note 2)

General

ledger account


CTCI Corp. Common Stock Core Pacific City Co., Ltd. N/A Financial assets at fair value


income-non-current

22,428,000 360,000$ 2.26 231,955$ -

CTCI Corp. Common Stock CDIB & Partners

Investment Holding

Corp.

The Company is the

supervisor



income-non-current

27,000,000 250,000 2.48 250,000 -

CTCI Corp. Common Stock Metro-consultant Co.,

Ltd.

The Company is the

Board of director



income-non-current

300,000 3,000 6.00 3,000 -

CTCI Corp. Common Stock Ever Victory Global Limited. N/A Financial assets at fair value


income-non-current

9,440,000 292,225 2.62 292,225 -

CTCI Corp. Common Stock Heng Keng Corp. N/A Financial assets at fair value


income-non-current

20,000 3,000 5.12 - -

908,225 777,180$

Less: Accumulated impairment 131,045)(

777,180$

CTCI Investment Corp. Fund Franklin Templeton Sinoam Money

Market Fund

N/A Financial assets at fair value

through profit or loss-current

671,211 6,937$ - 6,937$ -

CTCI Investment Corp. Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value


income-current

127,030 1,270 - 1,270 -

CTCI Investment Corp. Common Stock CTCI Corp. The Company Financial assets at fair value


income-non-current

344,436 16,533 0.05 16,533 -

CTCI Investment Corp. Common Stock Global Strategic Investment Inc. N/A Financial assets at fair value


income non-current

283,500 962 0.65 962 -

CTCI Development Corp. Common Stock CTCI Corp. The Company Financial assets at fair value


income-non-current

912,170 43,784 0.12 43,784 -

Table 3 Page 2

Type of marketable


Number of shares/

denominations

Book value


Footnote


(Note 1)


securities issuer

(Note 2)

General

ledger account


CTCI Development Corp. Common Stock CTCI Advanced System Inc. Subsidiary Financial assets at fair value


income-non-current

324,417 13,982$ 1.38 13,982$ -

CTCI Development Corp. Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value


income-current

311,010 3,110 - 3,110 -

CTCI Development Corp. Fund Yuanta De-Li Money Market Fund N/A Financial assets at fair value


184,103 3,000 - 3,000 -

CTCI Development Corp. Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value


635,033 8,590 - 8,590 -

CTCI Resources

Engineering Inc.

Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value


income-current

361,080 3,611 - 3,611 -

CTCI Resources

Engineering Inc.

Common Stock Global Strategic Investment Inc. N/A Financial assets at fair value


income-non-current

567,000 1,924 1.29 1,924 -

CTCI Resources

Engineering Inc.

Fund Yuanta De-Li Money Market Fund N/A Financial assets at fair value


1,226,776 20,000 - 20,000 -

CTCI Resources

Engineering Inc.

Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value


1,481,786 20,043 - 20,043 -

ECOVE Waste

Management Corporation



3,234,775 43,755 - 43,755 -

ECOVE Waste


Fund Franklin Templeton Sinoam Money

Market Fund



630,309 6,514 - 6,514 -

Table 3 Page 3

Type of marketable


Number of shares/

denominations

Book value


Footnote


(Note 1)


securities issuer

(Note 2)

General

ledger account


ECOVE Waste


Common Stock Taiwan Cement Corp. N/A Financial assets at fair value


income-current

478,841 19,752$ - 19,752$ -

ECOVE Wujih Energy

Corporation

Fund Prudential Financial Money Market N/A Financial assets at fair value


347,824 5,501 - 5,501 -

ECOVE Wujih Energy

Corporation

Fund FSITC Taiwan Money Market N/A Financial assets at fair value


65,511 1,002 - 1,002 -

ECOVE Wujih Energy

Corporation



1,849,418 25,016 - 25,016 -

ECOVE Wujih Energy

Corporation


Market Fund



1,809,993 18,707 - 18,707 -

ECOVE Wujih Energy

Corporation



income-current

475,508 19,615 - 19,615 -

ECOVE Environment

Corp.



income-current

472,758 19,502 - 19,502 -

ECOVE Environment

Corp.


Market Fund



974,304 10,069 - 10,069 -

ECOVE Environment

Corp.



4,295,415 70,028 - 70,028 -

ECOVE Environment

Corp.



income-current

226,157 2,262 - 2,262 -

Table 3 Page 4

Type of marketable


Number of shares/

denominations

Book value


Footnote


(Note 1)


securities issuer

(Note 2)

General

ledger account


ECOVE Environment

Corp.

Common Stock TeamWIN Opto-Electronics

Co., Ltd.



income-non-current

150,000 475$ 2.46 475$ -

ECOVE Environment

Corp.

Common Stock Eastern Pacific Energy Sdn. Bhd. ECOVE Environment

Corp.'s President is the

director



income-non-current

10,000 68 10.00 68 -

ECOVE Environmental

Services Corporation

Common Stock CTCI Corp. The Company Financial assets at fair value


income-current

1,028 50 - 50 -

ECOVE Environmental




income-current

1,251,971 48,639 - 48,639 -

ECOVE Environmental




income-current

255,567 2,310 - 2,310 -

ECOVE Environmental


Fund Schroder 2022 Emerging Market

Sovereign Bond Fund



35,000 11,033 - 11,033 -

ECOVE Environmental




4,441,844 60,075 - 60,075 -

ECOVE Mioali Energy

Corporation



851,393 11,516 - 11,516 -

ECOVE Mioali Energy

Corporation

Fund FSITC Taiwan Money Market N/A Financial assets at fair value


65,579 1,003 - 1,003 -

Table 3 Page 5

Type of marketable


Number of shares/

denominations

Book value


Footnote


(Note 1)


securities issuer

(Note 2)

General

ledger account


ECOVE Mioali Energy

Corporation


Market Fund



388,372 4,014$ - 4,014$ -

CTCI (Thailand) Co.,

Ltd.

Common Stock CHIYODA (Thailand) Co. Ltd. N/A Financial assets at fair value


income-non-current

3,600 349 9.00 349 -

Crown Asia-2

Investment Limited

Common Stock CTCI Corp. The Company Financial assets at fair value


income-non-current

500 24 - 24 -

CTCI Advanced System

Inc.



312,495 5,095 - 5,095 -


Inc.



income-current

908,578 37,479 - 37,479 -


Inc.



income-current

320,430 3,204 - 3,204 -


Inc.

Bonds BANK OF CHINA LTD PARIS N/A Financial assets at fair value


income-current

6,000,000 27,446 - 27,446 Note 5

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities in accordance with IAS 39, ‘Financial instruments: recognition and measurement’.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the book value without deduction of allowance for valuation loss of the marketable securities.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Note 5: The book value of bonds denominated in CNY.

Table 3 Page 6

Purchases

(sales) Amount

Percentage of total

purchases (sales) Credit term Unit price Credit term Balance

Percentage of

total notes/accounts

receivable (payable)

ECOVE Environmental


ECOVE Waste Management

Corporation

Second-tier

subsidiary(Sales) 156,086)($ 1.14% )(

30 days after

seasonal billings

Negotiated by

both parties

No significant

difference105,200$ 1.83% -

ECOVE Wujih Energy

Corporation


Corporation

Second-tier

subsidiary(Sales) 106,075)( 0.77% )(

30 days after

seasonal billings

Negotiated by

both parties

No significant

difference68,538 1.19% -

CTCI Corp. CTCI Overseas Co., Ltd Subsidiary (Sales) (226,345) 1.65% )( 30 days after

seasonal billings

Negotiated by

both parties

No significant


CTCI Engineering &

Construction Sdn. Bhd.

MIE INDUSTRIAL SDN.

BHD.Associate (Sales) (362,561) 2.64% )(

30 days after

seasonal billings

Negotiated by

both parties

No significant



Corporation

ECOVE Environmental


Second-tier

subsidiaryPurchases 156,086 1.14%

30 days after

seasonal billings

Negotiated by

both parties

No significant

difference105,200)( 1.00% )( -


Corporation

ECOVE Wujih Energy

Corporation

Second-tier

subsidiaryPurchases 106,075 0.77%

30 days after

seasonal billings

Negotiated by

both parties

No significant

difference68,538)( 0.65% )( -

CTCI Engineering

& Construction Sdn. Bhd.

MIE INDUSTRIAL SDN.

BHD.Associate Purchases 259,178 1.89%

30 days after

seasonal billings

Negotiated by

both parties

No significant

difference301,379)( 2.87% )( -

CCJV P1 Engineering &


MIE INDUSTRIAL SDN.

BHD.Associate Purchases 112,297 0.82%

30 days after

seasonal billings

Negotiated by

both parties

No significant

difference326,035)( 3.10% )( -

CTCI Overseas Co., Ltd. CTCI Corp. The Company Purchases 226,345 1.65% 30 days after

seasonal billings

Negotiated by

both parties

No significant

difference86,416)( 0.82% )( -


Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more




FootnotePurchaser/seller Counterparty

Relationship

with the

counterparty

Transaction

Differences in transaction terms

compared to third party

transaction Notes/accounts receivable (payable)

Tabl e 4 Page 1

Table 5

Amount Action taken

CTCI Corp.CTCI Machinery Corp.

Subsidiary 632,000$ Note -$ - -$ -$

CTCI Corp. CTCI Arabia Ltd. Subsidiary 1,371,935 Note - - - -

CTCI Corp. CTCI Singapore Pte. Ltd. Subsidiary 1,372,272 Note - - - -

CTCI Corp.CTCI Smart Engineering

Corp.Subsidiary 363,000 Note - - - -

CTCI Corp. CTCI (Thailand ) Co., Ltd. Subsidiary 405,167 Note - - - -

ECOVE Environment Corp.ECOVE Solar Energy

CorporationSecond-tier subsidiary 110,000 Note - - - -

CTCI Overseas Co., Ltd.CCJV P1 Engineering &

Construction Sdn. Bhd.Subsidiary 308,300 Note - - - -

CTCI Engineering & Construction Sdn.

Bhd.MIE INDUSTRIAL SDN. BHD. Associate 456,585 0.71 - - - -

ECOVE Environmental Services

Corporation.


Corporation.Second-tier subsidiary 105,200 1.52 - - - -

Note：Other accounts receivable arise from lending capital.


Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more


Expressed in thousands of NTD


Amount collected

subsequent to the

balance sheet date

Allowance for

doubtful accounts Creditor Counterparty

Relationship

with the counterparty

Balance as at

March 31, 2019 Turnover rate

Overdue receivables

Table 5 Page 1

General ledger account Amount Transaction terms

Percentage of consolidated total operating

revenues or total assets (Note 3)

0 CTCI Corp. CTCI Overseas Co., Ltd. 1 Sales revenue 226,345)($ Negotiated by both parties 1.65% )(

1 ECOVE Environmental Services

Corporation


Corporation

3 〃 156,086)( 〃 1.14% )(

2 ECOVE Wujih Energy Corporation ECOVE Waste Management

Corporation

3 〃 106,075)( 〃 0.77% )(

1 ECOVE Environmental Services

Corporation


Corporation

3 Accounts receivable 105,200 〃 0.77%

0 CTCI Corp. CTCI Machinery Corp. 1 Other receivables 632,000 〃 4.61%

0 〃 CTCI (Thailand ) Co., Ltd. 1 〃 405,167 〃 2.95%

0 〃 CTCI Arabia Ltd. 1 〃 1,371,935 〃 10.01%

0 〃 CTCI Singapore Pte. Ltd. 1 〃 1,372,272 〃 10.01%

0 〃 CTCI Smart Engineering

Corp.

1 〃 363,000 〃 2.65%

3 ECOVE Environment Corp. ECOVE Solar Energy

Corporation

3 〃 110,000 〃 0.80%

4 CTCI Overseas Co., Ltd. CCJV P1 Engineering &


3 〃 308,300 〃 2.25%


Significant inter-company transactions during the reporting period




Number

(Note 1) Company name Counterparty

Relationship

(Note 2)

Transaction

Tabl e 6 Page 1




Number


Relationship

(Note 2)

Transaction

0 CTCI Corp. CTCI Overseas (BVI) Co.

and its subsidiaries.

1 Advance construction

receipt

5,795,050$ Negotiated by both parties 42.26%

5 CTCI Machinery Corp. CTCI Corp. 2 〃 3,231,643 〃 23.57%

6 CTCI Resources Engineering Inc. 〃 2 〃 252,390 〃 1.84%

7 CTCI (Thailand ) Co., Ltd. 〃 2 〃 720,506 〃 5.25%

0 CTCI Corp. CTCI Development Corp. 1 Refundable deposits 128,300 〃 0.94%

0 〃 CTCI Machinery Corp. 1 Guarantee 375,436 Not applicable Not applicable

0 〃 CTCI Development Corp. 1 〃 500,000 〃〃

0 〃 CTCI Americas, Inc. 1 〃 1,406,866 〃〃

0 〃 CTCI Engineering &


1 〃 1,851,469 〃〃

0 〃 CTCI Singapore Pte. Ltd. 1 〃 2,463,254 〃〃

0 〃 CINDA Engineering &

Construction Private Limited

1 〃 2,896,128 〃〃

0 〃 CTCI Arabia Ltd. 1 〃 3,614,398 〃〃

0 〃 CTCI Overseas Co., Ltd. 1 〃 4,836,635 〃〃

0 〃 CTCI Shanghai Co., Ltd. 1 〃 967,416 〃〃

0 〃 CTCI Beijing Co., Ltd. 1 〃 1,091,508 〃〃

0 〃 CCJV P1 E&C SDN. BHD. 1 〃 1,217,785 〃〃

Tabl e 6 Page 2




Number


Relationship

(Note 2)

Transaction

0 CTCI Corp. CTCI (Thailand ) Co., Ltd. 1 Guarantee 1,157,682$ Not applicable Not applicable

0 〃 CTCI & HEC Water Business

Co., Ltd.

1 〃 102,000 〃〃

0 〃 CIPEC Construction Inc. 1 〃 524,861 〃〃

0 〃 CTCI Malaysia Sdn. Bhd. 1 〃 832,410 〃〃

5 CTCI Machinery Corp. CTCI Smart Engineering

Corp.

3 〃 560,000 〃〃

8 CTCI Chemical Corp. CTCI Machinery Corp. 3 〃 532,830 〃〃

6 CTCI Resources Engineering Inc. CTCI Smart Engineering

Corp.

3 〃 267,102 〃〃

3 ECOVE Environment Corp. ECOVE Solar Power

Corporation

3 〃 217,000 〃〃

3 ECOVE Environment Corp. ECOVE Solar Energy

Corporation

3 〃 1,344,661 〃〃

9 ECOVE Solar Energy Corporation ECOVE Solar Power

Corporation

3 〃 708,699 〃〃

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1)Parent company is ‘0’.


Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between

subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction;

for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

(1)Parent company to subsidiary.

(2)Subsidiary to parent company.

(3)Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on

accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Tabl e 6 Page 3

Balance as at

March 31, 2019

Balance as at

December 31, 2018 Number of shares Ownership (%) Book value

CTCI Corp. CTCI Smart Engineering

Corp.

Taiwan Design, management,

and building of nuclear

power, thermal power,

fire pumped storage

power generation and

others related to

engineering.

$ 456,251 $ 456,251 59,098,624 97.09 $ 95,145 ($ 60,033) ($ 58,286) A subsidiary

CTCI Corp. CTCI Resources

Engineering Inc.

Taiwan Mining of geology, sea oil

and gas, marbal and

rare；planning, design,

monitor of civil, traffic

environment and various

mechanical and

electrical equipment.

263,455 263,455 24,762,252 99.05 310,230 22,496 22,283 A subsidiary

CTCI Corp. CTCI Advanced

Systems Inc.

Taiwan Systems planning, design,

integration, and

engineering for various

IT systems, etc.

44,409 44,409 11,444,842 48.72 278,507 19,117 9,314 A subsidiary

CTCI Corp. CTCI Development

Corp.

Taiwan Real estate and leasing business. 1,870,000 1,690,000 187,000,000 100.00 2,740,261 27,045 27,045 A subsidiary

CTCI Corp. CTCI Investment

Corporation

Taiwan General investment. 2,072,000 2,072,000 207,200,000 100.00 1,646,758 ( 84,012) ( 84,012) A subsidiary

CTCI Corp. ECOVE Environment

Corp.

Taiwan General investment. 938,889 938,889 38,457,105 57.31 2,919,288 196,577 112,658 A subsidiary

CTCI Corp. CTCI (Thailand)

Co., Ltd.

Thailand Design and building of

petrochemical plant.

116,894 116,894 1,249,500 49.00 59,014 ( 1,995) ( 977) A subsidiary

CTCI Corp. CTCI Machinery

Corp.

Taiwan Secondary processing

of steel, piping, heat

treatment, manufacture

of pollution control

equipment and non-

destructive testing, etc.

293,800 293,800 20,000,000 100.00 497,482 13,753 13,753 A subsidiary

Net profit (loss)

of the investee for the

three-month period ended

March 31, 2019 (Note 2(2))

Investment income(loss)

recognised by the Company for

the three-month period ended

March 31, 2019（Note 2(3)） Footnote Investor

Investee

(Notes 1 and 2) Location Main business activities

Initial investment amount Shares held as at March 31, 2019


Information on investees (not including investees in Mainland China)




Table 7 Page 1

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



CTCI Corp. CTCI Arabia Ltd. Arabia Construction and

maintenance of refinery, storage

tanks and

chemical plant.

$ 23,312 $ 23,312 500 50.00 ($ 556,902) $ 15,724 $ 7,862 A subsidiary

CTCI Corp. Sinogal-Waste

Services Corp.

Macao Management of waste recycling

site and

maintenance of related

mechanical and

equipment, etc.

4,958 4,958 - 30.00 72,662 49,004 14,701 A subsidiary

CTCI Corp. CTCI Singapore Pte.

Ltd.

Singapore Investment and planning

of related engineering.

152,254 152,254 5,100,000 100.00 ( 627,504) 33,397 33,397 A subsidiary

CTCI Corp. CTCI Overseas

(BVI) Corp.

BVI Investment and planning


308,554 308,554 6,740,000 100.00 2,116,840 278,047 278,047 A subsidiary

CTCI Corp. CTCI Engineering &


Malaysia Investment and planning


4,118 4,118 450,000 60.00 ( 18,917) ( 26,243) ( 15,746) A subsidiary

CTCI Corp. CTCI CMCE JV SDN.

BHD.

Malaysia Construction planning. 2,759 2,759 382,500 51.00 9,089 ( 288) ( 147) A subsidiary

CTCI Corp. CTCI Americas, Inc. USA To extend foreign business, the

Group strengthen the collaborative

relationship with local business

owner and supplier, developing

adequate potential supplier, and

help them to operate projects,

purchase and other related

businesses.

3,217 3,217 100,000 100.00 ( 8,264) ( 12,233) ( 12,233) A subsidiary

CTCI Corp. CCJV P1

Engineering &

Construction Sdn.

Bhd.

Malaysia Construction planning. 2,259 2,259 247,500 99.00 ( 458,670) ( 380,317) ( 376,514) A subsidiary

CTCI Corp. CTCI & HEC Water

Business Co., Ltd.

Taiwan Sewerage System BOT Project. 255,000 255,000 25,500,000 51.00 243,947 ( 1,115) ( 568) A subsidiary

CTCI Corp. Blue Whale Water

Technology Co., Ltd.

Taiwan Wastewater Reclamation Unit

BTO Project.

347,900 347,900 36,260,000 49.00 455,274 41,505 20,337 An investee under

equity method

Table 7 Page 2

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



CTCI Corp. Pan Asia Corp. Taiwan Input of foreign labor

and technologies,

technical cooperation

with foreign construction

business, and construction of

engineering construction, etc.

$ 71,543 $ 71,543 39,219,509 34.27 $ 435,571 $ 107 ($ 91,018) An investee under

equity method

CTCI Corp. EVER ECOVE Corp. Taiwan Waste service, waste clear and

steam power cogeneration.

250,000 250,000 25,000,000 25.00 246,631 ( 16) ( 4) An investee under

equity method

CTCI Corp. HDEC-CTCI (Linhai)

Corporation

Taiwan Reclaimed water operators. 202,500 202,500 20,250,000 45.00 203,396 4,460 2,007 An investee under

equity method

$ 10,659,838 ($ 98,101)

CTCI Development

Corp.

CTCI Chemical

Corp.

Taiwan Manufacture, wholesale,

and retail of industrial

chemicals.

$ 13,522 $ 13,522 480,661 6.77 $ 17,200 $ 15,401 $ 1,043 A second-tier

subsidiary

CTCI Development

Corp.

ECOVE Environment

Corp.

Taiwan General investment. 11,270 11,270 243,918 0.36 18,473 195,710 711 A subsidiary

CTCI Development

Corp.

CTCI Resources

Engineering Inc.

Taiwan Mining of geology, sea oil

and gas, marbal and

rare; planning, design,

monitor of civil, traffic

environment and various

mechanical and

electrical equipment.

23 23 1,388 0.01 17 22,496 1 A subsidiary

CTCI Development

Corp.

Crown Asia-2

Investment Limited

Taiwan General investment. 2,531 2,531 25,000 100.00 594 ( 12) ( 12) A second-tier

subsidiary

CTCI Investment

Corporation

CTCI Chemical

Corp.

Taiwan Manufacture wholesale,


chemicals.

32,153 32,153 1,657,207 23.34 59,303 15,401 3,595 A second-tier

subsidiary

Table 7 Page 3

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



CTCI Investment

Corporation

ECOVE Environment

Corp.

Taiwan General investment. $ 1,374 $ 1,374 32,132 0.05 $ 2,429 $ 195,710 $ 94 A subsidiary

CTCI Investment

Corporation

CTCI Smart Engineering

Corp.

Taiwan Design, management,

and building of nuclear

power, thermal power,

fire pumped storage

power generation and

others related to

engineering.

11 11 1,000 0.002 3 ( 60,033) - A subsidiary

CTCI Investment

Corporation

Powertec Energy

Corp.

Taiwan Basically chemical industry

power generation, rotation

electric, machinery

manufacturing of electric

power and services of

energy technologies.

1,832,107 1,832,107 211,291,668 16.03 1,135,627 ( 570,659) ( 91,463) An investee under

equity method

CTCI Investment

Corporation

MIE INDUSTRIAL

SDN. BHD.

Malaysia Equipment & Instrument,

Procurement & Contruction &

Panel.


equity method

CTCI Machinery

Corp.

Boretech

Resource

Recovery

Engineering

Co., Ltd.

(Cayman)

Cayman

Islands

Share holding and

investment.

154,744 154,744 6,666,667 10.00 146,752 14,204 667 An investee under

equity method

ECOVE Environment

Corp.

ECOVE Waste

Management

Corporation

Taiwan International trade and

environmental service of waste

disposal, equipment installation

and mechanical installation, etc.

20,000 20,000 2,000,000 100.00 132,776 16,626 16,333 A second-tier

subsidiary

ECOVE Environment

Corp.

ECOVE Wujih Energy

Corporation

Taiwan Environmental service of

waste disposal device

installation, steam power

cogeneration, etc.

425,085 425,085 29,400,000 98.00 1,316,503 73,159 71,696 A second-tier

subsidiary

ECOVE Environment

Corp.

ECOVE Environmental


Taiwan Management of waste

recycling site and maintenance of

related

mechanical and

equipment, etc.

339,921 339,921 14,065,936 93.15 979,847 82,372 76,731 A second-tier

subsidiary

Table 7 Page 4

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



ECOVE Environment

Corp.

ECOVE Mioali

Energy Corporation




cogeneration, etc.

$ 1,012,483 $ 1,012,483 56,249,000 74.999 $ 1,028,379 $ 32,533 $ 24,399 A second-tier

subsidiary

ECOVE Environment

Corp.

ECOVE Solar Energy

Corporation

Taiwan Energy technology service. 762,349 279,465 63,245,452 100.00 868,223 12,236 12,236 A second-tier

subsidiary

ECOVE Environment

Corp.

Yuan Ding

Resources

Management Corp.

Taiwan Waste service, waste clear other

environmental service, and

environmental pollution service,

etc.

27,000 27,000 2,700,000 60.00 23,560 28 17 A second-tier

subsidiary

ECOVE Environment

Corp.

Boretech

Resource

Recovery

Engineering

Co., Ltd.

(Cayman)

Cayman

Islands

Share holding and

investment.


equity method

ECOVE Environment

Corp.

ECOVE Solvent Recycling

Corporation

Taiwan Operating basic chemical industry

and manufacture of other chemical

products.

86,480 86,480 8,099,000 89.99 78,213 ( 2,173) ( 1,955) A second-tier

subsidiary

ECOVE Environment

Corp.

EVER ECOVE Corp. Taiwan Waste service, waste clear and

steam power cogeneration.

50,000 50,000 5,000,000 5.00 49,326 ( 16) ( 9) An investee under

equity method

ECOVE

Environmental


ECOVE Wujih Energy

Corporation




cogeneration, etc.

6,000 6,000 600,000 2.00 26,867 73,160 1,463 A second-tier

subsidiary

ECOVE

Environmental


CTCI Chemical

Corp.

Taiwan Manufacture, wholesale,


chemicals.

24,851 24,851 1,910,241 26.9048 68,488 15,402 4,143 A second-tier

subsidiary

ECOVE

Environmental


Sinogal-Waste

Services Corp.

Macao Management of waste

recycling site and

maintenance of related

mechanical and

equipment, etc.

4,964 4,964 - 30.00 72,662 49,004 14,701 A second-tier

subsidiary

Table 7 Page 5

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



ECOVE

Environmental


ECOVE Mioali

Energy Corporation




cogeneration, etc.

$ 13 $ 13 1,000 0.001 $ 18 $ 32,572 $ 1 A second-tier

subsidiary

ECOVE

Environmental


ECOVE Solvent Recycling

Corporation

Taiwan Operating basic chemical industry

and manufacture of other chemical

products.

10 - 1,000 0.01 8 ( 2,173) - A second-tier

subsidiary

ECOVE Waste

Management

Corporation

ECOVE Environmental


Taiwan Management of waste

recycling site and maintenance of

related

mechanical and

equipment, etc.

53 53 1,000 0.01 78 82,324 5 A second-tier

subsidiary

ECOVE Waste

Management

Corporation

Yuan Ding

Resources

Management Corp.

Taiwan Waste service, waste clear other

environmental service, and

environmental pollution service,

etc.

18,000 18,000 1,800,000 40.00 15,188 28 11 A second-tier

subsidiary

ECOVE Solar Energy

Corporation

ECOVE Solar Power

Corporation

Taiwan Energy technology service. 180,000 180,000 18,000,000 100.00 205,210 1,149 1,149 A second-tier

subsidiary

ECOVE Solar Energy

Corporation

ECOVE Central

Corporation

Ltd.

Taiwan Energy technology service. 7,500 7,500 750,000 100.00 8,196 179 179 A second-tier

subsidiary

ECOVE Solar Energy

Corporation

ECOVE South Corporation

Ltd.

Taiwan Energy technology service. 16,500 16,500 1,650,000 100.00 18,065 96 96 A second-tier

subsidiary

ECOVE Solar Energy

Corporation

G.D. International, LLC. USA Energy technology service. 189,197 189,197 - 100.00 375,061 5,272 5,272 A second-tier

subsidiary

G.D International,

LLC.

Lumberton Solar W2-090,

LLC.

USA Energy technology service. 189,197 189,197 - 100.00 374,035 5,272 5,272 A second-tier

subsidiary

CTCI Overseas

(BVI) Corp.

CTCI Overseas

Co., Ltd.

Hong Kong Investment and planning


276,815 276,815 6,740,000 100.00 2,006,251 279,278 279,278 A second-tier

subsidiary

Table 7 Page 6

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



CTCI Overseas

Co., Ltd.

CTCI Arabia Ltd. Arabia Construction and


tanks and chemical plant.

$ 22,610 $ 22,610 500 50.00 ($ 556,902) $ 15,724 $ 7,862 A subsidiary

CTCI Overseas

Co., Ltd.

Universal Engineering

(BVI) Corp.

BVI Investment and planning


1,694 1,694 50,000 100.00 32,057 ( 656) ( 656) A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CIPEC

Construction Inc.

Philippines Construction and


tanks and

chemical plant.

663 663 9,973 39.89 ( 13,966) ( 9,147) ( 3,655) A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CIMAS

Engineering Corp.

Vietnam Chemical, petrochemical,

feasibility study &

planning, engineering

design, procurement &

fabrication, erection,

construction &

commissioning.

65,079 26,330 - 83.00 82,478 ( 2,576) ( 2,181) A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CTCI Engineering &




2,879 2,879 300,000 40.00 ( 12,611) ( 26,243) ( 10,497) A subsidiary

CTCI Overseas

Co., Ltd.

CINDA

Engineering &

Construction

Private Limited

India Chemical, petrochemical,

feasibility study &

planning, engineering

design, procurement &

fabrication, erection,

construction &

commissioning.

31,022 31,022 8,000,000 100.00 ( 59,142) ( 25,706) ( 25,706) A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

SUMBER MAMPU SDN.

BHD.

Malaysia Building of related engineering. 95 95 12,040 10.00 171,448 3,371 3,371 A second-tier

subsidiary

Table 7 Page 7

Balance as at

March 31, 2019

Balance as at


Net profit (loss)



March 31, 2019 (Note 2(2))





Investee



Universal

Engineering

(BVI) Corp.

Superiority


Thailand Investment and planning


$ 151 $ 151 2,156 49.00 ($ 75,483) ($ 1,440) ($ 1,440) A second-tier

subsidiary

Superiority

(Thailand) Co.,

Ltd.

CTCI (Thailand)

Co., Ltd.

Thailand Design and building of

petrochemical plant.

12,628 12,628 1,300,500 51.00 ( 76,174) ( 1,995) ( 1,018) A subsidiary

CTCI Advanced

Systems Inc.

Century Ahead Ltd. Samoa Professional investment company. 25,097 25,097 750,000 100.00 39,526 6,051 6,051 A second-tier

subsidiary

CTCI Smart

Engineering

Corp.

CTCI Chemical

Corp.



chemicals.

7,354 7,354 656,360 9.24 22,514 15,401 1,424 A second-tier

subsidiary

CTCI Resources

Engineering Inc.

CTCI Chemical

Corp.



chemicals.

7,354 7,354 656,360 9.24 22,745 15,401 1,424 A second-tier

subsidiary

CTCI Singapore

Pte. Ltd.

CTCI Netherlands B.V. Netherlands Engineers and other technical

design and consultancy.

11,274 11,274 300,000 100.00 50,859 1,092 1,092 A second-tier

subsidiary

CTCI Engineering &

Construction Sdn.

Bhd.

CTCI Malaysia SDN.

BHD.



1,357 1,357 150,000 20.00 62,272 4,249 850 A second-tier

subsidiary

CTCI Malaysia

SDN. BHD.

MIE INDUSTRIAL

SDN. BHD.

Malaysia Equipment & Instrument,

Procurement & Construction,

Panel.


equity method

SUMBER MAMPU

SDN. BHD.

CTCI Malaysia SDN.

BHD.



5,428 5,428 600,000 80.00 249,089 4,249 3,399 A second-tier

subsidiary

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules,

it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at March 31, 2019’ should fill orderly in the Company’s (public company’s)

information on investees and every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each

(ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.

(2) The ‘Net profit (loss) of the investee for the three-month period ended March 31, 2019’ column should fill in amount of net profit (loss) of the investee for this period.

(3) The ‘Investment income (loss) recognised by the Company for the three-month period ended March 31, 2019’ column should fill in the Company (public company) recognised investment income (loss)

of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its

direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Table 7 Page 8

Remitted to

Mainland China

Remitted back

to Taiwan

CTCI Beijing

Co., Ltd.

Design, survey, construction

and inspection of various

engineering and construction

projects, plants, machinery

and equipment, and

environmental protection

projects.

$ 433,473 2 $ 313,998 $ - $ - 313,998$ $ 85,093 100.00 $ 85,093 $ 1,871,922 $ 295,938 Note 3

CTCI Shanghai

Co., Ltd.

Design, survey, construction and

inspection of various engineering

and construction projects.

592,787 2 488,709 - 488,709 - 15,920 100.00 15,920 525,823 23,530 Note 7

CTCI Advanced

Systems

Shanghai Inc.

Computer technology services. 23,123 2 23,123 - - 23,123 6,050 48.72 2,947 38,345 - Note 4

ECOVE

Environment

Consulting Corp.

Technical development, advisory

and service in environmental field;

environmental pollution control

equipment and related parts

wholesale, import and export, etc.

4,147 1 4,147 - - 4,147 1,672 53.77 893 14,028 - -

FuJian Gulie

Petrochemical Co.,

Ltd.

Operating in manufacturing and selling

of ethylene and others.

10,277,948 2 292,225 - - 292,225 - 1.31 - 292,225 - Note 5

CTCI Trading

Shanghai Co., Ltd.

General trade. 23,748 2 - - - - 3,841 100.00 3,841 69,351 - Note 6


Information on investees (not including investees in Mainland China)


Expressed in thousands of NTD

Investee in

Mainland China


Book value of

investments in

Mainland China

as of March 31,

2019

Accumulated

amount

of investment

income

remitted back to

Taiwan as of

March 31, 2019

Table 8

Footnote Main business activities Paid-in capital

Investment method

（Note 1）

Accumulated

amount of

remittance from

Taiwan to

Mainland China

as of January 1,

2019

Accumulated

amount

of remittance

from Taiwan to

Mainland China

as of March 31,

2019

Ownership

held by

the

Company

(direct or

indirect)

Investment income

(loss) recognised

by the Company

for the three-month

period ended March

31, 2019

（Note 2(2)B）

Net income of

investee for the

three-month

period ended

March 31, 2019

Amount remitted from Taiwan to

Mainland China/

Amount remitted back

to Taiwan for the period ended

March 31, 2019

Table 8 Page 1

Company name

Accumulated amount of remittance

from Taiwan to Mainland China

as of March 31, 2019

Investment amount approved

by the Investment

Commission of the Ministry

of Economic Affairs

(MOEA)

Ceiling on investments in

Mainland China imposed

by the Investment

Commission of MOEA

CTCI Corp. $ 633,493 $ 1,186,634 $ 10,646,979

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1)Directly invest in a company in Mainland China..

(2)Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

(3)Others

Note 2: In the Investment income (loss) recognised by the Company for the three-month period ended March 31, 2019 column:

(1)FuJian Galie Petrochemical Co., Ltd did not accrue investment income or loss since it was still in preparation.

(2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:

A.The financial statements that are reviewed and attested by R.O.C. parent company’s CPA.

B.It is an insignificant subsidiary, and its financial report was not reviewed by the independent accountant.

C.Others.

Note 3: Invested by CTCI Overseas Co., Ltd.

Note 4: Invested by Century Ahead Ltd.

Note 5: Invested in Dynamic Ever Investments Limited through Ever Victory Global Limited.

Note 6: Invested by CTCI Shanghai Co., Ltd.

Note 7: Invested by CTCI Beijing Co., Ltd.

Table 8 Page 2

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